Feb 102019
 
 February 10, 2019  Posted by at 11:32 am Finance Tagged with: , , , , , , , , , ,  


Vincent van Gogh On the outskirts of Paris near Montmartre 1887

 

More Violence In Paris As Gilet Jaunes Protests Enter 13th Weekend (R.)
‘Macron Unleashed Violence Against Yellow Vests, Each Casualty Is On Him’ (RT)
Italy Saves Europe’s Dignity Over US Bullying Of Venezuela (ZH)
Plan To End Brexit Deadlock: Back May’s Deal, Then Hold People’s Vote (G.)
UK Cancels Brexit Ferry Contract Awarded To Firm With No Ferries (PA)
250 UK Firms Discuss Moving To Netherlands (G.)
Why The Sickly Ugly Sisters Of UK Politics Deserve To Suffer The Splits (G.)
MSM Fall in Lockstep for Cheap Trump/Rubio Venezuela Aid PR Stunt (Fair)
IMF Chief Lagarde Warns Of High Arab Public Debt (AFP)
Trump’s World Bank Pick, An Ally For The Lender’s Critics? (AFP)
Catalan Separatists Trial To Start: Not Just Legal Battle, Media One Too (AFP)
Carmageddon for Tesla Model 3: US Deliveries Plunge 55% to 60% (WS)

 

 

Another Sunday of looking in vain for Yellow Vests articles in the western media.

Best detail: the house of Macron’s leader of the National Assembly was attacked. Nobody knows who, nobody knows why. Yellow Vests? Who knows.

Well, Little Napoleon knows, apparently: “Nothing justifies intimidations and violence towards an elected official of the Republic..”

On the other hand, intimidations and violence towards his own people is fine. Gory photos galore of another guy who lost most of one of his hands to a police grenade.

More Violence In Paris As Gilet Jaunes Protests Enter 13th Weekend (R.)

Thousands of French gilets jaunes (yellow vests) demonstrators marched on Saturdayin what was their 13th weekend of action. There were scuffles in Paris and a demonstrator’s hand was mangled by a small explosive. There was also an overnight arson attack on the Brittany residence of the National Assembly head, Richard Ferrand, though no immediate link was made to the actions against President Emmanuel Macron. The demonstrations, named for high-visibility jackets worn by the protesters, began in mid-November over fuel taxes. They have since broadened into a more general revolt against a political class they view as out of touch with common people. In Paris, several thousand people marched on Saturday beside symbols of power such as the National Assembly and Senate.

The demonstrations were mainly peaceful, but some protesters threw objects at security forces, a scooter and a police van were set on fire and some shop windows were smashed. One participant’s hand was severely injured when he tried to pick up a so-called “sting-ball grenade” used by police to disperse crowds with teargas, a police source told Reuters. [..] Politicians from across the spectrum condemned the arson attack on the home of Ferrand, a close ally of Macron and president of parliament’s lower house. He published pictures on Twitter of a scorched living room, saying police found materials soaked in fuel. Ferrand said criminal intent was the likely cause, although the perpetrators’ identity was unclear. “Nothing justifies intimidations and violence towards an elected official of the Republic,” Macron tweeted in relation to the incident.

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Strong against the weak, and weak against the strong. Does Macron want to fight Onfray?

“Macron is trying to explain that there is not enough liberalist Europe in our lives, while the Gilets Jaunes are saying back to him that there is too much – not too much Europe, but too much liberalism.”

‘Macron Unleashed Violence Against Yellow Vests, Each Casualty Is On Him’ (RT)

One of France’s foremost public intellectuals has posted a 4,000-word screed exposing collusion between “the brute” Emmanuel Macron and the mainstream media to put down the Gilets Jaunes, all while blaming them for the violence. “Emmanuel Macron has chosen not to maintain order, but to suppress public protest,” writes Michel Onfray in his blog, in an attempt at a definitive account of the protests that have gripped France since November. “Intentionally, the president did not restrain the violence of protesters, and unleashed it on the part of the authorities. As the head of state, he carries responsibility for choosing repressive measures, so every single injury sustained is on him.” A household name in France, Onfray is the author of over 100 books on subjects ranging from philosophy to religion to politics, many of them non-fiction bestsellers.

He is also the founder of a tuition-free private university in Caen, which is part-funded by his publications. He is one of the most respected figures to try to give an overview of the crisis that goes beyond headlines and political allegiances. Onfray writes that the protest did not begin as a “peasants’ revolt of disgruntled right-wingers” refusing to pay an environmental fuel tax – as it is being portrayed by newspapers – but was simply a result of ordinary Frenchmen saying, “We cannot pay!” Instead of listening, however, Macron decided to escalate the conflict “using it for his own benefits, and the interests of the Maastricht camp [the pro-EU establishment].” The philosopher, who has previously aligned with leftist movements, details six “symbolic slaps” the president dealt out to the protesters, in addition to the physical violence they suffered in their weekly clashes during the demonstrations.

Onfray sees the roots of the problem in the “liberal Maastricht state” created in 1992 with the establishment of the European Union, “to promoting which Macron has dedicated his entire short adult life.” “This is an order that is strong against the week, as we can see on the streets, and weak against the strong, as is evident from the abolition of the wealth tax and the failure to root out tax havens,” writes the 60-year-old Onfray. “Macron is trying to explain that there is not enough liberalist Europe in our lives, while the Gilets Jaunes are saying back to him that there is too much – not too much Europe, but too much liberalism.” The Maastricht state is “cruel to those who carry the burdens of globalization” and “simply by declaring their poverty, these people have been ideologically criminalized.”


©Reuters/Gonzalo Fuentes

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The EU cares a whole lot more about Macron than about its dignity. Perhaps it should rethink that before it’s too late.

Italy Saves Europe’s Dignity Over US Bullying Of Venezuela (ZH)

The row between France and Italy is but the latest in a long-running spat between French President Emmanuel Macron and the newly elected coalition government in Rome. The Italian government is an unlikely coalition between the left-leaning Five Star Movement (5SM) and a rightwing party, La Lega (The League). Both parties are highly critical of the EU establishment and neoliberal capitalist polices which France’s former Rothschild banker-turned-president Macron embodies. Rome has also slammed France for its responsibility in fomenting massive immigration problems for Europe and Italy in particular through Paris’ criminal military interventions, along with the US and other NATO powers, in the Middle East and North Africa.

Things came to a head this week when it emerged that Italian deputy Prime Minister Luigi Di Maio (and 5SM leader) had met with members of the Yellow Vest protest movement in France. The Yellow Vest movement has been holding nationwide demonstrations for the past 12 weeks protesting against Macron’s economic policies and what they call his elitist style of government. Di Maio and the other Italian deputy premier Matteo Salvini (leader of The League) have been openly supporting the French protesters, whom they identify with as part of a popular revolt across Europe against neoliberal austerity.

Reacting to reports of Italian government contact with the French protesters, France’s Foreign Minister Jean-Yves Le Drian said it was “outrageous interference” in his country’s internal affairs. The row has further escalated after France recalled its ambassador from Rome. The last time that happened was in 1940 during the Second World War. This is a major breakdown in relations between two of the EU’s founding members. Here is where the irony descends into farce. France is blustering with rage at Italy’s alleged meddling in its sovereign affairs while at the very same time the French government is party to an international effort led by the US to bring about regime change in Venezuela. The hypocritical arrogance is priceless.

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The revolutionary new plan among MPs from both sides: Vote for May’s deal, and then let the people vote it down. That way, whatever happens is not your fault.

Plan To End Brexit Deadlock: Back May’s Deal, Then Hold People’s Vote (G.)

Theresa May could win parliament’s approval for her controversial Brexit deal in return for guaranteeing another referendum, under a new plan being drawn up by a cross-party group of MPs. The new vote would give the British people a simple choice: to confirm the decision or stay in the EU. The initiative, aimed at breaking the political impasse, is being advanced by Labour MPs Peter Kyle and Phil Wilson and has won the support of prominent Remainers in the Tory party including Sarah Wollaston, Dominic Grieve and Anna Soubry. Kyle says the idea, which is likely to be put forward as an amendment to the EU withdrawal bill, is also being taken seriously by “people at a high level in government” as a potential way to resolve the Brexit crisis.

