May 012020
 


Joseph-Désiré Court Le Masque 1843

 

No, I’m still not over the fact that they all initially missed the virus when they should have seen it most of all. The reasons why must be evaluated in every single location, in governments, CDC equivalents and obviously the WHO. A main reason is that they were all focusing on their economy, not the virus, -at least somewhat- ironically damaging their economies in the process.

I’m just afraid that you’re not going to prevent the next time, the next huge and deadly miss, as long as elections are popularity contests ultimately controlled by special interests. But at the same time, we’re past that first moment, which was somewhere in November or December (31st at the latest), and the next major threats loom.

After the Big Miss came the lockdowns, and as I said in Little Managers, that’s the one thing all these politicians may actually be somewhat good at. They stink at initial detection and reaction time, they stink at forward vision, but they can get people to stay home for a bit, and sell them that in the media.

They even get praised for it. Which is understandable, since their role is to set old ladies’ minds at ease, and most people, whatever age they are, have such minds, understandable but unfortunate, because 1) we’re about to leave the lockdowns phase as well and 2) they’re sure to screw up this one as royally as the first detection moment.

 

It would be good if everyone by now understood why lockdowns become inevitable after, but only after, initial detection has failed and the virus has been allowed to enter a society, if you face a highly contagious and deadly -to humans- virus that you don’t know anything about, but there are plenty people today who claim the lockdowns are what does the damage.

In case there is such a virus and you miss your first -and only- chance at “Crushing the Curve” (as opposed to flattening it, which is of limited use at best), you must prevent it from jumping from host to host, which means you need to keep people apart from each other to one extent or another. Societies have understood this for 1000s of years, and we don’t?

Keep people apart until you either know more about the virus, or you have a vaccine, or people become immune to it. Well, there’s no vaccine – did you know that no vaccine for a coronavirus was ever developed?-, immunity is in a very early phase, and just about literally everything we think we know about the virus is contradicted within 24 hours or so by a different report or group of “experts”.

 

These are truly not things we should let politicians fresh out of popularity contests decide. But that’s the model of our societies. The various relaxations of the various lockdowns are going to be an unmitigated disaster, guaranteed. We have all the elements for such disasters. It’ll work out fine in a few locations, but in most it will be terrible.

Because these guys and gals are under pressure from people who’ve been complaining about the lockdowns since the moment they were called. Because their “scientists” are, as we saw in The Only Man Who Has A Clue, utterly useless when it comes to even the most basic rules of risk assessment. But then for a few consecutive days numbers of cases and deaths seem to go down, and there is an election coming up next year or the one after that, and off to the races we are.

As long as there are no urgencies or calamities, we don’t notice these things, because everyone is busy living their own lives and fulfilling their own demands. And then when things do go wrong, there’s no redundancy, no resilience, no safety nets, and eventually no nothing. Because everyone’s too busy with their own lives.

We conduct our societies as if there is zero risk of a pandemic or any other disaster, because there’s no profit in redundancy. It’s a miracle we still have fire departments and hospitals, and those in most cases only still exist because someone has found a way to make money off of them (taxes).

 

Still, the worst thing about all the little managers “leading” us into the future is undoubtedly that little managers have no vision for that future. That’s why you hear “re-open”, re-this and re-that so much. But there is no “re-“, there is no going back to “normal”. And when you look at where we were pre-corona, you’d be mad not to ask why on earth we would want to go back there.

Shouldn’t we perhaps at least learn something from this virustime episode? Of course we should. But our “leaders” lack the ideas and vision to learn anything. They don’t go forward into the future, they go backward, fat asses first. They owe their jobs and their power to the past, after all.

And their only “science advisers”, the virologists and epidemiologists, also only look backwards, since their knowledge comes from past events, and they can only model the next “viral event” according to guesses, hunches, and a series of old algorithms. Some can construct a full genome of a virus within days or weeks, but still have no idea what it does.

We have the wrong people in charge at every step of the way. Because we have no idea what risk assessment is. Still, we’re all smart enough to understand that politicians and epidemiologists are the last people we would want to do that. And yes, that brings us straight back to The Only Man Who Has A Clue. When you don’t know what you’re up against, you don’t just try and guess and pray for a good outcome, you go back to basics: masks, testing, distance.

Lockdowns can’t last forever, people are social animals. Also, lockdowns don’t solve the problem, that’s not their goal; they merely buy you time. Would you say we have used that time wisely? Would you say it’s safe now to put less distance between people, who are for all intents and purposes potential hosts for a lethal virus?

I see a lot of claims that we know much more about the virus now, 4-6 weeks later, but I also see tons of contradictory reports, and I can only conclude we still know very little. Indeed, even many things we thought we knew turn out not to be true. And those happen to be the kinds of things that are essential if you want to assess risk.

Politicians and epidemiologists could only possibly have done one thing right -and they largely did- in this process: the lockdown. They understand what it is, and they have the tools to sell and enforce it. But that’s it. They don’t understand the risks involved in relaxing the lockdowns. It’s not just the pressure on them to “normalize” their societies, it’s that they don’t understand risk, period -but think and claim they do-.

That in itself is likely the biggest risk we face.

 

 

And I kid you not, I was setting out to write about finance and bailouts and stuff, and thought a little intro might be helpful, and it got a bit out of hand. Finance and bailouts “and stuff”, coming up, hopefully tomorrow. Got so much to say about that too. Sometimes it’s nice to just read news and opinions for a number of days without writing about it, but for me there’s always a lot of “what are these people thinking?”.

There are all these claims about elites and politicians and their grand schemes and plans and intentions, but so far I always veer back, along with Fat Tony, to the vastly underestimated achievements of sheer incompetence. But by all means, prove me wrong.

 

 

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Apr 232020
 


Jack Delano Union Station, Chicago, Illinois 1943

 

Not a Black Swan but a Portent of a More Fragile Global System – Taleb (NYer)
Coronavirus Started Spreading In US Much Earlier Than Thought (CoD)
Coronavirus Study Points To Vast Number Of Cases Under Radar In China (SCMP)
How Does Coronavirus Kill? (ScienceMag)
Many Small Businesses Say Loans Won’t Get Them To Rehire (AP)
Congressional Democrats Do Little To Improve ‘Pathetic’ Coronavirus Deal (IC)
Trump Disagrees ‘Strongly’ With Georgia Reopening Shops (JTN)
HHS Secretary Alex Azar Waited For Weeks To Brief Trump (WSJ)
Azar Tapped Former Labradoodle Breeder To Lead US Pandemic Task Force (R.)
Cuomo Taps Bloomberg To Lead COVID-19 Contact “Tracing Army” (Gothamist)
Turkey PPE Supplier Doesn’t Have Enough Stock To Meet UK Order (Sky)
Coronavirus Upends Global Narcotics Trade (R.)
The Analogy Trap in Economic Policy (Eichengreen)
New York Times Revives its Role in Chinagate (Lauria)

 

 

• The US had +2,341 new deaths from coronavirus today, down from its record high yesterday, bringing the total US death toll to 47,659.

• New York had +661 new deaths, while New Jersey had +310, Massachusetts had +221, and three other states (CA, MI, CT) had over 100 new deaths. Only five states did not have a coronavirus death today.

• The US had nearly +30k new confirmed cases today, bringing the total to over 848k, with over 717k active cases.

 

• US total cases currently at 848,735, with death totals at 47,663.
• Globally, total cases have hit 2,637,414, with death totals at 184,204.

 

• US yesterday new 25,985, today now 27,948.
• IL, CT today exceed 2,000

 

• Spain yesterday 3,968, today 4,211. Fluctuating. No daily testing data

 

• 4/22/20 – Top 12 State Cases
New York: 257,216
New Jersey: 95,865
Massachusetts: 42,944
California: 35,396
Illinois: 35,108
Pennsylvania: 35,045
Michigan: 33,966
Florida: 28,309
Louisiana: 25,258
Connecticut: 22,469
Texas: 21,069
Georgia: 20,740

 

 

#Coronavirus: Global #Covid19 Deaths By Week
01/22: 17
01/29: 133
02/05: 564
02/12: 1,118
02/19: 2,122
02/26: 2,770
03/04: 3,254
03/11: 4,615
03/18: 8,733
03/25: 21,181
04/01: 46,809
04/08: 88,338
04/15: 134,177
04/22: 183,027

 

 

Cases 2,656,391 (+ 82,920 from yesterday’s 2,573,471)

Deaths 185,156 (+ 6,598 from yesterday’s 178,558)

 

 

 

From Worldometer yesterday evening -before their day’s close-

 

 

From Worldometer – NOTE: among Active Cases, Serious or Critical fell to 3%. Among Closed Cases, Deaths have fallen to 20%

 

 

From SCMP:

 

 

From COVID19Info.live: Note: Turkey, Russia, UK are the biggest risers

 

 

 

 

“The state,” he told me, “should not smooth out your life, like a Lebanese mother, but should be there for intervention in negative times, like a rich Lebanese uncle.”

Not a Black Swan but a Portent of a More Fragile Global System – Taleb (NYer)

COVID19 has initiated ordinary citizens into the esoteric “mayhem” that Taleb’s writings portend. Who knows what will change for countries when the pandemic ends? What we do know, Taleb says, is what cannot remain the same. He is “too much a cosmopolitan” to want global networks undone, even if they could be. But he does want the institutional equivalent of “circuit breakers, fail-safe protocols, and backup systems,” many of which he summarizes in his fourth, and favorite, book, “Antifragile,” published in 2012. For countries, he envisions political and economic principles that amount to an analogue of his investment strategy: government officials and corporate executives accepting what may seem like too-small gains from their investment dollars, while protecting themselves from catastrophic loss.

For Taleb, an antifragile country would encourage the distribution of power among smaller, more local, experimental, and self-sufficient entities—in short, build a system that could survive random stresses, rather than break under any particular one. (His word for this beneficial distribution is “fractal.”) We should discourage the concentration of power in big corporations, “including a severe restriction of lobbying,” Taleb told me. “When one per cent of the people have fifty per cent of the income, that is a fat tail.” Companies shouldn’t be able to make money from monopoly power, “from rent-seeking”—using that power not to build something but to extract an ever-larger part of the surplus.

There should be an expansion of the powers of state and even county governments, where there is “bottom-up” control and accountability. This could incubate new businesses and foster new education methods that emphasize “action learning and apprenticeship” over purely academic certification. He thinks that “we should have a national Entrepreneurship Day.” But Taleb doesn’t believe that the government should abandon citizens buffeted by events they can’t possibly anticipate or control. (He dedicated his book “Skin in the Game,” published in 2018, to Ron Paul and Ralph Nader.) “The state,” he told me, “should not smooth out your life, like a Lebanese mother, but should be there for intervention in negative times, like a rich Lebanese uncle.”

Right now, for example, the government should, indeed, be sending out checks to unemployed and gig workers. (“You don’t bail out companies, you bail out individuals.”) He would also consider a guaranteed basic income, much as Andrew Yang, whom he admires, has advocated. Crucially, the government should be an insurer of health care, though Taleb prefers not a centrally run Medicare-for-all system but one such as Canada’s, which is controlled by the provinces. And, like responsible supply-chain managers, the federal government should create buffers against public-health disasters: “If it can spend trillions stockpiling nuclear weapons, it ought to spend tens of billions stockpiling ventilators and testing kits.”

Read more …

This was a given.

Coronavirus Started Spreading In US Much Earlier Than Thought (CoD)

Experts have released new information about just how long the coronavirus (COVID-19) might have been silently spreading in the United States. Health officials in California said the first U.S. coronavirus deaths actually occurred weeks before they previously believed. This comes as no surprise to doctors. Many doctors had patients earlier on that they now believe were COVID-19 cases. But they didn’t qualify for testing at the time because they either didn’t have a history of travel to China or the didn’t have the initially reported symptoms of fever, cough and shortness of breath. But now there’s concrete proof that the timeline of cases started much earlier.

The first confirmed case of the coronavirus in the U.S. came Jan. 21 in a man from Washington state who developed symptoms after returning from a trip to Wuhan, China. But the first confirmed death was thought to be more than a month later, on Feb. 29, in Kirkland, Washington. Health officials there later found two deaths on Feb. 26 were due to the virus, pushing the timeline back three days. But coroners across the country are now looking back at other deaths. The medial examiner in Santa Clara County, California, sent tissue samples collected during autopsies performed in February to the Centers for Disease Control and Prevention for testing.

Samples taken from patients who died at home on Feb. 6 and Feb. 17 both tested positive for the coronavirus. That pushes the fatality timeline back 20 days. Health officials believe the patients were infected in the community. Neither is known to have a travel history. Given that deaths tend to lag infections by about two weeks, the first patient could have been infected in mid-January. It’s likely the coronavirus was already spreading in the U.S. far earlier than initially reported — hidden in a bad flu season and undetected by rigid testing rules.

Read more …

So people will say: see, infection rate is much lower! Well, not if the death rate is also much higher. Which certainly in China is possible.

Coronavirus Study Points To Vast Number Of Cases Under Radar In China (SCMP)

China’s official tally of coronavirus cases could have quadrupled in mid-February if one broader system for classifying confirmed patients had been used from the outset of the pandemic, according to researchers at the University of Hong Kong. In a study published in the medical journal The Lancet on Tuesday, the researchers said China might have had 232,000 confirmed cases – rather than the official total of about 55,000 – by February 20 if a revised definition adopted earlier in the month had been applied throughout. “We estimated that there were at least 232,000 infections in the first epidemic wave of Covid-19 in mainland China,” they said, referring to the disease caused by the coronavirus.

“The true number of infections could still be higher than that currently estimated considering the possibility of under-detection of some infections, particularly those that were mild and asymptomatic, even under the broadest case definitions.” The researchers – led by Peng Wu from the University of Hong Kong’s school of public health – looked at the various classification systems used by the government after the epidemic erupted in the central Chinese city of Wuhan in late December. China has published seven editions of diagnosis and treatment guidelines, changing the classification system as understanding of the disease developed. The Hong Kong team found that different definitions made a big difference to the number of cases.

“We estimated that when the case definitions were changed from version 1 to 2, version 2 to 4, and version 4 to 5, the proportion of infections being identified as Covid-19 cases was increased by 7.1 times from version 1 to 2, 2.8 times from version 2 to 4, and 4.2 times from version 4 to 5,” the paper, co-authored by Peng’s HKU colleagues epidemiologist Benjamin Cowling and medical faculty dean Gabriel Leung, said.

Read more …

Thorough report on how and why. But even then a lack of understanding of what the virus is, remains.

How Does Coronavirus Kill? (ScienceMag)

When an infected person expels virus-laden droplets and someone else inhales them, the novel coronavirus, called SARS-CoV-2, enters the nose and throat. It finds a welcome home in the lining of the nose, according to a preprint from scientists at the Wellcome Sanger Institute and elsewhere. They found that cells there are rich in a cell-surface receptor called angiotensin-converting enzyme 2 (ACE2). Throughout the body, the presence of ACE2, which normally helps regulate blood pressure, marks tissues vulnerable to infection, because the virus requires that receptor to enter a cell. Once inside, the virus hijacks the cell’s machinery, making myriad copies of itself and invading new cells.

As the virus multiplies, an infected person may shed copious amounts of it, especially during the first week or so. Symptoms may be absent at this point. Or the virus’ new victim may develop a fever, dry cough, sore throat, loss of smell and taste, or head and body aches. If the immune system doesn’t beat back SARS-CoV-2 during this initial phase, the virus then marches down the windpipe to attack the lungs, where it can turn deadly. The thinner, distant branches of the lung’s respiratory tree end in tiny air sacs called alveoli, each lined by a single layer of cells that are also rich in ACE2 receptors.

Normally, oxygen crosses the alveoli into the capillaries, tiny blood vessels that lie beside the air sacs; the oxygen is then carried to the rest of the body. But as the immune system wars with the invader, the battle itself disrupts this healthy oxygen transfer. Front-line white blood cells release inflammatory molecules called chemokines, which in turn summon more immune cells that target and kill virus-infected cells, leaving a stew of fluid and dead cells—pus—behind. This is the underlying pathology of pneumonia, with its corresponding symptoms: coughing; fever; and rapid, shallow respiration. Some COVID-19 patients recover, sometimes with no more support than oxygen breathed in through nasal prongs.

But others deteriorate, often quite suddenly, developing a condition called acute respiratory distress syndrome (ARDS). Oxygen levels in their blood plummet and they struggle ever harder to breathe. On x-rays and computed tomography scans, their lungs are riddled with white opacities where black space—air—should be. Commonly, these patients end up on ventilators. Many die. Autopsies show their alveoli became stuffed with fluid, white blood cells, mucus, and the detritus of destroyed lung cells.

Read more …

All the big money’s already been handed out.

Many Small Businesses Say Loans Won’t Get Them To Rehire (AP)

Some small businesses that obtained a highly-coveted government loan say they won’t be able to use it to bring all their laid-off workers back, even though that is what the program was designed to do. The Paycheck Protection Program promises a business owner loan forgiveness if they retain or rehire all the workers they had in late February. But owners say the equation isn’t so simple, in part because of current economic conditions and partly due to the terms of the loans. As a result, the lending may not reduce unemployment as much as the Trump administration and Congress hope. The government’s $2 trillion relief package included $349 billion for the small business loan program, which was besieged with applications and ran out of money Thursday.

Congress and the White House reached a deal Tuesday that would provide another $310 billion. To get the loans forgiven, companies need to spend 75% on payroll within eight weeks of receiving the money. The other 25% can be spent on rent, utilities, and mortgage payments. Otherwise, the loan has generous terms: Only a 1% interest rate and six months before any principal is due. Many of the small companies that were able to obtain a loan are having second thoughts about rehiring all their workers and a few plan to return the money. Others will use what they can on rent and utilities, and will use some to rehire a portion of their laid-off staff. But most are unsure they will be able to reopen eight weeks from now.

They see little point in rehiring all their workers, paying them to do little or nothing, and then potentially laying them off again if business remains weak two months from now. “You’re turning the business into a pass through for the federal government,” said Joe Walsh, who owns Clean Green Maine, a cleaning service in Portland, Maine with 35 employees. “You’re doing very little to actually help the business.” [..] Also, the generous unemployment aid that was also included in the government’s relief package has made it more difficult to rehire. Many workers are making more with unemployment checks, which now include a $600 weekly benefit from the federal government.

Walsh, who received a $280,000 loan from the SBA, said that he is reluctant to push his employees to return to work because, under unemployment benefit rules, they could lose their weekly checks if they turn down potential jobs. “That’s just putting me as the employer in a really difficult position,” Walsh said. He pays at least $17 an hour, with benefits, but his former employees are getting the equivalent of roughly $25 an hour from unemployment.

Read more …

They all have the same campaign contributors. And they’re not small businesses.

Congressional Democrats Do Little To Improve ‘Pathetic’ Coronavirus Deal (IC)

PROGRESSIVE GROUPS are outraged with the nearly $500 billion interim coronavirus rescue package the Senate passed on Tuesday, urging House Democrats to oppose the “pathetic” deal they say doesn’t come close to providing the relief vulnerable people need while giving away all Democratic leverage for future legislation. The “Phase 3.5” bill, which is expected to sail through the House this week, left out almost everything Democratic leaders were advocating for. There’s no additional funding for state and local governments, no expanded food stamp benefits, no hazard pay for front-line workers, nor money for the U.S. Postal Service, which had all been basic Democratic priorities.

The lack of progressive opposition in Congress has been especially noteworthy, after members of the progressive caucus promised to help make future legislation more comprehensive following the hastily passed Phase 3 bill. While some progressive advocates argue that Democrats didn’t have much leverage on the package to begin with, others note that Democrats control the House and House Speaker Nancy Pelosi could have led the party to pass its own bill. “Just as importantly as the inadequate policy provisions, this bill gives away all Democratic leverage,” Ezra Levin, co-executive director of Indivisible, said in an emailed statement.

“We fought so hard to win back the House in 2018 — to make sure that we had a voice in negotiations like this. So far we’ve heard silence from the House. This bill may be our last chance to get the things we need. [Republican Senate Majority Leader] Mitch McConnell has already said he doesn’t want to push through another bill, and if he does, it won’t be for weeks.” [..] The interim package, which would replenish funds for an emergency small business lending program, also includes an additional $75 billion for hospitals and $25 billion for coronavirus testing — two necessities that have been framed as GOP concessions. House Majority Leader Steny Hoyer said the legislation is everything they were expecting. “When you look at the package that is going to be passed, it’s almost exactly like the one we asked for two weeks ago, or 12 days ago,” he told reporters on Tuesday.

Read more …

It takes 2 weeks for new infections to occur. By then, most of the US will have reopened.

Trump Disagrees ‘Strongly’ With Georgia Reopening Shops (JTN)

President Trump said he disagreed with Georgia’s decision to allow some shops to re-open as early as Friday after shuttering due to the coronavirus pandemic. “I told the governor of Georgia, Brian Kemp, that I disagree strongly with his decision to open certain facilities which are in violation of the Phase 1 guidelines for the incredible people of Georgia,” Trump said Wednesday during a press conference of the White House Coronavirus Task Force. “But at the same time, he must do what he thinks is right. I want him to do what he thinks is right. But I disagree with him on what he’s doing.” Trump said he wanted to give governors discretion, although he would step in if he sees something “totally egregious, totally out of line.”

Trump’s administration last week released a 3-phase set of guidelines to re-open following the worst of the pandemic. Trump said that these Georgia shops shouldn’t be re-opening during the federal phase 1 guidelines and should instead wait for phase 2. “We’re going to have phase 2 very soon,” Trump said. “It’s just too soon. I think it’s too soon. And I love the people. I love those people that use all of those things, the spas, and the beauty parlors, barber shops, tattoo parlors. I love ’em. But they can wait a little bit longer, just a little bit. Not much. Because safety has to predominate. We have to have that. So I told the governor very simply that I disagree with his decision, but he has to do what he thinks is right.”

[..] 46% of registered U.S. voters want decisions about re-opening the country after the coronavirus to be made by state and local officials. Only 15% think it should be a federal decision, according to the Just the News Daily Poll with Scott Rasmussen. Trump praised Gov. Gavin Newsom (D-Calif.) for his re-opening strategy. “Some of the governors have done a fantastic job working with us,” Trump said.

Read more …

Sidelined a little too late perhaps?

HHS Secretary Alex Azar Waited For Weeks To Brief Trump (WSJ)

On Jan. 29, Health and Human Services Secretary Alex Azar told President Trump the coronavirus epidemic was under control. The U.S. government had never mounted a better interagency response to a crisis, Mr. Azar told the president in a meeting held eight days after the U.S. announced its first case, according to administration officials. At the time, the administration’s focus was on containing the virus. When other officials asked about diagnostic testing, Dr. Robert Redfield, director of the Centers for Disease Control and Prevention, began to answer. Mr. Azar cut him off, telling the president it was “the fastest we’ve ever created a test,” the officials recalled, and that more than one million tests would be available within weeks.

