tariffs Archives - Page 2 of 8 - The Automatic Earth

Bank of England Governor Mark Carney took aim at the U.S. dollar’s “destabilizing” role in the world economy on Friday and said central banks might need to join together to create their own replacement reserve currency. The dollar’s dominance of the global financial system increased the risks of a liquidity trap of ultra-low interest rates and weak growth, Carney told central bankers from around the world gathered in Jackson Hole, Wyoming, in the United States. “While the world economy is being reordered, the U.S. dollar remains as important as when Bretton Woods collapsed,” Carney said, referring to the end of the dollar’s peg to gold in the early 1970s. Emerging economies had increased their share of global activity to 60% from around 45% before the financial crisis a decade ago, Carney said.

But the dollar was still used for at least half of international trade invoices – five times more than the United States’ share of world goods imports – fuelling demand for U.S. assets and exposing many countries to damaging spillovers from swings in the U.S. economy. Carney – who was considered a candidate to be the next head of the International Monetary Fund but failed to secure backing from Europe’s governments – said the problems in financial system were encouraging protectionist and populist policies. [..] Carney warned that very low equilibrium interest rates had in the past coincided with wars, financial crises and abrupt changes in the banking system. As a first step to reorder the world’s financial system, countries could triple the resources of the IMF to $3 trillion as a better alternative to countries protecting themselves by racking up enormous piles of dollar-denominated debt.

“While such concerted efforts can improve the functioning of the current system, ultimately a multi-polar global economy requires a new IMFS (international monetary and financial system) to realize its full potential,” Carney said. China’s yuan represented the most likely candidate to become a reserve currency to match the dollar, but it still had a long way to go before it was ready. The best solution would be a diversified multi-polar financial system, something that could be provided by technology, Carney said. Facebook’s Libra was the most high-profile proposed digital currency to date but it faced a host of fundamental issues that it had yet to address. “As a consequence, it is an open question whether such a new Synthetic Hegemonic Currency (SHC) would be best provided by the public sector, perhaps through a network of central bank digital currencies,” Carney said.

Globalization is dead.

• China Strikes Back At US With New Tariffs On $75 Billion In Goods (R.)

China said on Friday it will impose retaliatory tariffs against about $75 billion worth of U.S. goods, putting as much as an extra 10% on top of existing rates in the dispute between the world’s top two economies. The latest salvo from China comes after the United States unveiled tariffs on an additional $300 billion worth of Chinese goods, including consumer electronics, scheduled to go into effect in two stages on Sept. 1 and Dec. 15. China will impose additional tariffs of 5% or 10% on a total of 5,078 products originating from the United States including agricultural products such as soybeans, crude oil and small aircraft. China is also reinstituting tariffs on cars and auto parts originating from the United States.

Dead as a doornail.

• Trump Heaps Another 5% Tariff On Chinese Goods In Latest Escalation (R.)

U.S. President Donald Trump on Friday lashed back at a new round of Chinese tariffs by heaping an additional 5% duty on some $550 billion in targeted Chinese goods in the latest tit-for-tat trade war escalation by the world’s two largest economies. Trump’s move, announced on Twitter, came hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods, prompting the president earlier in the day to demand U.S. companies move their operations out of China. The intensifying U.S.-China trade war stoked market fears that the global economy will tip into recession, sending U.S. stocks into a tailspin, with the Nasdaq Compositedown 3%, and the S&P 500 down 2.6%. U.S. Treasury yields also declined as investors sought safe-haven assets, and crude oil, targeted for the first time by Chinese tariffs, fell sharply.

Trump’s tariff response was announced after markets closed on Friday, leaving potentially more damage for next week. “Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer,” Trump said on Twitter. “As President, I can no longer allow this to happen!” He said the United States would raise its existing tariffs on $250 billion worth of Chinese imports to 30% from the current 25% beginning on Oct. 1, the 70th anniversary of the founding of the communist People’s Republic of China. At the same time, Trump announced an increase in planned tariffs on the remaining $300 billion worth of Chinese goods to 15% from 10%.

Don’t take Nadler’s hobby away.

• Majority Of Americans Don’t Want Trump Impeached, Removed From Office (USAT)

A majority of Americans oppose impeaching President Donald Trump, according to a new poll by Monmouth University released Thursday. The data point – with 59% of those surveyed responding that Trump should not be impeached and compelled to leave office – comes as Trump’s approval rating remains at 40% in the same poll. In the poll, there is a clear partisan divide on whether the House Judiciary Committee should pursue an impeachment inquiry. While 72% of Democrats believe such an inquiry is a good idea, only 39% of independents and 8% of Republicans share that belief. House Judiciary Committee Chairman Rep. Jerry Nadler, D-N.Y. confirmed the launch of an impeachment inquiry by his House panel earlier this month in an interview on CNN.

Additionally, Nadler sent a letter Thursday asking four other Democratic House committee chairs currently leading investigations into Trump to share documents to aid his committee’s investigation into possible obstruction and other abuses, which could lead to potentially filing articles of impeachment against the president. Nadler wrote to Intelligence Chairman Adam Schiff, D-Calif., Oversight and Reform Chairman Elijah Cummings, D-Md., Financial Services Chairwoman Maxine Waters, D-Calif., and Foreign Affairs Chairman Eliot Engel, D-N.Y. He asked for “documents and testimony, depositions, and/or interview transcripts that you believe may be relevant to the Judiciary Committee’s ongoing impeachment investigation relating to President Trump.”

The Monmouth University poll surveyed 800 adults in the U.S. via telephone from August 16-20, 2019. It has a margin of error of plus or minus 3.5 percentage points.

Neither Orwell nor Bizzarro World have anything on this: CNN just hired the FBI’s former no. 2, who was fired for lying to his own employer/agency. For which he should obviously be in jail, but he’s not. Want to guess where you would be if you lied to the FBI? Ask George Papadopoulos. His lie was superficial slash meaningless at best, but he served time. McCabe’s lies are a whole different universe.

• CNN Hires Former FBI #2 Andy McCabe, Who Was Fired For Leaking And Lying (ZH)

Another Ex-Obama official has joined the ranks of anti-Trump cable news punditry, this time disgraced FBI #2 Andrew McCabe, who was fired for leaking information to the media – then lying about it at least four times, including under oath. Now, McCabe – who is suing the DOJ and FBI over what he claims was a “politically motivated” firing just days before he was set to retire with full benefits,” will join former Director of National Intelligence James Clapper at CNN. Succinctly put by The Federalist’s Mollie Hemmingway: “Andrew McCabe, one of the central figures of the “Russia collusion” hoax, who was fired from the FBI for lying about his leaks to the media, has been hired by CNN, one of the media outlets that did the most to perpetuate the damaging hoax.” – Mollie (@MZHemingway) August 23, 2019

McCabe authorized an FBI spokesman to tell the Wall Street Journal’s Devlin Barrett – just days before the 2016 US election, that the FBI hadn’t put the brakes on an investigation into the Clinton Foundation – at a time in which McCabe was coming under fire for his wife taking a $467,500 campaign contribution from Clinton associate, Terry McAuliffe. As noted above, McCabe then lied about the leak at least four times and was subsequently fired over it. McCabe claimed that his boss, also-fired former FBI Director James Comey, was well aware of the leaks. Comey shot back on ABC’s The View, calling McCabe a liar.

Comey was asked by host Megan McCain how he thought the public was supposed to have “confidence” in the FBI amid revelations that McCabe lied about the leak. “It’s not okay. The McCabe case illustrates what an organization committed to the truth looks like,” Comey said, adding “Good people lie … I still believe Andrew McCabe is a good person but the inspector general found he lied,” noting that there are “severe consequences” within the DOJ for doing so.

Part 4 of Whitney Webb’s incredible series on sexual blackmail.

“Of particular importance are Epstein’s relationship to the Clinton Foundation and the alleged role of Epstein’s Virgin Islands-based hedge fund and the Clinton Foundation in money laundering activity.. [..] It is this tale of intrigue that fully reveals the extent to which this decades-old alliance between organized crime, the CIA, and Israeli intelligence has corrupted and influenced politicians of both political parties, both through the use of sexual blackmail and through other means of coercion. ”

• Genesis and Evolution of the Jeffrey Epstein-Bill Clinton Relationship (Webb)

[..] these sexual blackmail operations proliferated during the Iran-Contra affair, which involved this same dark alliance between U.S./Israeli intelligence and organized crime. Though this series has thus far largely focused on the ties of Republican officials to those operations and associated crimes, the final installment of this series will focus on Democratic politicians, namely the Clinton family, and their ties to this same network as well as Jeffrey Epstein. The Clintons’ own involvement in Iran-Contra revolved around the covert activities at Arkansas’ Mena Airport, which involved the CIA front company Southern Air Transport and occurred while Clinton was governor.

Just a few years into the Clinton presidential administration, Leslie Wexner and Jeffrey Epstein would play a major role in Southern Air Transport’s relocation to Columbus, Ohio, leading to concerns among top Ohio officials that both men were not only working with the CIA, but that Wexner’s company, The Limited, sought to use the CIA-linked airline for smuggling. During that same period of time, Epstein had already forged close ties to important Clinton White House officials and prominent Clinton donors like Lynn Forester de Rothschild and made several personal visits to the official presidential residence.

Some of these ties appear related to Epstein’s shady financial activities, particularly involving currency markets and offshore tax havens — activities he began to perfect while working for prominent Iran-Contra figures in the early 1980s, several of whom were tied to the CIA-linked bank Bank of Credit and Commerce International (BCCI) and had known relationships with Israeli intelligence, namely the Mossad. The nature of Epstein’s work for these individuals and other evidence strongly suggests that Epstein himself had a relationship with BCCI after leaving Bear Stearns and prior to the bank’s collapse in 1991.

Of particular importance are Epstein’s relationship to the Clinton Foundation and the alleged role of Epstein’s Virgin Islands-based hedge fund and the Clinton Foundation in money laundering activity, a relationship still under investigation by MintPress. It is this tale of intrigue that fully reveals the extent to which this decades-old alliance between organized crime, the CIA, and Israeli intelligence has corrupted and influenced politicians of both political parties, both through the use of sexual blackmail and through other means of coercion.

From the same Whitney Webb article. This part warrants attention.

• Bill Barr And Bill Clinton (Webb)

After Clinton’s half-brother Roger was busted for cocaine smuggling (Clinton would later pardon him while president) the CIA sought to move Contra operations out of Arkansas, hoping to put a damper on the increasingly public and sloppy Arkansas-based operation. According to Terry Reed in his book Compromised: Clinton, Bush and the CIA, co-written with John Cummings, a hushed meeting was held in a bunker at Camp Robinson in North Little Rock, Arkansas. During the meeting, William Barr, who represented himself as the emissary of then-CIA Director Bill Casey told Clinton: “The deal we made was to launder our money through your bond business but what we didn’t plan on was you and your n****r here start taking yourselves seriously and purposely shrinking our laundry.”

Barr chastised Clinton for his sloppy handling of the delicate operation and his half-brother’s very public fall from grace. He would later tell Clinton, according to Reed, “Bill, you are Mr. Casey’s fair-haired boy … You and your state have been our greatest asset. Mr. Casey wanted me to pass on to you that unless you fuck up and do something stupid, you’re No. 1 on the short list for a shot at the job that you’ve always wanted. You and guys like you are the fathers of the new government. We are the new covenant.” Attempts to investigate Clinton’s role in the Mena operations and more broadly in the Iran-Contra affair were allegedly axed by Clinton’s own confidantes, who consistently denied he played a role in the scandal.

According to the Wall Street Journal, former IRS investigator William Duncan teamed with Arkansas State Police Investigator Russell Welch in what became a decade-long battle to bring the matter to light. In fact, of the nine separate state and federal probes into the affair, all failed. Duncan would later say of the investigations, “[They] were interfered with and covered up, and the justice system was subverted,” and a 1992 memo from Duncan to high-ranking members of the attorney general’s staff notes that Duncan was instructed “to remove all files concerning the Mena investigation from the attorney general’s office.” The attorney general, serving under George H. W. Bush, at that time was William Barr, who is currently attorney general under Trump.

This stuff is so institutionalized, so deeply engrained in our societies, that is will be very hard to get rid of.

• Long Before Epstein: Sex Traffickers & Spy Agencies (Vos)

In the U.S., the New York State Select Committee On Crime in 1982 investigated nationwide networks of trafficking underage sex workers and producing child pornography. Dale Smith, a committee investigator, noted that call services using minors also profited from “sidelines,” besides the income from peddling prostitution. Smith said they sold information “on the sexual proclivities of the clients to agents of foreign intelligence.” Presumably, this information could be used to blackmail those in positions of power. Smith added that one call service sold information to “British and Israeli intelligence.”

Another U.K. scandal included allegations that Sir Peter Hayman, a British diplomat and deputy director of MI6, was a member of the Pedophile Information Exchange (PIE). Police discovered that two of the roughly dozen pedophiles in his circle had been writing to each other about their interest in “the extreme sexual torture and murder of children,” according to the The Daily Mail. In 2015, The Guardian reported that former Prime Minister Margaret Thatcher had been “adamant that officials should not publicly name” Hayman, “even after she had been fully briefed on his activities….formerly secret papers released to the National Archives shows.”

Still, Hayman was unmasked as a subscriber to PIE in 1981 by M.P. Geoffrey Dickens, who also reportedly raised the national security risk of Hayman’s proclivities, implying they were a potential source of blackmail sought by intelligence agencies. The British tabloid The Mirror reported that intelligence agencies, including the KGB and CIA, kept their own dossiers on U.K. establishment figures involved with PIE and the abuse of minors, to blackmail the targets in exchange for information.

Makes very little sense. Suicide watch is a serious thing, and all it takes is one psychologist?

• Psychologist Approved Jeffrey Epstein’s Removal From Suicide Watch (R.)

A psychologist at the federal detention center in New York City where financier Jeffrey Epstein was jailed on sex-trafficking charges had approved his removal from suicide watch before he killed himself, the U.S. Justice Department said on Friday. The disclosure came in a letter dated on Thursday from Assistant Attorney General Stephen Boyd and addressed to the leaders of the Judiciary Committee of the U.S. House of Representatives, seeking details about the circumstances surrounding Epstein’s death earlier this month. Epstein, who was 66, was found dead Aug. 10 in his cell inside a segregated housing unit of the Metropolitan Correctional Center (MCC) in Lower Manhattan. An autopsy concluded that he hanged himself.

His death triggered investigations by the FBI, the Justice Department’s Office of Inspector General and the U.S. Bureau of Prisons, which runs the detention facility. The Boyd letter, provided to Reuters on Friday, confirmed that Epstein had been placed on suicide watch in July, a status under which the designated prisoner is held in a special cell under constant observation by staff or “inmate companions.” Epstein was “later removed from suicide watch after being evaluated by a doctoral-level psychologist who determined that a suicide watch was no longer warranted,” Boyd wrote in the three-page letter. The letter did not state precisely why a suicide watch had been ordered for Epstein. But Epstein in July had been found unconscious on the floor of his cell with marks on his neck, and officials had been investigating that incident as a possible suicide attempt or assault.

Maybe it takes the French to dig deep enough. Certainly wouldn’t bet on Bill Barr doing the job.

• France Launches Rape Inquiry in Jeffrey Epstein Case (BBC)

French prosecutors have opened an inquiry into rape allegations against the late US financier Jeffrey Epstein. [..] He had an apartment in Paris, and French gender equality minister Marlène Schiappa had called for an inquiry into any abuses committed on French soil. On Friday Paris prosecutors launched a probe for “rape” and “sexual assault”. [..] Epstein spent plenty of time in Paris and owned a luxury apartment near the Arc de Triomphe. Investigations “will focus on potential crimes committed against French victims… and on suspects who are French citizens”, Paris Prosecutor Remy Heitz said in a statement.

A French advocacy group for child sex abuse victims, Innocence En Danger (Innocence at Risk), said this week it had received 10 witness statements involving Epstein regarding alleged sex crimes committed against minors on French soil. Epstein was also friends with French modelling tycoon Jean-Luc Brunel, who was accused in US court documents of procuring young girls for Epstein, along with allegations of rape. Mr Brunel has denied the accusations.

“The Democratic contest may be peaking way too early. And Joe Biden hasn’t even had a chance to claim he is the out-of-wedlock grandson of W.C. Handy.”

• Lost at Sea (Kunstler)

Elizabeth Warren set the stage for anointing herself America’s Race Hustler-in-Chief by addressing the niggling matter of her former claim to be a Cherokee Indian, since disproven by a DNA test. There was loose talk, you see, that she used the Cherokee ruse to bamboozle her overseers on the Harvard Plantation, where she got to work in the Big House known as the Harvard Law School based on her “diversity” bona fides — a “minority hire!” The claim was so transparently idiotic and dishonest that she was desperate to walk it back as delicately as possible, in order to keep up with the race hustling of her fellow pols chasing the nomination. A rain dance was arranged in the aptly-named heartland town of Sioux City.

“Like anyone who’s being honest with themselves, I know that I have made mistakes,” said Ms. Warren, who was met with a standing ovation when she took the stage [The Times reported]. “I am sorry for harm I have caused. I have listened and I have learned a lot, and I am grateful for the many conversations that we’ve had together.” Was a more disingenuous political statement ever contrived? A bundle of devious platitudinous promises of the sort that white people always offered the indigenous folk at a thousand crooked treaty councils? It would have been a little more satisfying, perhaps, if Ms. Warren had specified the mistakes made, e.g. I was falsely claiming a racial identity for career advancement. Now that’s an apology!

“Listening and learning?” I dunno… sounds a little like groveling and pandering. Anyone can choke down a few bites of humble pie but please don’t make me eat that shit sandwich! The Democratic contest may be peaking way too early. And Joe Biden hasn’t even had a chance to claim he is the out-of-wedlock grandson of W.C. Handy. There are indications that the political center is already a little tired of the Everything-Is-Racist trope that the party ran up the flagpole this summer. For The New York Times, it became the publicly acknowledged official editorial slant when newsroom chief Dean Baquet announced that the paper needed a replacement for the shredded gonfalon of RussiaGate.

Is the DNC secretly working for Trump?

Gabbard torpedoed Kamala Harris’s shot at the job. That won’t be forgiven.

• Tulsi Gabbard Victimized by DNC’s Dubious Debate Criteria (Tracey)

Tulsi Gabbard is on the verge of being excluded from the next Democratic presidential debate on the basis of criteria that appear increasingly absurd. Take, for instance, her poll standing in New Hampshire, which currently places Gabbard at 3.3% support, according to the RealClearPolitics average as of Aug. 20. One might suspect that such a figure would merit inclusion in the upcoming debates — especially considering she’s ahead of several candidates who have already been granted entry, including Cory Booker, Amy Klobuchar, Beto O’Rourke, and Andrew Yang. But the Democratic National Committee has decreed that the polls constituting this average are not sufficiently “qualifying.”

What makes a poll “qualifying” in the eyes of the DNC? The answer is conspicuously inscrutable. Months ago, party chieftains issued a list of “approved sponsoring organizations/institutions” for polls that satisfy their criteria for debate admittance. Not appearing on that list is the Boston Globe, which sponsored a Suffolk University poll published Aug. 6 that placed Gabbard at 3%. The DNC had proclaimed that for admittance to the September and October debates, candidates must secure polling results of 2% or more in four separate “approved” polls – but a poll sponsored by the newspaper with the largest circulation in New Hampshire (the Globe recently surpassed the New Hampshire Union Leader there) does not count, per this cockamamie criteria.

There has not been an officially qualifying poll in New Hampshire, Gabbard’s best state, in over a month. The absurdity mounts. A South Carolina poll published Aug. 14 by the Post and Courier placed Gabbard at 2%. One might have again vainly assumed that the newspaper with the largest circulation in a critical early primary state would be an “approved” sponsor per the dictates of the DNC, but it is not. Curious.

Cerberus, the early days.

Will China Retreat Into Itself?

Aug 052019

August 5, 2019 Posted by Raúl Ilargi Meijer at 7:30 pm Primers Tagged with: BRI, CCP, central control, China, devaluation, dollar, Europe, foreign reserves, forex, renminbi, Russia, tariffs, trade talks, US, yuan 16 Responses »

Odilon Redon Peyrelebade landscape 1880

It’s never easy to gauge what exactly is happening in China, or why the CCP Politburo takes the decisions it does. Today, or overnight, is no exception to that. However, one thing that appears certain, but which I don’t see reflected in all the analyses, is that Beijing pushing the value of the renminbi (yuan) down below 7 to the USD in one fell swoop, is a major setback for Xi Jinping and his government.

Yes, China may have given up hope of reaching positive conclusions in its trade talks with the US. And yes, some may think, even in China itself, that devaluing the currency is a tool that can be useful in a potential currency war. But there’s another side to this coin. It’s not even about the value itself, or the change in it, it’s the heavy-handed way it’s executed.

China wants, and desperately needs too, for the yuan to be a force in global financial markets. In very simple terms this is true because if it then wants to buy something, it can simply print the money for it. But only about 1% of global trade today is executed in yuan. That is not nearly enough. It means China needs dollars and euros, all the time. And devaluing the yuan means the country needs even more of those.

You’d almost think: why would you want to do that? What are the long-term prospects for a move like this? You’re telling forex markets that the value of the yuan is not trustworthy, because if Xi or the PBOC decides in the next five minutes that it should go up or down by 10% or 20%, they can do it. The Fed and ECB also have tools to manipulate their currencies (re: interest rates), but none of that magnitude.

The crux of the dilemma probably lies in the Belt and Road Initiative (BRI), which I’ve been saying for years is just China’s way to sell its overcapacity and overproduction abroad. Sure, there may be loftier goals, and surely in the glitzy brochures, but the fact remains that China has tried to be an economic miracle, doing in 10 years what took the US a century, and it never slowed down its growth, at least not voluntarily, even if that might have been a wise move.

Already lately, purchases by Chinese citizens and companies of real estate and businesses abroad have been curtailed, and not a little bit, by Beijing. There’s no better way to convince Chinese people of the miracle’s success than to let them travel the world and spend there, but that, too, may well soon be cut. It kills foreign reserves.

If Beijing could charge participating countries in the Belt and Road Initiative in yuan, and they could pay for the overcapacity’s steel and cement and what not in yuan, that could be a game-changing program for the entire planet. But these countries have no reason to hold yuan, other than the BRI itself. And they, too, were watching the overnight move above 7 and must have thought: let’s be careful now.

And to top it all off, China right now needs for these countries to pay in dollars instead of yuan, because its foreign reserves are shrinking so fast. It’s Catch-22 all the way down. China’s need for dollars goes against everything BRI stands for.