The amendment would offer all MPs the chance to support, or abstain on, the withdrawal bill and would specify that, if passed, the decision would be implemented on the condition it was put to the public for approval in a second referendum. If the amendment passed through parliament but the deal was rejected in the subsequent referendum, the UK would stay in the EU under current arrangements. If, however, the British people confirmed the decision of MPs to leave the EU under the terms of May’s deal, Brexit on these terms would immediately come into effect without any need for it to return to parliament.

“The beauty of this plan is that it holds attractions for both Leavers and Remainers. For Leavers, if the deal is confirmed by the British people, it offers a definitive end to the withdrawal process with Brexit sealed once and for all. For Remainers, on the other hand, it offers the chance to make the case to stay in the EU to the public, based on facts not promises as before,” said Kyle.“Remainers could vote for May’s deal, or abstain, even though they might not like it, in the knowledge that they could campaign against it later in the referendum. “The key is that Labour and Tory MPs could choose their own way of allowing the bill to pass, yet both will still be able to campaign in the referendum for their real objectives and their principles will remain intact,” he added.

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These clowns are paid generous salaries to make these decisions. May that’s a good place to start.

UK Cancels Brexit Ferry Contract Awarded To Firm With No Ferries (PA)

A controversial no-deal Brexit ferry contract awarded to a firm with no ships has been cancelled by the UK’s department for transport. Transport secretary Chris Grayling’s decision to award Seaborne Freight a contract worth £13.8 million (€15.7 million) had attracted widespread criticism. The department said it had decided to terminate the contract after Irish company Arklow Shipping, which had backed Seaborne Freight, stepped away from the deal. A department of transport spokeswoman said: “Following the decision of Seaborne Freight’s backer, Arklow Shipping, to step back from the deal, it became clear Seaborne would not reach its contractual requirements with the government. We have therefore decided to terminate our agreement.

“The government is already in advanced talks with a number of companies to secure additional freight capacity — including through the port of Ramsgate — in the event of a no-deal Brexit.” Mr Grayling last month defended the Seaborne Freight contract, insisting it was “not a risk”. It was one of three firms awarded contracts totalling £108 million (€123 million) in late December to lay on additional crossings to ease the pressure on Dover when Britain leaves the EU, despite having never run a Channel service. The department said it had been Arklow Shipping’s backing that gave it confidence in the viability of the deal, and that it stands by the robust due diligence carried out on Seaborne Freight.

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How close Brexit is getting. 47 days. A Bloomberg headline this morning says it all:

“Cargo ships are about to set sail from Britain for Asia, the Middle East and Africa, but their goods will arrive in an uncertain post-Brexit world.”

250 UK Firms Discuss Moving To Netherlands (G.)

The Dutch government has said it is in talks with more than 250 companies about moving their operations from the UK to the Netherlands before Brexit. The economic affairs ministry said it had lured 42 companies or branch offices and 1,923 jobs from the UK last year, as it increases its efforts to gain Brexit business. Among those who have chosen to invest in the Netherlands are the Discovery Channel, Sony and Bloomberg. Sony announced last month it was moving its European headquarters to Amsterdam, as companies in the UK continue to progress with contingency plans. Its rival Panasonic has already moved to the Dutch capital.

The government report said another Japanese company, the investment bank Norinchukin, was also moving to Amsterdam, along with the global content company TVT Media, the financial services providers MarketAxess and Azimo, and the maritime insurer UK P&I Club. While Mark Rutte, the Dutch prime minister, recently said he did not see Brexit as a business opportunity, countries including Ireland, France, Germany, Belgium and Luxembourg have been actively looking for opportunities to capitalise on Brexit ever since the EU referendum. Banks and other financial services are obliged to have operations in a member state if they want to serve a pan-EU market, while broadcasters who transmit across the EU need to have a licence in one member state to meet regulations.

The BBC is considering setting up an international base in Belgium. The Dutch economic affairs ministry said: “In 2019, several companies including Discovery and Bloomberg have already announced their intention to invest in the Netherlands because of Brexit. “Additionally, the Netherlands foreign investment agency is talking with more than 250 foreign companies considering setting up operations in the Netherlands following Brexit.” Most of the 250 companies were British, but some were American or Asian firms reconsidering their European branch structures, the report said.

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Oh Christ, Britons who think this is a British issue. Lord have patience.

Why The Sickly Ugly Sisters Of UK Politics Deserve To Suffer The Splits (G.)

If they did not exist, would we invent them? Given the chance to start from scratch, would Britain regard the Conservative and Labour parties, the two old and ugly sisters of our politics, as the best we can do? Are they fit for the purpose of representing and reconciling the diversity of opinions in a modern and complex country? And for offering it a choice of decent governments? A growing number of us have been saying not and for a long time. Even before Brexit split both parties and scrambled voter allegiances, much of the electorate was expressing its dissatisfaction with the big two. The Tories have not won a solid parliamentary majority since 1987.

The last Labour leader who was not called Tony Blair to secure a healthy Commons majority was Harold Wilson in 1966. The number of voters who enthusiastically identify as red or blue has been in long-term decline. Party membership has also been shrivelling. The Tories, who once boasted that they were a million strong, bump along at around 100,000. Labour enjoyed a trend-defying surge in its membership during the Ohhh Jeremy Corbyn phase of his leadership, but that is going downhill as the magical uncle turns out not to be so wondrous after all. It is true that the big two can still gather up a lot of votes. After decades of decline in their combined vote share, it blipped up at the last election.

But I don’t think that truly indicated renewed enthusiasm for either of them. It was a false positive induced by an electoral system that compels many voters to make a forced choice between the unappetising and the inedible. It doesn’t mean that these nose-holding voters like what’s put before them. The current choice on offer is so disdained that, when pollsters ask who would make best prime minister, Theresa May and Jeremy Corbyn are regularly beaten into second and third place by Neither. More than half of the electorate say their views are not properly represented by the existing political parties.

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No, you got that really really wrong, they didn’t fall for anything, they are an integral part of the process.

MSM Fall in Lockstep for Cheap Trump/Rubio Venezuela Aid PR Stunt (Fair)

The Trump administration’s now completely overt effort to overthrow Venezuelan President Nicolás Maduro had a very successful public relations effort this week, as major Western media outlets uniformly echoed its simplistic, pre-packaged claim that the Venezuelan government was heartlessly withholding foreign aid. All of the articles—and scores more like it—repeated the same script: Maduro was blocking aid from the US “out of refusal to relinquish power,” preferring to starve “his own people” rather than feed them. It’s a simple case of good and evil—of a tyrannical, paranoid dictator not letting in aid to feed a starving population.

Except three pieces of key context are missing. Context that, when presented to a neutral observer, would severely undermine the cartoonish narrative being advanced by US media. 1) Both the Red Cross and UN warned the US not to engage in this aid PR stunt. 2) The bridge in question is a visual metaphor contrived by the Trump administration of little practical relevance. 3) The person in charge of US operations in Venezuela has a history of using aid as a cover to deliver weapons to right-wing mercenaries. (1) Not only has the international aid community not asked for the “aid,” earlier this week, both the International Red Cross and United Nations warned the US to explicitly not engage in these types of PR stunts. As Washington Post contributor Vincent Bevins pointed out, the transparent cynicism of these efforts was preemptively warned about by the groups actually charged with keeping starving people fed.

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“..oil producing countries should look to renewable energy in the coming decades..”

IMF Chief Lagarde Warns Of High Arab Public Debt (AFP)

Public debt has rapidly increased in many Arab countries since the 2008 global financial crisis, due to persistently high budget deficits, the International Monetary Fund warned Saturday. “Unfortunately, the region has yet to fully recover from the global financial crisis and other big economic dislocations over the past decade,” IMF Managing Director Christine Lagarde said. “Among oil importers, (economic) growth has picked up, but it is still below pre-crisis levels,” she told the Arab Fiscal Forum in Dubai. Lagarde said public debt among Arab oil importing nations had increased from 64 percent to 85 percent of GDP in the decade since 2008.