That didn’t happen. The CDC began shipping tests the following week, only to discover a flaw that forced it to recall the test from state public-health laboratories. When White House advisers later in February criticized Mr. Azar for the delays caused by the recall, he lashed out at Dr. Redfield, accusing the CDC director of misleading him on the timing of a fix. “Did you lie to me?” one of the officials recalled him yelling. Six weeks after that Jan. 29 meeting, the federal government declared a national emergency and issued guidelines that effectively closed down the country. Mr. Azar, who had been at the center of the decision-making from the outset, was eventually sidelined.

Many factors muddled the administration’s early response to the coronavirus as officials debated the severity of the threat, including comments from Mr. Trump that minimized the risk. But interviews with more than two dozen administration officials and others involved in the government’s coronavirus effort show that Mr. Azar waited for weeks to brief the president on the threat, oversold his agency’s progress in the early days and didn’t coordinate effectively across the health-care divisions under his purview.

[..] White House officials say there is no plan to replace Mr. Azar during a pandemic. Still, the president last week installed a former campaign aide, Michael Caputo, to serve as assistant secretary for public affairs at HHS. The White House also appointed policy adviser Emily Newman as a liaison to HHS who will oversee the agency’s political hires. Mr. Azar has largely been sidelined over the past several weeks from discussions with the president and with the White House task force, administration officials said. He hasn’t attended the daily briefing since April 3.

Read more …

The headline is just too good.

Azar Tapped Former Labradoodle Breeder To Lead US Pandemic Task Force (R.)

On January 21, the day the first U.S. case of coronavirus was reported, the secretary of the Department of Health and Human Services appeared on Fox News to report the latest on the disease as it ravaged China. Alex Azar, a 52-year-old lawyer and former drug industry executive, assured Americans the U.S. government was prepared. “We developed a diagnostic test at the CDC, so we can confirm if somebody has this,” Azar said. “We will be spreading that diagnostic around the country so that we are able to do rapid testing on site.” While coronavirus in Wuhan, China, was “potentially serious,” Azar assured viewers in America, it “was one for which we have a playbook.”

Azar’s initial comments misfired on two fronts. Like many U.S. officials, from President Donald Trump on down, he underestimated the pandemic’s severity. He also overestimated his agency’s preparedness. As is now widely known, two agencies Azar oversaw as HHS secretary, the Centers for Disease Control and Prevention and the Food and Drug Administration, wouldn’t come up with viable tests for five and half weeks, even as other countries and the World Health Organization had already prepared their own. Shortly after his televised comments, Azar tapped a trusted aide with minimal public health experience to lead the agency’s day-to-day response to COVID-19.

The aide, Brian Harrison, had joined the department after running a dog-breeding business for six years. Five sources say some officials in the White House derisively called him “the dog breeder.” Azar’s optimistic public pronouncement and choice of an inexperienced manager are emblematic of his agency’s oft-troubled response to the crisis. His HHS is a behemoth department, overseeing almost every federal public health agency in the country, with a $1.3 trillion budget that exceeds the GDP of most countries. [..[ Azar and his top deputies oversaw health agencies that were slow to alert the public to the magnitude of the crisis, to produce a test to tell patients if they were sick, and to provide protective masks to hospitals even as physicians pleaded for them.

The first test created by the CDC, meant to be used by other labs, was plagued by a glitch that rendered it useless and wasn’t fixed for weeks. It wasn’t until March that tests by other labs went into production. The lack of tests “limited hospitals’ ability to monitor the health of patients and staff,” the HHS Inspector General said in a report this month. The equipment shortage “put staff and patients at risk.” A promised virus surveillance program failed to take root, despite assurances Azar gave to Congress. Rather than share information, three current and three former government officials told Reuters, Azar and top staff sidelined key agencies that could have played a higher-profile role in addressing the pandemic. “It was a mess,” said a White House official who worked with HHS.

Read more …

Little Mike mighty actually pull it off. But he doesn’t care too much about privacy.

Cuomo Taps Bloomberg To Lead COVID-19 Contact “Tracing Army” (Gothamist)

Michael Bloomberg has been charged with amassing and leading a “tracing army” to track the spread of COVID-19 in the Tri-State area, according to Governor Andrew Cuomo. The goal will be to aggressively test and isolate contacts of all those who tested positive for the virus — a major undertaking that experts say is necessary before officials can consider relaxing social distancing measures. After previewing this push in recent weeks, Cuomo revealed during a press conference on Wednesday that Bloomberg will “coordinate the entire effort,” including developing the program and designing the training for thousands of newly-hired tracers.

The multibillionaire former mayor, who does not have a public health background, has also agreed to contribute $10 million to the initiative. By comparison, he spent $1 billion on his failed presidential bid. The announcement came hours after Mayor Bill de Blasio unveiled his own plans for a citywide contact tracing apparatus. The mayor was not informed by the Governor’s Office that Bloomberg, his predecessor and political rival, would be heading up the statewide effort until Wednesday morning, as de Blasio was announcing his own initiative, mayoral spokesperson Freddi Goldstein told Gothamist. While the city will still be responsible for hiring some of the field workers, Cuomo stressed that the initiative had to be regionally focused.

“You cannot trace someone within the boundaries of New York City,” he said. The state will also partner with Johns Hopkins University and the non-profit Vital Strategies to roll out the program. Some of the roughly 35,000 CUNY and SUNY students in medical fields will also be tapped for the effort, Cuomo said. The federal government has made available $1.3 billion for New York to begin contact tracing. Cuomo did not immediately have an estimate for how much it would cost. “You don’t have months to get this up and running,” he added. “You have weeks.”

Read more …

Turkey is one of the exploding countries. Is it a good ide to export their supplies?

Turkey PPE Supplier Doesn’t Have Enough Stock To Meet UK Order (Sky)

A commercial supplier in Turkey did not have enough stock to fulfil an order for 84 tonnes of protective equipment supposed to be bound for the UK, Turkish officials have said. British sources said the UK government was working with the company and the Turkish authorities to secure the shipment “as soon as possible” – though no time frame was given. It comes as a flight carrying PPE – urgently needed by front line health workers as they treat COVID-19 patients in the UK – arrived from Turkey, following days of delays. The Royal Air Force plane arrived at Brize Norton in Oxfordshire from Istanbul just after 3am.


The total consignment of 84 tonnes includes 400,000 clinical gowns, but it is not clear how much of this is on today’s flight. An initial batch of just 2,500 gowns was sent to the airport in Istanbul for quality control checks on Tuesday. Turkish officials said Britain’s attempt to buy the protective equipment from a Turkish firm ran into trouble because the supplier did not have enough stock. Turkey’s ambassador to the UK, Umit Yalcin, told Sky News: “As far as I understand there have been problems with the private supplier company. “Now Turkey is cooperating with the UK authorities to find a quick solution for the UK’s urgent needs.

Read more …

Support your local dealer.

Coronavirus Upends Global Narcotics Trade (R.)

Countries around the world have spent billions of dollars bailing out businesses affected by the coronavirus outbreak. Peru’s coca farmers, who grow the bushy plant used to make cocaine, say they want help, too. Prices for coca leaves sold to drug gangs have slumped 70% since Peru went on lockdown last month, according to Julián Pérez Mallqui, the head of a local growers’ organization. He said his members cater to Peru’s tightly regulated legal coca market, but acknowledged some growers sell on the black market. Peruvian officials say more than 90% of the country’s coca crop goes to traffickers who are now struggling to move product. With the sector in turmoil, Pérez’s group is crafting a plan to ask the government to buy up excess coca inventory.

Peru “has to design clear intervention strategies for coca,” Pérez said. “We’re screwed, just like everyone else in the world.” A spokesman for Peru’s anti-drugs agency said it may funnel more development aid to hard-hit areas. The coronavirus outbreak has upended industries across the globe. The international narcotics trade has not been spared. From the cartel badlands along the U.S.-Mexico border and verdant coca fields of the Andes, to street dealers in London and Paris, traffickers are grappling with many of the same woes as legitimate businesses, Reuters has found. On three continents, Reuters spoke with more than two dozen law enforcement officials, narcotics experts, diplomats and people involved in the illicit trade.

They described a business experiencing busted supply chains, delivery delays, disgruntled workers and millions of customers on lockdown. They also gave a window into the innovation – and opportunism – that are hallmarks of the underworld. [..] coronavirus has managed to do what authorities worldwide have not: slow the global narcotics juggernaut almost overnight and inflict a measure of pain on all who participate. In Mexico, the Sinaloa Cartel has faced many threats over the years, including the jailing of former leader Joaquin “El Chapo” Guzman. But never one like the coronavirus pandemic.

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“The task for now is income maintenance — targeting public support at the unemployed so that parents can feed their children.”

The Analogy Trap in Economic Policy (Eichengreen)

Where comparisons with past crises have value is precisely in highlighting how this crisis is different, and therefore how the policy response should vary. First, this crisis did not originate in the financial system, in contrast to 1929 and 2008. Flooding financial markets with liquidity, as central banks have done, may prevent problems on the real side of the economy from destabilising financial institutions and markets. But doing so will not mend the economy or even halt its downward spiral. Achieving this requires first containing the pandemic. Second, in contrast to these earlier episodes, major fiscal stimulus packages are not the right policy focus. Unlike in the past, we have also experienced an unprecedented supply shock.

It makes no sense to try to sustain demand at earlier levels at a time when production can’t keep up, since it is not yet safe — and won’t be safe for some time — for people to return to work. The time for demand stimulus is later. The task for now is income maintenance — targeting public support at the unemployed so that parents can feed their children. Third, this crisis will be most acute in low-income countries. These countries have weak health systems. They are being hit by weak commodity prices, falling remittances, capital flight, a shortage of trade credit and collapsing currencies all at once. They were not the focus in 1929 or 2008 because those crises centred on the global financial system, and because low-income countries had only rudimentary financial systems and were not integrated financially.

This time, low-income countries are at risk of a crisis that will dwarf anything in the advanced-country world. Addressing their plight should be priority number one on humanitarian grounds, but also because what happens there will spill back onto the rest of the world through both economic and epidemiological channels. With the IMF and World Bank meetings coming up next week, one wonders whether advanced countries will look beyond their domestic concerns. One worries that their preoccupation with the questions ‘is this downturn more serious than the Global Financial Crisis?’ and ‘could unemployment rise as high as in the Great Depression?’ will cause them to lose sight of what is about to become the most serious crisis of all.

Read more …

Yeah, before you know it you’re trapped with the NYT in your corner.

New York Times Revives its Role in Chinagate (Lauria)

During the saga of Russiagate The New York Times was the main vehicle for unnamed U.S. intelligence officials to filter uncorroborated allegations about Russia, presenting them as proven fact. Just as the Democratic Party attempted to shift the blame from its disastrous 2016 loss to Donald Trump onto Russia, the Trump administration is now trying to shift the blame from Trump’s disastrous handling of the Coronavirus crisis onto China. And The New York Times is once again the vehicle. In a front-page story on Wednesday, the Times reports as flat fact that “Chinese agents helped spread messages to millions of Americans about a fake lockdown last month, sowing virus panic in the U.S., officials said.” One of the messages said Trump would lock down the entire nation. “They will announce this as soon as they have troops in place to help prevent looters and rioters.”

But as in the Times‘ sordid history of numerous Russiagate stories, you have to read deep into the piece, in this case to paragraph seven, before you are told: “The origin of the messages remains murky. American officials declined to reveal details of the intelligence linking Chinese agents to the dissemination of the disinformation, citing the need to protect their sources and methods for monitoring Beijing’s activities.” Any reputable journalism school will teach its students that you hold off publishing until you see the evidence underlying an assertion. This is especially true when quoting anonymous sources. And it is doubly true when these sources are intelligence agents, who have a long history of deception. It is part of their job description.

Reporters should by now be wary and demand proof after they had allowed intelligence officials to misuse them in misleading the public about the reasons to invade Iraq, and indeed about the later proven lies about collusion between the Trump campaign and Russia. The Times story on Wednesday rather shamelessly revives and links China’s alleged misdeeds to Russiagate. “American officials said China, borrowing from Russia’s strategies, has been trying to widen political divisions in the United States. As public dissent simmers over lockdown policies in several states, officials worry it will be easy for China and Russia to amplify the partisan disagreements.”

Read more …

 

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Mar 282020
 


Dorothea Lange White Angel Bread Line, San Francisco 1933

 

US Coronavirus Cases Top 100,000, Doubling In Three Days (CNBC)
The UK’s Coronavirus Policy May Sound Scientific. It Isn’t (Taleb, Bar-Yam)
Up To 40 Million Lives Could Be Saved If Countries Act Quickly (Ind.)
Dr. Fauci: Coronavirus Death Rate Like Very Bad Flu (WND)
China Closes Borders, Claims Wuhan ‘Basically Blocked’ Coronavirus (SAC)
Countries Worldwide Roll Out Draconian Measures To Fight Covid-19 (RT)
COVID-19 Has Exposed Just How Broken American Economy & Society Are (Ritter)
US May Be Headed For Highest Unemployment Ever (RT)
Yet Another Rant on Coronavirus & Trump (Brad DeLong)
Millions Will Struggle To Pay Rent In April, But Few In Congress Care (IC)
Panama Canal Blocks Cruise Ship With 138 Ill, 2 COVID-19 Cases On Board (BI)
Venezuela’s Coronavirus Response Might Surprise You (Flores)
RT Loses Challenge Against Claims Of Bias In Novichok Reporting

 

 

US tops 100,000, world almost tops 100,00 new cases in 24 hours. Winning.

 

 

Cases 613,829 (+ 71,444 from yesterday’s 542,385)

Deaths (+ 3,861 from yesterday’s 24,368)

 

 

 

From Worldometer yesterday evening (before their day’s close)

 

 

From Worldometer -NOTE: mortality rate for closed cases is at 17% –

 

 

From SCMP:

 

 

From COVID2019Live.info:

 

 

 

 

I think we just missed the next 100,000 global cases within 24 hours.

US Coronavirus Cases Top 100,000, Doubling In Three Days (CNBC)

Confirmed COVID-19 cases in the U.S. surpassed 100,000 Friday, doubling in just three days as the pandemic accelerates and the U.S. rolls out broader testing measures. Data from Johns Hopkins University showed the total number of coronavirus cases as 101,707 and the total number of deaths in the U.S. as 1,544. The virus emerged in Wuhan, China, in December. It has since spread to more than half a million people in almost every country around the world and continues to pick up speed, the World Health Organization warned earlier this week. “The pandemic is accelerating,” WHO Director-General Tedros Adhanom Ghebreyesus said Monday at a press briefing from the organization’s Geneva headquarters.

“It took 67 days from the first reported case to reach 100,000 cases, 11 days for second 100,000 cases, and just four days for the third 100,000 cases.” Confirmed U.S. cases passed 50,000 on Tuesday, up from 5,000 last week. At the beginning of the month, there were roughly 100 confirmed cases in the U.S. On Thursday, confirmed cases in the U.S. surpassed that of both China and Italy, making it the country with the largest outbreak in the world. The number of confirmed cases likely underestimates the true number of infections across the country, officials have acknowledged. Testing in the U.S. has been hampered by delays and a restrictive diagnostic criteria that limits who can get tested. With 44,635 confirmed cases as of Friday morning, New York state accounts for almost half of all cases in the U.S., according to Gov. Andrew Cuomo.


He said Thursday that the rapid growth of confirmed cases is partly due to a “backlog” of infections that had not been confirmed due to lack of testing. However, the virus appears to be spreading to multiple so-called hot spots around the country, including Los Angeles, Detroit, New Orleans and other cities around the country.

Read more …

I can quote myself here from last night:

Taleb is very correct in his assessment that the precautionary principle is the only viable approach. Which means you have to hedge for the worst, and only after that may there be other options.

What he doesn’t say clearly enough, I think, is that the ignorant politicians and their science advisers (who only know how to model), as well as the equally ignorant media, have been so late in reacting they should all be pink slipped. Imagine people would have paid attention to the Jan 25 piece he references, when it was published (it advised “moderate distancing”, immediately). [constrain mobility. Immediately]

A report last week said if China had acted 3 weeks earlier 95% of its cases could have been prevented. That is true everywhere.”

The UK’s Coronavirus Policy May Sound Scientific. It Isn’t (Taleb, Bar-Yam)

When, along with applied systems scientist Dr Joe Norman, we first reacted to coronavirus on 25 January with the publication of an academic note urging caution, the virus had reportedly infected fewer than 2,000 people worldwide and fewer than 60 people were dead. That number need not have been so high. At the time of writing, the numbers are 351,000 and 15,000 respectively. Our research did not use any complicated model with a vast number of variables, no more than someone watching an avalanche heading in their direction calls for complicated statistical models to see if they need to get out of the way.

We called for a simple exercise of the precautionary principle in a domain where it mattered: interconnected complex systems have some attributes that allow some things to cascade out of control, delivering extreme outcomes. Enact robust measures that would have been, at the time, of small cost: constrain mobility. Immediately. Later, we invoked a rapid investment in preparedness: tests, hospital capacity, means to treat patients. Just in case, you know. Things can happen. The error in the UK is on two levels. Modelling and policymaking.

First, at the modelling level, the government relied at all stages on epidemiological models that were designed to show us roughly what happens when a preselected set of actions are made, and not what we should make happen, and how. The modellers use hypotheses/assumptions, which they then feed into models, and use to draw conclusions and make policy recommendations. Critically, they do not produce an error rate. What if these assumptions are wrong? Have they been tested? The answer is often no. For academic papers, this is fine. Flawed theories can provoke discussion. Risk management – like wisdom – requires robustness in models. But if we base our pandemic response plans on flawed academic models, people die. And they will.

This was the case with the disastrous “herd immunity” thesis. The idea behind herd immunity was that the outbreak would stop if enough people got sick and gained immunity. Once a critical mass of young people gained immunity, so the epidemiological modellers told us, vulnerable populations (old and sick people) would be protected. Of course, this idea was nothing more than a dressed-up version of the “just do nothing” approach. Individuals and scientists around the world immediately pointed out the obvious flaws: there’s no way to ensure only young people get infected; you need 60-70% of the population to be infected and recover to have a shot at herd immunity, and there aren’t that many young and healthy people in the UK, or anywhere. Moreover, many young people have severe cases of the disease, overloading healthcare systems, and a not-so-small number of them die. It is not a free ride.

And Taleb’s best friend, Fat Tony has a message for many people out there:

Read more …

As the WaPo: contends “Disease Modelers Factor In New Public Health Risk: Accusations Their Work Is A Hoax”. What, accused by Taleb? Why is anyone still quoting the WaPo? Doesn’t their record speak for itself?

40 million is one of the highest numbers I’ve seen. Luckily, not every politician is Bolsonaro.

Up To 40 Million Lives Could Be Saved If Countries Act Quickly (Ind.)

If all countries implemented strict anti-coronavirus measures and did so rapidly, up to 40 million lives worldwide could be saved in theory this year, British scientists have calculated. Acting early can cut death numbers by up to 95 per cent but failing to curb the effects of Covid-19 could lead to huge loss of life, they found. Their study concludes that testing and isolation of suspected cases as well as wide social-distancing measures early on can have a dramatic impact. Scientists at Imperial College London studied the health impacts of the pandemic in 202 countries, to compare three scenarios: theoretical death rates without any interventions or distancing with two that could be achieved by policies to curb or suppress spread of the disease.

In all three cases, health systems in all countries would still be quickly overwhelmed without high-cost steps to prevent coronavirus, the report warns. If governments globally did nothing to combat the virus, the pandemic in all likelihood would have caused around 7 billion infections 40 million deaths this year, they concluded. But by taking strict measures as soon as possible, 95 per cent of deaths could be prevented, saving 38.7 million lives, based on an average of 0.2 deaths per 100,000 population per week. If these strict measures are delayed, 30.7 million people’s lives are saved, the research found. “Delays in implementing strategies to suppress transmission will lead to worse outcomes and fewer lives saved,” the academics report.

A midway scenario that involved shielding the elderly and slowing but not interrupting transmission – with a 40 per cent reduction in social contacts among the general population – only halved the number of lives lost. “How individual countries respond in the coming weeks will be critical in influencing the trajectory of national epidemics,” the report says. But lower-income countries are likely to face a much higher burden than wealthier nations, with 25 times more patients in poor nations needing critical care than beds available, while in high-income countries demand outstrips supply by seven times, the report says. Dr Patrick Walker, an author of the report, said: “We estimate that the world faces an unprecedented acute public-health emergency in the coming weeks and months.

“Our findings suggest that all countries face a choice between intensive and costly measures to suppress transmission or risk health systems becoming rapidly overwhelmed. However, our results highlight that rapid, decisive and collective action now will save millions of lives in the next year.”

https://twitter.com/noelhimself/status/1243196148787163136

Read more …

Weird turnarounds: Fausi goes from a 1.0% CFR to 0.1% in 2 weeks, Neil Ferguson takes just 10 days to move from 500,000 deaths to under 20,000. Oh, and Deborah Brix claims the US have “..enough data now of the real experience with the coronavirus on the ground..” and, well, after all: “Models are [just] models”.

Now, she of course in fact merely has new models based on new data (so why diss models?), and it’s not nearly enough; re: testing. What Fauci and Ferguson hope to accomplish in risking their credibility with their sudden “moodswings” is unclear, but they’re not sufficiently supported by new data either. Not in that amount of time. Political pressure perhaps?

Dr. Fauci: Coronavirus Death Rate Like Very Bad Flu (WND)

Dr. Anthony Fauci, a key member of the White House Coronavirus Task Force, co-authored an article published Thursday in the New England Journal of Medicine predicting the fatality rate for the coronavirus will turn out to be like that of a “severe seasonal influenza.” In an exceptionally bad flu season, the case fatality rate is about one-tenth of 1 percent, the authors write. Regarding the current coronavirus pandemic, they said: “If one assumes that the number of asymptomatic or minimally symptomatic cases is several times as high as the number of reported cases, the case fatality rate may be considerably less than 1%.”

Taking into account the unreported cases, they conclude “that the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively.” Fauci is the director of the National Institute of Allergy and Infectious Diseases. His current assessment is a signicant downgrade from the figure he cited in testimony to the House of Representatives on March 11 in which he called for a cancellation of any large gatherings. Fauci estimated at the time – prior to the current shutdown – that the true mortality rate of the coronavirus outbreak, taking into account unreported cases, was “somewhere around 1%, which means it is 10 times more lethal than the seasonal flu.”