Could the move hurt the US as well? Absolutely. But the long-term view behind the tariffs, and the talks China appears to have lost faith in, is to move the US away from its near all-encompassing addiction to Chinese production, and to move at least some of that production back home. Problem of course is, that is precisely what China’s miracle growth has been built on.

If the US starts bringing production home, who is Beijing going to sell its (over-)production to? Yes, I hear you, to the BRI countries. But there it runs into the currency problems mentioned before. To Europe? The top of that trade route is also behind us. Europe will have to follow the US to an extent, and also bring factories back to the continent (and not just to Germany either).

China could perhaps sell more than it does today to Russia. But that country still does produce a lot of things, and has been forced to be much more self-sufficient due to US and EU sanctions. It’s also a mighty small market compared to 350 million North Americans and 500 million Europeans, who are on average much richer than your average Russian to boot.

There is a way for China to make the yuan more important in global trade (but devaluation is definitely not that way): Beijing could let go of its central and total control over the value of its currency, and let forex markets figure it out. That would give traders -and everyone else- faith in the value. Problem with that is, this is not how central control communist governments think.

Beijing wants both: central total control AND a prominent place in world trade. And it may take them a long time to figure out that is not going to happen, unless of course they first conquer the entire world militarily. That is not an option, at least not for the foreseeable future. Come see me next century.

It wouldn’t be the first time for me to say I can see China retreat into itself, into its own borders and culture and market (1.3 billion people!). If the Communist Party wants to remain in power, and there’s no doubt it does, this may be only possible choice going forward. If growth has indeed left the miracle -as many observers think-, it can implode in very rapid succession. And even if growth hasn’t yet evaporated, it may well very soon. Without the growth, there is no miracle anymore.

And if China can no longer grow its exports, its domestic growth will also become a thing of the past. Domestic consumption can only grow as long as exports do too. Seen from that angle, the problems with trade and the currency look downright ominous. If you need dollars that badly, and you notice that you’re already getting fewer of them, not more, you’re in trouble.

Devaluing your currency may afford you some temporary respite, but it can’t possibly solve your troubles. It can make them much worse though.

I think China has wanted too much too fast, got carried away and forgot to take care of a few potential barriers to its growth, in particular the standing its currency had and still has in the world, and the grinding need for dollars that stems from it. And the Communists have no answer to this problem.

Debt Rattle August 2 2019

Aug 022019

August 2, 2019 Posted by Raúl Ilargi Meijer at 9:55 am Finance Tagged with: Boeing, ECB, Good Friday, IMF, Ireland, Maddow, pensions, rate cut, repression, savings, servile, tariffs, zombies 11 Responses »

Pablo Picasso Bathers with a toy boat 1937

• The Giant Sucking Sound of Financial Repression (WS)

• Dutch Bank ING Warns Against Further ECB Money Printing (R.)

• Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)

• Rate Cut Odds Surge After Tariff Announcement (ZH)

• US Tariffs Risk Reviving Chinese Zombies (R.)

• The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)

• EU Governments Seek Name For IMF Head (R.)

• Boris Johnson’s Commons Working Majority Cut To One (BBC)

• Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)

• Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)

• Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)

• Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

The war on savings and pensions continues unabated. Central banks are in so deep there’s no way out anymore. But what happens when you want to, or have to, retire?

• The Giant Sucking Sound of Financial Repression (WS)

It’s called interest-rate repression. Or more poetically, financial repression. It’s where central banks manipulate interest rates down to where investments with little credit risk, such as Treasury securities, FDIC-insured savings accounts and CDs, pay little or no interest, or pay less interest than the rate of inflation. People such as savers and retirees, and institutions such as pension funds, that depend on this cash flow have lost their income stream. In addition, the purchasing power of their principal is getting gradually wiped out by inflation. How much money are we talking about? In the US alone, this interest rate repression impacts nearly $40 trillion. This includes savings products, Treasury securities, municipal bonds, and high-grade corporate debt.

$40 Trillion with a T. A 2% reduction across the board cuts this income by $800 billion a year. And this has had an impact. Central banks have accomplished this interest-rate repression by pushing short-term rates to zero or below zero, and by buying bonds and other assets to push long-term rates down too. These were emergency measures during the Financial Crisis that have become the “new normal,” as it has been called. This new normal has been going on for over a decade now. Other central banks, including the ECB and the Bank of Japan, pushed their policy rates below zero. This, in addition to vast asset buying binges by those central banks, produced $13 trillion in negative yielding bonds. But that’s a different universe of idiocy that we’re not going to get into today. We’re going to stick to US conditions.

To the Fed’s credit, it is the only major central bank that has raised its policy-rate target a bit, from near-zero to a range between 2.25% and 2.5%, which are still historically low rates. But it is under immense pressure by Wall Street and by the White House to cut rates again. So now we have this situation where short-term Treasury yields are low, and long-dated Treasury yields are even lower. How much money are we talking about here? Let’s see. There are $22 trillion in Treasury securities. They’re held by individuals and institutions, including insurance companies, pension funds, and the Social Security Trust Fund. Then there is high-grade corporate debt. The category of triple-A to single-A-rated debt is about $3.3 trillion. These yields have been pushed down too.

Then there are $3.8 trillion in municipal bonds outstanding. Many of them trade below US Treasury yields. For example, the GO bonds of California, which is not exactly a paragon of fiscal rectitude. During trading last Thursday, the California 10-year yield was 1.76%. This was about one-third of a percentage point below the US Treasury 10-year yield of 2.08% on the same day. Then there are $9.4 trillion in savings products, mostly savings accounts and CDs at banks. There are also about $3 trillion in checking accounts, payroll accounts, etc., but they’re not included here. These are just savings products. So let’s add these categories up: They amount to $39 trillion.

“There is no shortage of money in the market.”

• Dutch Bank ING Warns Against Further ECB Money Printing (R.)

Ralph Hamers made his plea as central banks redouble efforts to keep the cost of borrowing at historic lows to buoy the economy, a policy that weighs on bank profits and makes it costly to hold deposits. “I don’t think QE is a recipe to support an uncertain environment,” Hamers told journalists, referring to so-called quantitative easing to print fresh money. “There is no shortage of money in the market.” Although bankers have previously made similar complaints, Hamers’ blunt comments carry weight because his bank is one of Europe’s largest, with 38 million customers. ING, the largest Dutch bank, cautioned on Thursday that rock-bottom interest rates would pressure future earnings, as it announced a 1.4 billion euro net profit in the second quarter of the year.

“Looking ahead, we expect that persistently low interest rates will put pressure on net interest income,” Hamers said, referring to the bank’s chief earnings pillar from activities such as lending. European Central Bank President Mario Draghi has all but pledged to loosen monetary policy further amid a continued economic deterioration of Europe’s euro currency bloc, still grappling with the aftermath of a debt crisis. Officials recently told Reuters that an interest rate cut in September appeared certain, while government bond buys were also likely. Draghi recently said the outlook looked bleak as a global trade war hit Europe’s manufacturers.

Did he do it to push Powell?

• Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)

Donald Trump’s surprise decision to escalate the trade war with tariffs on another $300bn of Chinese goods has sent global financial markets into a tailspin. After sharp falls on Wall Street in the wake of the US president’s announcement on Twitter on Thursday, Asian share prices plummeted on Friday morning as growing hopes that the world’s two economic superpowers would be able to reach a deal were dashed. In Tokyo the Nikkei was down 2.3%, with a similar fall in Hong Kong and Shanghai. The Kospi was down 0.8% in Seoul while in Sydney the benchmark ASX200, which passed its pre-global financial crisis all-time high on Tuesday, fell 0.3%. On the commodities markets the price of Brent crude oil plunged 7%, its biggest fall for four years, although it recovered 2.5% on Friday to $62.01.

Trump’s decision was also likely to increase the chances of another cut in US interest rates with the prospect of worsening trade with China forcing the Federal Reserve to loosen monetary policy again in September. It follows Wednesday’s 0.25% reduction, which was widely seen as not being enough to please the president who has been very vocal in calling for lower rates to boost the economy. As a signal of lower rates to come, the 10-year US bond yield fell almost 12 basis points on Thursday to 1.902%, hitting the lowest level since Trump won the presidential election in November 2016. The US dollar also fell and stockmarkets in Europe and the US were braced for a turbulent last day’s trading of the week. The FTSE100 is set to drop 1% at the opening and the Dow 0.3%.

“It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.”

• Rate Cut Odds Surge After Tariff Announcement (ZH)

Earlier today, we wrote a post titled “What Would It Take For The Fed To Not Cut Again?”, with Goldman providing a stylized answer, although in retrospect, the post should have been titled “What Would It Take For The Fed To Cut Again”, as that is what the market was far more concerned about after yesterday’s hawkish Powell press conference. In any case, Goldman hinted at the one specific catalyst that could force the Fed to cut more: “We also see risks in the other direction, especially on a significant escalation of tariffs against China.” To this, we said that “if an acceleration in the trade war with China is what the Fed will need to cut more, it’s pretty clear what that means for the chances of any trade deal between Washington and Beijing, since even Trump now understands that if he keeps escalating trade war with China, Powell will have no choice but to eventually cut to 0% (and lower).”

Just a few hours later, we were proven right in suggesting that an escalation in the trade war is inevitable and imminent when Trump tweeted that he would hike tariffs on $300BN in Chinese imports to 10% starting September 1, ending the tentative ceasefire with Beijing with a bang, and sending risk prices sharply lower. And yes, while Trump did suffer a modest drop in his favorite polling indicator – i.e., the stock market – which “cratered” as much as 1.5% below its all time high – far more importantly Trump also called Powell’s bluff, and effectively forced the Fed to prepare for more rate cuts as the trade war with China – which Powell explicitly highlighted as a condition that would result in more easing – is set to escalate further.

Late today, Bloomberg confirmed as much noting that traders “fixated on a timeline in which Powell seems to suggest cooling trade tensions reduced the need for future rate reductions — and a day later Trump revs the tensions back up”, just as we said he would. “It fits the pattern of a president bent on getting the central bank to submit, many thought”, the Bloomberg authors concluded. “Powell was very careful to say that he was looking at three things, one of which was global growth and the extent to which that is risked by trade tensions,” said Ellen Hazen, senior vice president and portfolio manager for F.L. Putnam, which has $2.2 billion under management. “It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.” Precisely, hence our prediction first thing this morning.

Really? Xi is going to build more bridges to nowhere?

• US Tariffs Risk Reviving Chinese Zombies (R.)

President Donald Trump is threatening new levies on $300 billion of Chinese goods entering the United States, after Shanghai talks proved inconclusive this week. That might not prod Chinese officials into striking a deal, but it is likely to raise some unwelcome zombies. Trump is among those who claim the Chinese economy is on the brink of the abyss. And it’s true that as a truce in trade negotiations gets more elusive the country’s business community is being forced to price in a new status quo. Their country has stumbled into a cold war with the world’s largest economy, a nuclear-armed military colossus that controls the world’s foremost trading currency. But a $13 trillion economy growing at 6.2% is hardly imploding, and a country where private consumption makes up roughly two-fifths of nominal GDP has padding against a downturn in trade.

Tensions exacerbate economic problems of China’s own making, though. There is a massive stack of non-performing debt incurred by government banks that mis-allocated capital after the global financial crisis. And there are still plenty of inefficient state-backed companies that compete with China’s private sector, driving down profitability across the board. If the new 10% tariffs kick in on Sept. 1 as Trump threatened on Thursday, President Xi Jinping may re-open a playbook that reformist officials have been trying to close. The central government has already pushed localities to ramp up infrastructure spending, and there may be more to come. Construction investment creates jobs immediately, and the government can order banks to lend, and order state firms to build.

Trump won’t like this.

• The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)

New officials at the heart of the EU will likely keep America’s big tech firms under close scrutiny, experts have told CNBC. The European Commission — the EU’s executive arm — has fined companies such as Google for disrespecting its competition rules, it’s asked Ireland to collect unpaid taxes from Apple and is currently investigating Amazon. It has also proposed different laws that seek to limit online content and there’s little evidence that anything will change under the EU’s new leadership. Dexter Thillien, a senior industry analyst at Fitch Solutions, told CNBC via telephone Wednesday that Europe is keen to continue to be seen as the global leading force in tech regulation. Thillien explained that Europe saw a loophole in global tech regulation and felt the need to act.

“Europeans have all the negatives but none of the positives,” he said, referring to the fact that Europe has not created any large tech firms but has had to deal with the presence of Silicon Valley behemoths. “The European Commission has become more assertive making big tech companies pay their fair share of taxes. If anything, the incoming Commission looks even more determined to do so,” Florian Hense, an economist at Berenberg, told CNBC via email. Ursula von der Leyen, the president-elect of the Commission, said during a speech earlier this month that “if (tech companies) are making these profits by benefiting from our education system, our skilled workers, our infrastructure and our social security, if this is so, it is not acceptable that they make profits, but they are barely paying any taxes because they play our tax system.”

A European under Washington’s thumb.

• EU Governments Seek Name For IMF Head (R.)

European Union finance ministers are set on Friday to choose the bloc’s candidate to lead the International Monetary Fund from a list of four names, a spokeswoman for the French government said. The list includes Jeroen Dijsselbloem, the Dutch former head of euro zone finance ministers; Nadia Calvino, the Spanish economy minister; Olli Rehn, the Finnish central bank governor; and Bulgaria’s World Bank chief executive Kristalina Georgieva. Mario Centeno, the Portuguese chairman of euro zone finance ministers, said on Thursday he was pulling out of the race “in this stage of the process”, adding that he would be available if needed for a compromise solution.

Britain did not field a candidate because it could not come up with a name on time, a European official said. It had been expected to name a candidate and the deadline was extended by a few hours on Thursday to allow it to do so. France is leading the process to select a European candidate. The top job at the Washington-based global lender has historically been filled by a European. Outgoing IMF head Christine Lagarde is taking over from Mario Draghi as European Central Bank president.

is that enough to push through a no-deal Brexit?

• Boris Johnson’s Commons Working Majority Cut To One (BBC)

The Liberal Democrats have won the Brecon and Radnorshire by-election, leaving new PM Boris Johnson with a Commons working majority of just one. Jane Dodds overturned an 8,038 majority to beat incumbent Conservative Chris Davies by 1,425 votes. Mr Davies stood again after being unseated by a petition following his conviction for a false expenses claim. It was the first electoral test for Mr Johnson just eight days after becoming prime minister. It is the quickest by-election defeat for any new prime minister since World War Two.

Now, with the thinnest possible working majority, he will have to rely heavily on the support of his own MPs and his confidence-and-supply partners the DUP to get any legislation passed in key votes. It was also a bad night for Labour, whose vote share dropped by 12.4% as it was beaten into fourth place by the Brexit Party. The result means the Lib Dems now have 13 MPs. Ms Dodds, who is the Welsh Liberal Democrat leader, said: “My very first act as your new MP when I get to Westminster will be to find Mr Boris Johnson, wherever he’s hiding, and tell him to stop playing with the future of our community and rule out a no-deal Brexit.”

“Paddy should know his place..”

• Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)

Boris Johnson’s approach to Ireland is part of an ignoble tradition in British politics. At its heart is the false assumption that superiority in resources and military prowess equates to a superiority in intellectual power and moral rectitude. In short, the idea that might is right and that, ultimately, Paddy should know his place. This assumption shaped and even, at times, dominated, policy on Ireland for centuries before independence. It runs through 19th-century British depictions of the Irish as incapable of self-government, unreliable, lazy and inferior. For Benjamin Disraeli, a British prime minister who shares some personal characteristics with the current incumbent, the Irish were “wild, reckless, indolent, uncertain and superstitious”.

Most obviously, this sense of superiority and a refined “moral” stance was clearly manifest in government policy during the Great Famine of 1845-49, which caused the deaths of more than one million people on the island of Ireland. This consistently damaging strain of thought continued into the 20th century, with British military and economic power often used crudely to address deep-rooted political conflicts in Ireland, which refused, and continue to refuse, to allow for simple solutions. Ireland, the thinking went, should be the handmaiden for glorious Britannia – and this servile position is for Ireland’s own benefit and ultimately serves Irish interests.

Of course, within this particular strain of British political thought, the history of violence and tragedy in Ireland is sometimes portrayed as a product of Irish recalcitrance – a tendency towards disorder and conflict that fails to recognise the beneficence of British policy on the island. Britain, it is often suggested, is a guarantor of Irish stability, addressing and suppressing the inherent conflicts in Irish society, rather than a highly disruptive force that has often recklessly pursued its own interests at a serious cost to its nearest neighbour.

“Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”.

• Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)

In The Ultras, the brutal, brilliant novel by Eoin McNamee set during the Troubles, the protagonist (based on the real-life undercover British intelligence officer Robert Nairac) finds himself in the company of dangerous men like himself. The Ultras plot terrible events and create dark polities while forcing everyone else to live with their consequences. “Ultra meaning beyond,” wrote McNamee. “Ultra meaning extreme.” The so-called war cabinet formed by the new British prime minister, Boris Johnson, and whose course the maverick arch-Brexiteer Dominic Cummings now charts, of course bears no resemblance to the characters in the war of the Ultras imagined by McNamee.

But the sheer velocity and ferocity of their opening salvoes about crashing out of the EU with no deal on October 31 unless the backstop – the insurance policy to avoid a hard border in Ireland – is abolished, raise the kind of alarm that we in Ireland have not felt since the dark years of the Troubles. The political fear is that this new breed of “Brexit Ultras” (Johnson’s cabinet with Nigel Farage’s Brexit party snapping at its heels) could deliberately pursue a no-deal EU exit at the expense of a volatile Irish peace. The sabre-rattling and pre-emptive blame-shifting of course is intended to shore up political support in the UK ahead of a possible general election, but also to intimidate Ireland into abandoning the backstop while shaking the unity of the EU27.

Europe, with its own demons to face, has its red lines too and will not sacrifice the single market or its external borders, or jeopardise the wider integrity of the European project. Ireland, and the fragile peace process that has been built over the past 20 years, falls between these two positions. And while it is still early days for the Johnson premiership, we have a deteriorated state of Anglo-Irish relations following his ascent to power. How real is the damaging rhetoric emanating from London and the anti-Irish tropes spewing from much of the British media? David Yelland, the former editor of the Sun, revealed that he had been shocked when “Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”. “It seems, amazingly, that this is the actual policy of HMG under Johnson,” tweeted Yelland. “They are anti-Irish, arrogant, dangerous and wrong.”

Well, actually, they’re going to change hardware: a second flight control computer and a second angle-of-attack sensor. Both of which are altready on board, but not used.

• Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)

Boeing Co plans further changes to the software architecture of the 737 MAX flight-control system to address a flaw discovered after a test in June, two people briefed on the matter said late on Thursday. The redesign, first reported by the Seattle Times, involves using and receiving input from both flight control computers rather than one. The move comes in response to an effort to address a problem discovered in June during a Federal Aviation Administration(FAA) simulator test. This is on top of earlier announced changes to take input from both angle-of-attack sensors in the MCAS anti-stall system linked to two deadly crashes that led to a global grounding of the plane.

Boeing still hopes to complete the software redesign by the end of September to submit to the FAA for approval, the sources said. For decades, 737 models have used only one of the flight control computers for each flight, with the system switching to the other computer on the following flight, according to people familiar with the plane’s design. The FAA said in June that it had identified a new risk that would need to be addressed before the plane could be ungrounded. Under a scenario where a specific fault in a microprocessor caused an uncommanded movement of the plane’s horizontal tail, it took pilots too long to recognize a loss of control known as runaway stabilizer, a Boeing official said at the time.

Crazy bag lady.

• Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

Once a shining beacon of hope for Russiagate true believers, it looks like Rachel Maddow has left her best days behind her; MSNBC’s conspiracy queen has seen her show plummet to fifth place in cable news ratings. What happened? You rise fast and fall hard in the fickle world of television. Just last April, Maddow overtook Fox News’ Sean Hannity to claim the title of most-watched host across cable news. She had become a reliable source for Russigate aficionados to get their daily dose of crazy. Sadly for Maddow, the latest data released by Nielsen shows her show in fifth place with a total audience of 2.4877 million viewers for July – behind Hannity, Tucker Carlson, Laura Ingraham and The Five (all Fox News shows).

For context, in January this year, Maddow still boasted an audience of nearly 3.3 million, which means she shed around 800,000 viewers in just six months. Maddow was also in fifth place among viewers in the 25-54 age range – the group most-favored by advertisers. Ouch. Once dubbed “the smartest person on TV” by Forbes (really), this is certainly not the big payoff Maddow was expecting, having dedicated three years of her career to breathlessly covering every twist and turn in the anticlimactic Trump-Russia “collusion” drama.

Ship with dolphins.Wall painting from Akrotiri, Thera island (Santorini), Greece.17th century BC.

Debt Rattle May 31 2019

May 312019

May 31, 2019 Posted by Raúl Ilargi Meijer at 9:01 am Finance Tagged with: AOC, Assange, Boeing, extradition, immigration, Mexico, MH17, Russiagate, tariffs, torture, Trump, yield curve 5 Responses »

• Julian Assange Shows Psychological Torture Symptoms – UN Expert (G.)

• Julian Assange Must Never Be Extradited (Matt Taibbi)

• The Unrelenting State (Craig Murray)

• Trump Announces Tariffs On Mexico Until ‘Immigration Problem Remedied’ (G.)

• Futures, Peso Tumble As Trump Unleashes Tariffs On Mexico (ZH)

• GOP Senator Grassley Blasts Trump Over Mexico Tariff Threat (Hill)

• Russiagate Is #1 Threat To US National Security – Stephen Cohen (RT)

• Malaysia PM Wants Evidence To Show Russia Shot Down MH17 (FMT)

• Boeing Admits It ‘Fell Short’ On Safety Alert For 737 (BBC)

• Yield-Curve Spaghetti (WS)

• Ted Cruz, AOC Agree To Ban Former Congress Members From Becoming Lobbyists (G.)

Time is ticking away.

• Julian Assange Shows Psychological Torture Symptoms – UN Expert (G.)

Julian Assange is showing all the symptoms associated with prolonged exposure to psychological torture and should not be extradited to the US, according to a senior UN expert who visited him in prison. Nils Melzer, UN’s special rapporteur on torture, is expected to make his appeal to the UK government on Friday. It comes after Assange, the co-founder of WikiLeaks, was said by his lawyers to be too ill to appear by video link for the latest court hearing of the case on Thursday. Assange has been moved to the health ward of Belmarsh prison, London, where he has been serving a 50-week sentence for skipping bail while fighting extradition to the US.