Nearly half of these countries now have public debt of over 90 percent of GDP, she said. Public debt among oil exporters — including the six-nation Gulf Cooperation Council – rose from 13 percent of GDP to 33 percent of GDP, accelerated by the crash in oil prices around five years ago, Lagarde said. “The oil exporters have not fully recovered from the dramatic oil price shock of 2014,” she said. “Modest growth continues, but the outlook is highly uncertain.” Lagarde said oil producing countries should look to renewable energy in the coming decades, in line with the Paris Agreement on climate change, which stipulates a reduction in greenhouse emissions.

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Ironically, the World Bank is a facade for US rule.

Pelosi manages to utter that “Trump’s choice threatens to “undermine the institution’s mission.” An institution whose funds “internal audits and outside reports have tied to forced labor in Uzbekistan, death squads in Honduras and a Chadian oil pipeline that enriched the undemocratic local government all while child mortality rose..” Thanks, Nancy.

Trump’s World Bank Pick, An Ally For The Lender’s Critics? (AFP)

President Donald Trump’s choice to lead the World Bank is a firebrand critic of the world’s largest anti-poverty lender – an institution he has called wasteful, corrupt and overly generous to China. Those complaints are similar to those voiced by others in the development community. But that does not mean they have found a new ally in David Malpass, the senior US Treasury official who has pledged to reform the bank. Nancy Pelosi, the newly reinstalled Democratic speaker of the US House of Representatives, says Trump’s choice threatens to “undermine the institution’s mission.” And Liberia’s former minister of public works W. Gyude Moore tweeted that “an incorrigible arsonist will now be our fire chief.”

Malpass’ many criticisms of the Washington-based lender certainly echo familiar refrains. Many activists have long called for reforms at the World Bank, citing a litany of alleged human rights failures and scandals, and saying projects all too often left the world’s poorest even worse off, harmed the environment or entrenched the power of oligarchies and despots. Those critics might well have nodded their heads in accord in 2017 when Malpass said international financial institutions such as the World Bank “spend a lot of money” but are “not very efficient.” “They are often corrupt in their lending practices and they don’t get the benefit to the actual people in the countries,” he said in congressional testimony.

Internal audits and outside reports have tied World Bank funds to forced labor in Uzbekistan, death squads in Honduras and a Chadian oil pipeline that enriched the undemocratic local government all while child mortality rose, to name just a few examples.

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Spain went from right-wing to socialist government, and nothing changed. A familiar global pattern.

Catalan Separatists Trial To Start: Not Just Legal Battle, Media One Too (AFP)

The trial on Tuesday of 12 Catalan leaders over their role in Catalonia’s failed independence bid will be fought between Madrid and the separatists in the international media as much as in the courtroom. “We have to use this trial as a tool of denunciation, use it in our goal to make Catalonia independent,” the head of influential grassroots separatist group ANC, Elisenda Paluzie, said before the start of the trial at Spain’s Supreme Court on February 12. The separatists who govern the wealthy northeastern region have for years tried to convince the world of the legitimacy of their cause and make the case that Spain lacks political freedoms. But with over 600 journalists from 150 media outlets from around the world accredited to cover the trial, Spain’s central government does not want to remain on the sidelines.

The arrival in power in June of Socialist Prime Minister Pedro Sanchez marked a change in Madrid’s strategy. The previous conservative government of Mariano Rajoy was largely passive in the face of the separatists’ international campaign. But Sanchez’s Foreign Minister Josep Borrell – a Catalan who fiercely opposes independence – and his team spare no efforts to refute their arguments. “We are starting a completely different chapter,” the Global Spain spokesman said, adding the posture of the Rajoy government had “a very high cost in terms of misinformation”.

Officials from Spain’s justice ministry and the Supreme Court also met with foreign correspondents based in Madrid before the trial. And on Thursday Sanchez defended Spain’s judiciary during a visit to the Council of Europe and the European Court of Human Rights in Strasbourg in France. Many separatists are convinced that their leaders were jailed for political reasons and will not have a fair trial. And they see the central government’s public relations push as proof of this. “If the Spanish government is forced to carry out a campaign of marketing and misinformation, that means they feel insecure,” Alfred Bosch, in charge of foreign affairs in Catalonia’s regional government, said during a recent visit to London.

The Catalan government will respond to Madrid’s campaign by explaining “the truth….about a trial which is a political trial” and ease the work for foreign journalists and observers so they “reach their own conclusions”, he added. Catalonia’s public television will offer coverage of the trial in English to give it an “international dimension”. Grassroots separatist organisations ANC and Omnium Cultural are preparing their own information campaigns targeting an international audience which include videos made in several languages and meetings in cities across Europe. The lawyers of several of the defendants, who face long prison sentences if convicted, have demanded the presence of international observers at the trial. But the request was turned down by the Supreme Court..

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What did Elon say, there’s lots of interest but people can’t afford Tesla’s?!

Carmageddon for Tesla Model 3: US Deliveries Plunge 55% to 60% (WS)

Details trickling out over the 3,200-plus layoffs Tesla announced on January 18 are starting to paint a picture of what is happening on the demand side for the Model 3 in the US. According to two laid-off employees cited by Reuters, the company has gutted its delivery team of 230 people at its Las Vegas facility that delivered tens of thousands of Model 3s to buyers mostly in the US but also in Canada. About 150 of the 230 employees on the team have been let go, the two sources said who were among those let go, as the company struggles with deliveries that have plunged from the pace in the fourth quarter last year.

The federal tax credit of $7,500 was cut in half to $3,750 at the beginning of the year after Tesla’s EV sales rose past the 200,000-threshold in 2018. Yet the $35,000 Model 3 that CEO Elon Musk promised in 2016 remains a distant promise. The company already slashed its Model 3 price twice this year to stimulate demand, yet the least expensive Model 3 still has a price tag of $42,900. “There are not enough deliveries,” one of the laid-off employees told Reuters. “You don’t need a team because there are not that many cars coming through.”

The two laid-off employees said that in the first quarter, delivery targets for North America – mostly buyers in the US but also in Canada – are down 55% to 60% from what they were in Q4 2018. After a herculean effort late last year, Tesla delivered 145,610 Model 3s in 2018, all of them high-priced luxury versions. During this effort to deliver as many Model 3s as possible while the full federal tax credit of $7,500 was still in effect, the reservation list was “plucked clean” of American buyers “willing to pay current prices,” as Reuters put it, citing those two laid-off employees on the delivery team.

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Jan 192019
 
 January 19, 2019  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso Guitar on a table 1922

 

Mueller Shoots Down Buzzfeed’s Latest Russiagate Scoop With Rare Dismissal (RT)
US Asked Ecuadorean Officials About Alleged Assange-Manafort Meeting (R.)
56% Majority Of Britons Now Want To Remain In The EU – Poll (DM)
Extending The Brexit Deadline Could Clash With Coming EU Elections (CNBC)
EU Loves British Money More Than It Loves Democracy (Clark)
UK Patients Stockpile Drugs In Fear Of No-Deal Brexit (G.)
UK Shoppers Rein In Spending As Fears Grow Over Economy (G.)
Rising Credit-Card Use Shows US Consumers Are Strapped (DDMB)
Tesla Cuts 7% Of Workforce, Musk Sees ‘Very Difficult’ Road Ahead (CNBC)
Tesla Has $920 Million In Debt Coming Due, A Third Of Company’s Cash (CNBC)
Russia Outshines China To Become World’s 5th Biggest Holder Of Gold (RT)
French Court Cites Precautionary Principle To Cancel Monsanto Permit (R.)

 

 

Is this the worst day for fake news to date? It’s hard to keep track. It’s just that this one was taken up by so many hoping for -finally!- impeachment. Please Lord make it stop.