[..] the lead author of a dire coronavirus study cited by the White House, Downing Street and other governments in their decisions implement unprecendented “social distancing” measures has drastically revised the estimated death toll of the pandemic in the U.K. The study by Imperial College of London published March 16 estimated that 2.2 million Americans and 500,000 Britons could die. But lead author Neil Ferguson testified Wednesday to a parliamentary committee that the U.K. death toll is unlikely to exceed 20,000 and could be much lower. And more than half that number would have died anyway by the end of the year, because of their age and underlying illnesses, he told the panel.

[..] At the White House Coronavirus Task Force daily briefing Thursday, coordinator Dr. Deborah Birx mentioned Ferguson’s dramatic downgrade of his estimate. She said the predictions of models also “don’t match the reality on the ground in either China, South Korea or Italy.” “Models are models. There’s enough data now of the real experience with the coronavirus on the ground, really, to make these predictions much more sound,” said Birx. “So when people start talking about 20% of a population getting infected, it’s very scary,” she said. “But we don’t have data that matches that.”

Ferguson issued a clarification Thursday via Twitter, arguing his evidence to Parliament “referred to the deaths we assess might occur in the UK in the presence of the very intensive social distancing and other public health interventions now in place.” “Without those controls, our assessment remains that the UK would see the scale of deaths reported in our study (namely, up to approximately 500 thousand),” he wrote.

Read more …

China, from zero to hero. Nice story, but…

China Closes Borders, Claims Wuhan ‘Basically Blocked’ Coronavirus (SAC)

The Chinese government is reporting that the city of Wuhan, where the novel coronavirus began is no longer an area of “high risk” for the transmission of the coronavirus and hasn’t seen any new cases since March 18. The report comes as the country plans to close its borders to foreigners beginning Saturday, March 28 after limiting inbound and outbound international flights on Thursday. “The suspension is a temporary measure that China is compelled to take in light of the outbreak situation and the practices of other countries,” the Chinese Foreign Ministry said in a statement. “China will stay in close touch with all sides and properly handle personnel exchanges with the rest of the world under the special circumstances. The above-mentioned measures will be calibrated in light of the evolving situation and announced accordingly.”


The city of Wuhan first shut down on January, 23. That date, however, was too late in stopping the spread of the virus as millions of people fled shortly before the quarantine was ordered. According to the city’s mayor, it was nearly 5 million people. Many of the millions who left travelled abroad for the Chinese Lunar New Year. Earlier this month, President Xi Jinping visited Wuhan for the first time since the coronavirus outbreak began and claimed that the virus “has basically been curbed” in the city. He reportedly visited hospitals and quarantined citizens. The city is located in Hubei province, which claims to have had no cases for 22 consecutive days outside of Wuhan.

Read more …

Keyword: incompetence.

“..repeat offenders staring down the possibility of 3-18 months in prison..”

Countries Worldwide Roll Out Draconian Measures To Fight Covid-19 (RT)

New regulations in Singapore which threaten prison time for anyone found violating “social distancing” protocols exemplify the harsh rules being imposed around the world in the fight against coronavirus.
According to a press release from the Ministry of Health, Singaporeans who fail to maintain a distance of one meter from other people in “non-transient” public interactions can be fined up to 10,000 Singapore dollars ($6,985) and even risk a six-month jail sentence. The strict measures come as nations around the world adopt similarly extreme provisions to halt the spread of coronavirus.

Jordan introduced some of the most radical anti-coronavirus policies to date. The country initially imposed an around-the-clock lockdown, with officials promising to deliver bread and water to all citizens. Those who violated the strict quarantine were threatened with a year in prison. At least 800 were arrested over a span of several days, the Guardian reported. The measures were later eased, with the government permitting people to take walks and visit shops and pharmacies.

Authorities have begun to ratchet up efforts to stop quarantine violators in Italy. The country deployed more than 100 soldiers tasked with enforcing lockdown measures in Lombardy, the hardest-hit region in Europe. More than 90,000 Italians have been slapped with fines which can potentially reach €3,000 ($3,300). Italians can also end up behind bars for three months for flouting the stay-in-place protocols.

Spain might have the most stringent rules in Europe. Since announcing a countrywide lockdown in mid-March, residents have only been allowed outside for essentials such as grocery shopping or medical needs. The provisions, originally scheduled to be lifted after fifteen days, have been extended until April 11. Those found in violation of the rules face astronomical fines, with repeat offenders staring down the possibility of 3-18 months in prison. More than 30,000 fines have been issued and 900 arrests made for disobedience, according to reports.

Read more …

Just like Trump has, I would add.

COVID-19 Has Exposed Just How Broken American Economy & Society Are (Ritter)

The coronavirus pandemic has exposed some uncomfortable truths about the state of America today. First and foremost is the fragility of the American economy. After years of outsourcing manufacturing, the United States has constructed an economy where services industries comprise some 55 percent of overall economic activity. In the age of globalization, with interconnectivity functioning seamlessly, this model has been able to generate the appearance of prosperity, with a booming stock market and increased GDP. The reality, however, is that the American economy lacks resilience in time of crisis. The ongoing trade war with China, combined with a depressed global oil market, were in the process of exposing this reality before the coronavirus pandemic.

The national lockdown, and resulting economic stoppage, only accelerated what was a gradual economic recession in progress. Even if the US economy could be taken off stimulus-driven life support, the conditions that preceded the shutdown still exist and, if anything, have only been exacerbated by the impact of the pandemic on global economic health. American corporations have been shown to have little capacity to plan for “rainy day” contingencies, instead focusing all their economic resources on the generation of short-term profit. And the American working class has been likewise exposed as living on the edge of catastrophe, with few Americans able to fall back on savings that would enable them to ride out a period of sustained economic inactivity or, worse, to pay for emergency health care.

The other uncomfortable truth about America that has been exposed by the crisis is the overall fragility of American society. The medical emergency brought about by the need to treat this virus has shown that what passes for a national healthcare system is, in fact, a fragile construct of for-profit institutions susceptible to being rapidly overburdened and unable to function once the cash-stream of overpriced healthcare has been cut off. The coronavirus crisis has revealed the reality of the US healthcare system today – most Americans don’t have the wherewithal to get quality healthcare when needed – the cost of such care is prohibitive, as are the insurance premiums one must pay to cover it.

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“The peak unemployment rate in the US was 24 percent in the depth of the Great Depression..”

US May Be Headed For Highest Unemployment Ever (RT)

The coronavirus pandemic will push the US jobless rate even higher than it was during the Great Depression if all the gloomy forecasts are true, Roger Farmer, an economist at the University of Warwick, believes. Earlier this week, a US Federal Reserve official predicted that the outbreak will leave 30 percent of Americans jobless while the country’s GDP will fall by 50 percent. According to James Bullard, president of the St. Louis branch of the US Federal Reserve Bank, that could happen quite soon – in the second quarter of this year. “If that turns out to be correct it will be the highest ever recorded. The peak unemployment rate in the US was 24 percent in the depth of the Great Depression,” Professor Farmer told RT.


The economist noted that the decline may be short-term as the situation will start to improve as soon as social isolation ends. Much will depend on the right stimulus, such as direct wage subsidies that can help the economy to rebound. “If job losses become permanent and employment relationships are destroyed, the recovery will take longer,” the analyst said. Another forecast released by the developers of the US Private Sector Job Quality Index (JQI) warned that some 37 million workers across the US are vulnerable to layoffs due to the shutdowns triggered by the health crisis.

Read more …

Economist DeLong says: test test test. Which is the one thing everyone says they do, but nobody does, other than in token numbers.

Yet Another Rant on Coronavirus & Trump (Brad DeLong)

Could “reopening America for business” on Easter backfire? Oh, yes it could. Oh, it definitely could backfire: BIGTIME. The experience so far is that, in a society not undertaking social distancing, coronavirus cases double in a little less than five days—grow 100-fold in a month. If, say, the virus has been largely suppressed and only 10000 in the U.S. have it Easter week, then after the u.S. is opened up 1 million will have it on May 15, and then 100 million on June 15, at which point the epidemic will have pretty much run its course. But from May 1 to June 15 hospitals will have been overwhelmed. The likely death rate will have been not 1% but 6%. 5 million additional Americans will have died. In return we will have produced an extra $1 trillion of stuff. That’s a tradeoff of $200K per life, which is not a good tradeoff to aim at making.

And, while it could be better, it could be much worse… The right way to do it is to lockdown while we test, test, test, test, test: • Test a random-sample panel of 10000 Americans weekly to get a handle on the progress of the disease. • Test everyone for antibodies. • Let those who have had the disease and so are no immune go back to work—after testing to make sure that they are immune. • Indeed, draft those who have recovered to be hospital orderlies and nurses. • Make decisions based on knowledge of where the epidemic is in the community, and tune quarantine, social distancing, and shutdown measures to those appropriate given where the epidemic is. But we do not know where the epidemic is.

And because we are not testing on a sufficient scale, we will not know when and if the virus is truly on the run until a month after the peak, when deaths start dropping. And even then we will not know how much the virus is on the run. And removing social distancing before the virus is thoroughly on the run means that the virus comes roaring back. Once the virus is thoroughly on the run, then normal public health measures can handle it:

• Test, test, test. • Test patients presenting with symptoms. • Trace and test their contacts. Do what Japan and Singapore did—close to the epicenter in Wuhan, yet still with true caseloads lower than one in ten thousand. • Test those crossing borders, symptomatic or not. • Test those moving from city to city via air. •Test a random sample on the interstates, to see how much virus is leaking from place to place that way. • Test a random sample of the population to see whether and how much the disease was established, and then test another one.

Read more …

“..Pelosi and Democratic leadership still have their eyes on protecting corporations and not the people,” said one House Democratic staffer.”

Millions Will Struggle To Pay Rent In April, But Few In Congress Care (IC)

On Wednesday, April 1, rent payments will be due for the first time since the coronavirus outbreak was declared a pandemic — yet even with unemployment at a record high, major bill payments have barely factored into U.S. politicians’ response to the crisis. On Friday, the House passed an emergency multi-trillion dollar relief package, which was approved by the Senate on Wednesday night and will now head to President Donald Trump’s desk. It’s about five times bigger than Barack Obama’s 2009 stimulus and represents a massive upward transfer of wealth. Though it includes a significant expansion of unemployment benefits and a onetime check of up to $1,200 for individuals and $2,400 for couples, it’ll take up to three weeks for people to begin receiving those relief checks, according to Treasury Secretary Steven Mnuchin.

That will be too late for the nearly 3.3 million people who filed for unemployment benefits last week, and others who have become underemployed as a result of the pandemic. While some states — namely New York — have taken steps to temporarily block evictions, congressional Democrats, with the exception of a handful of progressive lawmakers, have shown almost no interest in addressing the bills due in less than a week, one of the most pressing financial concerns ordinary people currently face. “It shows that Pelosi and Democratic leadership still have their eyes on protecting corporations and not the people,” said one House Democratic staffer.

[..] For the most part, demands to cancel rent have been coming from the political left, tenants’ rights groups and other progressive activist circles. They have made modest and incremental gains in a handful of cities and states, but as of yet no change has been enacted that meets the size of the crisis. In California, Gov. Gavin Newsom issued an executive order leaving the decision to pause evictions up to local jurisdictions, which has prompted a confusing patchwork of temporary measures in cities like San Francisco and San Bernardino. States like Washington and Pennsylvania, meanwhile, have adopted more widespread measures.

Read more …

Left on March 7. And we still can’t say: leave them alone?!

Panama Canal Blocks Cruise Ship With 138 Ill, 2 COVID-19 Cases On Board (BI)

The Panama Canal Authority will block the MS Zaandam, a Holland America cruise ship with two confirmed cases of COVID-19 on board, from entering the canal. “Following protocol of Panama’s Ministry of Health, if a vessel has individuals who have tested positive for COVID-19 on board, it cannot make any port operations or transit the Canal,” the Panama Canal Authority said in a statement sent to Business Insider on March 27. The Holland America previously considered having the ship sail through the Panama Canal in order to head back to Fort Lauderdale for a March 30 arrival.


The Zaandam has been stranded off the coast of South America and Central America after different ports began closing to cruise ships due to coronavirus concerns. A bout of respiratory disease then broke out on the ship, prompting 138 sick passengers and crew members to report to the vessel’s medical center. Holland America confirmed that four passengers have died on board, and two individuals have tested positive for COVID-19. The cruise on the Zaandam was scheduled to last 14 days, embarking from Buenos Aires, Argentina, on March 7. For some passengers, the cruise would end after 14 days in San Antonio, Chile. For others, it was due to April 7 in Fort Lauderdale.

Read more …

Sanctions made Russia stronger, and Venezuela too.

Venezuela’s Coronavirus Response Might Surprise You (Flores)

Within a few hours of being launched, over 800 Venezuelans in the U.S. registered for an emergency flight from Miami to Caracas through a website run by the Venezuelan government. This flight, offered at no cost, was proposed by President Nicolás Maduro when he learned that 200 Venezuelans were stuck in the United States following his government’s decision to stop commercial flights as a preventative coronavirus measure. The promise of one flight expanded to two or more flights, as it became clear that many Venezuelans in the U.S. wanted to go back to Venezuela, yet the situation remains unresolved due to the U.S. ban on flights to and from the country. Those who rely solely on the mainstream media might wonder who in their right mind would want to leave the United States for Venezuela.

[..] These media outlets painted a picture of a coronavirus disaster, of government incompetence and of a nation teetering on the brink of collapse. The reality of Venezuela’s coronavirus response is not covered by the mainstream media at all. [Their articles shortchange] the damage caused by the Trump administration’s sanctions, which devastated the economy and healthcare system long before the coronavirus pandemic. These sanctions have impoverished millions of Venezuelans and negatively impact vital infrastructure, such as electricity generation. Venezuela is impeded from importing spare parts for its power plants and the resulting blackouts interrupt water services that rely on electric pumps. These, along with dozens of other implications from the hybrid war on Venezuela, have caused a decline in health indicators across the board, leading to 100,000 deaths as a consequence of the sanctions.

[..] First, international solidarity has played a priceless role in enabling the government to rise to the challenge. China sent coronavirus diagnostic kits that will allow 320,000 Venezuelans to be tested, in addition to a team of experts and tons of supplies. Cuba sent 130 doctors and 10,000 doses of interferon alfa-2b, a drug with an established record of helping COVID-19 patients recover. Russia has sent the first of several shipments of medical equipment and kits. These three countries, routinely characterized by the U.S. foreign policy establishment as evil, offer solidarity and material support. The United States offers more sanctions and the IMF, widely known to be under U.S. control, denied a Venezuelan request for $5 billion in emergency funding that even the European Union supports.

Second, the government quickly carried out a plan to contain the spread of the disease. On March 12, a day before the first confirmed cases, President Maduro decreed a health emergency, prohibited crowds from gathering, and cancelled flights from Europe and Colombia. On March 13, Day 1, two Venezuelans tested positive; the government cancelled classes, began requiring facemasks on subways and on the border, closed theaters, bars and nightclubs, and limited restaurants to take-out or delivery. It bears repeating that this was on Day 1 of having a confirmed case; many U.S. states have yet to take these steps. By Day 4, a national quarantine was put into effect (equivalent to shelter-in-place orders) and an online portal called the Homeland System (Sistema Patria) was repurposed to survey potential COVID-19 cases.

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If I were a Briton, I’d be very worried about the state of my judicial system by now.

RT Loses Challenge Against Claims Of Bias In Novichok Reporting

The Kremlin-backed news channel RT has lost a high court challenge to overturn a ruling by the UK media regulator that it broadcast biased programmes relating to the novichok poisoning in Salisbury and the war in Syria. Ofcom fined RT £200,000 after determining that seven programmes, including two presented by the former MP George Galloway, were in breach of UK broadcasting rules relating to due impartiality regarding matters of political controversy. The programmes fronted by Galloway, a regular presenter on the 24-hour news channel, covered the poisoning of the Russian ex-spy Sergei Skripal and his daughter Yulia in Salisbury two years ago. While the poisoning was blamed on Russia, Galloway cast doubt on the assertion.

Ofcom also found that four news and current affairs broadcasts addressing the US’s involvement in the Syrian conflict, and a news programme concerning the Ukrainian government’s position on Nazism and the treatment of Roma people, breached impartiality rules. RT contended that Ofcom had not taken into account the fact that the “dominant media narrative” at the time of the poisonings – that Russia was to blame – meant it could leave that view out of its own programming. The broadcaster also said the requirement to be impartial interfered with its right to freedom of expression. Lord Justice Dingemans, who delivered the high court judgment remotely on Friday, said the requirement for media to be balanced was paramount in the era of fake news.

“At present, the broadcast media maintains a reach and immediacy that remains unrivalled by other media,” he said. “Indeed, there is reason to consider that the need [for due impartiality] is at least as great, if not greater than ever before, given current concerns about the effect on the democratic process of news manipulation and of fake news.” He saud RT was not restricted from broadcasting its point of view on the Salisbury poisonings, the war on Syria or events in Ukraine. “The only requirement was that, in the programme as broadcast, RT provided balance to ensure that there was ‘due impartiality’,” he said.

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Thanks everyone for your wonderful and generous donations over the past few days. The rest of you: don’t be strangers.

 

 


Be like Mr Lego. Don’t forget to wash your hands

 

 

 

 

 

 

 

 

To prevent the Black Death spreading in the 14th century, all ships thought to be infected were isolated for 40 days to prevent the spread of the disease. In fact, the word quarantine comes from the Italian quaranta giorni, meaning “40 days”.

 

 

Support us in virustime. Help the Automatic Earth survive. It’s good for you.

 

Aug 062018
 
 August 6, 2018  Posted by at 9:20 am Finance Tagged with: , , , , , , , , , , ,  5 Responses »


Vasily Polenov Étretat 1874

 

Stock Market Manias of the Past vs the Echo Bubble (Tenebrarum)
US Bond Market Takes Looming Treasuries Deluge In Stride (R.)
America 10 Years After The Financial Crisis (NYMag)
Nassim Taleb: ‘No One Who Caused The Crisis Paid Any Price’ (ST)
Fears Of A ‘Car-Crash Brexit’ Make Life Difficult For Mark Carney (G.)
Rich, Reckless Brexit Zealots Are Fighting A New Class War (G.)
Saudi Expels Canadian Envoy, Recalls Its Own Over ‘Interference’ (AFP)
Chinese State Media Slams Trump For ‘Extortion’ In Trade Dispute (R.)
Wells Fargo Blames Computer Glitch For Customers Losing Homes (Hill)
Russian Gas Is A Problem For Germany (R.)

 

 

Buybacks prop up ever weaker stocks.

Stock Market Manias of the Past vs the Echo Bubble (Tenebrarum)

The diverging performance of major US stock market indexes which has been in place since the late January peak in DJIA and SPX has become even more extreme in recent months. In terms of duration and extent it is one of the most pronounced such divergences in history. It also happens to be accompanied by weakening market internals, some of the most extreme sentiment and positioning readings ever seen and an ever more hostile monetary backdrop. The above combination is consistent with a market close to a major peak – although one must always keep in mind that divergences can become even more pronounced – as was for instance demonstrated on occasion of the technology sector blow-off in late 1999 – 2000.

Along similar lines, extremes in valuations can persist for a very long time as well and reach previously unimaginable levels. The Nikkei of the late 1980s is a pertinent example for this. Incidentally, the current stock buyback craze is highly reminiscent of the 1980s Japanese financial engineering method known as keiretsu or zaibatsu, as it invites the very same rationalizations. We recall vividly that it was argued in the 1980s that despite their obscene overvaluation, Japanese stocks could “never decline” because Japanese companies would prop up each other’s stocks. Today we often read or hear that overvalued US stocks cannot possibly decline because companies will keep propping up their own stocks with buybacks.

Of course this propping up of stock prices occurs amid a rather concerning deterioration in median corporate balance sheet strength, as corporate debt has exploded into the blue yonder (just as it did in Japan in the late 1980s). The fact that an unprecedented number of companies is a single notch downgrade away from a junk rating should give sleepless nights to fixed income and stock market investors alike – as should the oncoming “wall of maturities”. A giant wall of junk bond maturities is looming in the not to distant future. Unless investors remain in a mood to refinance all comers, this threatens to provide us with a spot of “interesting times”. Something tells us that “QT” could turn into a bit of a party pooper as the “Great Wall” approaches.

It should also be mentioned that past stock market peaks as a rule coincided with record highs in buybacks. This indicates that record highs in buybacks are mainly a contrarian indicator rather than a datum providing comfort at extreme points. Of course, what actually represents an “extreme point” can only ever be known with certainty in hindsight, as extremes tend to shift over time – particularly in a fiat money system in which the supply of money and credit can be expanded willy-nilly. What can be stated with certainty is only whether the markets are entering what we would call dangerous territory.

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But the Fed is retreating.

US Bond Market Takes Looming Treasuries Deluge In Stride (R.)

U.S. government debt supply will likely continue to boom, but bond market investors seem to be taking it in stride. The Treasury Department is having to sell more debt to finance the government’s ballooning deficit, stemming from the massive federal tax overhaul in December and the spending deal passed in February. Still, bond yields have remained in a narrow range, suggesting investors may not be fretting about the swelling debt supply. “There will be no relief from supply especially from bills going into October,” said Tom Simons, money market strategist at Jefferies & Co in New York. Supply is expected to run high at least until the Treasury provides updated forecasts on its borrowing needs, next due in November – and might even accelerate further.

This week, the Treasury will sell $34 billion in three-year notes, with $26 billion in 10-year debt on Wednesday and $18 billion in 30-year bonds on Thursday. It will also auction $51 billion in three-month bills and $45 billion in six-month bills, together with an expected $65 billion in one-month bills. The supply will fall short of a record week of $294 billion set in March but continues a trend higher since February. Analysts, who said the market would have no trouble digesting this week’s offerings, see the government as becoming increasingly dependent on private investors for cash as the Fed further reduces its bond holdings. The goal is to shrink a balance sheet that had grown to more than $4 trillion from three massive rounds of asset purchases to combat the previous recession.

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“That loose civic concept known as the American Dream [..] has been shattered.”

America 10 Years After The Financial Crisis (NYMag)

If you were standing in the smoldering ashes of 9/11 trying to peer into the future, you might have been overjoyed to discover this happy snapshot of 2018: There has been no subsequent major terrorist attack on America from Al Qaeda or its heirs. American troops are not committed en masse to any ground war. American workers are enjoying a blissful 4 percent unemployment rate. The investment class and humble 401(k) holders alike are beneficiaries of a rising GDP and booming stock market that, as measured by the Dow, is up some 250 percent since its September 10, 2001, close. The most admired person in America, according to Gallup, is the nation’s first African-American president, a man no one had heard of and a phenomenon no one could have imagined at the century’s dawn. Comedy, the one art whose currency is laughter, is the culture’s greatest growth industry. What’s not to like?