He is accused of violating the Espionage Act by publishing secret documents containing the names of confidential US military and diplomatic sources. After meeting Assange earlier this month in the company of medical experts who examined him, Melzer will say on Friday that he fears the Australian’s human rights could be seriously violated if he is extradited to the US and will condemn what he describes as the “deliberate and concerted abuse inflicted for years” on him. “Physically there were ailments but that side of things are being addressed by the prison health service and there was nothing urgent or dangerous in that way,” Melzer said.

“What was worrying was the psychological side and his constant anxiety. It was perceptible that he had a sense of being under threat from everyone. He understood what my function was but it’s more that he was extremely agitated and busy with his own thoughts. It was difficult to have a very structured conversation with him.” [..] The lawyer [..] said that his office had been approached by Assange’s lawyers in December. But he said that he was initially reluctant to do so, admitting he was affected by what he called the “prejudice” around the case.However, he began looking into the case again in March and, earlier this week, wrote letters to the foreign ministers of the US, the UK and Sweden.

“In the course of the past nine years, Mr Assange has been exposed to persistent, progressively severe abuse ranging from systematic judicial persecution and arbitrary confinement in the Ecuadorian embassy, to his oppressive isolation, harassment and surveillance inside the embassy, and from deliberate collective ridicule, insults and humiliation, to open instigation of violence and even repeated calls for his assassination,” Melzer will say on Friday. He added the UK authorities had contacted his Geneva office to indicate that the British government would be issuing a point-by-point rebuttal of the assertions made in his letter. [..] “In 20 years of work with victims of war, violence and political persecution I have never seen a group of democratic states ganging up to deliberately isolate, demonise and abuse a single individual for such a long time and with so little regard for human dignity and the rule of law.”

I doubt Orwell ever knew how right he was.

• Julian Assange Must Never Be Extradited (Matt Taibbi)

WikiLeaks founder Julian Assange today sits in the Belmarsh High Security prison in southeast London. Not just for his sake but for everyone’s, we now have to hope he’s never moved from there to America. The United States filed charges against Assange early last month. The case seemed to have been designed to assuage fears that speech freedoms or the press were being targeted. That specific offense was “computer hacking conspiracy” from back in 2010. The “crime” was absurdly thin, a claim that Assange agreed (but failed, apparently) to try to help Chelsea Manning develop an administrative password that could have helped her conceal identity as she downloaded secrets. One typewritten phrase, “No luck so far,” was the damning piece of evidence.

The troubling parts of that case lurked in the rest of the indictment, which seemed to sell normal journalistic activity as part of the offense. The government complained that Assange “took measures to conceal Manning as the source of the disclosure.” Prosecutors likewise said, “Assange encouraged Manning to provide information and records from departments and agencies of the United States.” The indictment stressed Assange/Manning were seeking “national defense information” that could be “used to the injury of the United States.” The indictment likewise noted that the pair had been guilty of transmitting such information to “any person not entitled to receive it.” It was these passages that made me nervous a month and a half ago, because they seemed to speak to a larger ambition.

Use of phrases like “national defense information” given to persons “not entitled to receive it” gave off a strong whiff of Britain’s Official Secrets Acts, America’s Defense Secrets Act of 1911 (which prohibited “national defense” information going to “those not entitled to receive it”) and our Espionage Act of 1917, which retained many of the same concepts. All of these laws were written in a way that plainly contradicted basic free speech protections. The Espionage Act was revised in 1950 by the McCarran Internal Security Act, sponsored by Nevada Senator Pat McGarran (who incidentally was said to be the inspiration for the corrupt “Senator Pat Geary” character in The Godfather). The change potentially removed a requirement that the person obtaining classified information had to have intent to harm the country.

There was a way to read the new law that criminalized what the Columbia Law Review back in 1973 (during the Pentagon Papers controversy) called the “mere retention” of classified material. This provision buried in subsection 793 of the Espionage Law has, since passage, been a ticking time bomb for journalism. The law seems clearly to permit the government to prosecute anyone who simply obtains or receives “national defense” information. This would place not only sources who steal and deliver such information at risk of prosecution, but also the journalists who receive and publish it. If the government ever decided to start using this tool to successfully prosecute reporters and publishers, we’d pretty quickly have no reporters and publishers.

I’m not exaggerating when I say virtually every reporter who’s ever done national security reporting has at some time or another looked at, or been told, or actually received copies of, “national defense” information they were technically “not entitled to receive.

Britain employs torture. What do its own laws say about that?

• The Unrelenting State (Craig Murray)

We are seriously worried about the condition of Julian Assange. He was too unwell to appear in court yesterday, and his Swedish lawyer, Per Samuelson, found him in a state where he was unable to conduct a conversation and give instructions. There are very definite physical symptoms, particularly rapid weight loss, and we are not satisfied that genuine and sufficient diagnostic efforts are being made to determine the underlying cause. Julian had been held for the last year in poor, highly confining and increasingly oppressive conditions in the Ecuadorean Embassy and his health was already deteriorating alarmingly before his expulsion and arrest.

A number of conditions, including dental abcesses, can have very serious consequences if long term untreated, and the continual refusal by the British government and latterly the Ecuadoreans to permit him access to adequate healthcare while a political asylee was a callous denial of basic human rights. I confess to feeling an amount of personal relief after his arrest that at least he would now get proper medical treatment. However there now seems to be no intention to provide that and indeed since he has been in Belmarsh his health problems have accelerated. I witnessed enough of the British state’s complicity in torture to know that this may be more than just the consequence of unintended neglect. That the most lucid man I know is now not capable of having a rational conversation is extremely alarming.

There is no rational reason that Assange needs to be kept in a high security facility for terrorists and violent offenders. We are seeing the motive behind his unprecedented lengthy imprisonment for jumping police bail when he entered political asylum. As a convicted prisoner, Assange can be kept in a worse regime than if he were merely on remand for his extradition proceedings. In particular, his access to his lawyers is extremely restricted and for a man facing major legal proceedings in the UK, USA and Sweden it is impossible, even were he healthy, for his lawyers to have sufficient time with him adequately to prepare his cases while he is under the restrictions placed on a convict. Of course we know from the fact that, within three hours of being dragged from the Ecuadorean Embassy, he was already convicted and sentenced to a lengthy prison term, that the state has no intention that his lawyers should be able to prepare.

It’s like hammering in a nail with a pair of scissors.

• Trump Announces Tariffs On Mexico Until ‘Immigration Problem Remedied’ (G.)

In a surprise announcement that could compromise a major trade deal, Donald Trump announced on Thursday that he is slapping a 5% tariff on all Mexican imports to pressure the country to do more to crack down on the surge of Central American migrants trying to cross the border. He said the percentage would gradually increase “until the Illegal Immigration problem is remedied”. Trump made the announcement by tweet after telling reporters earlier Thursday that he was planning “a major statement” that would be his “biggest” so far on the border. “On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,” he wrote, “at which time the Tariffs will be removed.”

Mexico’s president, Andrés Manuel López Obrador, responded with a two-page letter to Trump on Thursday night. “The Statue of Liberty is not an empty symbol,” he said. “With all due respect, even though you have the right to say it, ‘make America great again’ is a fallacy because, until the end of times, and beyond national borders, universal justice and fraternity should prevail,” he wrote. Amlo, as the president is commonly called, offered his US counterpart history lessons on past periods of cordial US-Mexico relations. He also included details of his plans to develop Central America to stop migration and warned: “I don’t lack courage, I’m not a coward nor timid, rather, I act on principles.”

“The only way the S&P 500 doesn’t sink massively today is if Trump rows back on this.”

• Futures, Peso Tumble As Trump Unleashes Tariffs On Mexico (ZH)

Update 2: some borderline apocalyptic observations from Bloomberg markets live managing editor, Mark Cudmore who writes the following: “This Mexico tariff news is far worse than even the initial market reaction makes it out to be. The timing is almost immediate. Chaos for both companies and bureaucrats. No time for anyone to prepare or make contingencies. The only way the S&P 500 doesn’t sink massively today is if Trump rows back on this. The U.S. imported almost $350b worth of goods from Mexico in 2018. What makes it even worse again, if possible, is that so many traders were hoping Trump would soon take a more conciliatory trade zone because U.S. stocks have weakened. This is a black swan event for markets and people aren’t even registering. Maybe traders are all hoping there’s some mistake or that this won’t be implemented.”

Update 1: it’s going from bad to worse, with the White House warning that it will hike Mexico tariffs to 25% by October 1, if the border crisis persists, as Trump is activating a scorched earth approach whereby he will “punish” any offshore nation that he believes is transgressing, by imposing tariffs. Meanwhile, moments after Trump’s shock tweet, the Mexican deputy foreign minister Seade said that if President’s threat to impose tariffs is carried out, “it would be disastrous”, and Mexico would “respond strongly”, adding that “we will not remain with out arms folded” before the tariff deadline “to see if it is serious.”

“Trade policy and border security are separate issues.”

• GOP Senator Grassley Blasts Trump Over Mexico Tariff Threat (Hill)

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) condemned President Trump’s new tariffs on Mexico late Thursday, calling the move a “misuse” of presidential tariff authority and cautioning the levies could derail passage of the United States-Mexico-Canada Agreement (USMCA). “Trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent,” Grassley said in a statement. The lawmaker cautioned that following through on Trump’s tariff threat “would seriously jeopardize passage of USMCA,” a revision of the North American Free Trade Agreement (NAFTA).

“I support nearly every one of President Trump’s immigration policies, but this is not one of them,” he added. Trump announced he would impose the tariffs to pressure Mexico to stop the flow of migrants into the U.S. via the southern border. [..] Grassley had previously threatened to derail Trump’s central trade achievement over continued steel and aluminum tariffs. Last week, Trump hinted that he had reached a deal to drop those tariffs, paving the way for the USMCA in the Senate.

“This is the worst scandal in American history. It’s the worst, at least, since the Civil War.”

• Russiagate Is #1 Threat To US National Security – Stephen Cohen (RT)

The systemwide US Russophobia that reached its nadir with Russiagate has created a “catastrophe” for both domestic politics and foreign relations that threatens the future of the American system, professor Stephen Cohen tells RT. War with Russia could easily break out if the US insists on pursuing the policy of “demonization” that birthed Russiagate instead of returning to detente and cooperation, New York University professor emeritus of Russian history Stephen Cohen argues on Chris Hedges’ On Contact. While NATO deliberately antagonized post-Soviet Russia by expanding up to its borders, the US deployed missile defense systems along those borders after scrapping an arms treaty, leaving President Vladimir Putin devoid of “illusions” about the goodwill of the West – but armed with “nuclear missiles that can evade and elude any missile defense system.”

Cohen believes the conspiracy theory – which remains front-page news in US media despite being thoroughly discredited, both by independent investigators and last month by special counsel Robert Mueller’s report – is the work of the CIA and its former director, John Brennan, who are dead set against any kind of cooperation with Russia. Attorney General William Barr, who is investigating the FBI over how the 2016 counterintelligence probe began, should take a look at Brennan and his agency, Cohen says. “If our intelligence services are off the reservation to the point that they can first try to destroy a presidential candidate and then a president…we need to know it,” Cohen says. “This is the worst scandal in American history. It’s the worst, at least, since the Civil War.” And the damage wrought by this “catastrophe” hasn’t stopped at the US border.

“We don’t know why we are excluded from the examination but from the very beginning, we see too much politics in it.”

• Malaysia PM Wants Evidence To Show Russia Shot Down MH17 (FMT)

The Malaysian government wants strong evidence to show that Russia is responsible for the Malaysia Airlines flight MH17 tragedy in 2014, said Prime Minister Dr Mahathir Mohamad today. He said Malaysia accepted the investigation report of Holland but only up to the point where the plane was brought down by a missile made by Russia. Mahathir said while the government agreed that the plane was brought down by a Russian missile, it cannot be certain that the missile was launched by Russia. “They are accusing Russia but where is the evidence? We know the missile that brought down the plane is a Russian-type missile, but it could also be made in Ukraine. “You need strong evidence to show it was fired by the Russians.

“It could be by the rebels in Ukraine; it could be Ukrainian government because they too have the same missile,” he said during a dialogue and media conference with the Japanese Foreign Correspondents Club (FCCJ) here today. Mahathir said people of Russia are military people and they would know that MH17 is a passenger plane. “I don’t think a very highly disciplined party is responsible for launching the missile,” he said. The prime minister said Malaysia should also be involved in examining the black box as the plane belongs to Malaysia and there were Malaysian passengers. “We may not have the expertise but we can buy the expertise. For some reason, Malaysia was not allowed to check the black box to see what happened.

“We don’t know why we are excluded from the examination but from the very beginning, we see too much politics in it. “The idea was not to find out how this happened but seems to be concentrated on trying to pin it on the Russians. This is not a neutral kind of examination,” said Mahathir. “Had a neutral party examined and made the conclusion, Malaysia is willing to accept the findings but here we have parties with political interests in the matter,” he added.

Why is the CEO still in office?

• Boeing Admits It ‘Fell Short’ On Safety Alert For 737 (BBC)

Boeing has admitted it “fell short” when it failed to implement a safety alert system on the 737 Max. The aircraft was grounded globally in March after two crashes within months. Boeing boss Dennis Muilenburg said a mistake had been made in the software for a cockpit warning light called an “angle-of-attack (AOA) disagree alert”. He said: “We clearly fell short and the implementation of this angle-of-attack disagree alert was a mistake, right, we did not implement it properly.” In an interview with Norah O’Donnell of CBS News he said Boeing was now fixing the problem.

The alert could have notified pilots and maintenance crews that there was a problem early in the flight. One flight safety expert said if there had been an AOA disagree alert on board the Ethiopian airlines flight it “would have been the very first clue” for the pilots that something was wrong. Chris Brady, a pilot and author of The Boeing 737 Technical Guide said: “I’m fairly confident that the Ethiopian Airlines flight probably would not have crashed if they had had the AOA disagree alert” on the aircraft.

“This is getting pretty nutty, when you think about it.”

• Yield-Curve Spaghetti (WS)

On Thursday, the US Treasury yield curve sagged further in the middle, producing an ever more beautiful middle-age sag, so to speak, that first started taking shape late last year. The chart shows the yield curves on seven dates. Each line represents the yields from the 1-month yield on the left to the 30-year yield on the right, on that date. The steep green line coming up from the bottom represents the yields on December 14, 2016, when the Fed got serious about rate hikes — the steep slope, with short-term yields a lot lower than long-term yields, is what a yield curve in normal-ish times is supposed to look like. The beautifully sagging red line represents the yields today, May 30. The entire portion of the yield curve from the 3-year yield through the 10-year yield has now dropped by over 1 percentage point since the peak on November 8, 2018.

Some more standouts: The 3-year yield inched down to 2.00%, the lowest since January 2, 2018, forming the low point of the middle-age sag. On Nov 8, it was at 3.05%. The 10-year yield dipped to 2.22%, lowest since Sep 18, 2017, and below 1-year and shorter maturities; but it remains above the 2-year yield and in this cycle has not inverted with the 2-year yield yet. The 1-month yield ticked up to 2.37%, from 2.35% yesterday, which had been the bottom of its range, and as is to be expected, right in the middle of the Fed’s target range for the federal funds rate (2.25% -2.50%). The 6-month yield had been anchored since late October at round 2.5%, with only slight variations. It now too has dropped out of this range and hit 2.38% over the past two days but ticked up to 2.40% today. The 30-year yield dropped to 2.65%, the lowest since Nov 7, 2016. This is getting pretty nutty, when you think about it.

AOC should be focusing all her energy on Assange.

• Ted Cruz, AOC Agree To Ban Former Congress Members From Becoming Lobbyists (G.)

A conversation on Twitter has led to an unlikely collaboration between the Republican senator Ted Cruz and the Democratic representative Alexandria Ocasio-Cortez to pass legislation targeting lobbying by former members of Congress. The two lawmakers tweeted support of placing restrictions or a potential lifetime ban on former Congress members becoming lobbyists. The conversation began when Ocasio-Cortez tweeted a study from Public Citizen that found 60% of former Congress members had taken jobs influencing federal policy. “If you are a member of Congress and leave, you shouldn’t be allowed to turn right around and leverage your service for a lobbyist check,” she wrote.

Cruz retweeted Ocasio-Cortez, suggesting bipartisan legislation to fight the Washington political “swamp”. The Republican House representative Chip Roy tweeted that he would help Ocasio-Cortez spearhead the effort. She agreed to create a bipartisan team in the House while Cruz forms one in the Senate to write a ban. [..] Previous efforts to prevent lobbying from former congresspeople have been put forth but not passed, including a 2017 bill co-sponsored by the Republican senator Cory Gardner and the Democratic senators Michael Bennet and Al Franken. Also in 2017, Senator Jon Tester of Montana introduced legislation that would ban lawmakers from lobbying their former colleagues until five years after leaving office, but it failed to gain traction.

Debt Rattle May 10 2019

May 102019

May 10, 2019 Posted by Raúl Ilargi Meijer at 8:59 am Finance Tagged with: Assange, Bolton, Chelsea Manning, Chernobyl, China, Facebook, FBI, Ireland, leverage, Mueller, Steele, Sweden, tariffs, Wikileaks 5 Responses »

James McNeill Whistler Symphony in White, No. 3 1867

• US Hikes Tariffs On Chinese Goods, China Says To Strike Back (R.)

• Historic Lawsuit Could “Wreak Havoc” On The Leveraged Loan Market (ZH)

• The Real Muellergate Scandal (Craig Murray)

• From Russiagate to Gunboat Diplomacy (Jacobin)

• FBI’s Steele Story Falls Apart (Solomon)

• Roger Stone Wins Right To Receive Unredacted Parts of Mueller Report (SC)

• Chelsea Manning Released After 2 Months, Might Be Back In Jail In 6 Days (RT)

• The Law Being Used to Prosecute Julian Assange Is Broken (Ekeland)

• Swedish Prosecutor To Give Decision On Assange Rape Inquiry (G.)

• The Revelations of WikiLeaks: No. 2 (Vos)

• Facebook Co-Founder Calls For Breakup Of The Company (ZH)

• UK Tories Could Come Sixth In European Elections (G.)

• America, You Are Fired! (Dmitry Orlov)

• Chernobyl Has Become A Refuge For Wildlife 33 Years Later (Conv.)

• Ireland Second Country To Declare Climate, Biodiversity Emergency (RTE)

Keep talking!

• US Hikes Tariffs On Chinese Goods, China Says To Strike Back (R.)

U.S. President Donald Trump’s tariff increase to 25% on $200 billion worth of Chinese goods took effect on Friday, and Beijing said it would strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging a trade deal. China’s Commerce Ministry said it “deeply regrets” the U.S. decision, adding that it would take necessary countermeasures, without elaborating. The hike comes in the midst of two days of talks between top U.S. and Chinese negotiators to try to rescue a faltering deal aimed at ending a 10-month trade war between the world’s two largest economies. Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday.

The Commerce Ministry said that negotiations were continuing, and that it “hopes the United States can meet China halfway, make joint efforts, and resolve the issue through cooperation and consultation”. With no action from the Trump administration to reverse the increase as negotiations moved into a second day, U.S. Customs and Border Protection imposed the new 25% duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday. Goods in the more than 5,700 affected product categories that left Chinese ports and airports before midnight will be subject to the original 10% duty rate, a CBP spokeswoman said.

Don’t worry, Fed to the rescue.

• Historic Lawsuit Could “Wreak Havoc” On The Leveraged Loan Market (ZH)

Ask any banker (or analyst) what the difference is between a junk bond and a loan, and you’ll most likely get a blank start in response: starting with the size of the loan market, which is now virtually identical to that of the high yield bond market, continuing through the standardization of loan terms, the growth of secondary trading, and all the way through to “protections” granted to loan investors, which in an age of exclusively covenant-lite issuance, no longer exist, and one can argue that at least superficially, a loan is effectively the same as a junk bond. And yet, there is one critical difference between the two: junk bonds are securities, while loans aren’t. That difference, however, may not be true for much longer.

As Bloomberg reports, a group suing JPMorgan Chase and other banks over a loan that went sour four years ago is alleging the underwriters engaged in securities fraud. If successful, the article contends correctly, the lawsuit will “radically transform the $1.2 trillion leveraged lending market” because should the plaintiff ultimately prevail in arguing that loans are de facto securities, it would dramatically alter how American companies raise debt, according to two industry groups that filed a brief supporting the defendants’ argument last week. “There are absolutely enormous market consequences if a court determines that leveraged loans are securities,” J. Paul Forrester, a partner at Mayer Brown told Bloomberg. “Leveraged loans and lenders would be potentially subject to the same offering and disclosure requirements as securities and would face the same regulatory oversight and enforcement consequences.”

Well, whaddaya know, there are people who agree with me… The VIPS, Assange, it’s all I’ve been talking about. I said Mueller is a coward and a liar, Murray calls him deeply corrupt. Same difference.

• The Real Muellergate Scandal (Craig Murray)

Robert Mueller is either a fool, or deeply corrupt. I do not think he is a fool. I did not comment instantly on the Mueller Report as I was so shocked by it, I have been waiting to see if any other facts come to light in justification. Nothing has. I limit myself here to that area of which I have personal knowledge – the leak of DNC and Podesta emails to Wikileaks. On the wider question of the corrupt Russian 1% having business dealings with the corrupt Western 1%, all I have to say is that if you believe that is limited in the USA by party political boundaries, you are a fool. On the DNC leak, Mueller started with the prejudice that it was “the Russians” and he deliberately and systematically excluded from evidence anything that contradicted that view.

Mueller, as a matter of determined policy, omitted key steps which any honest investigator would undertake. He did not commission any forensic examination of the DNC servers. He did not interview Bill Binney. He did not interview Julian Assange. His failure to do any of those obvious things renders his report worthless. There has never been, by any US law enforcement or security service body, a forensic examination of the DNC servers, despite the fact that the claim those servers were hacked is the very heart of the entire investigation. Instead, the security services simply accepted the “evidence” provided by the DNC’s own IT security consultants, Crowdstrike, a company which is politically aligned to the Clintons.

That is precisely the equivalent of the police receiving a phone call saying: “Hello? My husband has just been murdered. He had a knife in his back with the initials of the Russian man who lives next door engraved on it in Cyrillic script. I have employed a private detective who will send you photos of the body and the knife. No, you don’t need to see either of them.” There is no honest policeman in the world who would agree to that proposition, and neither would Mueller were he remotely an honest man.

[..] Mueller’s failure to examine the servers or take Binney’s evidence pales into insignificance compared to his attack on Julian Assange. Based on no conclusive evidence, Mueller accuses Assange of receiving the emails from Russia. Most crucially, he did not give Assange any opportunity to answer his accusations. For somebody with Mueller’s background in law enforcement, declaring somebody in effect guilty, without giving them any opportunity to tell their side of the story, is plain evidence of malice. Inexplicably, for example, the Mueller Report quotes a media report of Assange stating he had “physical proof” the material did not come from Russia, but Mueller simply dismisses this without having made any attempt at all to ask Assange himself.