Two reasons why Mueller issued his statement: 1) the credibility of the Special Counsel itself (since every outlet ran with the -false- BuzzFeed story), 2) members of Congress were calling for investigations based on the story (would have been even more embarrassing than making the statement).

One Shimon Prokupecz on Twitter: “We cannot underestimate the statement disputing Buzzfeed’s story from the special counsel. I’m sure it pained them to do this. I’m sure this went through many levels at the DOJ and FBI. They don’t talk. This is massive.”

Trump on Twitter: “Remember it was Buzzfeed that released the totally discredited “Dossier,” paid for by Crooked Hillary Clinton and the Democrats (as opposition research), on which the entire Russian probe is based! A very sad day for journalism, but a great day for our Country!”

Mueller Shoots Down Buzzfeed’s Latest Russiagate Scoop With Rare Dismissal (RT)

Special Counsel Robert Mueller has poured cold water on BuzzFeed’s latest Russiagate “bombshell” with a rare public statement calling the article, which claims Trump told his ex-lawyer Cohen to lie to Congress, “not accurate.” BuzzFeed reported that President Donald Trump directly instructed his former attorney, Michael Cohen, to lie to Congress about his plans to build a Trump Tower property in Moscow, citing two anonymous “federal law enforcement officials” as sources that the president had suborned perjury – which, being an actual crime, triggered talk of impeachment “walls closing in” among the anti-Trump “Resistance.”

While half of Congress took to Twitter to wave the story as the long-awaited proof of Collusion, the BuzzFeed reporters could not seem to agree on their own sourcing. Anthony Cormier admitted to CNN he hadn’t seen the proof directly but had two “law enforcement” sources claiming they had seen it, while Jason Leopold told MSNBC they had in fact seen the documents themselves. The smoking gun du jour collapsed further when word came down from Mueller himself – via spokesman Peter Carr – that Buzzfeed’s “description of specific statements to the Special Counsel’s Office, and characterization of documents and testimony obtained by this office, regarding Michael Cohen’s Congressional testimony” were “not accurate.”

Mueller has been extremely tight-lipped about the numerous previous “Russiagate” scoops, and considering the time and effort involved in his own ongoing crusade to take Trump down, his dismissal of BuzzFeed’s would-be bombshell knocked the legs out from under a story whose vague sourcing had already raised questions.

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And this fits in seamlessly with the Mueller/BuzzFeed thing: The Guardian story has been thoroughly discredited, but 2 months later, US officials are still chasing it. What’s new to me is that it’s the first time I see a Guardian response: “The Guardian has defended the article and said it “relied on a number of sources.” Lame poppycock. And the same thing Buzzfeed says.

US Asked Ecuadorean Officials About Alleged Assange-Manafort Meeting (R.)

U.S. officials spoke with officials from Ecuador’s British embassy on Friday about an alleged meeting there between President Donald Trump’s former campaign manager, Paul Manafort, and WikiLeaks founder Julian Assange, an Ecuadorean government source said. The Guardian newspaper reported the meeting in November, alleging the two met at least three times, including in 2016, just before WikiLeaks released damaging emails about Trump’s rival in the 2016 presidential elections, Hillary Clinton. Manafort and Assange have both previously denied meeting each other at the embassy.

WikiLeaks, in a statement on Friday entitled the “U.S. interrogation of Ecuadorian diplomats,” accused Ecuador’s government of assisting the United States in prosecuting Assange, who first sought asylum in the embassy in 2012. The source said the embassy officials, at the request of the U.S. Justice Department, provided testimony in Quito at facilities provided by Ecuadorean authorities. [..] Part of Mueller’s probe has involved looking into whether Trump associates may have had advance notice before WikiLeaks published emails stolen by Russian hackers from Democratic computer networks to damage Clinton. WikiLeaks called the Guardian’s story “indisputably fabricated” and said it was being used as a pretext for the United States to prosecute Assange. The Guardian has defended the article and said it “relied on a number of sources.”

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But neither one of the two main parties do. How screwed up is that? Nobody represents the majority.

56% Majority Of Britons Now Want To Remain In The EU – Poll (DM)

A majority of Britons now say they want to stay in the EU after Theresa May’s Brexit plan suffered a massive defeat, a new poll published today has found. A YouGov survey asked 1,070 voters how they would vote in a second Brexit referendum if it were held today – and found Remain has stretched out a 12-point lead over Leave, with 56% saying they would vote to stay in the EU versus 44% in favour of leaving. The voters were questioned the day after the PM’s Brexit plan suffered a crushing defeat – leaving the machinery of government deadlocked and with the bitter divisions among MPs offering no clear way ahead.

Ministers are now at war over Brexit, openly clashing over whether Britain should be willing to crash out without a deal on March 29, or back a softer Brexit or second referendum. The Prime Minister must make a statement on Monday where she will lay out her ‘next steps’ on a Brexit ‘plan B’ before a week of debate on the various options. The following week, MPs will vote on their preferred course of action, putting huge pressure on the Prime Minister to adopt it. With Westminster gripped by chaos, the new poll suggests voters are losing faith in Brexit with growing numbers now backing Remain. The survey for The Times found that 56% of those polled would now back staying in the EU, while the same proportion back a second referendum. And voters were even more likely to want to stay in the bloc if the only other option was the PM’s Brexit deal, with Remain leading by 65% to 35%.

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If Article 50 were extended, which looks pretty sure, Britain will have to vote in European elections. But their seats have already been given out to others.

Extending The Brexit Deadline Could Clash With Coming EU Elections (CNBC)

Extending the official Brexit deadline for the U.K. could bring a wave of extra logistical and political problems for the EU. The ongoing deadlock has sparked a debate on the potential extension of Article 50 — the legal means by which the U.K. leaves the EU. However, there is strong opposition from some European lawmakers over giving more time to the U.K. to sort out its domestic politics. The U.K. is set to leave the EU on March 29 — but this could change if the U.K. asks for an extension and the other 27 member nations accept the request. Extending the departure beyond the agreed date would likely clash with European parliamentary elections that are set to take place between May 23 and 26. The chamber is made of lawmakers from all 28 European member countries, including the U.K., and is responsible for approving European policies, such as the Union’s total budget.

“What we will not let happen, deal or no deal, is that the mess in British politics is again imported into European politics. While we understand the U.K. could need more time, for us it is unthinkable that Article 50 is prolonged beyond the European Elections,” Guy Verhofstadt, a member of the European Parliament and its representative in Brexit negotiations, said on Twitter on Wednesday. [..] Seb Dance, member of the European Parliament for the U.K. Labour party, said the prospect of having Brexit and the European elections clashing “is a logistical headache.” “The impact of delaying Brexit on the EU elections is certainly troublesome logistically speaking,” he said, “but politically speaking it shouldn’t make a difference as it is entirely possible that elections take place in the other member states without needing to take place in Britain.”

[..] According to a Brussels-based European official, who did not want to be named due to the sensitivity surrounding the Brexit talks, an extension would likely mean that the U.K. would have to participate in the vote. This is because it would still technically be a member of the European Union. Zsolt Darvas, senior fellow at Bruegel, reiterated this point in an email to CNBC Friday. “If the extension goes beyond the elections, the U.K. would have to elect members of the European Parliament. Not expecting this, the European Parliament has already agreed on how to allocate the U.K. seats after Brexit. That agreement will have to be revised, or perhaps its implementation be postponed after the actual, delayed Brexit date.”

“From the U.K. side, it might look awkward to elect members of the European Parliament when people expect that the U.K. will leave the EU not much after the European elections; plus the U.K. would need to act quickly to make the European Parliament election possible, which would also involve some costs.”

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“..the Common Fisheries Quota has for the past 34 years given 84% of the cod in the English Channel to France and just 9% to the UK..”