Plenty, as it turns out. The mood in America is arguably as dark as it has ever been in the modern era. The birthrate is at a record low, and the suicide rate is at a 30-year high; mass shootings and opioid overdoses are ubiquitous. In the aftermath of 9/11, the initial shock and horror soon gave way to a semblance of national unity in support of a president whose electoral legitimacy had been bitterly contested only a year earlier. Today’s America is instead marked by fear and despair more akin to what followed the crash of 1929, when unprecedented millions of Americans lost their jobs and homes after the implosion of businesses ranging in scale from big banks to family farms.

It’s not hard to pinpoint the dawn of this deep gloom: It arrived in September 2008, when the collapse of Lehman Brothers kicked off the Great Recession that proved to be a more lasting existential threat to America than the terrorist attack of seven Septembers earlier. The shadow it would cast is so dark that a decade later, even our current run of ostensible prosperity and peace does not mitigate the one conviction that still unites all Americans: Everything in the country is broken. Not just Washington, which failed to prevent the financial catastrophe and has done little to protect us from the next, but also race relations, health care, education, institutional religion, law enforcement, the physical infrastructure, the news media, the bedrock virtues of civility and community. Nearly everything has turned to crap, it seems, except Peak TV (for those who can afford it).

That loose civic concept known as the American Dream — initially popularized during the Great Depression by the historian James Truslow Adams in his Epic of America — has been shattered. No longer is lip service paid to the credo, however sentimental, that a vast country, for all its racial and sectarian divides, might somewhere in its DNA have a shared core of values that could pull it out of any mess. Dead and buried as well is the companion assumption that over the long term a rising economic tide would lift all Americans in equal measure. When that tide pulled back in 2008 to reveal the ruins underneath, the country got an indelible picture of just how much inequality had been banked by the top one percent over decades, how many false promises to the other 99 percent had been broken, and how many central American institutions, whether governmental, financial, or corporate, had betrayed the trust the public had placed in them. And when we went down, we took much of the West with us. The American Kool-Aid we’d exported since the Marshall Plan, that limitless faith in progress and profits, had been exposed as a cruel illusion.

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“If anything, banks today are even more on government support.”

Nassim Taleb: ‘No One Who Caused The Crisis Paid Any Price’ (ST)

A year or so after the 2008 crisis, Nassim Taleb, a financial trader turned bestselling author, was called to Washington to talk to a commission that was compiling a report on what went wrong. Taleb, after all, had predicted the crisis with eerie prescience in his 2007 book The Black Swan, which talked about the underappreciated “tail risks” faced by the global economy. “They heckled me for about two or three hours on technicalities,” he recalls. “But not a single one of my points was in the report. Bunch of f****** bureaucrats. No wonder people voted for Donald Trump.” Taleb believes we have learnt nothing from the crisis. “Not only did people not get why it happened,” he says, “but the moral hazard in the system actually increased.”

The problem, in Taleb’s view, is what he calls a “Bob Rubin trade”. In the build-up to the crash, Robert Rubin, a former Treasury secretary under Bill Clinton, spent years advising the investment bank Citigroup, eventually becoming its chairman. After the crash happened, he resigned and walked away having made tens of millions. “What’s most depressing is that nobody who was involved in causing the crisis paid any price for it,” Taleb says. “America’s debt is now trillions higher because people transferred risk to the state, owing to mistakes made by individuals.” The crisis highlighted the licence to take risk that banks had, knowing the government would step in if things went wrong.

“People realised that, hey, you can do that with impunity,” Taleb says. “If anything, banks today are even more on government support.” He does identify one bright spot. “Some people have realised there was a problem,” he says. “There is an immense amount of disgruntlement by people who see this point, on the left in Europe and on the right in America. “So you have what is mislabelled ‘populism’ as a first-order reaction, which may be correct or incorrect. But at least some people are starting to see these methods are bullshit.”

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Yet another variation of Brexit.

Fears Of A ‘Car-Crash Brexit’ Make Life Difficult For Mark Carney (G.)

There may be times when Mark Carney regrets extending his stint at the Bank of England by an extra year. Had things gone as originally planned, Carney would have handed over the keys to Threadneedle Street a month ago and someone else would have had the task of steering the economy through what is certain to be a fiendishly tricky period. That would be the case even without Brexit. The UK economy has recovered more slowly and more unevenly than Carney envisaged when he took over at the Bank from Mervyn King in 2013. It was only last week that the Bank’s monetary policy committee felt confident enough to raise interest rates above the 0.5% emergency level that they reached in March 2009.

But Brexit is taking up half the governor’s time and it is clear that he is starting to get concerned. Certainly, his remarks when questioned on the BBC Today programme on Friday were blunt. With just eight months to go before Britain leaves the European Union, the risk of a no-deal Brexit is “uncomfortably high”. There was a time when such plain speaking from the governor of the Bank of England would have raised a few eyebrows in Downing Street. Not now. The line since the cabinet signed up to Theresa May’s soft Brexit plan is that the government has made all the concessions it can, and that means unless Brussels gives something in return there is a danger of chaos next March.

So the prime minister would not have been troubled when Carney said that a no-deal Brexit would be “highly undesirable” and something all parties should seek to avoid, because that’s the official Whitehall line. There will be no complaints if the governor continues to stress the importance of London as a source of low-cost capital for European governments and companies.

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Britain reveals what it really is.

Rich, Reckless Brexit Zealots Are Fighting A New Class War (G.)

We now know it beyond doubt: however we leave the European Union, the result is likely to be damage that Britain is in no position to absorb. Job losses are certain. A stack of Brexit impact reports from local authorities obtained last week by Sky News identified a catalogue of dire consequences, from farms in Shetland that could be plunged into impossible losses, through social care services in East Sussex already being hit by labour shortages, to the M26 being turned into a giant lorry park. With his characteristic emollience, the trade secretary, Liam Fox, says a no-deal Brexit is now more likely than a negotiated deal; Jeremy Hunt reckons we could fall off the came cliff-edge “by accident”, and reports about stockpiled food and medicines attest to the awfulness of any such prospect.

March 2019, then, could well mark a watershed point in a drawn-out disaster. But so, in a different way, could somehow nullifying the result of the referendum and staying put. It would be comforting to think that what George Orwell called “the gentleness of the English civilisation” would mean that an overturning of 2016’s outcome would be grudgingly swallowed by the vast majority of leave voters, but I would not be so sure. Ukip is back in the polls, and has newly strengthened links to the far right. A couple of weeks ago, I was in Boston in Lincolnshire, the town whose 75.6% vote for Brexit made it the most leave-supporting place in the UK. Many of the people I spoke to were already convinced that Brexit was doomed, and full of talk of betrayal.

Some of what I heard was undeniably ugly, though much of it was based on an undeniable set of facts. People were asked to make a decision, and they did. The referendum was the one meaningful political event in millions of voters’ lifetimes, and we were all assured that its result would be respected. Whatever the noise about a second referendum, this is the fundamental reason why the likelihood of Brexit interrupted remains dim.

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Our best friends.

Saudi Expels Canadian Envoy, Recalls Its Own Over ‘Interference’ (AFP)

Saudi Arabia said Monday it was expelling the Canadian ambassador and had recalled its envoy while freezing all new trade, in protest at Ottawa’s vigorous calls for the release of jailed activists. The kingdom gave the Canadian ambassador 24 hours to leave the country, in an abrupt rupture of relations over what it slammed as “interference” in its internal affairs. The move, which underscores a newly aggressive foreign policy led by Crown Prince Mohammed bin Salman, comes after Canada demanded the immediate release of human rights campaigners swept up in a new crackdown. “The Canadian position is an overt and blatant interference in the internal affairs of the kingdom of Saudi Arabia,” the Saudi foreign ministry tweeted.

“The kingdom announces that it is recalling its ambassador to Canada for consultation. We consider the Canadian ambassador to the kingdom persona non grata and order him to leave within the next 24 hours.” The ministry also announced “the freezing of all new trade and investment transactions with Canada while retaining its right to take further action”. Canada last week said it was “gravely concerned” over a new wave of arrests of women and human rights campaigners in the kingdom, including award-winning gender rights activist Samar Badawi. Samar was arrested along with fellow campaigner Nassima al-Sadah last week, the latest victims of what Human Rights Watch called an “unprecedented government crackdown on the women’s rights movement”.

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“street fighter-style deceitful drama of extortion and intimidation”.

Chinese State Media Slams Trump For ‘Extortion’ In Trade Dispute (R.)

Chinese state media on Monday lashed out at U.S. President Donald Trump’s trade policies in an unusually personal attack, even as they sought to reassure investors about the health of China’s economy as growth concerns roiled its financial markets. China’s strictly controlled news outlets have frequently rebuked the United States and the Trump administration as the trade conflict has escalated, but they have largely refrained from specifically targeting Trump.

The latest criticism from the overseas edition of the ruling Communist Party’s People’s Daily newspaper singled out Trump, saying he was starring in his own “street fighter-style deceitful drama of extortion and intimidation”. Trump’s desire for others to play along with his drama is “wishful thinking”, a commentary on the paper’s front page said, arguing that the United States had escalated trade friction with China and turned international trade into a “zero-sum game”. “Governing a country is not like doing business,” the paper said, adding that Trump’s actions imperiled the national credibility of the United States.

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So buy them new ones. But seriously, can anyone explain how Wells Fargo is still in business?

Wells Fargo Blames Computer Glitch For Customers Losing Homes (Hill)

Wells Fargo is blaming a computer glitch for more than 400 customers losing their homes between 2010 and 2015. The bank revealed in regulatory filings last week that the technological error resulted in 625 customers being denied loan modifications, and about 400 costumers having their houses foreclosed on, CNN Money reported on Friday. The filing says the bank has set aside $8 million to compensate the affected customers, it added. Wells Fargo apologized for the error and said in a statement that it is “providing remediation” to customers whose mortgages were affected, according to CNN.

The Treasury Department set up a program in 2009 to help Americans struggling to pay their mortgages, offering them the opportunity to apply for loan modifications, the network noted, adding that the computer error rejected applications from 625 Wells Fargo customers. A bank spokesperson told CNN that there is “not a clear, direct cause and effect relationship” between the error and foreclosures, but said some customers who were denied loan modifications lost their homes. Multiple government agencies are also probing Wells Fargo for its financing of low-income housing developments, Reuters reported. The embattled bank last week agreed to pay more than $2 billion to settle allegations related to offering subprime mortgages in the years before the 2008 financial crisis.

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Russia hysteria all over.

Russian Gas Is A Problem For Germany (R.)

For decades, the Friendship pipeline has delivered oil from Russia to Europe, heating German homes even in the darkest days of the Cold War. But a new pipeline that will carry gas direct from Russia under the Baltic Sea to Germany is doing rather less for friendship, driving a wedge between Germany and its allies and giving Chancellor Angela Merkel a headache. For U.S. President Donald Trump, Nord Stream 2 is a “horrific” pipeline that will increase Germany’s dependence on Russian energy. Ukraine, fighting Russian-backed separatists, fears the new pipeline will allow Moscow to cut it out of the lucrative and strategically crucial gas transit business.

It comes at an awkward time for Merkel. With the fraying of the transatlantic alliance and an assertive Russia and China, she has acknowledged that Germany must take more of a political leadership role in Europe. “The global order is under pressure,” Merkel said last month. “That’s a challenge for us … Germany’s responsibility is growing; Germany has more work to do.” In April she accepted for the first time that there were “political considerations” to Nord Stream 2, a project she had until then described as a commercial venture. Most European countries want Germany to do more to project European influence and protect eastern neighbors that are nervous of Russian encroachment.

But letting Russia sell gas to Germany while avoiding Ukraine does the opposite, depriving Kiev of transit revenues and making it, Poland and the Baltic states more vulnerable to cuts in gas supplies. “The price would be an even greater loss of trust from the Baltics, Poland and Ukraine,” said Roderich Kiesewetter, a Merkel ally on the parliamentary foreign affairs committee. “We Germans always say that holding the West together is our ‘center of gravity’, but the Russian approach has succeeded in dragging Germany, at least in terms of energy policy, out of this western solidarity.”

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Jul 032018
 


Edward Hopper Summer interior 1909

 

Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)
Stock Markets Look Ever More Like Ponzi Schemes (Murphy)
A Japanese Tsunami Out Of US CLOs Is Coming (HC)
The Eurozone’s Coming Debt Crisis (Lacalle)
The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)
UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)
Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)
Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)
Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)
Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)
Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)
The New York Times Squares off with the Truth, Again (AHT)
Anthony Kennedy and Our Delayed Constitutional Crisis (GP)
‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

 

 

And then QE ends.

Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)

Stocks right now are hanging by a thread, boosted by a bonanza of corporate buying unrivaled in market history and held back by a burst in investor selling that also has set a new record. Both sides are motivated by fear, as corporations find little else to do with their $2.1 trillion in cash than buy back their own shares or make deals, while individual investors head to the sidelines amid fears that a global trade war could thwart the substantial momentum the U.S. economy has seen this year. “Corporate cash is going to find a home, and it’s either going to be in buybacks, dividends or M&A activity. What it’s not going to be is in capex,” said Art Hogan, chief market strategist at B. Riley FBR.

“Individuals are looking at the turbulence we’ve seen this year that we had not seen last year. That creates its own sort of exit sign for investors who don’t want to deal with that.” The numbers showing where each side put their cash in the second quarter are striking. Companies announced $433.6 billion in share repurchases during the period, nearly doubling the previous record of $242.1 billion in the first quarter, according to market research firm TrimTabs. Dow components Nike and Walgreens Boots Alliance led the most recent surge in buybacks, with $15 billion and $10 billion, respectively, last week. In all, 31 companies announced buybacks in excess of $1 billion during June.

At the same time, investors dumped $23.7 billion in stock market-focused funds in June, also a new record. For the full quarter, the brutal June brought global net equity outflows to $20.2 billion, the worst performance since the third quarter of 2016, just before the presidential election. The selling is particularly acute in mutual funds, which saw $52.9 billion in outflows during the quarter and are typically more the purview of the retail side.

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“People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick.”

Stock Markets Look Ever More Like Ponzi Schemes (Murphy)

The FT has reported this morning that: “Debt at UK listed companies has soared to hit a record high of £390bn as companies have scrambled to maintain dividend payouts in response to shareholder demand despite weak profitability.” They added: “UK plc’s net debt has surpassed pre-crisis levels to reach £390.7bn in the 2017-18 financial year, according to analysis from Link Asset Services, which assessed balance sheet data from 440 UK listed companies.” So what, you might ask? Does it matter that companies are making sense of low-interest rates to raise money when I am saying that government could and should be doing the same thing?

Actually, yes it does. And that’s because of what the cash is being used for. Borrowing for investment makes sense. Borrowing to fund revenue investment (that is training, for example, which cannot go on the balance sheet but still adds value to the business) makes sense. But borrowing to pay a dividend when current profits and cash flow would not support it? No, that makes no sense at all. Unless, of course, you are CEO on a large share price linked bonus package and your aim is to manipulate the market price of the company. It is that manipulation that is going on here, I suggest. These loans are being used to artificially inflate share prices.

The problem is systemic. In the US the problem is share buybacks, which I read recently have exceeded $5 trillion in the last decade, meaning that US companies are now by far the biggest buyers of their own shares. That is, once again, market manipulation. And this manipulation does matter. People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick. And companies claim that their pension funds are better funded as a result of these share prices, and so they are meeting their obligations to their employees when that too is a con-trick. They may be insolvent when the truth is known, so serious is the fraud.

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Japan plays a strange role in the global economy. It won’t be able to keep that up much longer. The Bank of Japan has many options; none are good.

A Japanese Tsunami Out Of US CLOs Is Coming (HC)

Japan is at the very centre of the global financial system. It has run current account surpluses for decades, building the world’s largest net foreign investment surplus, or its accumulated national savings. Meanwhile, other nations, such as the US, have borrowed from nations like Japan to live beyond their own means, building net foreign investment deficits. We now have unprecedented levels of cross-national financing.

Much of Japan’s private sector saving is placed in Yen with financial institutions who then invest overseas. These institutions currency hedged most of their foreign assets to reduce risk weighted asset charges and currency write down risks. The cost of hedging USD assets has however risen due to a flattening USD yield curve and dislocations in FX forwards. As shown below, their effective yield on a 10 year US Treasury (UST) hedged with a 3 month USDJPY FX forward has fallen to 0.17%. As this is below the roughly 1% yield many financial institutions require to generate profits they have been selling USTs, even as unhedged 10 year UST yields rise. The effective yield will fall dramatically for here if 3 month USD Libor rises in line with the Fed’s “Dot Plot” forecast for short term rates, assuming other variables like 10 year UST yields remain constant.

As Japanese financial institutions sell US Treasuries, which are considered the safest foreign asset, they are shifting more into higher yielding and higher risk assets; foreign bonds excluding US treasuries as well as foreign equity and investment funds. This is a similar pattern to what we saw prior to the last global financial crisis. In essence, Japan’s financial institutions are forced to take on more risk in search of yield to cover rising hedge costs as the USD yield curve flattens late in the cycle. Critically as the world’s largest net creditor they facilitate significant added liquidity for higher risk overseas borrowers late into the cycle.

I follow these flows closely. One area I think is rather interesting is US Collateralised Loan Obligations (CLOs) which Bloomberg reports “ballooned to a record last quarter thanks in large part to unusually high demand from Japanese investors”. CLOs are essentially a basket of leveraged loans provided to generally lower rated companies with very little covenant protection. Alarmingly, some US borrowers have used this debt to purchase back so much of their own stock that their balance sheets now have negative net equity. A recent Fed discussion paper shows in the following chart that CLOs were the largest mechanism for the transfer of corporate credit risk out of undercapitalised banks in the US and into the shadow banking sector. Japanese financial institutions have been the underwriter of much of that risk in their search for yield.

Read more …

“This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.”

The Eurozone’s Coming Debt Crisis (Lacalle)

The European Central Bank (ECB) has signaled the end of its asset purchase program and even a possible rate hike before 2019. After more than 2 trillion euros of asset purchases and a zero interest rate policy, it is long overdue. The massive quantitative easing (QE) program has generated very significant imbalances and the risks far outweigh the questionable benefits. The balance sheet of the ECB is now more than 40 percent of the eurozone GDP. The governments of the eurozone, however, have not prepared themselves at all for the end of stimuli. They often claim that deficits have been reduced and risks contained. However, closer scrutiny shows that the bulk of deficit reductions came from lower cost of government debt.

Eurozone government spending has barely fallen, despite lower unemployment and rising tax revenues. Structural deficits remain stubborn, and in some cases, unchanged from 2013 levels. In other words, the problems are still there, they were just hidden for a while, swept under the rug of an ever-expanding global economy. The 19 eurozone countries have collectively saved 1.15 trillion euros in interest payments since 2008 due to ECB rate cuts and monetary policy interventions, according to German media outlet Handelsblatt. This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.

However, that illusion of savings and budget stability will rapidly disappear as most Eurozone countries face massive amounts of debt coming due in the 2018–2020 period and wasted precious years of quantitative easing without implementing strong structural reforms. The recent troubles of Italian banks are just one precursor of things to come. Taxes rose for families and small and medium-sized enterprises, while current spending by governments barely fell, competitiveness remained poor, and a massive 1 trillion euro in nonperforming loans raises doubts about the health of the European financial system.

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Good overview. Crises wherever you look.

The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)

When considering where the global credit cycle is at, it’s often easy to form a view based on a handful of recent articles, statistics and anecdotes. The most memorable of these tend to be either very positive or negative otherwise they wouldn’t be published or would be quickly forgotten. A better way to assess where the global credit cycle is at is to look for pockets of dodgy debt. If these pockets are few, credit is early in the cycle with good returns likely to lie ahead. If these pockets are numerous, that’s a clear indication that credit is late cycle.

In reviewing global debt, twelve sectors standout for their lax credit standards and increasing risk levels. There’s excessive risk taking in developed and emerging debt, as well as in government, corporate, consumer and financial sector debt. This points to global credit being late cycle. Central banks have failed to learn the lessons from the last crisis. By seeking to avoid or lessen the necessary cleansing of malinvestment and excessive debt, this cycle’s economic recovery has been unusually slow. Ultra-low interest rates and quantitative easing have increased the risk of another financial crisis, the opposite of the financial stability target many central bankers have.

For global debt investors, the current conditions offer limited potential for gains beyond carry. With credit spreads in many sectors at close to their lowest in the last decade, there is greater potential for spreads to widen dramatically than there is for spreads to tighten substantially. Keeping credit duration low, staying senior in the capital structure and shifting up the rating spectrum will cost some carry. However, the cost of de-risking now is as low as it has been for a long time. If the risks in the dirty dozen sectors materialise in the medium term, the losses avoided by de-risking will be a multiple of the carry foregone.

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I’d say it’s about time for the British to wake up to the damage May et al are inflicting on the nation.

UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)

A draft of Theresa May’s Brexit plan has already been dismissed as unrealistic by senior EU officials, who say the UK has no chance of changing the European Union’s founding principles. The prime minister is gathering her squabbling ministers at Chequers on Friday for a one-day discussion to thrash out the UK’s future relationship with the EU. But EU sources who have seen drafts of the long-awaited British white paper said the proposals would never be accepted. “We read the white paper and we read ‘cake’,” an EU official told the Guardian, a reference to Boris Johnson’s one-liner of being “pro having [cake] and pro-eating it”. Since the British EU referendum, “cake” has entered the Brussels lexicon to describe anything seen as an unrealistic or far-fetched demand.

May’s white paper is expected to propose the UK remaining indefinitely in a single market for goods after Brexit, to avoid the need for checks at the Irish border. While the UK is offering concessions on financial services, it wants restrictions on free movement of people – a long-standing no-go for the EU. Jean-Claude Piris, a former head of the EU council’s legal service, said it would be impossible for the EU to split the “four freedoms” underpinning the bloc’s internal market, which are written into the 1957 treaty that founded the European project: free movement of goods, services, capital and people. “The EU is in difficulties at the moment; the one and only success which glues all these countries together is a little bit the money and the internal market,” Piris said. “If you fudge the internal market by allowing a third state to choose what they want … it is the beginning of the end.”

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Not easy to find the right position on the topic. But Europe seems to show that uncontrolled immigration leads to the rise of right wing movements. Merkal gave birth to Salvini.

Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)

As liberals across America continue to attempt to one-up one another with the volume of virtue they can signal, specifically on the question of ‘open borders’ – especially since ‘jenny from the bronx’ victory over the weekend, none other than Nassim Nicholas Taleb unleashed a trite 3-tweet summary of how farcical this argument is…

What intellectuals don’t get about MIGRATION is the ethical notion of SYMMETRY:

1) OPEN BORDERS work if and only if the number of pple who want to go from EU/US to Africa/LatinAmer equals Africans/Latin Amer who want to move to EU/US

2) Controlled immigration is based on the symmetry that someone brings in at least as much as he/she gets out. And the ethics of the immigrant is to defend the system as payback, not mess it up. Uncontrolled immigration has all the attributes of invasions.

3) As a Christian Lebanese, saw the nightmare of uncontrolled immigration of Palestinians which caused the the civil war & as a part-time resident of N. Lebanon, I am seeing the effect of Syrian migration on the place.

So I despise these virtue-signaling open-borders imbeciles.

Silver Rule in #SkinInTheGame

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Mutti’s holding centers.

Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)

German Chancellor Angela Merkel survived a bruising challenge to her authority with a compromise deal on immigration but faced charges Tuesday that it spelt a final farewell to her welcoming stance toward refugees. In high-stakes crisis talks overnight, Merkel had put to rest for now a dangerous row with her hardline Interior Minister Horst Seehofer that had threatened the survival of her fragile coalition government. In separate statements, Merkel praised the “very good compromise” that she said spelt a European solution, while Seehofer withdrew a resignation threat and gloated that “it’s worth fighting for your convictions”.

In a pact both sides hailed as a victory, Merkel and Seehofer agreed to tighten border controls and set up closed holding centres to allow the speedy processing of asylum seekers and the repatriations of those who are rejected. They would either be sent back to EU countries that previously registered them or, in case arrival countries reject this – likely including frontline state Italy – be sent back to Austria, pending an agreement with Vienna. CSU general secretary called the hardening policy proposal the last building block “in a turn-around on asylum policy” after a mass influx brought over one million migrants and refugees.

But criticism and doubts were voiced quickly by other parties and groups, suggesting Merkel may only have won a temporary respite. Refugee support group Pro Asyl slammed what it labelled “detention centres in no-man’s land” and charged that German power politics were being played out “on the backs of those in need of protection”. Bernd Riexinger of the opposition far-left Die Linke party spoke of “mass internment camps” as proof that “humanity got lost along the way” and urged Merkel’s other coalition ally, the Social Democrats (SPD), to reject the plan.

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And Merkel made Kurz possible, too.

Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)

Austria’s government warned Tuesday it could “take measures to protect” its borders after Germany planned restrictions on the entry of migrants as part of a deal to avert a political crisis in Berlin. If the agreement reached Monday evening is approved by the German government as a whole, “we will be obliged to take measures to avoid disadvantages for Austria and its people,” the Austrian government said in a statement. It added it would be “ready to take measures to protect our southern borders in particular,” those with Italy and Slovenia. German Chancellor Angela Merkel reached a deal Monday on migration with her rebellious interior minister, Horst Seehofer, to defuse a bitter row that had threatened her government.

Among the proposals is a plan to send back to Austria asylum seekers arriving in Germany who cannot be returned to their countries of entry into the European Union. Austria said it would be prepared to take similar measures to block asylum seekers at its southern borders, with the risk of a domino effect in Europe. “We are now waiting for a rapid clarification of the German position at a federal level,” said the statement, signed by Austria’s conservative Chancellor Sebastian Kurz and his allies of the far-right Freedom party, Vice Chancellor Heinz-Christian Strache and Interior Minister Herbert Kickl. “German considerations prove once again the importance of a common European protection of the external borders,” the statement said.

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Wonder what the strategy meetings were like.

Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)

Facebook has long had the same public response when questioned about its disruption of the news industry: it is a tech platform, not a publisher or a media company. But in a small courtroom in California’s Redwood City on Monday, attorneys for the social media company presented a different message from the one executives have made to Congress, in interviews and in speeches: Facebook, they repeatedly argued, is a publisher, and a company that makes editorial decisions, which are protected by the first amendment. The contradictory claim is Facebook’s latest tactic against a high-profile lawsuit, exposing a growing tension for the Silicon Valley corporation, which has long presented itself as neutral platform that does not have traditional journalistic responsibilities.

The suit, filed by an app startup, alleges that Mark Zuckerberg developed a “malicious and fraudulent scheme” to exploit users’ personal data and force rival companies out of business. Facebook, meanwhile, is arguing that its decisions about “what not to publish” should be protected because it is a “publisher”. In court, Sonal Mehta, a lawyer for Facebook, even drew comparison with traditional media: “The publisher discretion is a free speech right irrespective of what technological means is used. A newspaper has a publisher function whether they are doing it on their website, in a printed copy or through the news alerts.” [..] Mehta argued in court Monday that Facebook’s decisions about data access were a “quintessential publisher function” and constituted “protected” activity, adding that this “includes both the decision of what to publish and the decision of what not to publish”.

David Godkin, an attorney for Six4Three, later responded: “For years, Facebook has been saying publicly … that it’s not a media company. This is a complete 180.” Questions about Facebook’s moral and legal responsibilities as a publisher have escalated surrounding its role in spreading false news and propaganda, along with questionable censorship decisions. Eric Goldman, a Santa Clara University law professor, said it was frustrating to see Facebook publicly deny that it was a publisher in some contexts but then claim it as a defense in court. “It’s politically expedient to deflect responsibility for making editorial judgements by claiming to be a platform,” he said, adding, “But it makes editorial decisions all the time, and it’s making them more frequently.”

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He did pull it off. But it may be too little too late. Biggest no-no: Model 3 was supposed to be $35,000. ended up at $78,000.

Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)

Tesla’s burning the midnight oil to hit a long-elusive target of making 5,000 Model 3 vehicles per week failed to convince Wall Street that the electric carmaker could sustain that production pace, sending shares down 2.3% on Monday. Tesla met the target by running around the clock and pulling workers from other projects, workers said. The company also took the unprecedented step of setting up a new production line inside a tent on the campus of its Fremont factory, details of which Chief Executive Elon Musk tweeted last month. Tesla’s heavily-shorted shares rose as much as 6.4% to $364.78 in early trading, but sank after several analysts questioned whether Tesla would be able to sustain the Model 3 production momentum, which is crucial for the long-term financial health of the company.

“In the interim, we do not see this production rate as operationally or financially sustainable,” said CFRA analyst Efraim Levy. “However, over time, we expect the manufacturing rate to become sustainable and even rise.” Levy cut CFRA’s rating on Tesla stock to “sell” from “hold.” Tesla, which Chief Executive Elon Musk hailed on Sunday as having become a “real car company,” said it now expects to boost production to 6,000 Model 3s per week by late August, signaling confidence about resolving technical and assembly issues that have plagued the company for months. Tesla also reaffirmed a positive cash flow and profit forecast for the year. Tesla has been burning through cash to produce the Model 3. Problems with an over-reliance on automation, battery issues and other bottlenecks have potentially compromised Tesla’s position in the electric car market as a host of competitors prepare to launch rival vehicles.

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NATO is “justified by the need to manage the security threats provoked by its enlargement.”.

The New York Times Squares off with the Truth, Again (AHT)

Whenever I’m having a rough day and need a pick-me-up, I turn to The New York Times’ editorial page. It’s always a gas to see how far the empire’s leading propaganda outfit is prepared to go in its mission to pull the wool over we the people’s gullible little eyes. The good editors have come through for me again with their latest entry, “Trump and Putin’s Too-Friendly Summit.” (Original title: “Trump and Putin: Best Frenemies for Life”). No doubt the original headline was deemed rather too impish for such a serious newspaper—it might, for instance, have alerted readers to the fact that the editorial’s content is not to be taken very seriously—and so was understandably jettisoned.

“One would think,” the editors write, “that the president of the United States would let Mr. Putin know that he faces a united front of Mr. Trump and his fellow NATO leaders, with whom he would have met days before the [Putin] summit in Helsinki.” Alas, during said meeting Trump reportedly remarked that “NATO is as bad as NAFTA”—the “free trade” agreement that has succeeded in decimating most of the manufacturing jobs spared by the automation wrecking ball. In other words, Trump does not necessarily think it’s a good idea to encircle Russia with a hostile military alliance whose existence, according to geopolitical expert Richard Sakwa, is “justified by the need to manage the security threats provoked by its enlargement.” (If you haven’t read Professor Sakwa’s comprehensive study of the Ukrainian crisis, Frontline Ukraine, put it at the top of your summer reading list.)

One notes the Turgidsonian delight with which the Times reminds us that, should push come to shove, we’ve got those Russki bastards outgunned. Of course, gullibles like you and I are to pay no mind to the fact that such a confrontation (a military one, for the Times brought up NATO) would almost certainly involve a nuclear exchange, rendering the disparity in manpower that so excites the Times totally meaningless. No, what’s important is that NATO has twenty-nine member states and counting, while the Warsaw Pact was dissolved twenty-seven years ago: ergo, unless he wants the old mailed fist, Putin had better ask “how high?” when we tell him to jump. One would be hard-pressed to come up with a more delusional assessment of where things stand.

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“We are in that constitutional crisis now, but just at the start of it.”

Anthony Kennedy and Our Delayed Constitutional Crisis (GP)

Like “swing vote” Justice Sandra Day O’Connor before him, “swing vote” justice Anthony Kennedy has been one of the worst Supreme Court jurists of the modern era. With swing-vote status comes great responsibility, and in the most consequential — and wrongly decided — cases of this generation, O’Connor and Kennedy were the Court’s key enablers. They • Cast the deciding vote that made each decision possible • Kept alive the illusion of the Court’s non-partisan legitimacy. Each of these points is critical in evaluating the modern Supreme Court. For two generations, it has made decisions that changed the constitution for the worse. (Small “c” on constitution to indicate the original written document, plus its amendments, plus the sum of all unwritten agreements and court decisions that determine how those documents are to be interpreted).

These horrible decisions are easy to list. They expanded the earlier decision on corporate personhood by enshrining money as political speech in a group of decisions that led to the infamous Citizens United case (whose majority opinion, by the way, was written by the so-called “moderate” Anthony Kennedy); repeatedly undermined the rights of citizens and workers relative to the corporations that rule and employ them; set back voting rights equality for at least a generation; and many more. After this next appointment, many fear Roe v. Wade may be reversed. Yet the Court has managed to keep (one is tempted to say curate) its reputation as a “divided body” and not a “captured body” thanks to its so-called swing vote justices and the press’s consistent and complicit portrayal of the Court as merely “divided.”

The second point above, about the illusion of the Court’s legitimacy, is just as important as the first. If the Court were ever widely seen as acting outside the bounds of its mandate, or worse, seen as a partisan, captured organ of a powerful and dangerous political minority (which it certainly is), all of its decisions would be rejected by the people at large, and more importantly, the nation would plunged into a constitutional crisis of monumental proportions. We are in that constitutional crisis now, but just at the start of it. We should have been done with it long ago. Both O’Connor and Kennedy are responsible for that delay.


Image credit: Mike Thompson / Detroit Free Press

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A tale of two refugees
Putin: Snowden is free to do whatever he wants
Lenin: I ordered Assange to be gagged and isolated and am coordinating “next steps” with US

‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

United States President Donald Trump is expected to pressure Russia to hand over NSA whistleblower Edward Snowden in exchange for sanctions relief at the upcoming Trump-Putin summit; however, Russia has emphasized that they “are not in a position” to expel Snowden and will “respect his rights” if any such attempt is made. “I have never discussed Edward Snowden with (Donald Trump’s) administration,” Russian Foreign Minister Sergey Lavrov said to Channel 4 reporters. “When he (Putin) was asked the question, he said this is for Edward Snowden to decide. We respect his rights, as an individual. That is why we were not in a position to expel him against his will because he found himself in Russia even without a U.S. passport, which was discontinued as he was flying from Hong Kong.”

Snowden, who is being prosecuted in the United States for leaking classified documents that showed surveillance abuse by U.S. intelligence agencies, was given political asylum in Russia after his passport was revoked. “Edward Snowden is the master of his own destiny,” Lavrov said. Trump is meeting with Russian President Vladimir Putin on July 16 in Helsinki, where Putin is expected to push for an end to U.S. sanctions. Trump has said he would like better relations with Russia, perhaps as a way of pulling them away from China, but Trump’s opponents in the United States are already applying political pressure on him for holding the summit, in the midst of the tensest U.S.-Russian relations since the height of the Cold War.

The fate of Wikileaks founder Julian Assange also lay in the balance when U.S. Vice President Mike Pence met with Ecuador’s President Lenin Moreno this week. “The vice president raised the issue of Mr. Assange. It was a constructive conversation. They agreed to remain in close coordination on potential next steps going forward,” a White House official said in a statement.

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Jun 232018
 


René Magritte Le Mal du Pays (Homesickness) 1940

 

The two most viral photographs of the ‘Trump Separation Scandal’ have now been debunked, or at the very least been proven to have been used ‘out of context’. This is a dangerous development, as are the reasons to use them the way they have been. Both pictures are of children who had not been separated from their mothers at all. But both were used to depict just that: a child being taken away from its mother.

What’s dangerous about this is, first, that those who spread the narrative regardless of the truth may next permit themselves to use images from entirely different locations or times to make their point. Yes, children have been taken from parents at US borders. And attention for that is warranted, very much so. But playing loose with the facts turns those facts into a mere narrative in which nobody can tell fact from fiction anymore.

First, a week ago already, I saw this on RT:

 

Debunked: Viral Image Of Crying, Caged Toddler ‘Detained By ICE’ Not What It Seems

A distressing image of a crying toddler locked in a barred cage after purportedly being detained by US immigration officials has gone viral – but despite online claims, it does not actually depict what has been alleged. The image, which shows a little boy crying in a cage as he looks out between its bars, was shared by activist journalist and undocumented migrant Jose Antonio Vargas as a comment on the Trump administration’s immigration crackdown on families.

In the same thread, Vargas admitted that he came across the photo on a friend’s timeline and was still looking for the original source. Nevertheless, the snap quickly went viral with Vargas’ post garnering more than 23,000 retweets and many others sharing the image across their own social media accounts.

 

Vargas explained that he shared the photo because when he was detained by ICE in McAllen, Texas in 2014, he encountered children who were locked up there. “It wasn’t okay then; it’s not okay now,” he wrote, adding that he’s been outraged about the incident for years.

It has since emerged that the picture was in fact not from a detention facility at all, and instead was taken at a protest against Trump’s immigration policies held on June 10 outside Dallas City Hall. The demonstration organized by Brown Berets de Cemanahuac was held to call out the policy of family separation and confining undocumented children.

Ergo: an activist journalist and undocumented immigrant makes it look as if a picture depicts something that in reality it did not. Note also that the article says he wanted to comment on the Trump immigration crackdown, because he has memories of the Obama immigration crackdown, when he saw children locked up. But then, hey, that’s social media, right? Anyone can say anything.

It’s different, though, when TIME Magazine uses such politics. And its editor-in-chief defends the use of the picture by saying it was the most visible symbol of something, even though he knew full well that the photo didn’t depict that something. That’s a mighty slippery scale. If they could have achieved the same effect with a picture of a overripe banana taken in the Pacific in the 1950’s, they probably would have used it. It’s the effect that counts, not the facts.

 

Fact-Check: Was Migrant Girl On US Border Taken From Mother? Unfounded

Two photos that went viral on social media depict scenes that are not directly related to the family separations taking place on the US-Mexico border since early May. The most prominent, of Honduran two-year-old Yanela Varela crying inconsolably, has become a global symbol of the separations – helping to attract more than $18 million in donations for a Texas non-profit called RAICES. The photograph was taken on June 12 in McAllen, Texas by John Moore, a Pulitzer Prize-winning photographer for Getty Images.

 

An online article about the picture, published by Time Magazine, initially reported the girl was taken from her mother, but was subsequently corrected to make clear that: “The girl was not carried away screaming by US Border Patrol agents; her mother picked her up and the two were taken away together.” Time Magazine nonetheless used the image of the sobbing child on its cover, next to an image of President Trump looming over her, with the caption “Welcome to America”. The head of Honduras’ Migrant Protection Office Lisa Medrano confirmed to AFP that the little girl, just two years old, “was not separated” from her family.

The child’s father also said as much. Denis Varela told the Washington Post that his wife Sandra Sanchez, 32, had not been separated from their daughter, and that both were being detained together in an immigration center in McAllen. Under fire for its cover – which was widely decried as misleading including by the White House – the magazine said it was standing by its decision. “The June 12 photograph of the 2-year-old Honduran girl became the most visible symbol of the ongoing immigration debate in America for a reason,” Time’s editor-in-chief Edward Felsenthal said.

 

Nassim Nicolas Taleb, of black swans and Fragility, has found the appropriate term for this ‘phenomenon’, and explains why it works so well that TIME apparently doesn’t care about the damage to its reputation caused by using photographs for such purposes.

 

Pedophrasty, Bigoteering, and Other Modern Scams

Pedophrasty Definition: Argument involving children to prop up a rationalization and make the opponent look like an asshole, as people are defenseless and suspend all skepticism in front of suffering children: nobody has the heart to question the authenticity or source of the reporting. Often done with the aid of pictures. [..] Pedophrasty is effective as it provides arguments to strike before the evidence is formed. People are moved into “doing something” Pedophrasts prey on our maternal (and paternal) instincts.

Pedophrasty has its most effects on actors, journalists and similar types who are intellectually insecure, deprived of critical judgment, and afraid of being classified as violators of some norm of political correctness. For instance, pedophrasty has been commonly used in the Syrian war by such propagandists as Julian Roepke continuously supplying the German public with pictures of dead children. Or the various lobbies hired by Saudi Barbaria (and allies), such as the Middle East Institute in Washington DC, to promote Sunni Islamist policies under the cover of “think tanks”.

The Nayirah testimony: a false congressional testimony by 15-year-old girl who provided only her first name, Nayirah (she turned out to be the daughter of the Kuwaiti ambassador to the U.S.) was a bit responsible into tipping the US into the war. Nayirah claimed that she had witnessed Iraqi soldiers take babies out of incubators a Kuwaiti hospital, and leave the babies to die. Nobody dared to question the veracity of her claims.

That’s what is dangerous: seeing a photo of a child in distress makes people halt their critical thinking. That’s also why such photos are used. They help build a narrative that doesn’t have to be factual to shock people. But at that point TIME becomes a fiction magazine; it’s where it leaves journalism behind.

The narrative also depends to a large extent on the singularity of Trump’s brutality compared to other presidents and nations’ leaders. It seeks to single him out as being extremely cruel. That narrative will fall to pieces going forward, and not only because the stories behind the photos have now been exposed.

First, here’s a look at what happened under earlier US presidents, in this case Obama, published by the ACLU in May 2018:

 

ACLU Obtains Documents Showing Widespread Abuse Of Child Immigrants In US Custody

Documents obtained by the American Civil Liberties Union featured in a new report released today show the pervasive abuse and neglect of unaccompanied immigrant children detained by U.S. Customs and Border Protection. The report was produced in conjunction with the International Human Rights Clinic at the University of Chicago Law School.

“These documents provide a glimpse into a federal immigration enforcement system marked by brutality and lawlessness,” said Mitra Ebadolahi, ACLU Border Litigation Project staff attorney. “All human beings deserve to be treated with dignity and respect regardless of their immigration status — and children, in particular, deserve special protection. The misconduct demonstrated in these records is breathtaking, as is the government’s complete failure to hold officials who abuse their power accountable. The abuse that takes place by government officials is reprehensible and un-American.”

The report is based on over 30,000 pages of documents dated between 2009 and 2014.

Then, what other ‘leaders’, who express their ‘disgust’ and worries at the Trump separation policies do at home. The Guardian yesterday:

 

Theresa May’s Brutal Family Separations Would Make Trump Blush

[..] as a British citizen I cannot, in good faith, reassure myself with that time-old mantra that we are somehow more civilised and less cruel or brutal than our cousins across the pond. Nor do I think that condemnation from our government can carry any real currency. Since long before anybody had heard the words “Make America great again”, splitting up families has been official policy in Theresa May’s Home Office – and it has been carried out with a brutality and on a scale that would make even President Trump blush.

The Children’s Commissioner has found that at least 15,000 children growing up in the UK live without a parent because the right of British citizens to reunite with a foreign spouse is limited by an unreasonable income threshold, an impossible complicated application system fraught with Home Office errors, and no legal aid for families to challenge incorrect decisions.

And the Sydney Morning Herald from December 2017:

 

Australia Is Wilfully Damaging The Health Of Children On Nauru To Make A Point – And It Is Appalling

When we visited Nauru as paediatric specialists three years ago, we were asked to see 30 of the 100 children being detained on the island. Among them was a six-year-old girl who had tried to kill herself and a two-year-old boy with such severe behaviour problems a doctor had prescribed anti-psychotic medicines. Their parents were in despair. They had fled persecution, trying to save their children from harm, but had ended up imprisoned on a remote island, without hope.

We left with the view that these were the most traumatised children we had ever consulted on, far worse than children we had seen in Australia, Africa, Asia or Europe. Three years later, 43 of those children remain on the island. Officially they are now free to move around, but reports of attacks by locals show Nauru is not safe and so they remain in the “Regional Processing Centre”.

In 2014, the Australian Human Rights Commission reported that children at this centre were deeply traumatised psychologically, and had even been abused. Their detention was harming them. When Australia introduced mandatory detention in 1992, it took 10 weeks on average to process an application for refugee status. Now it takes years. As the numbers of children in detention fall, the length of time in detention rises. This is deliberate: wilfully damaging children’s health to deter others from seeking asylum.

See, what TIME Magazine and others do, using pictures of crying children regardless of their actual context, may make for an initially appealing narrative, but in the end their approach only distracts from what really matters. Which is that children need to be with their mothers (and preferably fathers).

Just reporting the facts on this is not only enough, it’s the only way to report on it. Once you start making up stuff, you’re done, and the truth is done.

US immigration laws are clearly not working; so change them. ICE is a terrible organization that has attracted far too many sociopaths. Close it down. Child abuse as a tool to instill fear has been an international political tool for a very long time. Those are the things that should be making headlines. Turning this into yet another anti-Trump narrative, using crying children as shortcuts to people’s emotions, doesn’t work, or not for long.

This is not about Trump. Trying to make it about him is not going to help those children. And that’s what you want, right? Right?