Where would US media be without Russia?

• From Russiagate to Gunboat Diplomacy (Jacobin)

One of the things Russiagate skeptics found unsettling about the frenzy over supposed “collusion” was that it made war more likely. Not only did the now-debunked conspiracy theories and resulting political climate push officials into a more aggressive posture toward Russia, but once the Kremlin was returned to its status as the foreign policy elite’s Big Bad, it was easy to imagine a situation where the threat of a Russian bogeyman could be used to justify any number of unrelated foreign adventures. This appears to be exactly what’s happening with Venezuela right now. First there was Fareed Zakaria, who two months ago tried to goad Trump into attacking Venezuela by pointing to Russia’s support for Maduro.

“Putin’s efforts seem designed to taunt the United States,” he said (it might also have something to do with the billions of dollars Russia sank into the country), making reference to the Monroe Doctrine. He asked if Washington would “allow Moscow to make a mockery of another American red line,” warning that “if Washington does not back its words with deeds” the country could become another Syria. Zakaria concluded: “will Venezuela finally be the moment when Trump finally ends his appeasement?” More recently, Secretary of State Mike Pompeo charged that Russia had “invaded” Venezuela before claiming the Kremlin had dissuaded Maduro from fleeing the country at the last moment, something Pompeo has provided no evidence for but much of the media has treated as fact since.

National Security Advisor John Bolton has said that “this is our hemisphere” and “not where the Russians ought to be interfering.” Democratic Sen. Doug Jones echoed this sentiment on CNN, praising the Trump administration for saying “all options are on the table” to deal with Venezuela, something he suggested may have to be acted on “if there is some more intervention [by] Russia.” The national press, taking a break from warning about Trump being a dangerous authoritarian, has been demanding to know why he hasn’t been more aggressive toward the country over this. Particularly shameless was Florida Rep. Mario Díaz-Balart, who went on Tucker Carlson’s show to peddle half-baked innuendo as brazen as anything claimed in the lead up to the Iraq War. If Maduro’s government survived, he claimed, it would be “a green light, an open door for the Russians and for the Chinese and for others to increase their activity against our national security interest right here in our hemisphere.”

John Solomon digs on. “She quoted Steele as saying, “Payments to those recruited are made out of the Russian Consulate in Miami..” [..] “It is important to note that there is no Russian consulate in Miami.”

• FBI’s Steele Story Falls Apart (Solomon)

The FBI’s sworn story to a federal court about its asset, Christopher Steele, is fraying faster than a $5 souvenir T-shirt bought at a tourist trap. Newly unearthed memos show a high-ranking government official who met with Steele in October 2016 determined some of the Donald Trump dirt that Steele was simultaneously digging up for the FBI and for Hillary Clinton’s campaign was inaccurate, and likely leaked to the media. The concerns were flagged in a typed memo and in handwritten notes taken by Deputy Assistant Secretary of State Kathleen Kavalec on Oct. 11, 2016. Her observations were recorded exactly 10 days before the FBI used Steele and his infamous dossier to justify securing a Foreign Intelligence Surveillance Act (FISA) warrant to spy on Trump campaign adviser Carter Page and the campaign’s contacts with Russia in search of a now debunked collusion theory.

It is important to note that the FBI swore on Oct. 21, 2016, to the FISA judges that Steele’s “reporting has been corroborated and used in criminal proceedings” and the FBI has determined him to be “reliable” and was “unaware of any derogatory information pertaining” to their informant, who simultaneously worked for Fusion GPS, the firm paid by the Democratic National Committee (DNC) and the Clinton campaign to find Russian dirt on Trump. That’s a pretty remarkable declaration in Footnote 5 on Page 15 of the FISA application, since Kavalec apparently needed just a single encounter with Steele at State to find one of his key claims about Trump-Russia collusion was blatantly false.

In her typed summary, Kavalec wrote that Steele told her the Russians had constructed a “technical/human operation run out of Moscow targeting the election” that recruited emigres in the United States to “do hacking and recruiting.” She quoted Steele as saying, “Payments to those recruited are made out of the Russian Consulate in Miami,” according to a copy of her summary memo obtained under open records litigation by the conservative group Citizens United. Kavalec bluntly debunked that assertion in a bracketed comment: “It is important to note that there is no Russian consulate in Miami.”

What if the relevant sections did get redacted?

• Roger Stone Wins Right To Receive Unredacted Parts of Mueller Report (SC)

A federal judge in Washington ordered the Department of Justice to turn over any unredacted sections of Special Counsel Robert Mueller’s report on Russian activities during the 2016 presidential campaign that relate to Roger Stone. U.S. District Judge Amy Berman Jackson gave the prosecutors until Monday to “submit unredacted versions of those portions of the report that relate to defendant Stone and/or ‘the dissemination of hacked materials.” Judge Jackson would review the material in private to see if it is relevant to the case and to decide whether Stone and his defense team will have access to the material.

Is this a game?

• Chelsea Manning Released After 2 Months, Might Be Back In Jail In 6 Days (RT)

Whistleblower Chelsea Manning has been released from a Virginia prison where she spent the last 62 days for refusing to testify on her 2010 leak of classified military files before a grand jury. Manning was released from William G. Truesdale Adult Detention Center in Alexandria, Virginia, on Thursday after the term of the grand jury before which she was supposed to testify expired, her legal team said in a statement reported by the Sparrow Project. However, the WikiLeaks whistleblower and activist might soon be locked up again and has already been served with another subpoena, requesting that she testifies before a different set of jurors. “Unfortunately, even prior to her release, Chelsea was served with another subpoena.

This means she is expected to appear before a different grand jury, on Thursday, May 16, 2019, just one week from her release today,” her lawyers said. Despite having spent over two months behind bars, Manning has no intention to cave in to the demand and make herself available to a secret grand jury’s questioning, according to the statement. “Chelsea will continue to refuse to answer questions, and will use every available legal defense to prove to District Judge Trenga that she has just cause for her refusal to give testimony.” Manning insists that she already gave an “exhaustive testimony” on all the matters concerning her disclosure of military documents at a 2013 court martial. In an 8-page declaration filed to the Virginia court on May 6, Manning accused the US government of using the “corrupt and abusive tool” of grand jury to “harass and disrupt political opponents and activists.”

Taking us back to Aaron Schwartz.

• The Law Being Used to Prosecute Julian Assange Is Broken (Ekeland)

[..] the UK courts will evaluate the US’s request to send Assange to Virginia to stand trial in federal court for a single felony charge of conspiracy to commit unauthorized access to a government computer, a violation of the Computer Fraud and Abuse Act (CFAA). After Assange’s arrest, many reached out to ask me about the CFAA. For years, I’ve represented hackers in federal criminal cases nationally involving the CFAA, including Lauri Love, whom the US unsuccessfully tried to extradite from the UK. The US indicted Love in three separate federal courts in New York, New Jersey, and Virginia, for hacking of a number of government sites including NASA, the FBI, the United States Sentencing Commission, and the Bureau of Prisons.

This was part of #OpLastResort, in protest of the CFAA prosecution and death of computer science pioneer Aaron Swartz, whose suicide in 2013 was widely viewed as resulting from a draconian CFAA prosecution. Whether intended or not, the CFAA makes it easy for a prosecutor to bring felony computer crime charges even when there’s little or no harm. [..] The core problem with the Computer Fraud and Abuse Act is that it doesn’t clearly define one of the central things it prohibits: unauthorized access to a computer. The courts across the country aren’t any help on this front, issuing conflicting decisions both with other jurisdictions and often within their own. Under the CFAA, what is a felony in one jurisdiction is legal in another.

This lack of definitional clarity allows prosecutors to charge felonies even when the harms are minimal, questionable, or just political views that DOJ doesn’t like. This is a serious problem, given that much political speech and protest these days is done with computers. And DOJ has previously used the CFAA in a politically charged prosecution. In 2011, DOJ charged the politically outspoken Aaron Swartz under the CFAA for going into an open server closet at MIT, a mecca of modern American hacking, and downloading academic articles—many of which were publicly funded—for public distribution. Even though the extent of any harm was questionable—this was a mere copying of articles—DOJ charged him with felony unauthorized access to a computer, unauthorized damage to a protected computer, felony aiding and abetting of both, and wire fraud.

All Swedes need to be deeply ashamed. Is it too much to ask of you to let your voices be heard? All I hear is silence.

• Swedish Prosecutor To Give Decision On Assange Rape Inquiry (G.)

Sweden’s state prosecutor will announce on Monday whether she will reopen a preliminary investigation into a rape allegation against Julian Assange. The WikiLeaks founder is in prison in Britain after he was arrested last month after seven years holed up in the Ecuadorian embassy in London. The US wants to extradite him in a case relating to WikiLeaks’ massive release of sensitive military and diplomatic documents. Sweden’s legal tussle with the Australian Assange has dragged on for nearly a decade after he was accused by two Swedish women of sexual assault and rape in 2010.

The statute of limitations ran out on the sexual assault allegations in 2015 and the prosecutor dropped the investigation into the rape allegation in 2017 because Assange was in the Ecuadorian embassy, where he had taken refuge to avoid extradition. The prosecutor said at the time the investigation could be reopened if the situation changed. After Assange’s arrest last month, the lawyer representing the woman who accused Assange of rape asked for the investigation to be reopened. “At [a] press conference, the prosecutor will announce her decision, which will formally be made immediately before the press conference,” the Swedish prosecution authority said in a statement.

Elizabeth Lea Vos is compiling a history of all WikiLeaks files.

• The Revelations of WikiLeaks: No. 2 (Vos)

Three months after it published the “Collateral Murder” video, WikiLeaks on July 25, 2010 released a cache of secret U.S. documents on the war in Afghanistan. It revealed the suppression of civilian casualty figures, the existence of an elite U.S.-led death squad and the covert role of Pakistan in the conflict, among other revelations. The publication of the Afghan War Diaries helped set the U.S. government on a collision course with WikiLeaks founder Julian Assange that ultimately led to his arrest last month. The war diaries were leaked by then-Army-intelligence-analyst Chelsea Manning, who had legal access to the logs via her Top Secret clearance.

Manning only approached WikiLeaks, after studying the organization, following unsuccessful attempts to leak the files to The New York Times and The Washington Post. A major controversy surrounding the Diaries’ release were allegations that operational details were made public to the Taliban’s battlefield advantage and that U.S. coalition informants’ lives were put at risk by publishing their names. Despite a widely-held belief that WikiLeaks carelessly publishes un-redacted documents, only 75,000 from a total of more than 92,201 internal U.S. military files related to the Afghan War (between 2004 and 2010) were ultimately published.

WikiLeaks explained that it held back so many documents because Manning had insisted on it: “We have delayed the release of some 15,000 reports from the total archive as part of a harm minimization process demanded by our source.” Manning testified at her 2013 court-martial that the files were not “very sensitive” and did not report active military operations.

Facebook: We’re Not A Monopoly, We’re “A Successful American Company”

Chris Hughes, Zuck’s former roommate, said in a NYT op-ed that Facebook should be split up. The reaction: no, we’re just successful, but we do need new laws, and Zuck himself has some great ideas for that.

• Facebook Co-Founder Calls For Breakup Of The Company (ZH)

[..] would-be rivals can’t raise the money to take on Facebook. Nobody would finance them knowing that if they get too powerful, Facebook will run them out of business. Hughes doesn’t blame Zuckerberg for this; after all, he’s simply demonstrating the “virtuous hustle of a talented entrepreneur.” But this is exactly why the government should feel obligated to step in and “break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.” Specifically, Hughes believes the FTC should work with the DoJ to undo the Instagram and Whatsapp acquisitions. There is some precedent for this, he says.

How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded. Facebook shareholders would initially hold stock in the new companies, although Mark and other executives would probably be required to divest their management shares. Until recently, WhatsApp and Instagram were administered as independent platforms inside the parent company, so that should make the process easier. But time is of the essence: Facebook is working quickly to integrate the three, which would make it harder for the F.T.C. to split them up. For what it’s worth, Hughes acknowledges his complicity in creating Facebook, and the fact that he didn’t speak out – or even question the company’s monopoly power – until after Cambridge Analytica.

But that’s the past: Already, support for breaking up big-tech monopolies is gaining traction among Democrats and Republicans alike. The fact that Hughes has decided to criticized his former co-founder (and one-time college buddy) in such a public forum might seem galling to some: After all, Hughes was transformed into a millionaire 500 times over largely because he had the good fortune of being assigned to the same dorm room as Zuckerberg at Harvard. But regardless, now that Hughes has broken the seal, will he inspire more of Facebook’s co-founders and former top employees speak out. It’s worth noting that in March, Chris Cox, one of Zuckerberg’s top deputies and a longtime FB executive, left the company. Cox’s decision to leave was reportedly due to ‘disagreement’s’ that were alluded to in a blog post.

Torn between multiple lovers. The UK governed by a fringe party.

• UK Tories Could Come Sixth In European Elections (G.)

Conservative officials fear the party could come sixth in the European elections, with their support plummeting to single digits. Candidates running in the election said the party was “almost in denial” that the poll was happening and continued to insist they would not need to take up their seats in the European parliament, despite fading prospects for a cross-party deal with Labour that would enable Brexit to happen before 2 July. The fears of a dismal performance have been stoked by the fact that the party plans to spend no money on candidate campaigning, will not publish a manifesto and is refusing to hold a launch.

One MEP said candidates were funding their campaigns out of their own pockets, unlike previous years when there was a central pot of funding available. They have been told they are allowed to have their own regional manifestos, but many are not bothering, and there will be no central party manifesto. “The thinking is that if we make no effort then we will have an excuse for having done so badly. But it is seriously embarrassing,” said one MEP. Another Conservative source said internal data showed the party could do worse than the Brexit party, Labour, the Lib Dems, Change UK and even potentially the Greens, with support at less than 10%. That would translate to only a handful of seats, down from the current 22.

Nuclear is set to make a come back, because it is the only option to maintain our complex societies. He may have a point there. The ultimate desperation.

• America, You Are Fired! (Dmitry Orlov)

Some ironies are just too precious to pass by. The 2016 US presidential elections gave us Donald Trump, a reality TV star whose famous tag line from his show “The Apprentice” was “You are fired!” Focus on this tag line; it is all that is important to this story. Some Trump Derangement Disorder sufferers might disagree. This is because they are laboring under certain misapprehensions: that the US is a democracy; or that it matters who is president. It isn’t and it doesn’t. By this point, the choice of president matters as much as the choice of conductor for the band that plays aboard a ship as it vanishes beneath the waves. I have made these points continuously since before Trump got into office. Whether or not you think that Trump was actually elected, he did get in somehow, and there are reasons to believe that this had something to do with his wonderfully refreshing “You are fired!” tag line.

[..] Financially ruinous and generally nonsensical schemes such as tar sands, shale oil and industrial-scale photovoltaics, wind generation and electric cars will only accelerate the process of sorting nations into energy haves and energy have-nots, with the have-nots wiping themselves out sooner rather than later. Leaving aside various fictional and notional schemes (nuclear fusion, space mirrors, etc.) and focusing just on the technologies that already exist, there is only one way to maintain industrial civilization, and that is nuclear, based on Uranium 235 (which is scarce) and Plutonium 239 produced from Uranium 238 (of which there is enough to last for thousands of years) using fast neutron reactors. If you don’t like this choice, then your other choice is to go completely agrarian, with significantly reduced population densities and no urban centers of any size.

And if you do like this choice, then you have few alternatives other than to go with the world’s main purveyor of nuclear technology (VVER-series light water reactors, BN-series fast neutron breeder reactors and closed nuclear fuel cycle technology) which happens to be Russia’s state-owned conglomerate Rosatom. It owns over a third of the world nuclear energy market and has a portfolio of international projects stretching far into the future that includes as much as 80% of the reactors that are going to be built. The US hasn’t been able to complete a nuclear reactor in decades, the Europeans managed to get just one new reactor on line (in China) while Japan’s nuclear program has been in disarray ever since Fukushima and Toshiba’s financially disastrous acquisition of Westinghouse. The only other contenders are South Korea and China. Again, if you don’t like nuclear—for whatever reason—then you can always just buy yourself some pasture and some hayfields and start breeding donkeys.

Nuclear anyone?

• Chernobyl Has Become A Refuge For Wildlife 33 Years Later (Conv.)

About 30 researchers from the United Kingdom, Ireland, France, Belgium, Norway, Spain and Ukraine presented the latest results of our work. These studies included work on big mammals, nesting birds, amphibians, fish, bumblebees, earthworms, bacteria and leaf litter decomposition. These studies showed that at present the area hosts great biodiversity. In addition, they confirmed the general lack of big negative effects of current radiation levels on the animal and plant populations living in Chernobyl. All the studied groups maintain stable and viable populations inside the exclusion zone. These studies showed that at present the area hosts great biodiversity.

In addition, they confirmed the general lack of big negative effects of current radiation levels on the animal and plant populations living in Chernobyl. All the studied groups maintain stable and viable populations inside the exclusion zone. A clear example of the diversity of wildlife in the area is given by the TREE project (TRansfer-Exposure-Effects, led by Nick Beresford of the UK’s Centre for Ecology and Hydrology). As part of this project, motion detection cameras were installed for several years in different areas of the exclusion zone. The photos recorded by these cameras reveal the presence of abundant fauna at all levels of radiation. These cameras recorded the first observation of brown bears and European bison inside the Ukrainian side of the zone, as well as the increase in the number of wolves and Przewalski horses.

Our own work with the amphibians of Chernobyl has also detected abundant populations across the exclusion zone, even on the more contaminated areas. Furthermore, we have also found signs that could represent adaptive responses to life with radiation. For instance, frogs within the exclusion zone are darker than frogs living outside it, which is a possible defence against radiation. Studies have also detected some negative effects of radiation at an individual level. For example, some insects seem to have a shorter lifespan and are more affected by parasites in areas of high radiation. Some birds also have higher levels of albinism, as well as physiological and genetic alterations when living in highly contaminated localities. But these effects don’t seem to affect the maintenance of wildlife population in the area.

European bison (Bison bonasus), boreal lynx (Lynx lynx), moose (Alces alces) and brown bear (Ursus arctos) in Chernobyl Exclusion Zone (Ukraine). Proyecto TREE/Sergey Gaschack

Wondering what practical measures they have in mind. Renewables?

• Ireland Second Country To Declare Climate, Biodiversity Emergency (RTE)

Ireland has become only the second country in the world to declare a climate and biodiversity emergency. The development came after a Fianna Fáil amendment to the Oireachtas report on Climate Action was accepted by both the Government and Opposition parties without a vote. Chair of the Climate Action Committee, Fine Gael’s Hildegarde Naughton, welcomed the outcome as “an important statement” but added “now we need action.” She said Minister for Climate Action Richard Bruton would speedily return to the Dáil with new proposals, and she looked forward to working “with all parties and none” to scrutinise them.

Green Party leader Eamon Ryan also welcomed the development, but warned that “declaring an emergency means absolutely nothing unless there is action to back it up. That means the Government having to do things they don’t want to do”. Deputy Bríd Smith, of Solidarity/People Before Profit, said she was “delighted” with the declaration, but added it will be “interesting to see” if the Government will support her Climate Emergency Measures Bill next month, which seeks to to limit oil and gas exploration.

Debt Rattle March 4 2019

Mar 042019

March 4, 2019 Posted by Raúl Ilargi Meijer at 10:21 am Finance Tagged with: Beijing, Canada, cars, collusion, extinction, fruit bats, Monsanto, MSM, Roger Stone, socialism, tariffs, Trump, Venezuela, Xi 7 Responses »

Robert Frank London 1951-52

• US, China Said To Appear Close To Deal To Roll Back Tariffs (R.)

• Beijing To Encourage ‘Shadow’ Lending To Boost Growth – China Economist (CNBC)

• Beijing Locked Down For China’s Greatest Political Spectacle (G.)

• Huawei: Meng Wanzhou Sues Canadian Government Over Arrest (AP)

• May Accused Of £1.6bn Brexit ‘Bribe’ Over New Fund For Deprived Towns (Ind.)

• Russia Tells US It Is Ready For Bilateral Talks On Venezuela (R.)

• Roger Stone Suggests In Instagram Post Robert Mueller ‘Framed’ Him (CNBC)

• Donald Trump Facing Major New Investigation Into ‘Abuse Of Power’ (Ind.)

• America’s Trust In Mainstream Media Hits Rock Bottom (SCF)

• Trump Blames Timing Of Cohen Testimony For Collapse Of Kim Jong-Un Summit (G.)

• US Voters Overwhelmingly Reject “Socialists” And Candidates “Over 75” (ZH)

• Carpocalypse Now: We’re In The Endgame For Cars (BI)

• Toxic Agrochemicals And Regulators’ Collusion With Industry (OffG)

• Endangered Fruit Bats ‘Being Driven To Extinction’ In Mauritius (Ind.)

Can’t wait to see the details

• US, China Said To Appear Close To Deal To Roll Back Tariffs (R.)

The United States and China appear close to a deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese goods, as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs on U.S. goods, a source briefed on negotiations said on Sunday. U.S. President Donald Trump and Chinese President Xi Jinping could seal a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday. In an eight-month trade war, the United States has imposed punitive tariffs on $250 billion worth of imports from China, while Beijing has hit back with tariffs on $110 billion worth of U.S. goods, including soybeans and other commodities.

The actions have roiled financial markets, disrupted manufacturing supply chains and reduced U.S. farm exports. Trump administration officials have said they expect the two presidents to “close” a deal at a summit in coming weeks at Trump’s Mar-a-Lago estate in Florida. The source briefed on the talks said that no dates for a summit had been determined, but that Beijing had reserved a 10-day window from around March 20 for a possible summit. Many details still needed to be worked out, including the terms of an enforcement mechanism to ensure that Beijing follows through on pledges to make changes to policies to better protect U.S. intellectual property, end forced technology transfers and curb industrial subsidies.

Another source familiar with the talks said that Washington and Beijing were close to agreement on non-enforcement issues, including China’s pledges to increase purchases of farm, energy and manufactured products, as well as six agreements on structural policy changes.

Xiang Songzuo is the same economist who is December said Chinese GDP growth was just 1.67%. But openly saying that Xi is selling his soul to the shadows is quite the statement again. How’s that linked to the tariffs deal?