EU Loves British Money More Than It Loves Democracy (Clark)

The European establishment is desperate for Britain to reconsider Brexit. Internationalist ideals about ‘preserving European unity’, don’t come in to it, this is all about protecting income streams. Consider a few facts. If Britain does leave without a deal, then the EU as an institution would be considerably worse off. The UK has consistently been one of the top three countries that puts most into the EU budget (after Germany and France). It is one of ten countries that puts more into the EU than it gets out. In 2017, the UK’s net contribution was £9bn. If Britain leaves, the EU faces a financial shortfall. In 2016, 16 countries were net receivers, including Donald Tusk’s Poland. Little wonder that he regards Britain staying as “the only positive solution”.

The very generous financial remuneration packages of EU officials might also be threatened by British withdrawal. In December, it was reported that the EU’s top civil servants would be paid over €20,000 a month for the first time, and that Tusk and Juncker would see their packages rise to €32,700 a month. Austerity? Not in Brussels, mon ami! The EU is a fabulous gravy train once you are on board. But the gravy train relies on its richest members not leaving, otherwise who’s going to foot the bill? If Britain leaves with ‘No Deal’, it’s not just the EU budget which will take a hit. In 2017, EU countries sold around £67 billion more in goods and services to the UK, than the UK sold to them. Europe needs full and unfettered access to British markets, much more than Britain needs full and unfettered access to European markets.

[..] The country that would lose out the most with Brexit is Germany. Britain’s trade deficit with Germany is higher than with any other country, even higher than China, whose products are everywhere in our shops! In 2016, the year of the EU referendum, Britain imported around £26 billion more from Germany than it exported. [..] We also have to discuss fishing. The other EU countries do extremely well out of the Common Fisheries Policy, which provides them with access to UK waters. Belgian fleets get around half their catch from British waters! As reported in the Independent, the Common Fisheries Quota has for the past 34 years given 84% of the cod in the English Channel to France and just 9% to the UK. Overall, EU vessels take out around four times as much fish out of UK waters as British vessels take out of EU waters.

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Is it Brexit or just the overall state of affairs as the Tories dismantle the NHS?

UK Patients Stockpile Drugs In Fear Of No-Deal Brexit (G.)

Ministers have been urged by top doctors to reveal the extent of national drug stocks, amid growing evidence patients are stockpiling medication in preparation for a no-deal Brexit. The Royal College of Physicians (RCP), which represents tens of thousands of doctors, urged the government to be more “transparent about national stockpiles, particularly for things that are already in short supply or need refrigeration, such as insulin”. Prof Andrew Goddard, the RCP president, said: “Faith in the system will be created by openness and regular updates to trusts and clinicians; this will allow clinicians to reassure patients.” The Pharmaceutical Services Negotiating Committee (PSNC) has warned medical shortages have increased in recent months.

Generic drugs are usually bought through nationally set tariff prices. However, pharmacies can apply for price concessions under which the NHS will temporarily pay more when the drugs are in short supply. The number of concessions the PSNC applied for went up from 45 in October, to 72 in November and 87 in December. The Guardian has also found evidence some patients are stockpiling drugs, against official guidance. They said they were doing so by ordering drugs from abroad, and by asking their GPs for emergency prescriptions. One diabetic patient has been stockpiling insulin for four months, ordering twice the amount he needs for each of his drugs from the pharmacist.

Robin Hewings, the head of policy at Diabetes UK, backed calls for more transparency from the government about current stock levels to reassure patients. “There is a level of concern that has risen quite a lot [in the last few months] and people with diabetes are talking about stockpiling. The government needs to be more transparent about insulin supplies.”

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Only, not really: “..sales grew by 2.7% last year, compared with a growth rate of 2% in 2017.”

UK Shoppers Rein In Spending As Fears Grow Over Economy (G.)

British consumers reined in their spending in December after splashing out during November on Black Friday promotions, according to official figures that confirmed the tough festive shopping period on the high street. The Office for National Statistics said the quantity of goods bought last month fell by 0.9% compared to November, when Black Friday deals encouraged shoppers to bring forward some of their Christmas spending. All sectors except food and petrol declined on the month, the figures showed, coming after the British Retail Consortium said the key Christmas shopping period had been the worst for retailers since the financial crisis a decade ago.

James Smith, an economist at the City bank ING, said: “After another bumpy week for Brexit, today’s UK retail sales data is a timely reminder that all is not particularly well in the UK economy.” Figures for the three months to December, highlighting the wider trend for consumer spending, showed that the quantity of goods bought dropped by 0.2%. [..] Despite the downturn last month, the latest snapshot showed that retail sales growth for 2018 as a whole was above the level recorded a year earlier. Although significantly below the peak growth rate of 4.7% seen before the Brexit vote in 2016, sales grew by 2.7% last year, compared with a growth rate of 2% in 2017.

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Or does it show that they are more confident? Always a nice puzzle. A popular industry POV: people get deeper in debt because they feel so great.

Rising Credit-Card Use Shows US Consumers Are Strapped (DDMB)

Even though evidence is mounting that the U.S. economy may be soon heading into a recession, there are plenty of analysts who say that the surge in credit card borrowing is a sign of strong confidence among households. That’s hardly the case. In fact, households’ confidence in the future growth of their incomes has been cooling since late last summer, which means borrowers will only reach for what’s in their wallet to compensate for what their paychecks will not cover. Many working adults have no recollection of credit card borrowing not being a mainstay among their financing options. But then, few would be able to identify a Diners Club card, which was a popular brand during the 1980s “yuppie” era when Americans first began to embrace credit card spending in earnest.

These days, consumers are not keen to lean on credit cards, partly due to a cultural and financial shift in the industry. The financial crisis arguably altered households’ views on charging beyond their means. It didn’t hurt that the availability of subprime credit all but disappeared for a few years or that the interest rate on credit cards remained in double-digit territory despite the Federal Reserve’s zero interest rate policy. That said, the idea of frugality re-entered many households’ thinking in the wake of the severe hardship the foreclosure crisis brought to bear on millions of working Americans. Debit cards became the predominant form of plastic used at the checkout.

And yet, consumer credit likely rounded out 2019 at a new $4 trillion milestone as runaway higher educationand car-price inflation coupled with ridiculously looser lending standards pushed households to take on record levels of student loan and auto debt. At roughly $1 trillion, credit cards are but a co-star in a star-studded, full-length feature film. A long history of credit card borrowing suggests that we would have multiples of today’s $1.04 billion in outstanding balances had the growth rate of spending on plastic maintained the headier double-digit paces clocked in the 1980s and 1990s.

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Shares down 13%.

Tesla Cuts 7% Of Workforce, Musk Sees ‘Very Difficult’ Road Ahead (CNBC)

Tesla is cutting its full-time staff headcount by about 7 percent, as it ramps up production of its Model 3 sedans, CEO Elon Musk said Friday. The announcement follows recent cost-cutting measures the company has made in a bid to reduce the price of its products and boost margins. Tesla shares fell 13 percent by the end of trading Friday. In an email to employees, Musk said the company faces a “very difficult” road ahead in its long-term goal to sell affordable renewable energy products, noting the company is younger than other players in the industry. “Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Musk said.

“Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity, but succeeding in our mission is essential to ensure that the future is good, so we must do everything we can to advance the cause.” The exact number of employees who will be laid off has not been disclosed. However in an October tweet, Musk said Tesla had a staff count of 45,000. If still true today, that would mean 3,150 layoffs. Musk said Friday that Tesla faces “an extremely difficult challenge” in making its electric vehicles and solar products a competitive alternative to traditional vehicles and energy products that rely on fossil fuels.

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Plunging share prices are the last thing Tesla needs.

Tesla Has $920 Million In Debt Coming Due, A Third Of Company’s Cash (CNBC)

Tesla has a billion dollar debt coming due, and it could wipe out nearly a third of the company’s cash if the stock price doesn’t improve. About $920 million in convertible senior notes expires on March 1 at a conversion price of $359.87 per share. But Tesla’s stock hasn’t traded above $359 for weeks. If the shares are about $359.87, then Tesla’s debt converts into Tesla shares. If not, Tesla will have to pay the debt in cash. Tesla reported cash and cash equivalents of $3.37 billion at the end of its September quarter. The company continues to reveal pressure to maintain profitability, and announced Friday it would cut 7 percent of its full-time workforce. Shares fell more than 10 percent Friday following the announcement to trade around $310 per share.