 

 

Apr 222018
 


Vincent van Gogh Green Wheat Field With Cypress 1889

 

US Hints at China Truce as World Warns of Trade-War Threat (BBG)
US Banks Push Mortgage Apps As Home Lending Slows (R.)
Chinese Gangs Are Laundering Drug Money Through Vancouver Real Estate (GN)
New Zealand’s Ban On Home Sales To Foreigners Is “Discriminatory” – IMF (BBG)
Whirling Whirling (Jim Kunstler)
Home Office Under Theresa May Was Urged in 2014 To Act On Windrush (Ind.)
Tory Ministers Milking The System Are The Real Shirkers (G.)
Theresa May’s Hateful ‘Hostile Environment’ Immigration Policy (O.)
Europe’s Depopulation Time Bomb Is Ticking in the Baltics (BBG)
Members of European Parliament Call For Boycott of FIFA World Cup in Russia (UAW)
World Bank Recommends That Countries Eliminate Minimum Wage (BB)
Hopes For Greek Debt Deal Low Amid EU-IMF Discord (K.)
Turkish Justice Minister: Greece ‘A Gathering Place For Criminals’ (K.)
Nassim Nicholas Taleb Has Never Borrowed a Cent in His Life (Esq.)

 

 

At least in words, China has caved.

US Hints at China Truce as World Warns of Trade-War Threat (BBG)

U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing. Mnuchin said he’s “cautiously optimistic” of reaching an agreement with China that bridges their differences over trade. “A trip is under consideration,” Mnuchin told reporters on Saturday in Washington at the IMF’s spring meetings. “I’m not going to make a comment on timing, nor do I have anything confirmed.” China’s Ministry of Commerce said Sunday it is aware that the U.S. is considering a visit to Beijing to negotiate economic and trade issues and welcomes such a move.

A visit by the U.S. Treasury secretary to China could signal a breakthrough in the spat between the world’s two-biggest economies, whose threats to slap tariffs on each other have rattled markets and raised fears of a trade war. It would come at a sensitive time for the region’s geopolitics, with negotiations under way on a planned meeting between President Donald Trump and North Korean leader Kim Jong-Un. Mnuchin’s remarks came as finance ministers and central bankers at the IMF meetings gave their latest economic assessments, often citing trade as a threat looming over the strongest upswing in seven years.

[..] Mnuchin said he met with Yi Gang, governor of the People’s Bank of China, at the IMF gathering this week. The discussions focused on issues related to the Chinese central bank, not trade, said the secretary. Mnuchin said they also discussed China’s planned further opening of some markets, a move that U.S. has encouraged and “appreciated.” “China will vigorously push forward the reform and opening-up of the financial sector, significantly relax market access restrictions, create a more attractive investment environment, strengthen the protection of intellectual properties and actively expand imports,” Yi said in a statement on Saturday. China has announced plans to gradually remove foreign ownership caps for limits for car-, ship- and aircraft-makers.

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“Buying a house is supposed to be a joyful thing..”

US Banks Push Mortgage Apps As Home Lending Slows (R.)

Big U.S. banks are racing to launch websites and mobile apps to make getting a mortgage faster and easier, investments that may have modest near-term payoffs as home lending activity slows. Lenders have been spending on digital tools to cut costs, eliminate error-prone paperwork and appeal to younger home buyers. However, they are chasing a shrinking pool of refinancing business and new home loan volumes are still below pre-crisis levels. Bank of America has spent $1 billion on its digital banking services in the last six years and launched its lineup of techy mortgage products last week. Wells Fargo rolled out its website and app service during the first quarter, and JPMorgan Chase, which is investing $1.4 billion in technology in 2018, plans to launch its offering later this year.

Bank of America’s app automatically fills in a customer’s address, employment history and other information that the bank already has, cutting out hundreds of boxes customers would otherwise have to fill. JPMorgan’s lets customers e-sign important documents. Quicken Loans was the first to gain traction with digital home loans following its 2016 Rocket Mortgage launch. The app is now key to its mortgage sales with more than 98 percent of the $20 billion in first-quarter lending volume accessing Rocket Mortgage at some point in the mortgage process, Quicken spokeswoman Brianna Blust said.

Quicken was the biggest home lender by volume in the fourth quarter of 2017 and first quarter of 2018, Blust said. It was the second-largest U.S. mortgage lender for the full year 2017, according to data from Inside Mortgage Finance Publications. “Buying a house is supposed to be a joyful thing,” said Steve Boland, Bank of America’s head of consumer lending. “Filling out 330 fields is not, I think, something that brings you joy.” Refinancing volumes have plunged as interest rates have risen, meaning lenders must compete for a much smaller revenue pie in fresh home purchases.

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Bit over the top?

Chinese Gangs Are Laundering Drug Money Through Vancouver Real Estate (GN)

Criminal syndicates that control chemical factories in China’s booming Guangdong province are shipping narcotics, including fentanyl, to Vancouver, washing the drug sales in British Columbia’s casinos and high-priced real estate, and transferring laundered funds back to Chinese factories to repeat this deadly trade cycle, a Global News investigation shows. The flow of narcotics and chemical precursors — and a rising death count in western Canada caused by synthetic opioids — is driven by sophisticated organized crime groups known as Triads. The Triads have infiltrated Canada’s economy so deeply that Australia’s intelligence community has coined a new term for innovative methods of drug trafficking and money laundering now occurring in B.C.

It is called the “Vancouver Model” of transnational crime. Details of the Vancouver Model are outlined in a November 2017 report obtained by Global News from B.C.’s provincial government, in a freedom of information request. The report, by John Langdale of the department of security studies and criminology at Macquarie University, was presented to Australian intelligence officers and Austrac, the country’s anti-money laundering agency. B.C. Attorney General David Eby has reviewed the report, and recently travelled to Ottawa to inform a federal committee of his concerns. His message was blunt. Eby testified that Canada’s anti-money laundering system has completely failed. He told the committee that gangsters have been openly carrying hockey bags stuffed with hundreds of thousands in drug cash into B.C. casinos, and there has not been a single prosecution.

In an interview with Global, Eby said the Australian report shows “that Vancouver is now recognized internationally as a hub of transnational money laundering.”

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Is this also about Chinese gangs?

New Zealand’s Ban On Home Sales To Foreigners Is “Discriminatory” – IMF (BBG)

The IMF has criticized New Zealand’s “discriminatory” ban on home sales to foreigners, saying it’s unlikely to improve housing affordability. “Foreign buyers seem to have played a minor role in New Zealand’s residential real estate market recently,” the IMF said in a statement Tuesday, after concluding its annual Article IV mission to New Zealand. If the government’s broader housing policy agenda is fully implemented, that “would address most of the potential problems associated with foreign buyers on a less discriminatory basis,” it said. The new Labour-led government has pledged to fix the nation’s housing crisis with a raft of measures, including a ban on foreign speculators buying residential property, removal of tax distortions and an ambitious building program.

House prices have surged more than 60% in the past decade amid record immigration and a construction shortfall, shutting many out of the housing market. [..] Proposed changes to the Overseas Investment Act, which the government says will bring New Zealand into line with neighboring Australia, will classify residential land as “sensitive,” meaning non-residents or non-citizens can’t purchase existing dwellings without the consent of the Overseas Investment Office. While non-resident foreigners will be allowed to invest in new construction, they will be forced to sell once the homes are built.

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“Their parting shot to an unjust world was voting for Donald Trump. Next time, they won’t even be around.”

Whirling Whirling (Jim Kunstler)

It begins to look like The USA will litigate itself into Civil War Two with the first battle being half the lawyers in the Department of Justice prosecuting the other half until Anthropogenic Global Warming puts the DC Swamp completely underwater and all parties concerned scuttle off into the deep blue sea. It was rather a shock to see the photo lineup of all those familiar faces — Comey, Hillary, McCabe, Loretta Lynch et. al. — in the criminal referral “matters” sent over to the DOJ by congress on Wednesday, as if they were some mob of goombahs caught running a waste management kickback racket in the Hackensack mud-flats.

But the evidence trail has been in plain sight for more than a year that Justice Department officials of various ranks and stripes colluded to bring off a legalistic coup d’etat against the loathed and despised winner of the 2016 election — with a little help from (of all things and personae) Russia, as in that political smallpox blanket known as the Steele Dossier. Mixed metaphors aside, it looks like all the clones of Ricky Ricardo and Lucy engineered in some CIA black lab will never satisfy the amount of ’splainin’ that needs to be done, and that the ensuing trials may last longer than the lifetimes of millennials still struggling on campus with their gender presentation. There may be even more line-ups to come.

I’m thinking players like Susan Rice, the Podesta brothers, Huma Abedin, John Brennan, James Clapper, Debbie Wasserman-Schultz, and perhaps the gentleman who preceded the Golden Golem of Greatness in the oval office. This melodrama will make The Lord of the Rings look like a knock-knock joke. Meanwhile, the Republic actually whirls around the drain, both as a legitimate polity between Montauk Point and the Farallon Islands, and as an actor on the world stage. The Washington bureaucracy is not the only swamp that needs to be drained. There’s also the reeking Okeefenokee wasteland known as the US economy, led by its financial avatars on Wall Street who engineered the orgy of asset-stripping that chewed through the industrial states like some flesh-eating bacteria.

There is nothing left in Flyover-land. I drove through part of it yesterday on a book-reporting chore: the “quiet corner” of northeastern Connecticut south of Worcester, Mass, a valley of decrepitating mill towns and opiate addiction, like some place out of H.P. Lovecraft’s demon-haunted imagination, where the sun comes up twenty minutes later than anywhere else, and a dwindling population of malevolent diseased imbeciles shriek their lonesome agonies of failure and destitution to a God that never returned from lunchbreak one day in 1985. Their parting shot to an unjust world was voting for Donald Trump. Next time, they won’t even be around.

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No accident.

Home Office Under Theresa May Was Urged in 2014 To Act On Windrush (Ind.)

Home Office officials were urged four years ago to act on the growing problems facing the Windrush generation, it has emerged, including recommendations to create a specialist taskforce which was only set up this week. It follows intense pressure on the government department and Theresa May over their handling of the Windrush scandal that has highlighted the plight of members of a generation of immigrants who arrived as British citizens in the mid-twentieth century. This week both Amber Rudd, the home secretary, and the prime minister have personally apologised for the debacle, promising compensation for those affected and setting up a new dedicated team in the Home Office tasked with helping members of the Windrush generation prove their right to British citizenship.

But the government now faces renewed criticism after it emerged that a similar recommendation – the creation of specialist Home Office unit – was made in October 2014 while Ms May was in charge of the department as home secretary. In a detailed report, published in October 2014 by the Legal Action Group, it was also warned that thousands of migrants who have been in Britain legally for decades were falling victim to the “hostile immigration” policies aimed at illegal immigrants in the UK. The recommendations of the Chasing Status report also included maintaining applicants’ ability to work and claim benefits while their status is resolved.

[..]The Labour MP David Lammy, who has been a leading campaigner for those members of the Windrush generation experiencing difficulties, told The Independent: “It is utterly extraordinary that the Home Office was clearly aware of the impact that their pernicious policies would have, yet ignored all the warnings and impact assessments. “The apologies made by the home secretary and prime minister are merely crocodile tears given that they were fully aware of the human cost that their policies would have. It’s time for a proper and independent review of our immigration policy and the hostile environment.”

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“Lose one form, and you lose cancer treatment and your liberty – lose a generation’s forms, and you’re the effing PM..”

Tory Ministers Milking The System Are The Real Shirkers (G.)

If I were editing a tabloid newspaper this week – and I’m always open to guest stints – I would have had advertising vans out since Monday. They would have been crawling v-e-r-y slowly back and forth past the houses of Theresa May, Amber Rudd, Nick Timothy and David Cameron – and those just for starters. Instead of the repulsive GO HOME message that adorned the infamous vans May’s Home Office sent out, which resulted in the eventual deportation of precisely 11 migrants, I would have something along the lines of STAY HOME. Stay home, permanently. Whether they would get the message is uncertain. Collectively, Britain did its very best to provide a hostile environment for May with the election result. The message was very clear: take a hike. Not a hiking holiday, but the full hike.

Yet the import does not seem to have got through to the prime minister, or the various arse-coverers around her. It’s fair to say we are dealing with a very specific class of unworthy here. There are few groups who take less responsibility for their actions, as this week in the Windrush scandal has laid starkly bare. Some of the most senior political figures in the land are – in the purest sense of one of their favourite terms – shirkers. They are feckless. They act like these things are happening to them, as opposed to because of them. Given the judgments they like to visit on the weaker members of society for comparatively minuscule transgressions, this makes them the most raging hypocrites too.

[..] And on they all go. If the government is in any doubt as to why so many millions think it’s one rule for them and another for the little people, then this week couldn’t be a better primer. You lose one form and you lose your job, your cancer treatment, your benefits, your liberty; you lose a generation’s forms and you’re the effing prime minister. Those condemned to battle the systems that ministers design know what happens if they make tiny errors. Furthermore, they know that if they messed up a tenth as badly in their jobs, they’d be sacked. But in the arse-over-tit world of government, you’re safe because your sacking would make the big boss – May – look weak. Just like your HR department, right? Except on crystal meth.

I don’t want to fall back on a series of politicians’ best-loved cliches, but this level of irresponsibility is just scrounging with a red box. They play for high stakes – but never their own. It’s the sort of system-milking demonised in a benefits office in Grimsby but regarded as career progression in Westminster. It makes it appear there’s no glass ceiling in modern political life, just a reinforced lead floor. Once you’re in, you basically have to die to stop earning rewards.

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“Children as young as 10 who were born in the UK are subjected to a “good character” test when they apply for citizenship..”

Theresa May’s Hateful ‘Hostile Environment’ Immigration Policy (O.)

History will judge Theresa May harshly. In recent weeks, the appalling stories about the impact of the government’s “hostile environment” policy reported by our sister paper, the Guardian, have continued to grow in number. They paint a shocking picture of a Kafkaesque state that has denied people who came to the UK from the Commonwealth as children their rightful entitlement to work, to housing and to healthcare. May has maintained these are people who have been wrongly caught up in her 2013 decision as home secretary to create a “really hostile environment” for people living in Britain illegally. But their tragic stories are the direct consequence of a policy so punitive that it would inevitably make life intolerable for legal British residents.

People without a passport are now being required to provide an absurd level of proof – four pieces of documentary evidence for each year of residence – of their legal status. Without this, they can no longer work, rent a home, open a bank account or access NHS care and may be detained and threatened with deportation. Doctors, bank clerks and landlords have become obliged to snoop on their fellow citizens by checking up on their immigration status.

[..] Those who become caught up in this are confronted with a cruel Home Office bureaucracy that operates outside the principles of natural justice. Officials are incentivised to reject applications for the tiniest of technical errors; immigration application fees are so high they are generating profits of up to 800% for the state, and there is no longer any right of appeal or legal aid available in most types of immigration cases. Children as young as 10 who were born in the UK are subjected to a “good character” test when they apply for citizenship; if they have been cautioned, their application can be refused.

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The EU fails everywhere, and spectacularly. It sucks the periphery dry. Just like Rome did.

Europe’s Depopulation Time Bomb Is Ticking in the Baltics (BBG)

With much of Eastern Europe already in the European Union or looking to join, living standards have been rising in the cities that dot these former Soviet satellites. More storefronts beckon to western tourists, who have grown more eager to wander among the cobblestones of historic capitals that were once less than hospitable. But a closer look outside the central squares reveals a different reality. According to the UN’s Department of Economic and Social Affairs, nine of the world’s countries most at risk of losing citizens over the next few decades are former East bloc nations. Porous borders and greater opportunity in the west have lured people away. Meanwhile, the populist wave sweeping the continent has made it next-to-impossible for African or Middle Eastern refugees to take their place.

Former Latvian economic minister Vjaceslavs Dombrovskis, now head of the Certus think tank, compared the westward migration of young eastern Europeans to the industrial revolution, when peasants rushed to large urban centers. He said these countries risk turning into what ancestral villages are for city dwellers: “a lovely place where you might spend an odd weekend with your folks.” The trend is hitting especially hard in the Baltics. Latvia, with a current population of 1.96 million, has lost about 25% of its residents since throwing off Soviet control in 1991. The UN predicts that by 2050, it will have lost an additional 22% of its current population—second only to Bulgaria—and by 2100, 41%.

In Estonia, with a population of 1.32 million, the UN foresees a 13% decline by 2050, growing to 32% by 2100. And in Lithuania, the current population of 2.87 million is expected to drop by 17% in 2050. By 2100, it will have lost 34%. As bad as those numbers look, the trend looks even worse for Ukraine and Moldova. The UN predicts 36% and 51% declines in those nations by the end of the century, respectively. Russia, meanwhile, is expected to lose 13% by 2100. Several factors are contributing to the depopulation of Eastern Europe, and Latvia has all of them: low income, compared with more developed EU nations; insufficient growth; and strong anti-immigrant sentiment. The average annual take-home pay among all EU nations was 24,183 euros ($29,834) in 2015, according to Eurostat, while in Latvia it was only 6,814 euros ($8,406).

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There are 751 members. 60 support this.

Members of European Parliament Call For Boycott of FIFA World Cup in Russia (UAW)

60 members of the European Parliament called on EU member states to boycott the FIFA World Cup in Russia, DW reports. The initiator of this appeal is a representative of the Green Party, Rebecca Harms. She believes that Russian President Vladimir Putin cannot be a host of the World Cup while the war continues in Syria and Ukraine. She also pointed out that Russia supports right-wing extremist and anti-democratic parties in the EU and has been trying to influence elections. Overall, the statement was signed by representatives of 5 factions of the European Parliament from 16 countries. The authors of the document indicate that Russia itself is pushing Europe towards such steps.

A group of deputies reminded others about the poisoning of former GRU agent Sergei Skripal and his daughter Yulia, which they called a mockery of European values. MEPs believe that EU member states should take the UK and Iceland as good examples of the countries which counter the “strengthening of the authoritarian and anti-Western course of the Russian president.” The authors also draw attention to the unsatisfactory situation with human rights and freedoms in Russia, especially the violation of freedom of speech. Earlier, a White House representative urged British and American fans to think twice before going to the World Cup in Russia.

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Let’s shut down the World Bank. It’s been rotting for too long.

World Bank Recommends That Countries Eliminate Minimum Wage (BB)

A draft of the World Bank’s annual flagship World Development Report says that its creditor-states (the poorest countries in the world) should eliminate their minimum wage rules, allow employers to fire workers without cause, and repeal laws limiting abusive employment contract terms. The bank argues that this is necessary to stop employers from simply investing in automation and eliminating workers altogether. The report does not contemplate the possibility that the world’s governments would just raise taxes on corporations and their investors to provide for all their citizens.

Poor countries – especially decolonized countries – are often in debt to organizations like the World Bank and IMF, sometimes because they were forced to literally buy their freedom (like Haiti, whose slave-descended population had to remit a sizable portion of its annual GDP to the descendants of French slavers until 1947), sometimes because their wealth was looted by colonists during and after the colonial period, and sometimes because rich creditor nations were complicit in the exfiltration of the nation’s treasure by gangster-politicians, a practice that continues to this day.

Countries generally carry more debt than they can hope to repay, and teeter on the brink of continuous default, putting them at the mercy of creditor-organizations, who can order changes to national laws, sell-offs of public industries and assets, and other measures that further reduce debtor-states’ ability to prosper, creating more debt and deeper concessions. The World Bank’s recommendations feel like the beginning of the end-game of late-stage capitalism, a recognition that the post-war era in which cruel exploitation of workers was considered a bug rather than a feature is drawing to a close, and a return to a kind of market feudalism, where property rights – no matter how corrupt their origins – always trump human rights.

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Divide and rule.

Hopes For Greek Debt Deal Low Amid EU-IMF Discord (K.)

Hopes for a breakthrough on the issue of Greek debt relief at a summit of eurozone finance ministers in Sofia on Friday are muted following a lack of progress in talks between European officials and representatives of the IMF in Washington over the weekend. Talks involved all of the key players in the debate on Greece’s debt, including IMF chief Christine Lagarde, European Monetary and Economic Affairs Commissioner Pierre Moscovci, and the finance ministers of Germany, Italy, Spain and France. But a long-standing rift between EU and IMF officials over how a debt relief mechanism should operate continued, with the Fund representatives insisting that it should be automatic and the Europeans saying it should be tied to conditions.

In view of the resistance put up chiefly by Germany, the EU’s largest economy, Finance Minister Euclid Tsakalotos expressed his concern that the debt relief being considered for Greece would be inadequate. Another worry is over creditors’ objections to a growth plan proposed by Greece. European officials responded with a 30-page memo to Greece’s 85-page proposal, requesting more detail and a stricter time frame. The growth plan was one of the issues discussed by leftist SYRIZA’s political secretariat during a session chaired by Prime Minister Alexis Tsipras on Saturday.

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What you say about a neighbor you want good relations with.

Turkish Justice Minister: Greece ‘A Gathering Place For Criminals’ (K.)

Turkish Justice Minister Abdulhamit Gul has written to his Greek counterpart Stavros Kontonis saying “Greece is becoming a gathering place for criminals” following a court ruling releasing one of eight Turkish servicemen seeking asylum in Greece, Anadolu reported on Saturday. Gul’s letter came a day after Turkish Prime Minister Binali Yildirim slammed the Council of State ruling, saying Greece was becoming a “safe haven” for Turkey’s enemies. The ruling issued on Thursday by Greece’s highest administrative court relates to Süleyman Özkaynakçı, who piloted the helicopter in which he and seven other Turkish servicemen fled to Greece in July 2016 following Turkey’s failed coup.

However it is expected to apply to all eight servicemen. In his comments on Friday, Yildirim said it was “unacceptable” for people who took part in the coup attempt in the summer of 2016 to be protected by Greece. “Unfortunately, recently, criminals of the FETO organization have started seeing Greece as a safe haven,” he said, referring to what Ankara describes as a terrorist group led by exiled cleric Fethullah Gulen. “I hope they will extradite the members of this organization,” he said, adding that Turkish authorities “do not desire a negative impact on Greek-Turkish relations because of members of the FETO organization.”

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“We have to worry about the 2 percent—the intellectuals and politicians making the big decisions who don’t have skin in the game and are messing the whole thing up for everybody else.”

Nassim Nicholas Taleb Has Never Borrowed a Cent in His Life (Esq.)

People ask me my forecast for the economy when they should be asking me what I have in my portfolio. Don’t make pronouncements on what could happen in the future if you’re immune from the consequences. In French, they use the same word for wallet and portfolio. I have never, ever borrowed a penny. So I have zero credit record. No loans, no mortgage, nothing. Ever. When I had no money, I rented. I have an allergy to borrowing and a scorn for people who are in debt, and I don’t hide it. I follow the Romans’ attitude that debtors are not free people. I carry euros, dollars, and British pounds. What I do with my money is personal. People who say they give it to charity, that’s a no-no in my book. Nobody should ever talk about a charitable act in public.