• Beijing To Encourage ‘Shadow’ Lending To Boost Growth – China Economist (CNBC)

After tamping down on shadow banking in the last few years, China will now likely encourage such lending to boost economic growth, a Chinese economist told CNBC on Monday ahead of the country’s annual parliamentary session. “The top agenda of (the) NPC this year is to design policies to prevent further decline (of growth rate),” said Xiang Songzuo, professor at Renmin University in Beijing, referring to the National People’s Congress, which kicks off on Tuesday. “I think this year, regulators will encourage more shadow banking financing, particularly to the private sector,” said Xiang, who was previously a deputy director at the People’s Bank of China and chief economist at the Agricultural Bank of China.

Shadow banking refers to activities performed by financial firms outside the formal banking sector, and therefore subject to lower levels of regulatory oversight and higher risks. According to Xiang, Chinese officials have moved from talking about cutting debt to stabilizing the economy. China’s GDP target last year was around 6.5%. Sources have told Reuters that Beijing will likely set a growth target of between 6.0 to 6.5% in 2019. Shadow banking is “coming back,” Xiang said. In addition to spending more on infrastructure, Beijing will also need to stimulate the economy through lending, particularly to the private sector, he added. [..] Beijing will need to tread a tightrope as it faces the dilemma of what increased shadow lending could bring, said Xiang. “On the one hand, they need shadow banking to finance investment; but on the other hand, they (need to) try to control the potential risks,” he added.

Orwell lives!

• Beijing Locked Down For China’s Greatest Political Spectacle (G.)

China’s largest political event of the year, a meeting of legislative delegates and political advisers known as the “two sessions”, gets under way this week and comes at a time when Chinese leader Xi Jinping faces one of the most challenging periods since coming to power. Thousands of delegates will descend on the Great Hall of the People in Beijing while authorities go into overdrive to prevent any semblance of dissent during the two weeks of meetings of the 3,000-strong National People’s Congress (NPC) , and the Chinese People’s Political Consultative Conference (CPPCC), an advisory body. Xi faces public scrutiny against the backdrop of a slowing Chinese economy, a bruising trade war with the US, heightened international concern over Chinese tech firm Huawei, and growing global criticism over Chinese policies in Xinjiang.

[..] Debate among delegates, scholars, and political observers will be even more constrained this year. Notices ahead of the meeting instruct party members on the “right way to build the party” banning over-the-top praise of the party as well as criticism. “People can’t talk normally, and now even this kind of expression is forbidden. It shows this is a very sensitive period,” said Zhang Lifan, a historian based in Beijing who follows elite Chinese politics. “I’m afraid party committees have taken many preventive measures, to prevent any sensitive speech that can lead to a chaos during the meeting.” He believes discussion of economic issues and the trade war are inevitable. “I think there will still be some ways of talking about the political system, not in direct ways, but using the economy,” he said.

This will hurt Canada much more than the US.

• Huawei: Meng Wanzhou Sues Canadian Government Over Arrest (AP)

Meng Wanzhou, the chief financial officer of Chinese technology company Huawei, is suing the Canadian government, its border agency and the national police force over her high-profile detention. Meng claims they detained, searched and interrogated her before telling her she was under arrest. Lawyers for Meng said on Sunday they had filed a notice of civil claim in the British Columbia supreme court. Canada arrested Meng, the daughter of Huawei’s founder, at the request of the US on 1 December at Vancouver airport. US prosecutors will accuse her of misleading banks about the company’s business dealings in Iran. Meng’s lawsuit alleges that instead of immediately arresting her, authorities interrogated her “under the guise of a routine customs” examination and used the opportunity to “compel her to provide evidence and information”.

The suit also claims Canada Border Service Agency agents seized her electronic devices, obtained passwords and unlawfully viewed the contents and intentionally failed to adviser her of the true reasons for her detention. The suit said only after three hours was she told she was under arrest and had right to counsel. “This case concerns a deliberate and pre-meditated effort on the part of the defendant officers to obtain evidence and information from the plaintiff in a manner which they knew constituted serious violations of the plaintiff’s rights,” the claim says. Meng has been released on bail and is living in Vancouver awaiting extradition proceedings.

25 days. Desperation creeps in. May is bribing Labour MPs.

• May Accused Of £1.6bn Brexit ‘Bribe’ Over New Fund For Deprived Towns (Ind.)

The government has been accused of “bribing” MPs to back Theresa May‘s Brexit deal after announcing a new £1.6bn fund to help deprived towns. The “Stronger Towns Fund“ will offer investment to places that have not benefited from economic growth as much as other parts of the country, ministers said. The government said the money would be used to create jobs, train local people and boost investment, but critics said it was an attempt to convince Labour MPs in Leave-voting areas to back Ms May’s withdrawal agreement, and was not enough to offset the impact of Brexit. £1bn of the funding will be allocated to areas across the country, with more than half going to towns in the north of England. The other £600m will be available for local authorities to bid for.

Of the money being directly allocated by the government, the north west will receive the most, with £281m, followed by the west Midlands (£212m) and Yorkshire and the Humber (£197m). Announcing the fund, Ms May said: ”For too long in our country prosperity has been unfairly spread. Our economy has worked well for some places but we want it to work for all communities. “Communities across the country voted for Brexit as an expression of their desire to see change – that must be a change for the better, with more opportunity and greater control. “These towns have a glorious heritage, huge potential and, with the right help, a bright future ahead of them.”

Doubt that Bolton is interested.

• Russia Tells US It Is Ready For Bilateral Talks On Venezuela (R.)

Russia is ready to take part in bilateral talks with the United States over the issue of Venezuela, Russia’s foreign minister told his U.S. counterpart late on Saturday. The situation in Venezuela was the main topic in a phone call between Foreign Minister Sergei Lavrov and U.S. Secretary of State Mike Pompeo that took place on March 2, Russia’s foreign ministry said on its website. “In connection with Washington’s proposal to hold bilateral consultations on the Venezuelan topic, it was stated that Russia is ready to participate in this,” the ministry said in a statement.

It was “vital to be strictly guided by the principles of the UN Charter since only the Venezuelan people have the right to determine their future,” the statement said. Russia and the United States have been at loggerheads over a U.S.-led campaign for international recognition of Juan Guaido, the Venezuelan opposition leader who declared himself the interim head of state, over President Nicholas Maduro. In the phone call, initiated by the United States, Lavrov condemned the threats that Washington made towards “the country’s lawful leadership,” the ministry said, referring to Maduro.

You can’t put Stone under quasi house arrest and expect him to be quiet. He’ll end up doing crazy stuff.

• Roger Stone Suggests In Instagram Post Robert Mueller ‘Framed’ Him (CNBC)

Roger Stone on Sunday suggested he has been “framed” by special counsel Robert Mueller in an Instagram post that appeared to run afoul of a judge’s barely week-old gag order barring President Donald Trump’s longtime friend from criticizing the prosecutors in the criminal case against him. Stone deleted the only image in that multi-image post that included “Who framed Roger Stone” language shortly after CNBC emailed his lawyer to ask about it. Stone’s post was put online less than 48 hours after the judge, Amy Berman Jackson, ordered lawyers for the admitted Republican “dirty trickster” to explain why they did not tell her earlier about the planned publication of a book by Stone that could violate her gag order on him.

Stone announced on Instagram in January that he was coming out with the book, “The Myth of Russian Collusion: The Inside Story of How Trump Really Won.” In her gag order in U.S District Court in Washington, D.C., Jackson barred Stone from “making statements to the media or in public settings about the Special Counsel’s investigation or this case or any of the participants in the investigation or the case.” The gag extends to “posts on Facebook, Twitter, Instagram or any other form of social media.” If Stone violates the order, Jackson could order him jailed without bail until his trial.

Stone’s new post is comprised of a rotating series of images that ask for money to support Stone’s defense to charges that he lied to Congress and tampered with a witness. One says, “I am committed to proving my innocence. But I need your help.” Another photo, which shows a young Stone standing behind Trump years ago, says, “I’ve always had Trump’s back. Will you have mine?” Two other images tout a “Roger Stone Did Nothing Wrong” t-shirt and “Stone Cold Truth” sweatshirt.

Nadler, Schiff, Mark Warner, they’re on a publicity tour to keep collusion alive just as it’s dying.

• Donald Trump Facing Major New Investigation Into ‘Abuse Of Power’ (Ind.)

The US House Judiciary Committee will launch a probe into possible obstruction of justice and abuse of power by Donald Trump. Jerry Nadler, who chairs the committee, told ABC that the panel wanted to obtain documents from more than 60 people and entities as part of the investigation. Documents from Donald Trump Jr, the president’s son and Allen Weisselberg, the Trump Organization’s chief financial officer, are among those wanted by the panel. “We are going to initiate investigations into abuses of power, into corruption … and into obstruction of justice,” Mr Nadler said. “It’s our job to protect the rule of law.” “It’s very clear that the president obstructed justice,” he said. But the congressman added that it was too soon to consider the possibility of impeachment.

“Before you impeach somebody, you have to persuade the American public that it ought to happen,” he said. The politician said the committee would release the full list of people and organisations it would be seeking information from on Monday. He said that the president’s firing of James Comey, who at the time was leading an investigation into Russia’s alleged interference in the 2016 US election, was evidence of Mr Trump’s obstruction. The congressman also cited what he described as Mr Trump’s attempts to intimidate witnesses involved in the probe. “I am an innocent man being persecuted by some very bad, conflicted & corrupt people in a Witch Hunt that is illegal & should never have been allowed to start,” Donald Trump said on Twitter, in response to the announcement. “Despite this, great success!”

After two years of peddling collusion & venerating Mueller's probe, Nadler now says that if Mueller's probe doesn't find collusion, "we can agree to disagree," and that "this investigation goes far beyond collusion." This isn't moving the goalposts, it's moving the arena: https://t.co/XjHvKPB8jg

— Aaron Maté (@aaronjmate) March 3, 2019

Gee, how can it be?

• America’s Trust In Mainstream Media Hits Rock Bottom (SCF)

Things are going from bad to worse for the US legacy media as its trust credentials have reached an all-time new low, as if that were possible. It has even achieved a lower trust rating than lawyers and members of Congress. The introduction to the CJR poll provided the following ominous opening: “For decades, we’ve known that Americans don’t trust the press. What we haven’t known is how people view the makings of journalism, from the use of fact checkers and anonymous sources to the question of whether money skews journalistic decision-making. This new national poll for CJR answers those questions, and points to how big the trust gap remains.” Indeed, the cynicism on the street should have every mainstream media purveyor in a state of absolute panic.

In one particular finding, it was revealed that many news consumers believe that reporters, seemingly in an effort to push forward with a political agenda, are too quick to run with a story before knowing all of the facts. This has never been more true before than in the Trump era where anything goes, so long as it trashes conservatives. We have just witnessed ample proof of that media tendency in several high-profile cases. This week, attorneys for Nick Sandmann, a student from Covington Catholic High School, filed a lawsuit against the Washington Post, seeking $250 million in damages for negligence. Sandmann and his fellow students became the target of false accusations of racism during a trip to Washington, D.C.

The mainstream media, as well as many politicians and celebrities, pushed the story that the young student, a Trump supporter, had taunted an elderly Native American Indian near the Lincoln Memorial. The story quickly fell apart, however, after video of the encounter and eyewitness accounts destroyed the media version of events. Attorneys for the boy claim that the Bezos-owned newspaper “wrongfully targeted and bullied Nicholas because he was the white, Catholic student wearing a red ‘Make America Great Again’ souvenir cap on a school field trip to the January 18 March for Life in Washington, D.C.” Todd McMurtry, one of the attorneys for the Catholic student, called the Washington Post “a weaponized news outlet that used its power and strength to destroy Nick Sandmann’s reputation.”

[..] When asked how much confidence they had in the media, almost 70 percent of Republican respondents answered “hardly any confidence at all,” while just 25 percent of Democrats held a similar opinion.

Well, not entirely; he merely named it as a factor.

• Trump Blames Timing Of Cohen Testimony For Collapse Of Kim Jong-Un Summit (G.)

US president Donald Trump has blamed that the Democrats’ decision to interview his longtime fixer, lawyer Michael Cohen, on the same day as a meeting with Kim Jong-un for the fact that the North Korea summit ended with no deal. “For the Democrats to interview in open hearings a convicted liar & fraudster, at the same time as the very important Nuclear Summit with North Korea, is perhaps a new low in American politics and may have contributed to the ‘walk.’” Trump said on Twitter, referring to his decision to walk away from what he previously said was a bad deal with Kim. “Never done when a president is overseas. Shame!” Last week in Hanoi, Trump and Kim met for the second time to try to negotiate a deal that would surrender some of North Korea’s nuclear weapons arsenal in return for sanctions relief. After talks fell apart over the issue of sanctions, Trump told a media conference “sometimes you have to walk”.

At the same time in Washington, Trump’s former aide Cohen was testifying before the US House of Representatives’ oversight committee, accusing Trump of ordering his personal attorney to make threats for him about 500 times over the past 10 years. He also called the president a liar, racist and conman. When asked about Cohen’s testimony at a press conference on Thursday in Hanoi after Trump had abruptly decided to end the summit with Kim early, the president called the allegations “incorrect” and criticised the decision to have the hearing while he was away. “I tried to watch as much as I could,” Trump said. “I wasn’t able to watch too much because I’ve been a little bit busy, but I think having a fake hearing like that and having it in the middle of this very important summit is really a terrible thing.”

It doesn’t get more obvious.

• US Voters Overwhelmingly Reject “Socialists” And Candidates “Over 75” (ZH)

[..] in the latest indication that the odds in the general election would be heavily stacked against Bernie, an NBC/Wall Street Journal poll revealed that only 25% of respondents ranked “socialist” as a desirable trait for a candidate. And only 37% said “someone over 75” would be a desirable candidate, according to Bloomberg. Meanwhile, more voters said they would accept a candidate who was gay or a lesbian, or an Independent under the age of 40. Critically, the survey showed that 41% of voters would definitely or likely vote for Trump in 2020, while 48% said they would probably vote for the Democratic candidate. But, in a possible silver lining for Sanders and his “political revolution”, 55% of voters said they would support a candidate who would implement major changes (as Trump did), vs. 42% who said they wouldn’t.

“We’re getting early signals from Democratic primary voters that they are looking for bigger change and someone who agrees with them on policy,” said Bill McInturff, a Republican pollster who worked on the survey. Republicans in the White House, Congress and in the media have made “socialism” a significant point of attack as the election draws closer, ripping proposals for expanded access to Medicare, the so-called Green New Deal, and other Democratic priorities. And though only 41% of respondents said they would support Trump in 2020, a majority said they had a favorable view of the Trump economy, and few expect a recession in the coming year. “As long as these economic numbers look like this, that always keeps an incumbent president in the race,” McInturff said.

[..] only 38% of respondents said they would support a third-party candidate in 2020. Meanwhile, Trump’s approval rating ticked higher in January from 43% to 46%. [..] Trump’s approval rating ticked up to 46 percent from 43 percent in January. He had the support of 88 percent of Republicans. Thirty-seven percent of GOP primary voters said they’d like to see another Republican challenge Trump in 2020, while 59 percent said they were opposed to that.

I’m all for ending teh scourge that cars have become. But why do we need a bunch of US investors for that? And do these people realize that we won’t pay for the upkeep of the roads once we ditch our cars? It’s going to be public transport, not Lyft cars.

• Carpocalypse Now: We’re In The Endgame For Cars (BI)

The founders of the ride-sharing app Lyft filed their IPO papers last week, and their vision for the company is dramatic. Lyft (which works a bit like Uber) is not just about getting you from A to B, they say. Rather, founders Logan Green and John Zimmer believe that car ownership is in permanent decline and they want to help it die, they write in their S-1 filing. “We believe that the world is at the beginning of a shift away from car ownership to Transportation-as-a-Service, or TaaS. Lyft is at the forefront of this massive societal change,” they told investors.

“Car ownership has … economically burdened consumers. US households spend more on transportation than on any expenditure other than housing. … On a per household basis, the average annual spend on transportation is over $9,500, with the substantial majority spent on car ownership and operation.” Cars create “inequality,” they argue. “The average cost of a new vehicle in the United States has increased to over $33,000, which most American households cannot afford,” the IPO says. “We estimate over 300,000 Lyft riders have given up their personal cars because of Lyft.”

• Car sales in Britain declined 18.2% in January. It was the eighth successive month of decline. • Sales in Turkey declined 60%. •Europe-wide, sales are down around 6%. • In the US, total car registrations have declined by about 10% • Tire sales – a proxy for vehicle production – are down in China, too.

The power of Bayer and Monsanto will make us commit collective suicide.

• Toxic Agrochemicals And Regulators’ Collusion With Industry (OffG)

Dr Mason had been writing to the European Chemicals Agency (ECHA), the European Food Safety Authority (EFSA) and the EU Commission for an 18-month period, challenging them about ECHA’s positive assessment of glyphosate. Many people around the world had struggled to understand how and why the US EPA and the EFSA concluded that glyphosate is not genotoxic (damaging to DNA) or carcinogenic, whereas the World Health Organisation’s cancer agency, the IARC, came to the opposite conclusion. The IARC stated that the evidence for glyphosate’s genotoxic potential is “strong” and that glyphosate is a probable human carcinogen. While IARC referenced only peer-reviewed studies and reports available in the public literature, the EPA relied heavily on unpublished regulatory studies commissioned by pesticide manufacturers.

In fact, 95 of the 151 genotoxicity assays cited in the EPA’s evaluation were from industry studies (63%), while IARC cited 100% public literature sources. Another important difference is that the EPA focused its analysis on glyphosate in its pure chemical form, or ‘glyphosate technical’. The problem with that is that almost no one is exposed to glyphosate alone. Applicators and the public are exposed to complete herbicide formulations consisting of glyphosate plus added ingredients (adjuvants). The formulations have repeatedly been shown to be more toxic than glyphosate in isolation. The European Ombudsman has now rejected Rosemary Mason’s complaint who has in turn written a 25-page response documenting the wide-ranging impacts of glyphosate-based Roundup and other agrochemicals on human health and the environment.

She also outlines the various levels of duplicity that have allowed many of these chemicals to remain on the commercial market. Mason is led to conclude that, due to the rejection of her complaint (as with others lodged by her to the Ombudsman), the European Ombudsman Office is also part of the problem and is essentially colluding with European pesticide regulatory authorities. Mason has addressed this concern directly to Emily O’Reilly, who currently holds the post of European Ombudsman: “In your rejection of all my complaints over the last few years, it is clear that The Ombudsman’s Office is protecting the European pesticides regulatory authorities, who are in turn being controlled by the European Glyphosate Task Force…. You have turned a blind eye to the authorisation of many of the toxic pesticides that are on the market today because industry is being allowed to self-regulate.”

The things that must be turned around. We’ve gone much too far.

“The bats – also known as flying foxes – are resorting to eating in orchards to survive because only 5 per cent of Mauritius’s native forests remain..”

• Endangered Fruit Bats ‘Being Driven To Extinction’ In Mauritius (Ind.)

Scientists are suing the Mauritian government for “driving endangered fruit bats towards extinction”, after mass culls killed at least half their population. More than 50,000 of the animals are thought to have been killed in three culls since 2015, in an attempt to protect fruit in orchards. The bats – also known as flying foxes – are resorting to eating in orchards to survive because only 5 per cent of Mauritius’s native forests remain, animal experts warned. Fruit bats are vital for biodiversity as they pollinate flowers and scatter seeds, enabling trees and plants to grow and spread, according to conservationists. But populations of the flying foxes have fallen by more than 50 per cent in four years, said Vincent Florens, an ecologist at the University of Mauritius. Some believe fewer than 30,000 now remain.

Tigga Kingston, a biologist and bat specialist for the International Union for Conservation of Nature, said the fewer animals remain, the more vulnerable they will be to natural disasters, disease and habitat loss, leading to extinction. Britain’s Bat Conservation Trust has pleaded for the culls to end, citing research that found they accounted for only 10 per cent of fruit plant damage. The first cull, in 2015, killed 30,000, and in a second cull, the following year, 7,380 were targeted. The IUCN then raised the bats’ status from vulnerable to endangered. But the latest cull involved 13,000. Prof Florens said he believed the number killed is much higher than the 50,300 government figure. “The culls took place late in the year, when many mothers were pregnant or had babies,” he told National Geographic. “You shoot one bat and basically kill two.” Others were likely to have been injured and died later, he said.

At least 50,000 fruit bats have been culled in Mauritius since they have been forced to survive on orchard fruits because of deforestation (iStock )

Debt Rattle February 21 2019

Feb 212019

February 21, 2019 Posted by Raúl Ilargi Meijer at 11:02 am Finance Tagged with: AOC, arms ban, austerity, Barr, Brexit, collusion, Comey, corporate debt, Germany, independent, Mueller, Sanders, tariffs 12 Responses »

Jan van Eijk The Arnolfini portrait 1434

• A $3 Trillion Debt Tsunami Is About To Flood The Stock Market (MW)

• Attorney General Barr To Announce End Of Mueller Probe Next Week: CNN (ZH)

• Mueller Report May Be ‘Anti-Climactic’ – Clapper (Hill)

• FBI Top Lawyer Believed Hillary Clinton Should Face Charges (Solomon)

• Conservative Split As Tory Rebels Denounce Hardline Brexiters (G.)

• How Not To Organise A Split In A Party (Galloway)

• UK And Ireland Retailers Warn Of 40% Tariffs On Food In No-Deal Brexit (G.)

• UK Economy £100 Billion Smaller Because Of Austerity (G.)

• Germany Rebuffs UK Call To Back Off Saudi Arms Freeze (ZH)

• Bernie Sanders Raised $6 Million In One Day After Launching Campaign (ZH)

• Ocasio-Cortez Refuses To Back Bernie Sanders For 2020 (Ind.)

They’re all still talking about the markets that aren’t markets. Curious. Is it because it’s all they have? Either way, seems leargely useless to me.

• A $3 Trillion Debt Tsunami Is About To Flood The Stock Market (MW)

Will Nasgovitz, who oversees about $1.3 billion in assets as the chief executive of Heartland Advisors, isn’t calling for a “full blown financial crisis,” but, with trillions in corporate debt coming due in the coming years, the industry veteran’s not exactly predicting smooth sailing in the stock market, either. “With interest rates low, the economy strong, and relatively easy lending standards, the thinking went that borrowing to buyback shares or finance acquisitions was a low-risk strategy,” Nasgovitz explained in a recent post. “But the next five years could severely test that Pollyanna view.” Nasgovitz used this chart to illustrate his stance. As you can see, about $3.3 trillion — or 48% of all current outstanding commercial debt — comes due by 2023.

The timing could be problematic. “The sheer volume would be challenging for the market to digest in the best of scenarios, let alone this late in an economic expansion,” Nasgovitz wrote. “Adding to our sense of caution are early signs that lending standards have begun to tighten for commercial and industrial borrowers.” He says that, as banks become more stringent, borrowers could end up paying higher rates just to secure funds to retire outstanding obligations. “While we don’t currently see signs of a full-blown financial crisis on the horizon,” he concluded, “we do believe that excessive debt adds unnecessary challenges to companies in general and will likely be a headwind for heavy borrowers in the intermediate term going forward.”