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If only because of the sanctions.

Russia Outshines China To Become World’s 5th Biggest Holder Of Gold (RT)

The Central Bank of Russia reported purchasing 8.5 million troy ounces of gold in January-November 2018. With its 67.6 million ounces of gold Russia is now the world’s fifth largest holder behind the US, Germany, France and Italy. China dropped to sixth place as it reported an increase in gold reserves just once in more than two years – to 59.6 million ounces in December 2018 from 59.2 million ounces in October 2016. Industry sources told Reuters that Western sanctions against Russia lifted the country’s gold buying to record highs in 2018. One of the reasons Russia’s Central Bank was betting on the yellow metal was because it could not be frozen or blacklisted, sources explained.

“It seems that there is an aim to diversify from American assets,” said a source in one of Russia’s gold producers, referring to the Central Bank’s holdings. While purchases of the precious metal by Russia jumped last year the country continued getting rid of US Treasury securities. Earlier this month, Russia’s Central Bank reported that it cut the share of the US dollar in the country’s foreign reserves to a historic low, transferring nearly $100 billion into the euro, the Japanese yen and the Chinese yuan. The step came as a part of a broader state policy on eliminating reliance on the greenback. According to sources, the Central Bank has been purchasing a significant portion of Russia’s domestic gold production, which is also rising.

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As the EU promotes Roundup, this court has the only right attitude, referring to “a precautionary principle in French law.” All GMO crops should be banned because of that principle. The risks are too great, and there’s likely no way back. You can’t put the onus of proof on society at large, Monsanto will have to prove there is no risk or damage at all, not the other way around. Nassim Taleb is the only person I’ve seen who also says this as the most important thing concerning GMO.

French Court Cites Precautionary Principle To Cancel Monsanto Permit (R.)

A French court canceled the license for one of Monsanto’s glyphosate-based weedkillers on Tuesday over safety concerns, placing an immediate ban on Roundup Pro 360 in the latest legal blow to the Bayer-owned business. Germany’s Bayer, which bought Monsanto for $63 billion last year, faces thousands of U.S. lawsuits by people who say its Roundup and Ranger Pro products caused their cancer. A court in Lyon in southeast France ruled that the approval granted by French environment agency ANSES in 2017 for Roundup Pro 360 had failed to take into account potential health risks. Bayer, which said it disagreed with the decision and was considering its legal options, has cited regulatory rulings as well as scientific studies that found glyphosate to be safe.

The firm is appealing a first U.S. court ruling that awarded $78 million in damages to a school groundskeeper from California. “Bayer disagrees with the decision taken by the Administrative Court of Lyon to cancel the marketing authorization for RoundUp Pro 360,” it said in a statement. “This product formulation, like all crop protection products, has been subject to a strict evaluation by the French authorities (ANSES), an independent body and guarantor of the public health security.” The French court said ANSES had not respected a precautionary principle in French law, notably by not conducting a specific evaluation of health risks for Roundup Pro 360.

“Despite the European Union’s approval of the active substance (glyphosate), the court considered that scientific studies and animal experiments showed Roundup Pro 360 … is a potentially carcinogenic product for humans, suspected of being toxic for human reproduction and for aquatic organisms,” the court said in a summary of its ruling. ANSES said it was still examining the court ruling, but that the decision was effective immediately. “As a consequence, the sale, distribution and use of RoundUp Pro 360 are banned as of today,” the agency said in an email.

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Nov 272018
 
 November 27, 2018  Posted by at 10:34 am Finance Tagged with: , , , , , , , , , , , ,  


Otto Dix Ice drift 1940

Putin ‘Seriously Concerned’ After Ukraine Votes To Impose Martial Law (G.)
The Latest Ukronazi Provocation In The Kerch Strait (Saker)
Trump Says He Isn’t Happy With GM Decision To Shed 14,700 Jobs (G.)
GM Cuts 14,700 Jobs As Auto Bubble Begins To Burst (Colombo)
Tesla China Sales Plunge 70% In October (R.)
May’s Brexit Deal Sounds Like A ‘Great Deal For The EU’ – Trump (G.)
Theresa May’s Brexit Deal Could Cost UK £100bn Over A Decade (G.)
Shares Rally As Italy Edges Away From Brussels Budget Clash (G.)
Bitcoin Is Down More Than 80% From Last Year’s High (CNBC)
Human Rights Watch Asks Argentina To Probe MbS Over Yemen, Khashoggi (R.)
The ‘Sharing Economy’ Has Been Seized By Big Money (G.)
Who Will Fix Facebook? (Matt Taibbi)
Investors Go After Zuckerberg After Facebook Plunges 40% In 4 Months (CNBC)
Fighting Climate Change Can Be America’s New New Deal (R.)
The Detention and Isolation from the World of Julian Assange (Stefania Maurizi)

 

 

Here’s what this is about:

“Since the completion of the bridge over the Kerch strait, Moscow has demanded that Ukrainian ships not only give notice of their intention to transit the strait but request permission, a change that Kiev has rejected. According to western diplomats, the dispatch of the three ships was intended to assert freedom of navigation..”

Russia came close to losing its only warm water ports in early 2014. They won’t let that happen again.

Putin ‘Seriously Concerned’ After Ukraine Votes To Impose Martial Law (G.)

Russian president Vladimir Putin has expressed “serious concern” over Ukraine’s decision to impose martial law, the Kremlin said on Tuesday, as the simmering confrontation between Moscow and Kiev sparked a new global crisis. In a phone conversation with Chancellor Angela Merkel, Putin also said he hoped the German leader could intervene to rein in Kiev. Putin “expressed a serious concern over Kiev’s decision to put its armed forces on alert and to introduce martial law,” the Kremlin said in a statement following the call. He also said he hoped “Berlin could influence the Ukrainian authorities to dissuade them from further reckless acts,” it added.

The political efforts came after Russia fired on and seized three Ukrainian vessels and their crews in the Kerch strait separating Crimea from the Russian mainland. Ukrainian MPs responded by voting to impose martial law. Six Ukrainians were reported to be injured, one of them critically, in the clash at the mouth of the Sea of Azov, where Russia has been building up its naval presence and seeking to restrict Ukrainian access since completing a bridge across the strait in May. The Ukrainian government released video footage of one of its ships being rammed by a Russian vessel. The incident sparked an emergency debate at the UN security council, where the Russian and Ukrainian ambassadors accused each other’s governments of seeking to trigger a conflict to deflect from their own domestic unpopularity.

The Ukrainian ambassador to the UN, Volodymyr Yelchenko, said the Russian naval authorities had been notified that the three Ukrainian vessels – two cutters and a tugboat – wished to pass through the strait, and had been waiting to hear confirmation on Sunday morning when the vessels were attacked. [..] Since the completion of the bridge over the Kerch strait, Moscow has demanded that Ukrainian ships not only give notice of their intention to transit the strait but request permission, a change that Kiev has rejected. According to western diplomats, the dispatch of the three ships was intended to assert freedom of navigation and also to reinforce a very small Ukrainian naval presence in the Sea of Azov.

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“..Considering the current single-digit popularity rating of Poroshenko and the fact that he has no chance in hell to be re-elected ..”

The Latest Ukronazi Provocation In The Kerch Strait (Saker)

Second, let me give you the single most important element to understand what is (and what is not) taking place: the Sea of Azov and the Black Sea are, in military terms, “Russian lakes”. That means that Russia has the means to destroy any and all ships (or aircraft) over these two seas: on the Black Sea the life expectancy of any intruder would be measured in minutes, on the Sea of Azov in seconds. Let me repeat here that any and all ships deployed in the Black Sea and the Sea of Azov are detected and tracked by Russia and they can all easily be destroyed. The Russians know that, the Ukrainians know that and, of course, the Empire knows that. Again, keep that in mind when trying to make sense of what happened.