Better to miss a zillion opportunities than blow up once. I learned this at my first job, from the veteran traders at a New York bank that no longer exists. Most people don’t understand how to handle uncertainty. They shy away from small risks, and without realizing it, they embrace the big, big risk. Businessmen who are consistently successful have the exact opposite attitude: Make all the mistakes you want, just make sure you’re going to be there tomorrow. Don’t invest any energy in bargaining except when the zeros become large. Lose the small games and save your efforts for the big ones. There’s nothing wrong with being wrong, so long as you pay the price. A used-car salesman speaks well, they’re convincing, but ultimately, they are benefiting even if someone else is harmed by their advice.

A bullshitter is not someone who’s wrong, it’s someone who’s insulated from their mistakes. There is less “skin in the game” today than there was fifty years ago, or even twenty years ago. More people determine the fates of others without having to pay the consequences. Skin in the game means you own your own risk. It means people who make decisions in any walk of life should never be insulated from the consequences of those decisions, period. If you’re a helicopter repairman, you should be a helicopter rider. If you decide to invade Iraq, the people who vote for it should have children in the military. And if you’re making economic decisions, you should bear the cost if you’re wrong.

Ninety-eight percent of Americans—plumbers, dentists, bus drivers—have skin in the game. We have to worry about the 2 percent—the intellectuals and politicians making the big decisions who don’t have skin in the game and are messing the whole thing up for everybody else. Thirty years ago, the French National Assembly was composed of shop owners, farmers, doctors, veterinarians, and small-town lawyers—people involved in daily activities. Today, it’s entirely composed of professional politicians—people who are just divorced from real life. America is a little better, but we’re heading that way.

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Mar 262018
 


Dorothea Lange Gravestone St. George, Utah 1953

 

There are numerous ways to define the Precautionary Principle. It’s something we can all intuitively understand, but which many parties seek ways to confuse since it has the potential to stand in the way of profits. Still, in the end it should all be about proof, not profits. That is exactly what the Principle addresses. Because if you first need to deliver scientific proof that some action or product can be harmful to mankind and/or the natural world, you run the risk of inflicting irreversible damage before that proof can be delivered.

In one of many definitions, the 1998 Wingspread Statement on the Precautionary Principle says: “When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically.”

Needless to say, that doesn’t easily fly in our age of science and money. Cigarette makers, car manufacturers and oil companies, just to name a few among a huge number of industries, are all literally making a killing while the Precautionary Principle is being ignored. Even as it is being cited in many international treaties. Lip service “R” us. Are these industries to blame when they sell us our products, or are we for buying them? That’s where governments must come in to educate us about risks. Which they obviously do not.

Nassim Nicholas Taleb -of Black Swan and Antifragile fame- has made the case, in his usual strong fashion, for applying the Precautionary Principle when it comes to GMOs. His argument is that allowing genetically modified organisms in our eco- and foodsystems carries unknown risks that we have no way of overseeing, and that these risks may cause irreversible damage to the very systems mankind relies on for survival.

Taleb is not popular among GMO producers. Who all insist there is no evidence that their products cause harm. But that is not the point. The Precautionary Principle, if it is to be applied, must turn the burden of proof on its head. The absence of evidence is not evidence of absence. Monsanto et al must prove that their products do no harm. They can not. Which is why they have, and need, huge lobbying, PR and legal departments.

 

But I didn’t want to talk about GMOs today, and not about Precautionary Principle alone. I wanted to talk about this: Paragraph 2 of article 191 of the European Union’s Lisbon Treaty (2009) states that:

“Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.”

In other words, the EU has committed itself to the Precautionary Principle. Well, on paper, that is. However, then we get to a whole series of reports on wildlife in Europe, and they indicate all sorts of things, but not that Brussels cares even one bit about adhering to the Precautionary Principle, either for its people or its living environment. One voice below calls it a “state of denial”, but I would use some other choice words. Let’s start with the Guardian this morning, because they have an interesting perspective:

Most Britons remain blithely unaware that since the Beatles broke up, we have wiped out half our wildlife…

since the fall of the Berlin Wall in 1989, the number of flying insects on nature reserves in Germany had dropped by at least 76% – more than three-quarters…

Things like ‘since you were born’, ‘since man landed on the moon’, ‘since the wall came down’ or ‘since 9/11’ may be a bit clearer than 100 years, or 25 years. Moreover, I read somewhere that since Columbus landed in 1492, America has lost on third of all its biodiversity, but that doesn’t yet explain the rate of acceleration that is taking place.

In October last year, the Guardian had this:

 

Three-Quarters Of Flying Insects In Germany Have Vanished In 25 Years

The abundance of flying insects has plunged by three-quarters over the past 25 years , according to a new study that has shocked scientists. Insects are an integral part of life on Earth as both pollinators and prey for other wildlife and it was known that some species such as butterflies were declining. But the newly revealed scale of the losses to all insects has prompted warnings that the world is “on course for ecological Armageddon”, with profound impacts on human society.

The new data was gathered in nature reserves across Germany but has implications for all landscapes dominated by agriculture, the researchers said. The cause of the huge decline is as yet unclear, although the destruction of wild areas and widespread use of pesticides are the most likely factors and climate change may play a role. The scientists were able to rule out weather and changes to landscape in the reserves as causes, but data on pesticide levels has not been collected.

“The fact that the number of flying insects is decreasing at such a high rate in such a large area is an alarming discovery,” said Hans de Kroon, at Radboud University in the Netherlands and who led the new research. “Insects make up about two-thirds of all life on Earth [but] there has been some kind of horrific decline,” said Prof Dave Goulson of Sussex University, UK, and part of the team behind the new study. “We appear to be making vast tracts of land inhospitable to most forms of life , and are currently on course for ecological Armageddon. If we lose the insects then everything is going to collapse.”

[..] When the total weight of the insects in each sample was measured a startling decline was revealed. The annual average fell by 76% over the 27 year period, but the fall was even higher – 82% – in summer, when insect numbers reach their peak. Previous reports of insect declines have been limited to particular insects, such European grassland butterflies, which have fallen by 50% in recent decades. But the new research captured all flying insects, including wasps and flies which are rarely studied, making it a much stronger indicator of decline.

Then last week from AFP:

 

France’s Bird Population Collapses As Pesticides Kill Off Insects

Bird populations across the French countryside have fallen by a third over the last decade and a half, researchers have said. Dozens of species have seen their numbers decline, in some cases by two-thirds, the scientists said in a pair of studies – one national in scope and the other covering a large agricultural region in central France. “The situation is catastrophic,” said Benoit Fontaine, a conservation biologist at France’s National Museum of Natural History and co-author of one of the studies. “Our countryside is in the process of becoming a veritable desert,” he said in a communique released by the National Centre for Scientific Research (CNRS), which also contributed to the findings.

The common white throat, the ortolan bunting, the Eurasian skylark and other once-ubiquitous species have all fallen off by at least a third, according a detailed, annual census initiated at the start of the century. A migratory song bird, the meadow pipit, has declined by nearly 70%. The museum described the pace and extent of the wipe-out as “a level approaching an ecological catastrophe”. The primary culprit, researchers speculate, is the intensive use of pesticides on vast tracts of monoculture crops, especially wheat and corn. The problem is not that birds are being poisoned, but that the insects on which they depend for food have disappeared.

“There are hardly any insects left, that’s the number one problem,” said Vincent Bretagnolle, a CNRS ecologist at the Centre for Biological Studies in Chize. Recent research, he noted, has uncovered similar trends across Europe, estimating that flying insects have declined by 80%, and bird populations has dropped by more than 400m in 30 years. Despite a government plan to cut pesticide use in half by 2020, sales in France have climbed steadily, reaching more than 75,000 tonnes of active ingredient in 2014, according to EU figures. “What is really alarming, is that all the birds in an agricultural setting are declining at the same speed, even ’generalist’ birds,” which also thrive in other settings such as wooded areas, said Bretagnolle.

Not that it’s just Europe, mind you. Still ‘ove’ this one from Gretchen Vogel in ScienceMag, about a year ago, on a phenomenon most of you stateside will have noticed too:

 

Where Have All The Insects Gone?

Entomologists call it the windshield phenomenon. “If you talk to people, they have a gut feeling. They remember how insects used to smash on your windscreen,” says Wolfgang Wägele, director of the Leibniz Institute for Animal Biodiversity in Bonn, Germany. Today, drivers spend less time scraping and scrubbing. “I’m a very data-driven person,” says Scott Black, executive director of the Xerces Society for Invertebrate Conservation in Portland, Oregon. “But it is a visceral reaction when you realize you don’t see that mess anymore.”

Some people argue that cars today are more aerodynamic and therefore less deadly to insects. But Black says his pride and joy as a teenager in Nebraska was his 1969 Ford Mustang Mach 1—with some pretty sleek lines. “I used to have to wash my car all the time. It was always covered with insects.” Lately, Martin Sorg, an entomologist here, has seen the opposite: “I drive a Land Rover, with the aerodynamics of a refrigerator, and these days it stays clean.”

Though observations about splattered bugs aren’t scientific, few reliable data exist on the fate of important insect species. Scientists have tracked alarming declines in domesticated honey bees, monarch butterflies, and lightning bugs. But few have paid attention to the moths, hover flies, beetles, and countless other insects that buzz and flitter through the warm months. “We have a pretty good track record of ignoring most noncharismatic species,” which most insects are, says Joe Nocera, an ecologist at the University of New Brunswick in Canada.

After all those numbers, and before they get worse -which they will, it’s already baked in the cake-, you would expect the EU to remember the Precautionary Principle all its member nations signed on to for the Lisbon Treaty. You would expect wrong. Instead Brussels vows to continue with the exact same policies that have led to its mind-boggling biodiversity losses.

 

EU In ‘State Of Denial’ Over Destructive Impact Of Farming On Wildlife

Europe’s crisis of collapsing bird and insect numbers will worsen further over the next decade because the EU is in a “state of denial” over destructive farming practices, environmental groups are warning. European agriculture ministers are pushing for a new common agriculture policy (CAP) from 2021 to 2028 which maintains generous subsidies for big farmers and ineffectual or even “fake” environmental or “greening” measures, they say. In a week when two new studies revealed drastic declines in French farmland birds – a pattern repeated across Europe – the EU presidency claimed that the CAP continued to provide safe food while defending farmers and “protecting the environment”.

“The whole system is in a state of denial,” said Ariel Brunner, head of policy at Birdlife Europe. “Most agriculture ministers across Europe are just pushing for business as usual. The message is, keep the subsidies flowing.” Farm subsidies devour 38% of the EU budget and 80% of the subsidies go to just 20% of farmers , via “basic payments” which hand European landowners £39bn each year.

Because these payments are simply related to land area, big farmers receive more, can invest in more efficient food production – removing hedgerows to enlarge fields for instance – and put smaller, less intensive farmers out of business. France lost a quarter of its farm labourers in the first decade of the 21st century, while its average farm size continues to rise.

A smaller portion – £14.22bn annually – of EU farm subsidies support “greening” measures but basic payment rules work against wildlife-friendly farming: in Britain, farmers can’t receive basic payments for land featuring ponds, wide hedges, salt marsh or regenerating woodland. Signals from within the EU suggest that the next decade’s CAP [..] will continue to pay farmers a no-strings subsidy, while cash for “greening”, or wildlife-friendly farming, may even be cut. Birdlife Europe said the “greening” was mostly “fake environmental spending” and wildlife-friendly measures had been “shredded” by “loophole upon loophole” introduced by member states.

[..] This week studies revealed that the abundance of farmland birds in France had fallen by a third in 15 years – with population falls intensifying in the last two years. It’s a pattern repeated across Europe: farmland bird abundance in 28 European countries has fallen by 55% over three decades, according to the European Bird Census Council. Conservationists say it’s indicative of a wider crisis – particularly the decimation of insect life linked to neonicotinoid pesticides.

20% of farmers work 80% of the land in Europe. That is used as an argument to single them out to pay them billions in subsidies. But it simply means these 20% use the most detrimental farming methods, most pesticides, most chemicals. The subsidies policy guarantees further deterioration of an already disastrous situation. The polluter doesn’t pay, as the Lisbon Treaty demands, but the polluter gets paid.

And even that is apparently still not enough for the fast growing bureaucracy. In a move perhaps more characteristic of the EU than anything else, it approved something last week that a million people had vehemently protested: the Bayer-Monsanto merger. The European parliament may have thrown out all Monsanto lobbyists recently, and voted to ban Roundup, but the die has been cast.

A million citizens can protest in writing, many millions in France and Germany and elsewhere may do the same on the street, none of it matters. The people who brought you WWII nerve gases and Agent Orange can now come together to take over your food supply.

 

EU Approves Buyout Of Monsanto By German Chemical Firm Bayer

German conglomerate Bayer won EU antitrust approval on Wednesday for its $62.5bn (£44.5bn) buy of US peer Monsanto, the latest in a trio of mega mergers that will reshape the agrochemicals industry. The tie-up is set to create a company with control of more than a quarter of the world’s seed and pesticides market. Driven by shifting weather patterns, competition in grain exports and a faltering global farm economy, Dow and Dupont, and ChemChina and Syngenta had earlier led a wave of consolidation in the sector. Both deals secured EU approval only after the companies offered substantial asset sales to boost rivals.

Environmental and farming groups have opposed all three deals, worried about their power and their advantage in digital farming data, which can tell farmers how and when to till, sow, spray, fertilise and pick crops based on algorithms. The European Commission said Bayer addressed its concerns with its offer to sell a swathe of assets to boost rival BASF [..] “Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger,” European Competition Commissioner Margrethe Vestager said in a statement. “In particular, we have made sure that the number of global players actively competing in these markets stays the same.”

[..] Vestager said the Commission, which received more than a million petitions concerning the deal, had been thorough by examining more than 2,000 different product markets and 2.7 million internal documents to produce a 1,285-page ruling. [..] Online campaigns group Avaaz criticised the EU approval. “This is a marriage made in hell. The Commission ignored a million people who called on them to block this deal, and caved in to lobbying to create a mega-corporation which will dominate our food supply,” Avaaz legal director Nick Flynn said.

Dow-Dupont, ChemChina and Bayer Monsanto have a lot more political influence than a million Europeans, or ten million Americans. They have even convinced numerous, if not most, people that without their products the world would starve. That their chemicals are needed to feed a growing human population. Farming based on algorythms.

They are not ‘seed companies’. They are ‘seeds-that-need-our-chemicals-to-grow’ companies. And they are out to conquer the entire world. A 100-times worse version of Facebook. And our governments subsidize the use of their products. As we not-so-slowly see our living world be massacred by those products.

We don’t know how bad GMOs will turn out to be. Which is in itself a very good reason to ban them. Since once they spread, they can’t be stopped anymore. Then the chemical boys will own all of our food. But we do know how bad the pesticides and other chemicals they produce are. And we’re not even banning those. We just eat all that sh*t and shut up.

It’s a failure to understand what science is: that you must proof harm first before banning stuff. The only real science is the one that has adopted the Precautionary Principle. Because science is supposed to be smart, and there’s nothing smart about destroying your own world. Because science should never be used to hurt people or nature. Science can only be good if it benefits us. Not our wallets, but our heads and hearts and forests, and our children. Do no harm.

Yeah, I know, who am I fooling, right?

 

 

Jul 172016
 
 July 17, 2016  Posted by at 4:08 pm Finance Tagged with: , , , , , , , , , ,  7 Responses »


Ben Shahn Daughter of Virgil Thaxton, farmer, near Mechanicsburg, Ohio 1938

Recently, I posted a two-tear old article on facebook.com/TheAutomaticEarth that was shared so many times it seems to make sense to use it for an Automatic Earth article as well. The article asks how toxic the wheat we eat is – or Americans, more specifically-, and why that is.

But first I would like to touch on a closely connected issue, which is Nassim Nicholas Taleb’s ‘war’ on GMOs. Taleb, of Black Swans fame, has been at it for a while, but he’s stepped up his efforts off late.

In 2014, with co-authors Rupert Read, Raphael Douady, Joseph Norman and Yaneer Bar-Yam, he published The Precautionary Principle (with Application to the Genetic Modification of Organisms), an attempt to look at GMOs through a ‘solidly scientific’ prism of probability and complex systems. From the abstract:

The precautionary principle (PP) states that if an action or policy has a suspected risk of causing severe harm to the public domain (affecting general health or the environment globally), the action should not be taken in the absence of scientific near-certainty about its safety. Under these conditions, the burden of proof about absence of harm falls on those proposing an action, not those opposing it. PP is intended to deal with uncertainty and risk in cases where the absence of evidence and the incompleteness of scientific knowledge carries profound implications and in the presence of risks of “black swans”, unforeseen and unforeseable events of extreme consequence.

[..] We believe that the PP should be evoked only in extreme situations: when the potential harm is systemic (rather than localized) and the consequences can involve total irreversible ruin, such as the extinction of human beings or all life on the planet. The aim of this paper is to place the concept of precaution within a formal statistical and risk-analysis structure, grounding it in probability theory and the properties of complex systems. Our aim is to allow decision makers to discern which circumstances require the use of the PP and in which cases evoking the PP is inappropriate.

This puts into perspective the claims made by Monsanto et al that since no harm has ever been proven to arise from the use of GMOs, they should therefore be considered safe. Which is the approach largely taken over by American politics, and increasingly also in Europe and other parts of the world. In their paper, Taleb et al say the approach does not meet proper scientific standards.

This is very close to my personal opinion, expressed in many articles in the past, that GMOs pose such risks on such a wide scale to the food supply of every human being on earth -as well as a much wider selection of organisms- that they should not be legalized before perhaps 100 years of tests have been done by large and independent teams of specialists.

Note that if you, as an individual farmer, as a community or even as a nation, want to ban GMOs but your neighbors do not, you will in the case of many crops not stand a chance of keeping your plants GMO free. For which you can subsequently be sued by the ‘owner’ of the genetically altered plants and seeds.

Also, I think it is irresponsibly dangerous to give a handful of companies (Monsanto, Bayer, DuPont, Syngenta), who all happen to be chemical giants dating back to the 20th century interbellum, and all with questionable pasts, a quasi-monopoly over the -future of- world’s food. Because that is where things will go unless proper principles are applied, both scientific and legal.

One of the main arguments proponents of GMOs use is that through thousand of years mankind has altered crops through selection ‘anyway’, so talking about anything ‘pure’ or ‘natural’ in this regard is not relevant. Taleb put the difference between altering a staple through this ‘generational’ selection on the one hand and the modifying of genes in a lab into a sketch:

The sketch was later annotated by Rahul Goswami, approved and shared by Taleb:

I think it is obvious that ‘generational’ selection through breeding is localized, can be rejected by nature. Genetic modification is something completely different, it takes a much bigger step (a giant leap) and forces itself -as a more or less alien body- onto a much larger eco-system.

It’s not about trying to figure out what works, but about forcing itself upon the world and its inhabitants regardless of the consequences. The precautionary principle is missing where it is most needed.

A few examples of Taleb’s tweets on the topic in the past few days make his stance abundantly clear.

“GMO issue is ignorance of the properties of complex systems/fattails (Monsanto’s 107 Nobels, 80 y.o. are 50 y behind)”

“Anyone pro-GMOs on “scientific” grounds is 50 years behind, ignorant of complexity, or just stupid”

“Monsanto pulled no stop trying to discredit me: 1000 mails to Univ (!),>1000 shill posts. Nada. F***you money works.”

Then, on to the article I started talking about above. As I said, it was written some two years ago by Sarah at the Healthy Home Economist. From the reactions to my posting it on Facebook -a huge number of shares- I surmise that many people A) had no idea that what Sarah describes is common practice, and B) have a profound interest in the topic.

Note: while a fair number of people said they had never heard of this, and/or doubted it was true at all, quite a few confirmed it as common where they live, and not just stateside, but in Scotland, Argentina etc.

Let’s see how we get through this. I don’t want to just post the whole thing, but I’ll need large portions of it.

The Real Reason Wheat is Toxic

The stories became far too frequent to ignore. Emails from folks with allergic or digestive issues to wheat in the United States experienced no symptoms whatsoever when they tried eating pasta on vacation in Italy. Confused parents wondering why wheat consumption sometimes triggered autoimmune reactions in their children but not at other times.

In my own home, I’ve long pondered why my husband can eat the wheat I prepare at home, but he experiences negative digestive effects eating even a single roll in a restaurant. There is clearly something going on with wheat that is not well known by the general public. It goes far and beyond organic versus nonorganic, gluten or hybridization because even conventional wheat triggers no symptoms for some who eat wheat in other parts of the world.

What indeed is going on with wheat? For quite some time, I secretly harbored the notion that wheat in the United States must, in fact, be genetically modified. GMO wheat secretly invading the North American food supply seemed the only thing that made sense and could account for the varied experiences I was hearing about. I reasoned that it couldn’t be the gluten or wheat hybridization. Gluten and wheat hybrids have been consumed for thousands of years.

It just didn’t make sense that this could be the reason for so many people suddenly having problems with wheat and gluten in general in the past 5-10 years.

Finally, the answer came over dinner a couple of months ago with a friend who was well versed in the wheat production process. I started researching the issue for myself, and was, quite frankly, horrified at what I discovered. The good news is that the reason wheat has become so toxic in the United States is not because it is secretly GMO as I had feared (thank goodness!).

The bad news is that the problem lies with the manner in which wheat is grown and harvested by conventional wheat farmers. You’re going to want to sit down for this one. I’ve had some folks burst into tears in horror when I passed along this information before.

Common wheat harvest protocol in the United States is to drench the wheat fields with Roundup several days before the combine harvesters work through the fields as the practice allows for an earlier, easier and bigger harvest

Pre-harvest application of the herbicide Roundup or other herbicides containing the deadly active ingredient glyphosate to wheat and barley as a desiccant was suggested as early as 1980. It has since become routine over the past 15 years and is used as a drying agent 7-10 days before harvest within the conventional farming community.USDA pesticides applied to wheat.

According to Dr. Stephanie Seneff of MIT who has studied the issue in depth and who I recently saw present on the subject at a nutritional Conference in Indianapolis, desiccating non-organic wheat crops with glyphosate just before harvest came into vogue late in the 1990’s with the result that most of the non-organic wheat in the United States is now contaminated with it.

Seneff explains that when you expose wheat to a toxic chemical like glyphosate, it actually releases more seeds resulting in a slightly greater yield: “It ‘goes to seed’ as it dies. At its last gasp, it releases the seed” says Dr. Seneff. According to the US Department of Agriculture, as of 2012, 99% of durum wheat, 97% of spring wheat, and 61% of winter wheat has been treated with herbicides. This is an increase from 88% for durum wheat, 91% for spring wheat and 47% for winter wheat since 1998.

Wheat farmer Keith Lewis: “I have been a wheat farmer for 50 yrs and one wheat production practice that is very common is applying the herbicide Roundup (glyphosate) just prior to harvest. Roundup is licensed for preharvest weed control. Monsanto, the manufacturer of Roundup claims that application to plants at over 30% kernel moisture result in roundup uptake by the plant into the kernels. Farmers like this practice because Roundup kills the wheat plant allowing an earlier harvest.