Overall sentiment: it won’t amount to much. So the media’s next steps are being prepared in the vein of “Just because Mueller couldn’t find a thing, doesn’t mean it doesn’t exist”.

Russiagate has been the media’s golden goose; what can they turn to now?

• Attorney General Barr To Announce End Of Mueller Probe Next Week: CNN (ZH)

Barely a week after being sworn in as the head of the Justice Department, Attorney General William Barr is reportedly planning to announce as early as next week that Robert Mueller has completed his investigation and that a confidential report on Mueller’s findings will be submitted to Congress in the very near future. According to CNN, the preparations – which are in line with an NBC report from late last year that the Mueller report would be completed by the end of February – “are the clearest indication yet that Mueller is nearly done with his almost two-year investigation.” Barr has said that he wants to be as “transparent” as possible while being “consistent with the rules and the law.”

According to the law, Mueller must submit a “confidential” report to the AG after the investigation ends. But the rules don’t require it to be shared with Congress or the public (though, like everything involving the Mueller probe, it will almost certainly leak). One thing that remains unclear is to what extent Mueller’s findings will be shared with Congress (since the DOJ typically frowns on publicizing embarrassing or compromising information about people who haven’t been charged with a crime…though that principle has apparently gone out the window over the last two years). CNN also noted that it’s possible that Mueller has made referrals to other prosecutors besides the New York US attorney who brought charges against Michael Cohen.

The existence of other investigations might also soon come to light. CNN reported that attorneys from the US attorney’s office for Washington DC have been visiting Mueller “more than usual.” Signs that the Mueller probe is winding down have been multiplying in recent weeks. Four of his 17 prosecutors have been reassigned, and the grand jury he has used to secure his indictments hasn’t convened since late January. While Trump is probably hoping that the Russia collusion narrative will decidedly die after the report is released, former DNI James Clapper – whom Trump threatened to strip of his security clearance – warned that the report might leave open the question of whether there actually was collusion between Trump and Russia, giving the release a disappointingly anti-climactic feel, according to the Hill.

A ‘subtle’ shift: now that going after Trump himself is going nowhere, Clapper et al claim Putin uses Trump as an unwitting asset. Takeaway: they will simply continue their collusion accusations. And Putin is an even easier victim.

Give me one reason why this entire cabal should not be investigated.

As I said yesterday: “Isn’t it supremely ironic that Mueller’s main objective today is trying to come up with some narrative that justifies his own probe? It’s circular ‘logic’ at its very best.

But why is McCabe so cocky about his treasonous(-like) behavior? Imagine someone like him doing an interview like that 2 years (or 6) into Obama’s presidency, saying it was possible Barack was an asset of China. Just imagine.”

• Mueller Report May Be ‘Anti-Climactic’ – Clapper (Hill)

Former Director of National Intelligence James Clapper said Wednesday that he’s far from sure that special counsel Robert Mueller’s investigation will clear up questions about President Trump and Russia. He said he was hopeful the Mueller probe will provide some answers, but warned it might not even draw a conclusion on whether there was collusion between the Trump campaign and Moscow. “I think the hope is that the Mueller investigation will clear the air on this issue once and for all. I’m really not sure it will, and the investigation, when completed, could turn out to be quite anti-climactic and not draw a conclusion about that,” Clapper said Wednesday on CNN.

Clapper, a frequent critic of Trump’s, said people in the intelligence community see a strange deference on the president’s part toward Russian President Vladimir Putin. “The strange thing I think that has bothered a lot of people both in and out of the intelligence community is this strange personal deference to Putin by the president. I’ve speculated in the past that the way Putin behaves is to treat President Trump as an asset,” Clapper said Wednesday. He added that if Trump were indeed advancing Putin’s interests, he would more likely be doing so unwittingly.

The White House has lashed out at Clapper over his criticism in the past and announced in August it was reviewing existing security clearances for Clapper and several other former intelligence and law enforcement officials who have criticized the White House. Speculation has ramped up over Trump’s relationship with Russia after it was reported last month that the Justice Department had opened an investigation into whether the president was working on behalf of Moscow’s interests. Former acting FBI Director Andrew McCabe on Friday claimed that he believes “it’s possible” Trump is a Russian asset.

And there’s Comey again, out to save the country.

• FBI Top Lawyer Believed Hillary Clinton Should Face Charges (Solomon)

For most of the past three years, the FBI has tried to portray its top leadership as united behind ex-Director James Comey’s decision not to pursue criminal charges against Hillary Clinton for transmitting classified information over her insecure, private email server. Although in the end that may have been the case, we now are learning that Comey’s top lawyer, then-FBI General Counsel James Baker, initially believed Clinton deserved to face criminal charges, but was talked out of it “pretty late in the process.” The revelation is contained in testimony Baker gave to House investigators last year. His testimony has not been publicly released, but I was permitted to review a transcript.

During questioning by Rep. John Ratcliffe (R-Texas), Baker was unequivocal about his early view that Clinton should face criminal charges. “I have reason to believe that you originally believed it was appropriate to charge Hillary Clinton with regard to violations of law — various laws, with regard to mishandling of classified information. Is that accurate?” Ratcliffe, a former federal prosecutor, asked Baker. Baker paused to gain his lawyer’s permission to respond, and then answered, “Yes.” He later explained why he came to that conclusion, and how his mind was changed: “So, I had that belief initially after reviewing, you know, a large binder of her emails that had classified information in them,” he said.

“And I discussed it internally with a number of different folks, and eventually became persuaded that charging her was not appropriate because we could not establish beyond a reasonable doubt that — we, the government, could not establish beyond a reasonable doubt that — she had the intent necessary to violate (the law).” Asked when he was persuaded to change his mind, Baker said: “Pretty late in the process, because we were arguing about it, I think, up until the end.” Baker made clear that he did not like the activity Clinton had engaged in: “My original belief after — well, after having conducted the investigation and towards the end of it, then sitting down and reading a binder of her materials — I thought that it was alarming, appalling, whatever words I said, and argued with others about why they thought she shouldn’t be charged.”

His boss, Comey, announced on July 5, 2016, that he would not recommend criminal charges. He did so without consulting the Department of Justice (DOJ), a decision the department’s inspector general (IG) later concluded was misguided and likely usurped the power of the attorney general to make prosecutorial decisions. Comey has said, in retrospect, he accepts that finding but took the actions he did because he thought “they were in the country’s best interest.”

More will follow. 5 weeks left.

• Conservative Split As Tory Rebels Denounce Hardline Brexiters (G.)

Three Conservative MPs who resigned to join a new independent group on Wednesday said Theresa May had allowed their former party to fall prey to hardline Brexiters and declared that the Tory modernising project had been destroyed. In the latest evidence that Brexit is reshaping the political landscape, Heidi Allen, Anna Soubry and Sarah Wollaston, all outspoken critics of May’s stance on Europe, said the Conservative party as they had known it under David Cameron was dead. “I’m not leaving the Conservative party – it has left us,” said Soubry at a hastily convened press conference around the corner from the House of Commons. “The modernising reforms that had taken years to achieve were destroyed.”

Allen was asked if she could ever return to the Conservatives and answered: “If we do our jobs properly, there won’t be a Tory party to go back to.” She added: “We’re about creating something better that is bang smack in the centre ground of British politics that people out there, I am convinced, we are convinced, want.” The dramatic resignations – announced shortly before May confronted Jeremy Corbyn at prime minister’s questions – sent shockwaves through Westminster, where MPs had barely digested news of the Labour split. The move reduces May’s already tenuous working majority to eight, raising still more questions over her authority amid rumours that there could be further Tory defections.

On Wednesday night, Allen told ITV’s Peston that “a third of the party” – around 100 of her former colleagues – shared her frustrations at its direction. The Tory former attorney general Dominic Grieve told the BBC: “The government which I am supporting implementing a no-deal Brexit – what would I do? I would not be able to maintain my support of the government. I would have to leave the party.”

George Galloway is right: center liberal parties are exactly what the whole world is rejecting.

• How Not To Organise A Split In A Party (Galloway)

Just seven MPs announced their departure from Jeremy Corbyn’s Labour Party and though there may be others to come this was their first rank. And there lies the first problem. Other than Chuka Umunna virtually nobody has ever heard of the new Independent Group of MPs who were quickly dubbed the ‘Seven Dwarfs’. [..] From a crowded field I’d say the next biggest blunder was registering their parliamentary factions as a private company in a transparent effort to avoid…transparency! It’s true that Chuka and co are the corporate suit types and most of them are more familiar with the boardroom than the boiler room but no parliamentary group in history has turned themselves into a business!

The reasons – millions of them – are not hard to discern. A political party must declare who’s funding it and how much. A private company doesn’t. But again what seemed like a wheeze is in fact a blunder. I’m now free to speculate that they’ve already received millions from Hamas, Hezbollah, Iran and President Putin. It’s probably not true, but how can one tell? [..] I may be wrong and Manchester United may win the Champions League but I’m perfectly sure Centrist neo-liberal politics are currently out of fashion throughout the world. I base this on 14 weeks of mayhem on the streets of France, and not much more than that in President Macron’s opinion poll ratings. On Mrs Merkel slouching out of the German Chancery in ruins. On the Rushmore like ruin of Hillary Clinton. On the portrait of Dorian Gray that is the haunted face of the most hated man in Britain, Tony Blair.

And that’s only the tariffs.

• UK And Ireland Retailers Warn Of 40% Tariffs On Food In No-Deal Brexit (G.)

A no-deal Brexit could lead to tariffs of 40% or more being imposed on food such as beef and cheddar cheese, driving up prices in shops and squeezing household budgets across the UK and Ireland, retail organisations from both countries have warned. With mounting fears that the UK could leave the European Union without an agreement in 36 days’ time, the British Retail Consortium (BRC), Northern Ireland Retail Consortium (NIRC) and Retail Ireland, issued a joint warning that this outcome could lead to delays at borders and shortages of fresh meat, fish, fruit and vegetables. The scheduled withdrawal on 29 March comes at a time in the year when the UK imports a lot of fresh, out-of-season, produce – 90% of the lettuce consumed in Britain, 80% of tomatoes and 70% of soft fruits come from, or arrive via, Europe.

Increased tariffs, the devaluation of sterling and new regulatory checks would drive up the cost of fresh food and drink, which would be passed on to consumers, the retail bodies warned. If the UK leaves the EU without a deal, both fall back on the World Trade Organization’s most favoured nation tariffs, which means import duties on everyday food items from fruit to cheese. This would mean a 42% tariff on imported cheddar, 46% on mozzarella, 40% on beef, 21% on tomatoes and 15.5% on apples, the BRC said. Last year one of the UK’s largest dairy producers, based in Northern Ireland, warned that leaving the customs union under a hard Brexit could lead to the price of meat doubling in the UK and the price of dairy, half of which is imported, rising by up to 50%.

Imagine taking that into a severe recession.

• UK Economy £100 Billion Smaller Because Of Austerity (G.)

Austerity policies from the Treasury have resulted in slower growth in every year since 2010 and left each household £300 a month worse off as a result, a thinktank has said. The New Economics Foundation said its analysis of the impact of tax and spending changes since the Conservatives came to power, first as part of a coalition with the Liberal Democrats, had left the economy £100bn smaller than it would otherwise have been. Although the peak impact of the attempt to reduce a record peacetime budget deficit occurred during the first two years of the 2010-15 parliament, the thinktank said austerity was still acting as a drag on output. The NEF said the cumulative effect of tax, public spending and welfare adjustments on growth by the end of the 2018-19 financial year would be to leave the average household £3,629 a year worse off – the equivalent of £1,495 per person.

The latest public finances figures, due out on Thursday, will show whether the chancellor, Philip Hammond, is on course to hit his forecast for a budget deficit in 2018-19 of £25.5bn – one sixth of its level in the aftermath of the financial crisis and deep recession of 2008-09. Alfie Stirling, head of economics at the NEF, said work by the Office for Budget Responsibility and the Institute for Fiscal Studies made it possible to isolate the effects of austerity. “At this time of year there is often renewed speculation over whether the chancellor will meet his year-end deficit targets by March. But for nine years, the elephant in the room has largely been missed: the sheer scale of economic damage that these targets have contributed to in the first place.”

The Germans have a much smaller weapons industry.

• Germany Rebuffs UK Call To Back Off Saudi Arms Freeze (ZH)

Germany is feeling the pressure from western allies over its weapons exports freeze in the wake of the Saudi killing of Jamal Khashoggi, a freeze first announced in November, which included plans to reject any future export licences to Riyadh, but not previously approved deals. German allies like the UK have lately implored the German government to soften its stance, noting the potential broader economic impact on Europe. British foreign minister Jeremy Hunt, currently in Berlin to discuss the terms of Brexit, reportedly wrote to the German foreign minister, Heiko Maas, in a private letter first revealed by Der Spiegel that UK defense companies would be hindered in contractual obligations related to Eurofighter Typhoon and the Tornado fighter jet delivery, namely to supply parts affected by the German arms freeze.

Hunt told Maas in the letter published in German press: “I am very concerned about the impact of the German government’s decision on the British and European defence industry and the consequences for Europe’s ability to fulfil its Nato commitments.” This follows comments by German chancellor Angela Merkel at the past weekend’s Munich Security Conference acknowledging the need for “common export controls guidelines” across Europe. She said during a question-and-answer session after her speech at the conference: “We have because of our history very good reasons to have very strict arms export guidelines, but we have just as good reasons in our defense community to stand together in a joint defense policy. And if we want … to develop joint fighter planes, joint tanks, then there’s no other way but to move step-by-step towards common export controls guidelines.”

It’s like nothing changed in 4 years. Only this time Bernie may be the favorite.

• Bernie Sanders Raised $6 Million In One Day After Launching Campaign (ZH)

Just one day after officially launching his campaign for the 2020 Democratic nomination during an interview on Vermont Public Radio, Bernie Sanders has already raised more than $6 million through more than 220,000 individual contributions, according to CNN. Sanders, who consistently ranks near the top of most polls alongside former Vice President Joe Biden, saw the money pour in from donors in all 50 states. The average contribution was $27, which is roughly in line with the average contribution from Sanders 2016 upstart primary campaign against Hillary Clinton, in which he won a number of crucial primaries (all while actively working against the DNC). Confirming his outsize popularity in an increasingly crowded field, the self-described “Democratic Socialist”‘s haul dwarfs the $300,000 raised by Elizabeth Warren during the 24 hours after her official campaign launch.

Of the $6 million raised, some 10% (about $600,000) came in the form of recurring donations, providing “a huge, dependable grassroots donor base that will afford the campaign a consistent budgeting baseline.” During his last race, Sanders regularly touted the fact that his campaign was largely funded by small donations. And it appears this is already emerging as a central theme for the 2020 race. “The only way we will win this election and create a government and economy that work for all is with a grassroots movement – the likes of which has never been seen in American history,” Sanders said in his message announcing his campaign. “They may have the money and power. We have the people.”

On top of that $6 million haul, Sanders is entering the race with more than $9 million left in his US Senate campaign committee: funds that he can transfer to his presidential campaign. That puts him behind only Warren ($11 million) and Sen. Kirsten Gillibrand ($10.3 million).

She has no reason to support anyone at all.

• Ocasio-Cortez Refuses To Back Bernie Sanders For 2020 (Ind.)

Alexandria Ocasio-Cortez has refused to endorse Bernie Sanders for the 2020 Democratic nomination, despite working on the senator’s first presidential campaign. A spokesperson for Ms Ocasio-Cortez, like Mr Sanders a self-described democratic socialist, refused to comment directly on the 77-year-old’s Tuesday announcement he is running for a second time. “We’re excited to see so many progressives in the race,” spokesperson Corbin Trent said. “We’re not thinking at all about the next election.” Any endorsement by Ms Ocasio-Cortez is likely to be influential on the outcome of the race, thanks to her massive support among the grassroots of the party. But the 29-year-old, a congresswoman for New York, is unlikely to offer an endorsement before her state’s Democratic primary next year, and may even permanently withhold any explicit support for a single candidate.

Debt Rattle January 17 2019

Jan 172019

January 17, 2019 Posted by Raúl Ilargi Meijer at 9:57 am Finance Tagged with: Brexit, carmakers, China, Corbyn, delay, FYROM, liquidity, Macedonia, May, plastic, referendum, smear, Steele dossier, stimulus, tariffs, Trump 17 Responses »

Pablo Picasso Nude female standing 1922

• Theresa May Survives Confidence Vote, Britain Remains In Brexit Deadlock (G.)

• Corbyn: No Talks With May Until No-Deal Brexit Is Off The Table (G.)

• Markets Expect Brexit To Be Delayed, Bank Of England Governor Says (G.)

• More Than 170 UK Business Leaders Join Call For 2nd Brexit Referendum (G.)

• German Carmakers Warn Hard Brexit Would Be ‘Fatal’ (R.)

• Trump ‘Inclined’ To Impose New US Auto Tariffs (R.)

• Chinese Unemployment Worries Grow As Beijing Beefs Up Stimulus (CNBC)

• China Injects Gargantuan 1.1 Trillion In Liquidity This Week (ZH)

• Greek PM Tsipras Wins Confidence Vote After FYROM Name Crisis (R.)

• DOJ Official Warned Steele Dossier Biased, Connected To Clinton (Solomon)

• The New York Times Smears the President (Stockman)

• Fake Washington Post Copies Announcing Trump Resignation Handed Out In DC (RT)

• Plastic Pollution Of The Oceans Is Set To Treble In The Next Decade (G.)

Brexit will be delayed, quite possibly indefinitely. May’s looking for a way to achieve this while putting the blame on anyone but herself. She survived this votes only becasue of the DUP, whose votes she bought. Welcome to democracy.

• Theresa May Survives Confidence Vote, Britain Remains In Brexit Deadlock (G.)

Theresa May has survived as prime minister after weathering a dramatic no-confidence vote in her government, but was left scrambling to strike a Brexit compromise that could secure the backing of parliament. In a statement in Downing Street on Wednesday night, the prime minister exhorted politicians from all parties to “put aside self-interest”, and promised to consult with MPs with “the widest possible range of views” in the coming days. It followed her announcement that she would invite Jeremy Corbyn and other party leaders for immediate talks on how to secure a Brexit deal, something she had declined to do earlier in the day, although Labour later said Corbyn would decline the invitation unless no-deal was taken off the table.

A day after overwhelmingly rejecting her Brexit deal, rebel Conservatives and Democratic Unionist party (DUP) MPs swung behind the prime minister to defeat Labour’s motion of no confidence by 325 votes to 306 – a majority of 19. In her late-night statement, the prime minister said: “I am disappointed that the leader of the Labour party has not so far chosen to take part – but our door remains open … It will not be an easy task, but MPs know they have a duty to act in the national interest, reach a consensus and get this done.”

The Scottish National party’s leader in Westminster, Ian Blackford, met May on Wednesday night, and the Liberal Democrat leader, Vince Cable, also accepted her invitation. Blackford later wrote to May, urging her to make a “gesture of faith” to show that she was serious. He said the SNP would take part in cross-party talks if she was able to confirm “that the extension of article 50, a ruling out of a no-deal Brexit and the option of a second EU referendum would form the basis of those discussions”.

Corbyn is gambling on new elections. That, too, delays any solution.

• Corbyn: No Talks With May Until No-Deal Brexit Is Off The Table (G.)

Jeremy Corbyn has said he will not hold talks with Theresa May until the prime minister agrees to remove the threat of a no-deal Brexit, ruling out any meeting with the prime minister in the immediate aftermath of the no-confidence vote. Responding to May’s offer of swift talks to break the Brexit impasse, the Labour leader told MPs that before he would entertain “positive discussions about the way forward” she had to agree to his precondition. “The government must remove clearly once and for all the catastrophe of a no-deal exit from the European Union and all the chaos that would result from that,” Corbyn said minutes after the opposition party was defeated in the confidence vote.

Minutes after the exchanges in the Commons, with Downing Street refusing to take no deal off the table, Corbyn’s spokesman said that as things stood, the Labour leader would not take up May’s offer of an evening Brexit meeting. The two sides were still in discussions, but in light of such a fundamental difference, appeared unlikely to come to an agreement to speak in the immediate future – even though only 10 weeks remain until the UK’s planned departure date. When asked directly if Corbyn was going to No10, the spokesman added: “As I understand it that is not going to take place.”

Labour is willing to support a Brexit deal if May will accept a customs union, a close relationship with the single market and enhanced protections for workers and consumers rights. However, this would represent a massive shift for the prime minister and risk splits in her own party, making it hard to see how a deal could be agreed. Corbyn’s spokesman acknowledged this, saying, “Any change in the government red lines will cause them internal splits.”

Times headline said 2020.

• Markets Expect Brexit To Be Delayed, Bank Of England Governor Says (G.)

Investors expect a delay to Britain’s exit from the EU following the crushing defeat of the prime minister’s Brexit deal, the Bank of England governor has said. Mark Carney said the reaction of financial markets in the wake of the vote showed a degree of confidence that a no-deal Brexit was unlikely on 29 March. The pound bounced back against the dollar on Tuesday night amid optimism that article 50 would be prolonged and that the prospect of a disorderly severance from Brussels had receded. “Public market commentary, consistent with our market intelligence, is that a rebound appears to reflect some expectation that the process of resolution would be extended and that the prospect of no-deal may have been diminished,” said Carney.

Speaking to MPs on the Treasury select committee on Wednesday, the governor said investors were following developments in parliament closely to detect shifts in the direction of Brexit. The reaction of EU officials and governments across the continent was also being watched closely. Carney said a “sharp rebound in sterling following the vote” was the main indicator that some investors believed Brexit could be delayed beyond the end of March.

2nd referendum is poison. General elections not so much. But the Tories will cling to power no matter what.

• More Than 170 UK Business Leaders Join Call For 2nd Brexit Referendum (G.)

More than 170 business leaders, including Terence Conran and Norman Foster, have thrown their weight behind the campaign for a second referendum on Brexit. In a step designed to indicate growing support for a “people’s vote” after Theresa May suffered the heaviest parliamentary defeat in the modern era over her Brexit plan, the letter due to be published in the Times on Thursday asks both main party leaders in Westminster to support a second referendum. Conran, the renowned designer, who was knighted in 1983, and Lord Foster, the architect behind the Gherkin skyscraper in the City of London, were among 172 signatories from the world of business urging a second referendum on the final Brexit deal.