Third, whether the waters in which the incident happened belong to Russia or not is entirely irrelevant. Everybody knows that Russia considers these waters are belonging to her and those disagreeing with this have plenty of options to express their disagreement and challenge the legality of the Russian position. Trying to break through waters Russia considers her own with several armed military vessels is simply irresponsible and, frankly, plain stupid (especially considering point #2 above). That is simply not how civilized nations behave (and there are plenty of contested waters on our planet).

Fourth, one should not be too quick in dismissing Poroshenko’s latest plan to introduce martial law for the next 60 days. Albeit Poroshenko himself declared that this mobilization does not mean that the Ukronazi regime wants war with Russia, the fact is that the first-line reserves will be mobilized. This is important because the situation resulting from the introduction to martial law could be used to covertly increase the number of soldiers available for an attack on Novorussia or, God forbid, Russia herself. In fact, Poroshenko also officially appealed to the veterans of the war against Novorussia to be ready for deployment.

[..] Considering the current single-digit popularity rating of Poroshenko and the fact that he has no chance in hell to be re-elected it is pretty darn obvious of why the Ukronazi regime in Kiev decided to trigger yet another crisis and then blame Russia for it. The very last thing Russia needs is yet another crisis, especially not before a possible Putin-Trump meeting at the G20 Buenos Aires summit later this month. In fact, Ukrainian bloggers immediately saw this latest provocation as an attempt to scrap upcoming elections.

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Remind me, what did it cost to keep GM alive?

Trump Says He Isn’t Happy With GM Decision To Shed 14,700 Jobs (G.)

General Motors has announced it will halt production at five North American facilities and cut 14,700 jobs as it deals with slowing sedan sales and the impact of Donald Trump’s tariffs. More than 6,000 blue-collar jobs will be hit by GM plans to stop production at a car plant in Canada and two more in Ohio and Michigan. Two transmission plants in the US will also be mothballed, putting the future of those plants in doubt. The cuts will also include 15% of GM’s 54,000 white-collar workforce, about 8,100 people, and come as 18,000 GM workers have been asked to accept voluntary redundancy. Trump, who won over voters in many of the states affected by GM’s decision by promising to save their jobs, told reporters he was not happy with the decision.

“We don’t like it,” he told reporters. “This country has done a lot for General Motors. They better get back to Ohio, and soon.” Mary Barra, GM’s chief executive, was due to meet with top White House economic adviser Larry Kudlow later on Monday. “We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions,” Barra said in a conference call. GM’s share price rose 5.5% on the news. The car plants – Lordstown Assembly in Ohio, Detroit-Hamtramck Assembly and Oshawa Assembly – all build slow-selling cars. Trump held a rally close to the Lordstown plant in July and told workers not to sell their homes because “jobs are coming back”.

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Fiat/Chrysler increased sales (but its CEO died recently), Ford and GM lost big.

GM Cuts 14,700 Jobs As Auto Bubble Begins To Burst (Colombo)

On Monday, General Motors announced that it will cut 14,700 jobs or 15% of its North American workforce in addition to closing three assembly plants and two other facilities: While GM’s CEO Mary Barra is spinning this move as a positive, I am highly suspicious because it is taking place at the same time that global auto sales are plunging (see chart below). Ford also said recently that it will cut more than 20,000 jobs across the globe as part of an $11 billion restructuring.

The reason why I criticized President Trump’s excitement about Ford’s decision was because I’ve been warning (then and now) that the U.S. automobile sales boom was driven by a debt bubble that would end very badly. Since 2010, total outstanding U.S. auto loans increased by $445 billion or 64% to over $1.1 trillion as Americans took advantage of record low interest rates to finance automobile purchases.

U.S. Auto Loans

After the Great Recession in 2008 and 2009, the U.S. Federal Reserve cut interest rates to record low levels and held them there for a record length of time, making it much cheaper to take out loans of all kinds. Notice how the total outstanding U.S. auto loans in the chart above start to soar shortly after interest rates were cut to record lows (based on the chart below)? That is certainly no coincidence. Low interest rates lead to borrowing booms that end when interest rates go back up, which is what has been happening over the last few years. Rising interest rates are threatening the U.S. automobile sales and loan bubble and will eventually cause its popping.

Interest Rates

It’s entirely possible that GM is aware of the risk of a more serious auto sales downturn ahead as higher interest rates start to bite, which is why they decided to cut jobs and close the plants before it’s too late. If that’s the case, it’s a smart move on CEO Mary Barra’s part.

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70% may seem a lot, but the remaining 30% consisted of just 211 cars. Non-story.

Tesla China Sales Plunge 70% In October (R.)

Tesla Inc’s vehicle sales in China sank 70 percent last month from a year ago, the country’s passenger car association told Reuters on Tuesday, underscoring how the Sino-U.S. trade war is hurting the U.S. electric carmaker. An official from China Passenger Car Association said data from the industry body showed Tesla sold just 211 cars in the world’s largest auto market in October. The electric carmaker, which imports all the cars it sells in China, said in October that tariff hikes on auto imports were hammering its sales there. In July, Beijing raised tariffs on imports of U.S. autos to 40 percent amid a worsening trade standoff with the United States. While so-called new-energy vehicle sales have continued to climb in China, wider auto sales have slowed sharply since the middle of the year, taking the market to the brink of its first annual sales contraction in almost three decades.

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First vote is December 11, the second around Christmas time.

May’s Brexit Deal Sounds Like A ‘Great Deal For The EU’ – Trump (G.)

Donald Trump has delivered a weighty blow to Theresa May’s hopes of steering her Brexit deal through parliament, saying it sounded like a “great deal for the EU” that would stop the UK trading with the US. Trump was speaking to reporters outside the White House when he was asked about the deal May struck with the EU’s other 27 heads of state and government on Sunday. “Sounds like a great deal for the EU,” the president said. “I think we have to take a look at, seriously, whether or not the UK is allowed to trade. Because, you know, right now, if you look at the deal, they may not be able to trade with us … I don’t think that the prime minister meant that. And, hopefully, she’ll be able to do something about that.”

Trump’s intervention caught Downing Street off-guard and is likely to weaken May’s hand at a time when she is seeking to get the deal approved by parliament, where she faces determined resistance from 89 Tory backbenchers who argue the deal does not secure sufficient freedom of action for the UK. A vote is due on 11 December after a five-day debate. A No 10 spokesman argued that Trump’s take on Brexit was wrong: “The political declaration we have agreed with the EU is very clear we will have an independent trade policy so that the UK can sign trade deals with countries around the world – including with the US.”

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Insert any number you can think of. And then realize that people actually get paid to issue these fully hollow reports.

Theresa May’s Brexit Deal Could Cost UK £100bn Over A Decade (G.)

Theresa May’s Brexit deal is expected to cost the UK economy as much as £100bn over the next decade compared with remaining in the EU, according to one of the country’s leading economic thinktanks. An analysis of the prime minister’s EU withdrawal agreement from the National Institute of Economic and Social Research suggested that by 2030, Britain would lose GDP growth equivalent to the annual economic output of Wales. The study, commissioned by the People’s Vote campaign for a second referendum, found GDP over the long term was forecast to be about 4% less than it would have been had the UK stayed in the EU.

It comes as the government prepares to publish its own analysis of the impact of the deal this week, possibly on Wednesday, to help inform MPs before they vote on whether to back it in parliament. NIESR said the cost to the economy of the prime minister’s deal would be the equivalent of losing about £1,000 a year for every person in the UK. Garry Young, the director of macroeconomic modelling and forecasting at NIESR, said: “Leaving the EU will make it more costly for the UK to trade with a large market on our doorstep and inevitably will have economic costs.” The NIESR report found May’s deal would not be as damaging for the economy as Britain leaving the EU without an agreement, which would cost the economy about £140bn over the next 10 years.

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The emptiness of the rumors that drive this stuff is deafening. These are not markets.

Shares Rally As Italy Edges Away From Brussels Budget Clash (G.)