A wheat field often ripens unevenly, thus applying Roundup preharvest evens up the greener parts of the field with the more mature. The result is on the less mature areas Roundup is translocated into the kernels and eventually harvested as such. This practice is not licensed. Farmers mistakenly call it “dessication.”

Consumers eating products made from wheat flour are undoubtedly consuming minute amounts of Roundup. An interesting aside, malt barley which is made into beer is not acceptable in the marketplace if it has been sprayed with preharvest Roundup. Lentils and peas are not accepted in the market place if it was sprayed with preharvest roundup….. but wheat is ok.. This farming practice greatly concerns me and it should further concern consumers of wheat products.”

This practice is not just widespread in the United States either. The Food Standards Agency in the United Kingdom reports that use of Roundup as a wheat desiccant results in glyphosate residues regularly showing up in bread samples. Other European countries are waking up to to the danger, however. In the Netherlands, use of Roundup is completely banned with France likely soon to follow.

Using Roundup on wheat crops throughout the entire growing season and even as a desiccant just prior to harvest may save the farmer money and increase profits, but it is devastating to the health of the consumer who ultimately consumes the glyphosate residue laden wheat kernels.

The chart below of skyrocketing applications of glyphosate to US wheat crops since 1990 and the incidence of celiac disease is from a December 2013 study published in the Journal Interdisciplinary Toxicology examining glyphosate pathways to autoimmune disease. Remember that wheat is not currently GMO or “Roundup Ready” meaning it is not resistant to its withering effects like GMO corn or GMO soy, so application of glyphosate to wheat would actually kill it.

While the herbicide industry maintains that glyphosate is minimally toxic to humans, research published in the Journal Entropy strongly argues otherwise by shedding light on exactly how glyphosate disrupts mammalian physiology. Authored by Anthony Samsel and Stephanie Seneff of MIT, the paper investigates glyphosate’s inhibition of cytochrome P450 (CYP) enzymes, an overlooked component of lethal toxicity to mammals.

The currently accepted view is that glyphosate is not harmful to humans or any mammals. This flawed view is so pervasive in the conventional farming community that Roundup salesmen have been known to foolishly drink it during presentations! However, just because Roundup doesn’t kill you immediately doesn’t make it nontoxic. In fact, the active ingredient in Roundup lethally disrupts the all important shikimate pathway found in beneficial gut microbes which is responsible for synthesis of critical amino acids.

Friendly gut bacteria, also called probiotics, play a critical role in human health. Gut bacteria aid digestion, prevent permeability of the gastrointestinal tract (which discourages the development of autoimmune disease), synthesize vitamins and provide the foundation for robust immunity. In essence:

Roundup significantly disrupts the functioning of beneficial bacteria in the gut and contributes to permeability of the intestinal wall and consequent expression of autoimmune disease symptoms

In synergy with disruption of the biosynthesis of important amino acids via the shikimate pathway, glyphosate inhibits the cytochrome P450 (CYP) enzymes produced by the gut microbiome. CYP enzymes are critical to human biology because they detoxify the multitude of foreign chemical compounds, xenobiotics, that we are exposed to in our modern environment today.

As a result, humans exposed to glyphosate through use of Roundup in their community or through ingestion of its residues on industrialized food products become even more vulnerable to the damaging effects of other chemicals and environmental toxins they encounter! What’s worse is that the negative impact of glyphosate exposure is slow and insidious over months and years as inflammation gradually gains a foothold in the cellular systems of the body.

The consequences of this systemic inflammation are most of the diseases and conditions associated with the Western lifestyle: Gastrointestinal disorders, Obesity ,Diabetes, Heart Disease, Depression, Autism, Infertility, Cancer, Multiple Sclerosis, Alzheimer’s, etc.

In a nutshell, Dr. Seneff’s study of Roundup’s ghastly glyphosate which the wheat crop in the United States is doused with uncovers the manner in which this lethal toxin harms the human body by decimating beneficial gut microbes with the tragic end result of disease, degeneration, and widespread suffering

[..] The bottom line is that avoidance of conventional wheat in the United States is absolutely imperative even if you don’t currently have a gluten allergy or wheat sensitivity. The increase in the amount of glyphosate applied to wheat closely correlates with the rise of celiac disease and gluten intolerance.

Dr. Seneff points out that the increases in these diseases are not just genetic in nature, but also have an environmental cause as not all patient symptoms are alleviated by eliminating gluten from the diet. The effects of deadly glyphosate on your biology are so insidious that lack of symptoms today means literally nothing. If you don’t have problems with wheat now, you will in the future if you keep eating conventionally produced, toxic wheat!

I guess we can leave it at that for now. Do go to the original article for more. Whether you look at it from a scientific viewpoint, as Taleb et al do, or from a common sense one, as Sarah does, the common thread seems obvious: Monsanto and other rich chemical giants seek to be the sole providers -even owners- of the world’s food, handed to us for free by nature and generations of our ancestors.

And to achieve that magnitude of power -and riches- they are more than willing to literally drive over sick and dead bodies. Once again, Taleb:

The precautionary principle (PP) states that if an action or policy has a suspected risk of causing severe harm to the public domain (affecting general health or the environment globally), the action should not be taken in the absence of scientific near-certainty about its safety. Under these conditions, the burden of proof about absence of harm falls on those proposing an action, not those opposing it.

That is not what’s happening, and there’s not much time left to start applying it before it’s too late. Because GMOs, once they’ve been introduced in a large enough environment, are near impossible to get rid of.

To end on a somewhat happier note, Taleb thinks that Monsanto is doing quite poorly these days, financially. Then again, that’s why Bayer wants to buy them, and that would only mean a continuation or even increase of the present practices.

What we need is decision makers who understand the science of complex systems, probability and the precautionary principle. And I don’t know about you, but when I look at who’s vying to be the leaders of the US, UK and many other nations, I think we’re a long way away from that.

Only Putin seems to get it. His stated goal is to make Russia the largest producer of organic food in the world. So maybe there is still hope.

Jul 022016
 
 July 2, 2016  Posted by at 8:18 am Finance Tagged with: , , , , , , , , ,  2 Responses »


Walker Evans Vicksburg, Mississippi. “Vicksburg Negroes and shop front.” 1936

Everyone’s a Winner in Brexit Aftermath as Doves Rescue Market (BBG)
The European Union Is ‘Doomed To Fail’ : Taleb (CNBC)
Hungary’s Migrant Referendum Shows Europe’s Post-Brexit Challenge (R.)
Kyle Bass Says China’s Corporate Bond Market Is ‘Freezing Up’ (BBG)
QE Only Works When You’re The Only Country Doing It: Kyle Bass (ZH)
Bad-Loan Ultimatum in India Sees Default Risk Climb Most in Asia (BBG)
World Biggest Pension Fund Seen Losing $43 Billion Last Quarter (BBG)
We May Have Reached Peak Pensioner (G.)
Hacked Emails Reveal US NATO General Plotting Against Obama (Intercept)
Australia Accused Of Torturing, Waterboarding Refugees (Ind.)

 

 

Bad news is good news again. No more uncertainty.

Everyone’s a Winner in Brexit Aftermath as Doves Rescue Market (BBG)

One week after Brexit, the lesson investors are taking away is that there’s no problem central banks can’t fix. Just days after the U.K.’s vote to leave the European Union roiled financial markets around the world, stocks and bonds surged in tandem this week as policy makers once again rode to the rescue, dropping hints of further stimulus and suggesting they’ll keep interest rates lower for longer. Traditionally, what’s good for one asset class has not been good for the other, and stocks and bonds more often move in opposite directions on the same information. Yet with unprecedented monetary easing showing no signs of slowing, that relationship continues to break down.

With almost $12 trillion of government bonds globally paying less than zero, a rush into Treasuries Friday pushed yields to record lows, even as encouraging economic data helped propel U.S. stocks toward all-time highs. “This may be the new normal,” said Aaron Kohli, a fixed-income strategist in New York at BMO Capital Markets, one of 23 primary dealers that trade with Fed. “If you flood the markets with liquidity, and you have the anticipation that the central banks are going to be dovish — either adding to quantitative easing or becoming less hawkish, as the case may be for the U.S. Fed — any assets that aren’t impaired or encumbered are going to do very well.”

Read more …

“This is 2016. They are still thinking 1950 economics..”

The European Union Is ‘Doomed To Fail’ : Taleb (CNBC)

The European Union is doomed to fail, “Black Swan” author Nassim Nicholas Taleb said Thursday. He told CNBC’s “Power Lunch” the EU has become a “metastatic and rather incompetent bureaucracy” that is too intrusive. “The way they’ve been building it top down from Brussels is doomed to fail. This is 2016. They are still thinking 1950 economics,” said Taleb, who is also the author of “Antifragile” and is an advisor to Universa Investments. Taleb has warned about an EU breakup for some time, calling it a horrible, stupid project back in 2012. In fact, the U.K.’s vote to exit the EU last week didn’t turn out to be the catastrophe that was expected, he said. While Brexit fears initially rattled global markets, stocks have been climbing back up over the last few days.

While he’s against the current bureaucracy in place in the Europe, he still believes countries can work together, forming free trade agreements and joint military and economic policies. He envisions an Anglo-Saxon economic zone that encompasses the U.S., Ireland, Scotland and Britain. Taleb also doesn’t see Brexit as an isolated event. “People just realize that these elites don’t know what they’re talking about. It’s nice to have elites..you don’t want them to tell you what to do,” he said. “So they are tired of that and it’s a rebellion.” “You have waves and of course we have a wave and I think that .. it’s spreading.” That can be seen in the popularity of Donald Trump, he added. “He’s a brilliant salesperson. He knows how to sell you real estate.. He knows what people want. And he detected exactly that point. And he’s delivering but through trial and error.

Read more …

Note: On July 1, Slovakia took over from Holland as chair of the EU. Slovakia is very much opposed to the migrant quota plans.

And Orban is a dick, but he poses a basic question on sovereignty. Which the EU should not just try to sweep under the carpet, because it represents the very core of all the issues. It’s worrisome to me that the right seems to be the only side asking the right questions these days.

Hungary’s Migrant Referendum Shows Europe’s Post-Brexit Challenge (R.)

Emboldened by Britain’s shock vote to quit the EU, Hungary’s leader Viktor Orban is forging ahead with his own referendum on migration, in what European diplomats see as a sign of battles to come with anti-Brussels populists across the continent. The 53-year-old Orban, in power since 2010, has clashed several times with the EU on issues ranging from independence of the courts and the central bank to his handling of the migrant crisis, which has included a fence on Hungary’s southern border. His next clash pits him against an EU Commission plan to resettle refugees across member states based on quotas, which Orban sees as an act of out-of-touch Brussels bureaucrats usurping national authority.

“We need to fight to prove to people that it is possible to form an EU migration policy that is in line with the Hungarian national interest,” Orban said days after the Brexit vote. “This is going to be a long struggle for which I will need a strong mandate, which cannot be ensured without a referendum,” said Orban, who is in favor of remaining in the EU but wants more powers for member states. Orban has enlisted allies, such as neighboring Slovakia, which also opposes the quotas and this week joined a chorus of eastern EU states calling for the powers of the EU Commission to be reined in after Britain’s vote to leave.

“We have a big problem with the proposed reform of the Dublin system,” Slovak Prime Minister Robert Fico said. “We think it’s stupid, because this is exactly what will keep dividing Europe if (countries) will be asked to pay €250,000 for each migrant they refuse to take.” [..] Orban has said the migration crisis could drive more countries out of the EU. His government will ask Hungarians: “Do you agree that the European Union should be able to prescribe the mandatory settlement of non-Hungarian citizens in Hungary without the consent of parliament?”

Read more …

“..the largest macro imbalance in world history..” People who’ve been reading me for a while will know I fully agree with Bass. Except perhaps for his optimism about China as a buying opportunity. You must take into account, in my view, the inevitable massive losses for Chinese citizens, and their potential reaction to them.

Kyle Bass Says China’s Corporate Bond Market Is ‘Freezing Up’ (BBG)

Kyle Bass, the hedge-fund manager who’s wagering on a devaluation in China, said the country’s $3 trillion corporate bond market is “freezing up” amid rising defaults and canceled debt sales. “We’re starting to see the beginning of the Chinese machine literally break down,” Bass, the founder Hayman Capital Management, said in an interview on Real Vision. China’s corporate bond market contracted by a record in May as tepid economic growth and a raft of missed payments spooked investors. Seventeen publicly-traded Chinese bonds have defaulted so far this year, up from six in 2015, and at least 188 firms have scrapped or delayed debt sales since the end of March, according to data compiled by Bloomberg.

Bass, who rose to fame after prescient bets against U.S. subprime mortgages, has so far had less success with his China wagers, saying they’ve contributed to his “terrible” performance over the past two years. While his corporate bond warning follows signs of market stress, there’s no evidence yet of a collapse. Yields on junk-rated Chinese debt fell the most this year in June, while companies were able to sell 1.85 trillion yuan ($278 billion) of onshore notes in the second quarter. Defaults have ramifications beyond the corporate debt market, according to Bass. It also threatens to undermine the $3.5 trillion market for wealth management products, which raise money from Chinese individuals to invest in bonds, stocks and derivatives, he said.

The products receive less regulatory oversight than banks and often have mismatches between their maturities and underlying assets. Bass said in February that China’s lenders may suffer losses more than four times those at American banks during the 2008 credit crisis. He also predicted the yuan will fall in excess of 30%. In the Real Vision interview, Bass reiterated that China’s lending binge in recent years has created “the largest macro imbalance in world history.” He expects bank losses of $3 trillion to trigger a bailout, with the central bank slashing reserve requirements, cutting the deposit rate to zero and expanding its balance sheet – all of which will weigh on the yuan.

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Great interview with Bass.

QE Only Works When You’re The Only Country Doing It: Kyle Bass (ZH)

Grant : this idea of helicopter money, and the idea of banning cash, and all these things that, when you sit here in the cold like that, you can see exactly why they need to do these things. You watch the narrative unfold in the media, and then the trial balloons get floated. But you’re right, they have to go to helicopter money, they’re really not going to have a choice. And it seems to me that they are going to have to try to ban cash. Because, as you say, the U.S. savings rate has tripled since 2007, and that’s literally the last thing they want or need. So is there any way out for these guys? Because that’s the thesis that I keep checking. I can’t see a way out, absent cold fusion.

Kyle : Look, I had a fascinating out of body experience meeting with one of the world’s top central bankers in a private meeting about three years ago. And he said, “You know Kyle, quantitative easing only works when you’re the only country doing it.” He would never say that publicly. And I’ll protect his name, because it was a private meeting. But it was one of those moments where I…it was one of those epiphanies almost, where it’s something you and I knew, but hearing him say it, call it one of the four top central bankers in the world, it was a jarring experience for me, because when I look around the world today, everyone’s in the same boat. So we’re all trying…we’re attempting through our treasury and our Fed to get the rest of the world to not devalue against us, while we quietly attempt to devalue ourselves against them, and it’s all this…it is the race to the bottom, it is the beggar thy neighbor policies that we all talk about. And I believe that there is no way out.

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Another economic miracle showing rot.

Bad-Loan Ultimatum in India Sees Default Risk Climb Most in Asia (BBG)

Investors are starting to show nerves over the Reserve Bank of India’s ultimatum for state lenders to clean up their rising pile of bad loans this fiscal year. Bank of India’s credit-default swaps jumped 31 basis points in the past month, the most among Asian banks, after it was one of three lenders downgraded by S&P Global Ratings on May 30. Yield premiums on dollar bonds of the Mumbai-based company, Indian Overseas Bank and Syndicate Bank climbed to the highest in at least four months after the action. “It’s one of the most trying times for the public sector banks and how they handle this will be crucial for their future survival,” said Rajesh Mokashi at CARE Ratings. “I see a substantial jump in non-performing loans for most banks for the year to March 31, 2017.”

RBI Governor Raghuram Rajan, who will hand over the reins to an as-yet-undecided successor in September, has given lenders until March 31 to clean up stressed loans that surged to 11.5% of their assets last fiscal year. The rating downgrades will make it harder to raise capital for India’s state-owned commercial lenders, which issued no dollar bonds this year, versus $895 million in the first half of last year.

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From AAA to stocks. It took only a few years. And there goes your pension.

World Biggest Pension Fund Seen Losing $43 Billion Last Quarter (BBG)

Losses for the world’s biggest pension fund likely deepened in the quarter just ended, extending what may be its worst annual loss since the global financial crisis, brokerage estimates showed. Japan’s Government Pension Investment Fund will probably post a 4.4 trillion yen ($43 billion) loss in the April-June quarter, according to calculations by Yohei Iwao, executive director of the institutional equities division at Morgan Stanley MUFG Securities. That follows what he estimates was a 5 trillion yen decline in the fiscal year ended March 31, which would amount to the worst performance since fiscal 2009 when the fund lost 9.7 trillion yen.

The calculations come amid criticism the government has put the public’s pension money at risk after the fund known as the whale for the size of its assets increased its equity allocations in 2014. That’s prompted the main opposition party to pledge GPIF will move investments back into safer ones in its manifesto ahead of elections this month. “Looks like the scrutiny on GPIF will continue,” Morgan Stanley MUFG’s Iwao said. GPIF has been hurt after global stock routs in mid-2015 and early this year helped wipe about $7.4 trillion off world equities in the past 12 months. Japan’s Topix index has tumbled 19% in 2016 to be the second-worst performing developed stock market as the yen strengthened, reducing returns from overseas holdings.

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No politician wants to touch this. Not in their timeframe.

We May Have Reached Peak Pensioner (G.)

Since 2004-05 the average income of all pensioners has jumped from £250 a week to £297. For pensioner couples the average income is £444, or £23,000 a year. During the same period, incomes for working people have stagnated or fallen; even today, average net disposable income is below where it was in 2007-08. Two factors have driven pensioner incomes up: first, the “triple lock” for state pensions, which has guaranteed that it rises every year by the highest of price inflation, earnings growth or 2.5%. During the global financial crash the triple lock meant pensioners received income rises even when pay for working people was falling. Income from welfare benefits has increased for pensioners since 1994-95, but fallen for working people.

[..] generous final salary pension schemes are in catastrophic decline, now confined almost entirely to the public sector. In the private sector their replacements will only pay a fraction of the amount enjoyed by the generation before them. While many previously picked up two-thirds of their final salary, today’s workers will be lucky to pick up 25%-30% of their former salary. Today’s well-off pensioners are, literally, a dying breed. This is not an argument to say that today’s pensioners should in any way be stripped of their incomes. There is huge inequality among pensioners themselves.

You know all those stories about pensioners saying their incomes have been destroyed by a decade of super-low interest rates? The truth is that the median weekly income from savings in retirement is just £6 a week. The average, though, is £64 a week. That tells you that a small number of pensioners have a large investment income, but the majority have almost nothing. There is a debate to be had about generational fairness. Britain, like all developed nations, is an ageing country. How do we arrange our national finances so that the elderly are protected, while at the same time the young are not overly burdened paying for it?

The problem is that the reforms suggested so far fall on today’s working generation. For example, the age at which you will qualify for the state pension is rising steeply. That’s an inevitable consequence of improved longevity, but one that will hit people in their late 50s, especially women, hard, not the existing retired. Another widely mooted reform is to slash pension tax relief, but the losers there are again the existing working population. Should better-off pensioners be expected to pay more as well? Maybe. But as we know from the referendum result, the old vote and the young don’t.

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Breedlove is a nasty piece of work. So is NATO.

Hacked Emails Reveal US NATO General Plotting Against Obama (Intercept)

Retired U.S. Air Force Gen. Philip Breedlove, until recently the supreme commander of NATO forces in Europe, plotted in private to overcome President Barack Obama’s reluctance to escalate military tensions with Russia over the war in Ukraine in 2014, according to apparently hacked emails from Breedlove’s Gmail account that were posted on a new website called DC Leaks. Obama defied political pressure from hawks in Congress and the military to provide lethal assistance to the Ukrainian government, fearing that doing so would increase the bloodshed and provide Russian President Vladimir Putin with the justification for deeper incursions into the country.

Breedlove, during briefings to Congress, notably contradicted the Obama administration regarding the situation in Ukraine, leading to news stories about conflict between the general and Obama. But the leaked emails provide an even more dramatic picture of the intense back-channel lobbying for the Obama administration to begin a proxy war with Russia in Ukraine. In a series of messages in 2014, Breedlove sought meetings with former Secretary of State Colin Powell, asking for advice on how to pressure the Obama administration to take a more aggressive posture towards Russia.

“I may be wrong, … but I do not see this WH really ‘engaged’ by working with Europe/NATO. Frankly I think we are a ‘worry,’ … ie a threat to get the nation drug into a conflict,” Breedlove wrote in an email to Powell, who responded by accepting an invitation to meet and discuss the dilemma. “I seek your counsel on two fronts,” Breedlove continued, “… how to frame this opportunity in a time where all eyes [sic] on ISIL all the time, … and two,… how to work this personally with the POTUS.”

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Unbelievable. Australians themselves need to address their government’s despicable behavior.

Australia Accused Of Torturing, Waterboarding Refugees (Ind.)

[..] in a devastating critique of Australia’s methods, medical ethicists have warned there is “increasing evidence that Australia is engaged in torturing asylum seekers” with refugees imprisoned for more than a year without trial. There are allegations of waterboarding, another method of torture called “zipping” in which people are tied to a bed that is then thrown into the air, sexual assault and exploitation, and child abuse. And the inmates of detention centres created outside of Australia to avoid its laws are held in conditions of secrecy that prevent scrutiny of their treatment while laws prevent doctors speaking out about mistreatment.

Last year, a United Nations report accused Australia of breaking the Convention Against Torture over its treatment of migrants. The then Prime Minister, Tony Abbott, responded that “Australians are sick of being lectured to by the United Nations”, saying their policies had stopped refugee boats from trying to make the perilous sea journey to Australia and “ended the deaths at sea”. In a paper in the Journal of Medical Ethics, the ethicists, Dr John-Paul Sanggaran, of the University of New South Wales, and Professor Deborah Zion, of Victoria University, wrote that there was “increasing evidence that Australia is engaged in torturing asylum seekers”.

“There are allegations of situations, circumstances and actions that also constitute cruel and unusual punishment throughout Australian immigration detention,” they wrote. They pointed to allegations by guards at a detention centre on the island of Nauru “of waterboarding, familiar to most as a torture technique that simulates drowning used by the CIA in places like Guantanamo bay”. “‘Zipping’ is also alleged. It is described as tying an individual to a metal bed frame with cable ties, the bed is then thrown into the air causing injury to the bound individual when the frame crashes to the ground,” they added.

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