The architect Sir David Chipperfield and the noble laureate and research scientist Paul Nurse were also among new names on the list of supporters. Several other captains of industry, including Mike Rake, the former chairman of BT, had previously backed the campaign and were also included as signatories. The figures from business, together representing more than £100bn in annual contributions to the UK economy, warned that a bad Brexit deal or Britain leaving without any deal at all could damage the economy. While admitting that many business leaders had initially backed May’s deal, even though they believed it was far from perfect, the group stated that the priority after the prime minister’s defeat in parliament was to stop a “chaotic crash-out from the EU”.

The letter said: “The only viable way to do this is by asking the people whether they still want to leave the EU. With the clock now ticking rapidly before we are due to quit, politicians must not waste any more time on fantasies. We urge the leadership of both the main parties to support a people’s vote.” Both May and the Labour frontbench under Jeremy Corbyn have so far dismissed the idea of a second referendum. The prime minister has said she will speak to senior MPs to find a compromise deal, while Corbyn is pushing for a general election.

German economy is under severe pressure. Still, I don’t see what’s so wrong about fewer cars.

• German Carmakers Warn Hard Brexit Would Be ‘Fatal’ (R.)

German carmakers on Wednesday warned of fatal consequences if Britain left the European Union without a divorce deal, predicting job losses in Britain and Europe and urging lawmakers to redouble efforts to ensure tariff-free trade can continue. Prime Minister Theresa May’s deal to leave the EU suffered an overwhelming defeat in parliament on Tuesday, leaving the country’s future in limbo and manufacturers bracing for their “worst-case scenario”, a no-deal Brexit. Britain would suffer most if it lost free trade with European markets since 80 percent of vehicles assembled in the country are exported, mostly to the European Union. But for Germany the stakes are also high.

In 2016, Britain was the largest single export market for German manufacturers, who sold 800,000 new cars there, or 20 percent of their overall global exports. Fewer cars are exported to China and U.S. because German carmakers have factories there. “The consequences of a ‘no deal’ would be fatal,” German auto industry association VDA said after the vote. “Without an orderly and practical solution for business, jobs in the car industry, particularly on the British side, are on the line.”

Cars is not the big one, agriculture is. But Europe won’t budge on chlorinated chickens.

• Trump ‘Inclined’ To Impose New US Auto Tariffs (R.)

U.S. President Donald Trump is likely to move ahead with tariffs on imported vehicles, a move that could prompt the European Union to agree a new trade deal, said Senate Finance Committee Chairman Charles Grassley on Wednesday. “I think the president’s inclined to do it,” the Republican senator told reporters. “I think Europe (is) very very concerned about those tariffs … It may be the instrument that gets Europe to negotiate.” U.S. Commerce Department recommendations into whether Trump should impose tariffs of up to 25% on imported cars and parts on national security grounds are due by mid-February. Grassley, who has had regular talks with Trump and U.S. Trade Representative Robert Lighthizer on trade issues, said he did not like new tariffs but “they are a fact of life when Trump is in the White House.”

He said they may have been an “effective tool” in getting China, Canada, Mexico and others to negotiate on trade. Iowa senator Grassley also wants the EU to agree to include agricultural issues in trade talks, although EU trade commissioner Cecilia Malmström said last week the 28-country bloc could not negotiate on agriculture. The White House has pledged not to move forward with imposing tariffs on the EU or Japan as long as it is making constructive progress in bilateral trade talks. Trump has urged the EU to drop its 10% tariff on imported vehicles. The U.S. passenger car tariff is 2.5%, while it imposes 25% tariffs on pickup trucks. Trump has repeatedly threatened to impose new auto tariffs. “Cars is the big one,” Trump said last year.

The economy grows 6% amid widespread job losses?!

• Chinese Unemployment Worries Grow As Beijing Beefs Up Stimulus (CNBC)

Beijing is working hard to stop a slowing Chinese economy from hitting its workforce. In the last several weeks authorities have made a flurry of announcements, including tax cuts, monetary policy loosening and plans to support public spending. The push comes as economic data points to sagging domestic growth and the U.S. looks set to keep up the pressure on trade. Amid that environment, worries of widespread job losses won’t help the already gloomy sentiment that’s giving consumers a second thought on spending. The overarching worry for China’s leaders is that unemployment could lead to social unrest, and deeper questioning of the Communist Party’s claim to having a handle on the best interests of the country.

Already, the economy is widely expected to slow from around 6.5% growth to just above 6%. “We think the biggest risk in the near term is rising unemployment around the Lunar New Year,” Haibin Zhu, chief China economist and head of China equity strategy, J.P. Morgan, said in a Monday report. [..] Gavekal Dragonomics’ China Consumer Analyst Ernan Cui pointed out in a Jan. 9 report that an official survey covering 374,000 large industrial firms shows total employment declined by about 2.8 million people in the 12 months through November. [..] [A UBS] survey in November found that 23% of 125 Chinese respondents in manufacturing have already laid off employees due to the negative effect of U.S.-China trade tensions. Some 34% planned to lay off employees in the next six months, and 18% had cut wages, the report said.

Job losses in Chinese manufacturing accelerated in mid-2018 after the U.S. imposed tariffs Note: Employment in large industrial enterprises, three-month moving average. December excluded for data anomalies.

“..a panicked “spasm”..”

• China Injects Gargantuan 1.1 Trillion In Liquidity This Week (ZH)

Following what Bloomberg calculated was a record net reverse repo liquidity injection on Wednesday, when the PBOC injected a whopping 560 billion yuan of liquidity into the financial system via open market operations, the Chinese central bank has done it again and in Thursday’s open market operation, it sold 250BN yuan in 7 Day repos (slightly below yesterday’s record 350BN), and 150BN in 28 Day repos, which net of maturities resulted in a whopping net 380BN yuan ($56.2BN) liquidity injection. This brings the net liquidity injection this week to a near record 1.14 Trillion yuan (Monday 20BN, Tuesday 180BN, Wednesday 560BN and Thursday 380BN) and the week is not even over yet – should tomorrow’s reverse repo be of similar magnitude, then this week will go down in history as China’s biggest liquidity injection on record.

As yesterday, today’s massive liquidity injection was aimed at “keeping reasonable and sufficient liquidity in banking system as liquidity falls relatively fast during peak season for tax payments,” according to a statement from the PBOC, although why this year should be such a significant outlier, even when factoring in the liquidity needs ahead of the Lunar new year, to prior periods was not exactly clear. There is, of course, a much simpler explanation: with Chinese economic and trade data turning from bad to worse with every passing day, Beijing’s response is increasingly one of a panicked “spasm”, as Nomura’s Charlie McElligott wrote today when he noted that with regard to the response of Chinese authorities in addressing their economic slowdown and credit crunch, “it had to get worse before it got better”—recently collapsing Chinese data has now clearly forced an escalation of easing-/stimulus-/liquidity- policies.

He ‘won’ by one vote. And now has to win another vote on the name deal itself. Funny to see western media all say Macedonia is set to change its name. Who likes homework, after all? There is no country named Macedonia, that’s the whole point.

• Greek PM Tsipras Wins Confidence Vote After FYROM Name Crisis (R.)

The Greek prime minister, Alexis Tsipras, has won a confidence vote in parliament, clearing a major hurdle for Greece’s approval of an accord to end a dispute over Macedonia’s name and averting the prospect of a snap election. Tsipras called the confidence motion after his rightwing coalition partner Panos Kammenos quit the government on Sunday in protest at the name deal signed between Athens and Skopje last year. Parliament gave Tsipras 151 votes, meeting the threshold he required in the 300-member assembly. His leftist party, Syriza, has 145 seats in parliament. Additional support was given by defectors of Kammenos’s Independent Greeks party (ANEL) and independents.

Tsipras told parliament: “I call upon you with hand on heart to give a vote of confidence to the government which gave battle, which bled, but managed to haul the country out of memorandums and surveillance,” referring to Greece’s international lenders, who kept the country on a tight leash for years. [..] Greek opponents of the agreement say Macedonia’s new name – the Republic of North Macedonia, reached after decades of dispute between Athens and Skopje – represents an attempt to appropriate Greek identity.

There are far too many questions for this to go away. Bill Barr to the rescue.

• DOJ Official Warned Steele Dossier Biased, Connected To Clinton (Solomon)

When the annals of mistakes and abuses in the FBI’s Russia investigation are finally written, Bruce Ohr almost certainly will be the No. 1 witness, according to my sources. The then-No. 4 Department of Justice (DOJ) official briefed both senior FBI and DOJ officials in summer 2016 about Christopher Steele’s Russia dossier, explicitly cautioning that the British intelligence operative’s work was opposition research connected to Hillary Clinton’s campaign and might be biased. Ohr’s briefings, in July and August 2016, included the deputy director of the FBI, a top lawyer for then-Attorney General Loretta Lynch and a Justice official who later would become the top deputy to special counsel Robert Mueller.

At the time, Ohr was the associate attorney general. Yet his warnings about political bias were pointedly omitted weeks later from the Foreign Intelligence Surveillance Act (FISA) warrant that the FBI obtained from a federal court, granting it permission to spy on whether the Trump campaign was colluding with Russia to hijack the 2016 presidential election. Ohr’s activities, chronicled in handwritten notes and congressional testimony I gleaned from sources, provide the most damning evidence to date that FBI and DOJ officials may have misled federal judges in October 2016 in their zeal to obtain the warrant targeting Trump adviser Carter Page just weeks before Election Day.

They also contradict a key argument that House Democrats have made in their formal intelligence conclusions about the Russia case. Since it was disclosed last year that Steele’s dossier formed a central piece of evidence supporting the FISA warrant, Justice and FBI officials have been vague about exactly when they learned that Steele’s work was paid for by the law firm representing the Clinton campaign and the Democratic National Committee (DNC). A redacted version of the FISA application released last year shows the FBI did not mention any connection to the DNC or Clinton.

David guts the entire narrative. Well done.

• The New York Times Smears the President (Stockman)

The Donald has been on a red hot twitter rampage, and he’s completely justified. Actually, we didn’t think the Russian Collusion Hoax could get any stupider until we saw the New York Times’ Friday evening bushwhack. The trio of authors, apparently self-tortured victims of the Trump Derangement Syndrome, actually had the gall to print a story in the once and former Gray Lady of journalistic rectitude which was nothing more than an ugly smear on the sitting President of the United States—one that would have done Joe McCarthy proud. [..] the trio —one of whom graduated from Harvard in 2015 and the other two not much older—don’t seem to even know that foreign policy is a debatable issue.

Or that the American people actually voted into office a candidate who took the other side of Imperial Washington’s unwarranted demonization of Putin and made no bones about his desire for a rapprochement with Russia. Actually, as to pursuing rapprochement, so did: • JFK, after the near catastrophe of the Cuban Missile Crisis; • Lyndon Johnson, after the Seven Days War during his meeting with Kosygin at Glassboro NJ; • Richard Nixon, with the ABM Treaty, detente and his visit with Brezhnev in Moscow; • Jimmy Carter, when he signed the SALT-II agreement; • Ronald Reagan, when he went to Moscow to virtually end the Cold War; and • Bill Clinton, when he sent a multi-billion IMF aid package to Yeltsin to help him get re-elected in 1996.

The fact is, all of the above presidential policy initiatives were heatedly debated in Washington during a period when the US and Soviet Union each had roughly 9,000 nuclear warheads pointed at the other. But that did not lead to FBI counter-intelligence investigations of politicians—to say nothing of sitting Presidents—who took the “wrong” side of these thoroughly democratic debates.

Wonder who they’re mocking. Is it Bezos?

• Fake Washington Post Copies Announcing Trump Resignation Handed Out In DC (RT)

Taking the art of fake news to new heights, a non-profit has circulated mock Washington Post issues near the White House, telling readers that President Donald Trump fled to Crimea on the back of women-led protests. Activists giving out fake copies of the Washington Post commuters were spotted near the White House on Wednesday morning. Vigilant readers immediately alerted the newspaper, which said that the copies, dated May 1, 2019, were “not Post products” and that it was “looking into this.” The fake copies include an eye-catching headline for the lead story: “UNPRESIDENTED. Ending Crisis, Trump Hastily Departs White House,” complete with a picture of a glum Trump on his way to “slip in a private car in the wee hours of the morning.”

The paper “reports” that Trump abruptly left his office at 3:15am on May 1, leaving a message on a napkin in the Oval Office that blamed “crooked Hillary,” the mysterious “Hfior,” and “the Fake News Media” for his flight. The report, meticulously mimicking the Washington Post’s source-based reporting style, cites “four White House aides” speaking on condition of anonymity, that they found the napkin two days before events took a dramatic turn. Trump’s fictional resignation and the subsequent swearing-in of Vice President Mike Pence, who instantly promises to keep as low a profile as possible, comes amidst “massive protests” staged by a grassroots movement with #MeToo as its backbone.

[..] The news of Trump’s resignation sparks a wave of celebrations across the globe, with European countries refusing to shelter him. The creators of the fake diligently stick to the Washington Post’s style, fanning the Russia collusion narrative just like their prototype by sending Trump to seek safe haven in Russia – namely, Crimea. While there has been speculation that radical liberal political activist group MoveOn or CODEPINK, a women-led grassroots NGO, might be behind the stunt since they promoted the action, later in the day, The Yes Men, a progressive non-profit group, claimed responsibility in a press release.

UK MPs want action. I say don’t depend on politicians if you want to get things done. Britain has a target date of 2042 for phasing out avoidable plastic waste. As its volume is set to treble by 2030. That is so insane, forget about the rest too. Politics won’t solve this.

• Plastic Pollution Of The Oceans Is Set To Treble In The Next Decade (G.)

A new global agreement to protect the seas should be a priority for the government to stop our seas becoming a “sewer”, according to a cross-party group of MPs. Plastic pollution is set to treble in the next decade, the environmental audit committee warned, while overfishing is denuding vital marine habitats of fish, and climate change is causing harmful warming of the oceans as well as deoxygenation and acidification. The effects of plastic pollution are particularly poorly understood, the committee found in its report, published on Thursday. It found “a lack of data on the serious long-term harm and health implications of plastic particles entering the food chain” and accused the government of treating the oceans as “out of sight, out of mind”.

One way of tackling the problem would be through a “Paris agreement for the sea”, the MPs recommended. Governments are still working on a possible new ocean protection treaty, under the UN. The MPs also called for the government to bring forward the target date of phasing out avoidable plastic waste from 2042, and urged greater action to reduce greenhouse gas emissions. Labour MP Mary Creagh, chair of the committee, said: “We have to stop treating our seas as a sewer. Plastic, chemicals and sewage are choking our oceans, polluting our water and harming every ocean species from plankton to polar bears. Supporting Indonesia and Malaysia to reduce plastic while simultaneously exporting our contaminated plastics to them shows the lack of a joined-up approach at the heart of the government’s strategy.”

[..] A UK government spokesperson said: “The UK is already a global leader in protecting our seas and oceans. We have recently proposed 41 new marine conservation zones, led calls to protect 30% of the world’s oceans by 2030, and we are going further and faster to tackle the plastic that harms marine life with our ambitious resources and waste strategy. “We know there is more to do, and we will soon publish an international ocean strategy to drive global action to conserve the world’s oceans.”

China Won’t Be Taking Over

Jan 092019

January 9, 2019 Posted by Raúl Ilargi Meijer at 7:27 pm Finance, Primers Tagged with: Apple, Balding, CCP, China, debt, exports, GDP, Growth, imports, Samsung, SilkRoad, smartphone, tariffs, Xi 9 Responses »

Pablo Picasso Massacre in Korea 1951

In the New Year, after a close to the old one that was sort of terrible for our zombie markets, do prepare for a whole lot of stories about China (on top of Brexit and Yellow Vests and many more windmills fighting the Donald). And don’t count on too many positive ones that don’t originate in the country itself. Beijing will especially be full of feel-good tales about a month from now, around Chinese New Year 2019, which is February 5.

And we won’t get an easy and coherent true story, it’ll be bits and pieces stitched together. What will remain is that China did the same we did, just on steroids. It took us 100 years to build our manufacturing capacity, they did it in under 20 (and made ours obsolete). It took us 100 years to borrow enough to get a debt-to-GDP ratio of 300%, they did it in 10.

In the process they also accumulated 10 times more non-productive assets than us, idle factories, bridges to nowhere and empty cities, but they thought that would be alright, that demand would catch up with supply. And if you look at how much unproductive stuff we ourselves have gathered around us, who can blame them for thinking that? Perhaps their biggest mistake has been misreading our actual wealth situation; they didn’t see how poorly off we really are.

Xiang Songzuo, “a relatively obscure economics professor at Renmin University in Beijing”, expressed some dire warnings about the Chinese economy in a December 15 speech. He didn’t get much attention, not even in the West. Not overly surprising, since both Beijing and Wall Street have a vested interest in the continuing China growth story.

But with the arrival of 2019, that attention started slowly seeping through. Former associate professor of business and economics at the Peking University HSBC Business School in Shenzhen, Christopher Balding, left China 6 months ago after losing his job. At the time, he wrote: “China has reached a point where I do not feel safe being a professor and discussing even the economy, business and financial markets..”. And, noting a change that very much seems related to what is coming down the road:

”One of my biggest fears living in China has always been that I would be detained. Though I happily pointed out the absurdity of the rapidly encroaching authoritarianism, a fact which continues to elude so many experts not living in China, I tried to make sure I knew where the line was and did not cross it. There is a profound sense of relief to be leaving safely knowing others, Chinese or foreigners, who have had significantly greater difficulties than myself. There are many cases which resulted in significantly more problems for them. I know I am blessed to make it out.”

A few days ago, Balding wrote this on Twitter:

“Most experts dismissed the speech by Xiang Songzuo (claiming Chinese GDP growth could be as low as 1.67%) as implausible…”. No, we didn’t. The GS PE guy and the PKU dean have every reason to deny it. Car and mobile phone shipment down 2% and 16% are not a 6.5% growth economy.”

That certainly sets the tone of the discussion. GDP growth of 1.67% vs the official 6.5%; smartphone shipments down 16%, car sales slumping. Not the kind of numbers you’ll hear from Beijing. And Balding does know China, whether they like it or not. On Monday, Bloomberg, where he was/is a regular contributor, published this from his hand:

China Has a Dangerous Dollar Debt Addiction

Officially, China lists its outstanding external debt at $1.9 trillion . For a $13 trillion economy, that’s not a major amount. But focusing on the headline number significantly understates the underlying risks. Short-term debt accounted for 62% of the total as of September, according to official data, meaning that $1.2 trillion will have to be rolled over this year .

Just as worrying is the speed of increase: Total external debt has increased 14% in the past year and 35% since the beginning of 2017 . External debt is no longer a trivial slice of China’s foreign-exchange reserves, which stood at just over $3 trillion at the end of November, little changed from two years earlier. Short-term foreign debt increased to 39% of reserves in September, from 26% in March 2016.

The true picture may be more precarious. China’s external debt was estimated at between $3 trillion and $3.5 trillion by Daiwa Capital Markets in an August report. In other words, total foreign liabilities could be understated by as much as $1.5 trillion after accounting for borrowing in financial centers such as Hong Kong, New York and the Caribbean islands that isn’t included in the official tally. Circumstances aren’t moving in China’s favor.

The nation’s companies rushed to borrow in dollars when there was a 3% to 5% spread between Chinese and U.S. interest rates and the yuan was expected to strengthen. Borrowing offshore was cheaper and offered the additional bonus of likely currency gains. Now, the spread in official short-term yields has shrunk to near zero and the yuan has been depreciating for most of the past year. Refinancing debt in dollars has become harder, and more risky.

Beijing’s policies have exacerbated the buildup of foreign debt. To promote Xi Jinping’s Belt and Road Initiative, the president’s landmark foreign policy endeavor, China has been borrowing dollars on international markets and lending around the world for everything from Kenyan railways to Pakistani business parks. With this year and 2020 being the peak years for repayments, China faces dollar funding pressure.

To repay their dollar debts, Chinese firms will either have to draw from the central bank’s foreign-exchange reserves (a prospect Beijing is unlikely to allow) or buy dollars on international markets. This creates a new set of problems. There are only 617 billion yuan ($90 billion) of offshore renminbi deposits in Hong Kong available to buy dollars . If China was to push firms to bring debt back onshore, this would necessitate significant outflows that would push down the yuan’s value against the dollar.

The Xiang Songzuo speech was also noted by the Financial Times this week. Their conclusions are not much rosier. Recent US imports from China look good only because both buyers and sellers try to stay ahead of tariffs. And whole some truce or another there may smoothen things a little, China must launch a massive stimulus against the background of twice as much investment being needed for a unit of GDP growth.

Nervous Markets: How Vulnerable Is China’s Economy?

A relatively obscure economics professor at Renmin University in Beijing sparked a minor furore last month when he claimed a secret government research group had estimated China’s growth in GDP could be as low as 1.67% in 2018 — far below the officially published rate of 6.7% for the year up to September.

Most experts dismissed the speech by Xiang Songzuo as implausible, despite longstanding doubts about the reliability of China’s official GDP data. Yet although discussion of his claims was quickly scrubbed from the Chinese internet, the presentation has been viewed more than 1.2m times on YouTube — an indication of the raw nerve Mr Xiang touched with his doom-laden warnings.

[..] the question that is hanging over global markets is just how vulnerable is China to a much sharper slowdown? Ominously, the recent downturn has occurred even though the expected hit to Chinese exports from the trade war has not yet materialised. In fact, analysts say exports probably received a one-off boost in recent months as traders front-loaded shipments to beat the expected tariff rise from 10% to 25% that US president Donald Trump threatened would take effect in January. That rise is now on hold due to the 90-day truce that Mr Trump agreed with Chinese president Xi Jinping at the G20 meeting in Argentina last month.

[..] The amount of new capital investment required to generate a given unit of GDP growth has more than doubled since 2007 , according to Moody’s Analytics. In other words, investment stimulus produces little bang for Beijing’s buck, even as it adds to the debt levels.

[..] “They [Beijing] will soon have no choice but to launch massive stimulus,” says Alicia Garcia Herrero, chief Asia Pacific economist at Natixis in Hong Kong. “They do not want to give away their credibility because they said they wouldn’t do it, but there is no time to be cautious any more. Not having growth is ultimately the worst outcome of all.”

Christopher Whalen picks up on Xiang Songzuo’s speech as well, and quotes him saying that “Chinese stock market conditions resemble those during the 1929 Wall Street Crash”. Whereas the China Beige Book states that sales volumes, output, domestic and export orders, investment, and hiring fell on a year-over-year and quarter-over-quarter basis. Which leads to the conclusion that deflation is, or should be, Beijing’s main worry.

Oh, and Chinese consumer demand has weakened, something we’ve seen more off recently. Reuters headlines “China To Introduce Policies To Strengthen Domestic Consumption” today, but that headline could have come from any of the past 5 years or so. Domestic consumption is precisely China’s problem, and they can’t achieve nearly enough growth there.

China’s Stability Is at Risk

Foreign investors have convinced themselves that the Chinese Communist Party (CCP) is superior in terms of economic management, this despite ample evidence to the contrary, thus accepting the official view is easy but also increasingly risky. In a December 15 speech , Renmin University’s Xiang Songzuo warned that Chinese stock market conditions resemble those during the 1929 Wall Street Crash. He also suggested that the Chinese economy is actually shrinking.

China growth, Tesla profitability, or the mystical blockchain all require more credulity than ever before. For example, in the first half of 2016 global capital markets stopped due to fear of a Chinese recession. Credit spreads soared and deal flows disappeared. But was this really a surprise? In fact, the Chinese government had accelerated official stimulus in 2015 and 2016 to counter a possible slowdown and, particularly, ensure a quiet domestic scene as paramount leader Xi Jinping was enshrined into the Chinese constitution.

Today western audiences are again said to be concerned about China’s economy and this concern is justified, but perhaps not for the reasons touted in the financial media. The China Beige Book (CBB) fourth-quarter preview, released December 27, reports that sales volumes, output, domestic and export orders, investment, and hiring fell on a year-over-year and quarter-over-quarter basis. CBB is a research service that surveys thousands of companies and bankers on the ground in China every quarter.

Contrary to the positive foreign narrative about “growth” in China, CBB contends that deflation is the bigger threat compared to inflation. “Because of China’s structural problems, deflation has very clearly emerged as the bigger threat in a slowing economy than inflation. Consumer demand has weakened, and you see that reflected in retail and services prices,” CBB Managing Director Shehzad Qazi said in an interview.

So, China phone shipments are down 16%, as per Balding. But Tim Cook says Apple’s never done better. Still, if that 16% number is correct, either Apple or its Chinese suppliers are doing worse, not better. And 16% is a lot.

Despite Recent Battering, Tim Cook Says Apple’s ‘Ecosystem Has Never Been Stronger’

Apple Inc. stock has taken a beating in recent months, but Chief Executive Tim Cook defended his company Tuesday, and expressed optimism that trade tensions with China would soon ease. Apple shares have fallen by more than one-third since their peak on Oct. 3, and tumbled further last week after the tech giant warned of disappointing iPhone sales in its holiday quarter. But in an interview Tuesday with CNBC’s Jim Cramer, Cook said the company was still going strong, and its naysayers were full of “bologna.” “Here’s the truth, what the facts are,” Cook said about reports of slow iPhone XR sales, according to a CNBC transcript.

“Since we began shipping the iPhone XR, it has been the most popular iPhone every day, every single day, from when we started shipping, until now. . . . I mean, do I want to sell more? Of course I do. Of course I’d like to sell more. And we’re working on that.” Slower sales in China also contributed to Apple’s lowered forecast, and Cook said Tuesday he believes that situation to be “temporary.”

“We believe, based on what we saw and the timing of it, that the tension, the trade-war tension with the U.S. created this more-sharp downturn,” he said. Cook said he’s “very optimistic” a trade deal between the U.S. and China will be reached . “I think a deal is very possible. And I’ve heard some very encouraging words,” he said.

16% fewer phones, that gets you the second production cut at Apple and its ‘magnificent ecosystem’ in short order. Now sure, Cook can try and blame the tariffs. but Samsung’s Q4 2018 sales fell 11%, and its operating profit fell by 29%. It’s a bigger and wider issue, and China is at the heart of it.

Apple Cuts Q1 Production Plan For New iPhones By 10%

Apple, which slashed its quarterly sales forecast last week, has reduced planned production for its three new iPhone models by about 10% for the January-March quarter, the Nikkei Asian Review reported on Wednesday. That rare forecast cut exposed weakening iPhone demand in China, the world’s biggest smartphone market, where a slowing economy has also been buffeted by a trade war with the United States.

Many analysts and consumers have said the new iPhones are overpriced. Apple asked its suppliers late last month to produce fewer-than-planned units of its XS, XS Max and XR models, the Nikkei reported, citing sources with knowledge of the request. The request was made before Apple announced its forecast cut, the Nikkei said.

And very much not least there was this graph of Chinese investments in Africa. What are the conditions? At what point will they call back the loans? And when countries can’t pay back, what’s the penalty? How much of this has been provided by Beijing in US dollars it doesn’t have nearly enough of?

It’s like the much heralded Belt and Road project, or Silk Road 2.0, isn’t it, where the first batch of participating nations have started sounding the alarm over loan conditions. Yes, it sounds great, I admit, but I have long said that in reality Belt&Road is China’s ingenious scheme to export its industrial overcapacity and force other countries to pay for it. It’s like the model Rome had, and the US still do, just all in one single project. And this one has a name, and it can be expanded to Africa.

But no, I don’t see it. I think China’s debt, combined with the vast distance it still has from owning a global reserve currency, will call the shots, not Xi Jinping.

China won’t be taking over. At least, not anytime soon.

Debt Rattle January 7 2019

Jan 072019

January 7, 2019 Posted by Raúl Ilargi Meijer at 10:54 am Finance Tagged with: Brexit, China, dollar, euro, household debt, Irish border, Macron, May, Mody, tariffs, trade talks, yellow vests, yuan 5 Responses »

Berthe Morisot Julie and her boat 1884

• China Has a Dangerous Dollar Debt Addiction (Balding)

• China Drops Hints Of Trade Pain Ahead (BV)

• US and China To Resume Trade Talks With Both Eager For Compromise (G.)

• May To Hold Parliamentary Brexit Vote On January 15 (R.)

• Theresa May Pleads For EU To Give Ground And Rescue Brexit Deal (G.)

• Germany and Ireland Step Up Efforts To Find Brexit Border ‘Fix’ (G.)

• Average UK Unsecured Household Debt Hits Record £15,400 (G.)

• UK Car Sales Record Biggest Fall Since Financial Crisis (R.)

• France’s Macron Reeling As Tough Stance Against ‘Yellow Vests’ Backfires (R.)

• The Euro: A Mindless Idea – Ashoka Mody (Spiked)

$1.2 trillion will have to be rolled over this year. There are $90 billion of offshore renminbi deposits in Hong Kong available to buy dollars. Good luck.

• China Has a Dangerous Dollar Debt Addiction (Balding)

China’s foreign debt has been rising rapidly, and that’s becoming an increasingly big problem — for the country and, potentially, the world. Officially, China lists its outstanding external debt at $1.9 trillion. For a $13 trillion economy, that’s not a major amount. But focusing on the headline number significantly understates the underlying risks. Short-term debt accounted for 62% of the total as of September, according to official data, meaning that $1.2 trillion will have to be rolled over this year. Just as worrying is the speed of increase: Total external debt has increased 14% in the past year and 35% since the beginning of 2017. External debt is no longer a trivial slice of China’s foreign-exchange reserves, which stood at just over $3 trillion at the end of November, little changed from two years earlier. Short-term foreign debt increased to 39% of reserves in September, from 26% in March 2016.

The true picture may be more precarious. China’s external debt was estimated at between $3 trillion and $3.5 trillion by Daiwa Capital Markets in an August report. In other words, total foreign liabilities could be understated by as much as $1.5 trillion after accounting for borrowing in financial centers such as Hong Kong, New York and the Caribbean islands that isn’t included in the official tally. Circumstances aren’t moving in China’s favor. The nation’s companies rushed to borrow in dollars when there was a 3% to 5% spread between Chinese and U.S. interest rates and the yuan was expected to strengthen. Borrowing offshore was cheaper and offered the additional bonus of likely currency gains. Now, the spread in official short-term yields has shrunk to near zero and the yuan has been depreciating for most of the past year. Refinancing debt in dollars has become harder, and more risky.

Beijing’s policies have exacerbated the buildup of foreign debt. To promote Xi Jinping’s Belt and Road Initiative, the president’s landmark foreign policy endeavor, China has been borrowing dollars on international markets and lending around the world for everything from Kenyan railways to Pakistani business parks. With this year and 2020 being the peak years for repayments, China faces dollar funding pressure. To repay their dollar debts, Chinese firms will either have to draw from the central bank’s foreign-exchange reserves (a prospect Beijing is unlikely to allow) or buy dollars on international markets. This creates a new set of problems. There are only 617 billion yuan ($90 billion) of offshore renminbi deposits in Hong Kong available to buy dollars. If China was to push firms to bring debt back onshore, this would necessitate significant outflows that would push down the yuan’s value against the dollar.

More trickle down fails.

• China Drops Hints Of Trade Pain Ahead (BV)

While a cut in the reserve requirement ratio, China’s fifth in a year, was not surprising, the 100-basis point shift that started off 2019 was larger than anticipated. Of course, demand for cash tends to spike around this time of year, due to both the Chinese New Year holiday and tax deadlines, but the economy is cooling uncomfortably fast. Official figures may show growth slowed to 6.3% in the fourth quarter, Standard Chartered reckons. Friday’s announcement adds to other easing measures: People’s Bank of China officials last month announced a new policy tool to encourage lenders to disburse their cash more widely. The “targeted medium-term lending facility” will make cheaper funding available to banks that the PBOC judges to be doing their part by lending more to small companies.

It’s certainly not full-blown monetary stimulus yet; the central bank has not fired its heavier artillery, such as a benchmark rate cut. The market has also been kept waiting for reductions to cost of borrowing from the PBOC’s more important channel, its regular medium-term lending facility. But the overall direction of travel is clear, and both recent moves point to structural issues that worry pessimists: the extra liquidity pumped into the system does not seem to be translating into more loans for smaller companies, which may signal deeper problems with capital allocation, not to mention the private sector’s nervousness about politics in 2019.

All of this is bad news for Beijing’s trade negotiators, when they hold talks with U.S. counterparts face-to-face this week. As the pain mounts, they may be pushed to yield more in order to gain relief. They could, for example, agree to formally drop the controversial “Made in China 2025” plan, or to announce concrete measures to beef up enforcement of intellectual property rights. Trump said on Sunday that weakness in China’s economy will push officials to negotiate. He may be right.

Tariffs rose Jan 1. It’s getting urgent.

• US and China To Resume Trade Talks With Both Eager For Compromise (G.)

US officials arrived in China for the first face-to-face negotiations since a 90-day truce was declared in a trade war between Washington and Beijing, in the hope of ending a bruising confrontation between the world’s two largest economies. Hopes that the sixth round of negotiations between the two sides could yield a breakthrough helped Asian shares rise on Monday, combined with optimism about the state of the global economy on the back of strong US jobs figures on Friday. In Tokyo, the Nikkei soared more than 3% and there were also strong positive moves in Shanghai, Hong Kong and Sydney. US and Chinese trade representatives were set to hold talks on Monday and Tuesday.

After failing to reach an agreement in December when Donald Trump and Xi Jinping met, both sides agreed to suspend tariff increases while holding discussions on technology transfers, as well as intellectual property theft and cybersecurity. If no agreement is reached, US tariffs on $200bn of Chinese goods will increase in March to 25% from the current 10%. Trump said on Sunday that China was under pressure to do a deal amid signs of a slowdown in its economy. “I think China wants to get it resolved. Their economy’s not doing well. I think that gives them a great incentive to negotiate,” he said. “China’s slowdown is occurring across the board, affecting almost every industry and region,” said Scott Kennedy, a trade expert focused on China at the Center for Strategic and International Studies. “Resolving the trade war or at least finding some common ground with Washington will be needed to fully restore confidence,” he said.

Whatever the outcome, chaos guaranteed. You can jot down next Tuesday night in your agenda for that.

• May To Hold Parliamentary Brexit Vote On January 15 (R.)

Prime Minister Theresa May will hold a delayed parliamentary vote on her Brexit deal on Tuesday, January 15, the BBC reported on Monday, citing government sources. May was forced to pull the vote on her deal in December after she said it would be defeated by a large majority. The government had previously said the vote would be held in the week of January 14. May said on Sunday that Britain would be in uncharted territory if her Brexit deal is rejected by parliament, despite little sign that she has won over sceptical lawmakers.

In case you were still wondering who will be blamed.

• Theresa May Pleads For EU To Give Ground And Rescue Brexit Deal (G.)

Theresa May is preparing to make another desperate plea to EU leaders to offer a concession on the Irish backstop as she attempts to win over Brexiters who have vowed to vote down the government’s deal. The prime minister on Sunday promised to hold the meaningful vote in parliament in the week beginning 14 January despite growing opposition from Conservative backbenchers and the Democratic Unionist party, whose votes are required to push the deal through parliament. As MPs prepare to return to Westminster with the crucial Commons vote looming on the withdrawal agreement, Downing Street insisted that new compromises could still be won from Europe that would ensure the safe passage of May’s plan.

The hope of new developments came as opposition to the prime minister’s deal hardened. The hurdles facing May include: • Brexiters say the government faces a disaster if it fails to ditch the current deal, with DUP deputy leader Nigel Dodds describing the Irish backstop as “toxic”. • EU sources say talks to be held in Dublin on Tuesday between Leo Varadkar and Germany’s foreign minister, Heiko Maas, will not seek to reopen negotiations over the 585-page withdrawal agreement. • Senior MPs including Yvette Cooper and Nicky Morgan are launching a parliamentary campaign to rewrite government legislation to block a no-deal Brexit. • Chris Patten, the former Conservative Party chairman, called for a second referendum on the UK’s decision to leave the EU. • More than 200 MPs have signed a letter calling for Theresa May to rule out a no-deal Brexit. Tory ex-minister Dame Caroline Spelman, who organised the letter with Labour’s Jack Dromey, said the group had been invited to see the prime minister on Tuesday.

In an interview on Sunday, May said the vote, which was due to be held last month and postponed, would go ahead next week, as she sought further clarification from the EU to address MPs’ concerns. She also said she would look at giving parliament a greater say in how the UK’s future relationship would be negotiated, but refused to say exactly what that might be. Asked if there had been any changes she could offer to backbenchers who were expected to vote down her deal, she told BBC1’s Andrew Marr Show: “What we will be setting out over the next few days are assurances in three areas: first are measures specific to Northern Ireland; the second is a greater role for parliament as we take these negotiations forward into the next stage for our future relationship; and third – and we are still working on this – is further assurances from the European Union to address the issues that have been raised.”

Whitehall sources insisted that a compromise could still be found with the EU and that further planned announcements will be made this week that would win over MPs opposed to the deal. “We will be working flat out. There will be further contacts with the EU leaders. The issue of the backstop is not yet over,” the source said.

“The EU cannot now give another concession ahead of the vote because if the deal isn’t ratified, it means any new concessions will simply be banked again to no benefit at all. It would be pointless.”

• Germany and Ireland Step Up Efforts To Find Brexit Border ‘Fix’ (G.)

Germany’s foreign affairs minister is to fly to Dublin on Tuesday for Brexit talks as relations with Ireland intensify in an attempt to find a “fix” that will help Theresa May get the EU withdrawal agreement ratified. Heiko Maas will address an annual gathering of Ireland’s global diplomatic corps and take part in an unofficial fourth round of talks between Ireland and German leaders since Thursday. He will make the address in English, with a large German media contingent accredited, a reflection of how significant his speech is deemed back in Berlin. Last week the taoiseach, Leo Varadkar, had a lengthy telephone call with Angela Merkel. He then flew to Munich to address a meeting of her coalition partners, the CSU, and on Friday met the Germany chancellor’s successor as CDU leader, Annegret Kramp-Karrenbauer, for discussions on Brexit and the future of Europe.

The emerging Irish-German nexus on the Irish border backstop “fix” is being seen as significant in Irish political circles, where people also point to the fact that Varadkar speaks German and has a good working relationship with Merkel. They point out it was Merkel, not the taoiseach, who requested the phone call with Varadkar last Thursday. The talks lasted 40 minutes and were, according to Varadkar, “an opportunity to kind of brainstorm a bit as to what we could do to assist prime minister Theresa May in securing ratification of the withdrawal agreement”. But informed EU sources say Brexiters should not raise their hopes of a reopening of negotiations. The “fix” will be further details in the political declaration on the future relationship and not the 585-page withdrawal agreement. “That is locked,” said one EU source.

There is deep frustration that the British cannot see how far the EU went to break the impasse on the Irish border talks, yielding to May’s demands for a UK-wide customs arrangement. One EU source said: “The EU was totally opposed to this in 2017 and again in March and June in 2018. It then emerged out of the tunnel in the autumn as the solution, but the Brexiters did not see it for what it was – a major concession. [..] “They are now looking for more concessions, but they just can’t be given. The Brits banked this major concession and just did nothing with it. People can’t understand why it wasn’t sold as a victory for May. “The EU cannot now give another concession ahead of the vote because if the deal isn’t ratified, it means any new concessions will simply be banked again to no benefit at all. It would be pointless.”

That’s about $20,000. Not including mortgages and student loans.

• Average UK Unsecured Household Debt Hits Record £15,400 (G.)

Britain’s household debt mountain has reached a new peak, with UK homes now owing an average of £15,385 to credit card firms, banks and other lenders, according to the TUC. The trade union body said household debt rose sharply in 2018 as years of austerity and wage stagnation forced households to increase their borrowing. The TUC said in its annual report on the nation’s finances that the amounts owed by British households rose to a combined £428bn in the third quarter of 2018. Each household owed £886 more than it did 12 months previously, it said. The figures do not include outstanding mortgage debts but do include student loans.

The level of unsecured debt as a share of household income is now 30.4%, the highest level it has ever been at. It is well above the £286bn peak in 2008 before the financial crisis, the TUC said. That figure also included student loans, but tuition fees then were £3,000 a year compared with up to £9,250 now. [..] The TUC general secretary, Frances O’Grady, said: “Household debt is at crisis level. Years of austerity and wage stagnation has pushed millions of families deep into the red. The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans.”

They’re going to stay home?!

• UK Car Sales Record Biggest Fall Since Financial Crisis (R.)

British new car sales in 2018 fell at their fastest rate since the global financial crisis a decade ago, hit by a slump in demand for diesel, stricter emissions rules and waning consumer confidence due to Brexit, according to an industry body. Demand dropped by nearly 7% last year to 2.37 million vehicles, the largest fall since registrations nosedived 11.3% in 2008, preliminary data from the Society of Motor Manufacturers and Traders (SMMT) showed. A nearly 30% drop in demand for diesel was the most significant factor in the decline. Diesel has been pummelled since the Volkswagen emissions cheating scandal of 2015, prompting a crackdown and higher levies.

But the industry also warned that Britain’s departure from the European Union due at the end of March risks the future of a sector which employs over 850,000 people and has been one of Britain’s few manufacturing success stories since the 1980s. “It’s still hard to see any upside to Brexit,” said SMMT Chief Executive Mike Hawes. “Everyone recognises that Brexit is an existential threat to the UK automotive industry and we hope a practical solution will prevail,” he said, calling for lawmakers to back Prime Minister Theresa May’s deal to guarantee a transition period. [..] After record highs in 2015 and 2016, demand fell in 2017 and some analysts see car demand as a leading indicator which could be a harbinger for future economic performance. Britain’s economy slowed to a crawl at the end of 2018, the housing market is stalling and lending to consumers growing at its slowest pace in nearly four years, according to data released on Friday.

Macron is not just a fool himself, he’s surrounded by them as well. His spokesman after fleeing his office out of a back door as protesters invaded the courtyard and smashed up several cars said: “It wasn’t me who was attacked.” “It was the Republic.”.

Because the government is the Republic. The population is not.

• France’s Macron Reeling As Tough Stance Against ‘Yellow Vests’ Backfires (R.)

Emmanuel Macron intended to start the new year on the offensive against the ‘yellow vest’ protesters. Instead, the French president is reeling from more violent street demonstrations. What began as a grassroots rebellion against diesel taxes and the high cost of living has morphed into something more perilous for Macron – an assault on his presidency and French institutions. The anti-government protesters on Saturday used a forklift truck to force their way into a government ministry compound, torched cars near the Champs Elysees and in one violent skirmish on a bridge over the Seine punched and kicked riot police officers to the ground.

The French authorities’ struggle to maintain order during the weekend protests raises questions not just over policing tactics but also over how Macron responds, as he prepares to bring in stricter rules for unemployment benefits and cut thousands of public sector jobs. On Sunday evening, Macron wrote on Twitter: “Once again, the Republic was attacked with extreme violence – its guardians, its representatives, its symbols.” His administration had hardened its stance against the yellow vests after the protest movement appeared to have lost momentum over the Christmas holidays.

The government would not relent in its pursuit of reforms to reshape the economy, government spokesman Benjamin Griveaux said on Friday, branding the remaining protesters agitators seeking to overthrow the government. Twenty-four hours later, he was fleeing his office out of a back door as protesters invaded the courtyard and smashed up several cars. “It wasn’t me who was attacked,” he later said. “It was the Republic.”

“There is a Euro, which is a single currency in an incomplete monetary union, with a set of fiscal rules that are evidently economically illiterate..”

• The Euro: A Mindless Idea – Ashoka Mody (Spiked)

[..] most serious of all is the notion of common economic development as a basis for Europe. It was briefly true after the Treaty of Rome in 1957, which opened up the borders, but the momentum ran out within two decades. You open borders, but once they’re open, there’s not a lot more you can do. Even the gains from the so-called Single Market are very limited beyond a certain point. Every economist understands that. On the Euro, there was never any question that it was a bad idea. Nicholas Kaldor, an economist at Cambridge University, wrote in March 1971 that a single currency was a terrible idea, both as economics and as politics. And Kaldor has been proven right time and again.

But the entire European establishment just ignores every subsequent warning from well-regarded economists, and produces defensive counternarratives. For example, I often hear that Europe needs fixed exchange rates in order to have a Single Market. Why? Germany is trading a lot with Poland, Hungary and the Czech Republic, which are in the Single Market, but have different currencies. These fluctuate, but the trade continues apace. You don’t need a single currency for a Single Market.

spiked: When did your critique of the European project emerge? Was it during your involvement in the Irish bailout? Mody: When I finished at the IMF I planned to write a book on the Euro crisis. And I began writing it as an IMF economist would – what happened before the crash, the bubble, the bubble bursting, the panic, the fact it wasn’t well managed, and so on. But I soon realised that something wasn’t right here. And so I spent two years tracing the history of the Euro, and asking the question: what brought the Euro into existence in its current form? You see, it is not just that there is a Euro. There is a Euro, which is a single currency in an incomplete monetary union, with a set of fiscal rules that are evidently economically illiterate – and nobody questions the fact that they are economically illiterate, that they lack a necessary fiscal backstop and the necessary fiscal union. So why does it exist?

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