Italy has shown the first signs of backing away from a budget clash with Brussels, sparking a share rally in Rome. On a day when equities rose across the globe, tentative signs of progress in negotiations between the European commission and Italy’s populist leaders resulted in the key barometer of the Italian stock market rising by almost 3%. Bank shares – seen as particularly vulnerable in the event of a loss of confidence in Italian assets triggered by a prolonged confrontation – were up by 5% on Monday. Reports that Rome was willing to cut its budget deficit from 2.4% of national output to as low as 2% also led to a fall in the interest rate the Italian government pays to borrow on the world’s financial markets.

Italy’s main stock market index – the FTSE MIB – was the best performer of the leading European bourses on a day of across-the-board gains, closing 2.8% higher. Frankfurt’s Dax index rose by 1.45%, while the City’s FTSE 100 ended the day up by 1.2% at 7,036. After sharp falls last week, shares rallied on Wall Street and the Dow Jones industrial average ended Monday trading 1.5% higher amid signs of strong Black Friday spending by American consumers. Ever since it came to power in the spring, Italy’s coalition government has been on a collision course with the commission over its plans to stimulate growth by running a bigger budget deficit. The proposed move would violate the eurozone’s fiscal rules and in the past few weeks investors have become increasingly more nervous about Italy’s public finances.

The concessions hinted at by the Rome government would go nowhere near far enough to meet the demands made by Brussels, however. A proposed budget deficit of 2% of GDP would still leave open the possibility of Rome being fined by the commission’s excessive deficit procedure rules but even a partial climbdown was enough to trigger a fall in 10-year Italian bond yields – a key benchmark of official borrowing costs. The spread between the interest rate Italy pays and the much cheaper interest rates for Germany fell to its lowest in more than a month.

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Nice try, but Bitcoin no longer is what it was 10 years ago at birth. So fluctuations aren’t either. Who’s going to put serious money into something that loses 81% in less than a year?

Bitcoin Is Down More Than 80% From Last Year’s High (CNBC)

Bitcoin is only 10 years old, but the cryptocurrency has already seen its fair share of bear markets. The most recent one, which some are dubbing “crypto winter,” worsened over the weekend. The cryptocurrency slid below $3,500 for the first time in 14 months, then later recovered toward the $3,900 level by Monday, according to data from CoinDesk. That brings its decline from last year’s peak to more than 81 percent. That loss isn’t the worst bitcoin has suffered, but the world’s largest digital currency is getting close. Bitcoin’s current level is still well above the fraction of a penny price where it first began trading in 2010— and its early investors are mostly wealthier because of it. By June 2011, it had risen to a new all-time high of roughly $30. But by that November, the cryptocurrency was back below $2.50, tumbling more than 92 percent from their high.

That year, volume was still low and the dozens of now popular trading exchanges like Coinbase didn’t exist yet. Tokyo-based Mt. Gox was handling roughly 70 percent of all cryptocurrency transactions in the world. [..] Roughly $700 billion has been wiped off cryptocurrencies’ global market capitalization since the high, according to data from CoinMarketCap.com. The price of one bitcoin has dropped more than $15,000 since December. Bitcoin skyrocketed to current its all-time high of almost $20,000 in December 2017. Coinbase’s CEO said this summer that at the height of that boom, the exchange was opening up 50,000 new accounts a day, for mostly retail investors. The all-time high also came ahead of the availability of bitcoin futures. Those products have also fallen. On Monday, they dropped to their lowest levels since launching.

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Not going to happen. Unless they find a vigilante prosecutor.

Human Rights Watch Asks Argentina To Probe MbS Over Yemen, Khashoggi (R.)

Human Rights Watch has asked Argentina to use a war crimes clause in its constitution to investigate the role of Saudi Crown Prince Mohammed bin Salman in possible crimes against humanity in Yemen and the murder of journalist Jamal Khashoggi. Argentina’s constitution recognizes universal jurisdiction for war crimes and torture, meaning judicial authorities can investigate and prosecute those crimes no matter where they were committed. Human Rights Watch said its submission was sent to federal judge Ariel Lijo.

HRW’s Middle East and North Africa director Sarah Leah Whitson said the international rights group took the case to Argentina because Prince Mohammed, also known as MbS, will attend the opening of the G20 summit this week in Buenos Aires. “We submitted this info to Argentine prosecutors with the hopes they will investigate MbS’s complicity and responsibility for possible war crimes in Yemen, as well as the torture of civilians, including Jamal Khashoggi,” Whitson told Reuters. Argentine media cited judicial sources as saying it was extremely unlikely that the authorities would take up the case against the crown prince, Saudi Arabia’s de facto ruler.

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Gee, what a surprise. Downplaying the economic losses to communities caused by Airbnb, Uber and Amazon doesn’t help.

The ‘Sharing Economy’ Has Been Seized By Big Money (G.)

[..] The year 2018 is to the sharing economy what 2006 was to user-generated content: it can only go downhill. Platforms won’t disappear; far from it. However, the initial lofty objectives that legitimised their activities will give way to the prosaic and occasionally violent imperative imposed by the iron law of competition: the quest for profitability. Uber may help some make ends meet through occasional driving gigs. The need to achieve profitability, however, means that it will have no qualms about ditching its drivers for fully automated vehicles; a company that lost $4.5 bn in 2017 alone would be silly to do otherwise.

Airbnb may have presented itself as an ally of the middle classes against entrenched economic interests. But the drive for profits already forces it to partner with the likes of Brookfield Property Partners, one of the world’s largest real-estate firms, to develop Airbnb-branded hotel-like residencies, often by purchasing and converting existing apartment blocks. Few entrenched interests – save, perhaps, for the tenants who see their apartment blocks become Airbnb-run hotels – get disrupted here. Given the huge sums involved, the most likely outcome of current battles in sectors such as ride-sharing will be more centralisation, with just one or two platforms controlling each region. Uber’s surrender – in China, India and Russia, as well as much of southeast Asia and Latin America – to local players, many of them also backed by Saudi money, suggests as much.

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What ails the Automatic Earth: “Small blogs cannot exist without Facebook..”. But Facebook shut down access to our account, and thousands of ‘friends’, without one single word of explanation. So what now? Set up a new accoint, only for them do to it again? Are you beginning to see what’s wrong here?

Who Will Fix Facebook? (Matt Taibbi)

James Reader tried to do everything right. No fake news, no sloppiness, no spam. The 54-year-old teamster and San Diego resident with a progressive bent had a history of activism, but itched to get more involved. So a few years ago he tinkered with a blog called the Everlasting GOP Stoppers, and it did well enough to persuade some friends and investors to take a bigger step. “We got together and became Reverb Press,” he recalls. “I didn’t start it for the money. I did it because I care about my country.”

[..] The site took off, especially during the 2015-16 election season. “We had 30 writers contributing, four full-time editors and an IT worker,” Reader says. “At our peak, we had 4 million to 5 million unique visitors a month.” Through Facebook and social media, Reader estimates, as many as 13 million people a week were seeing Reverb stories. Much of the content was aggregated or had titles like “36 Scariest Quotes From the 2015 GOP Presidential Debates.” But Reverb also did original reporting, like a first-person account of Catholic Church abuse in New Jersey that was picked up by mainstream outlets.

Like most independent publishers, he relied heavily on a Facebook page to drive traffic and used Facebook tools to help boost his readership. “We were pouring between $2,000 and $6,000 a month into Facebook, to grow the page,” Reader says. “We tried to do everything they suggested.” Publishers like Reader jumped to it every time Facebook sent hints about changes to its algorithm. When it emphasized video, he moved to develop video content. Reader viewed Facebook as an essential tool for independent media. “Small blogs cannot exist without Facebook,” he says. “At the same time, it was really small blogs that helped Facebook explode in the first place.”

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The investors are not the answer to the problem. The links to secret services are.

Investors Go After Zuckerberg After Facebook Plunges 40% In 4 Months (CNBC)

It’s been a brutal few months for Facebook investors. Shares of the social network have tumbled almost 40 percent since reaching a high on July 25, even after a modest rebound on Monday. The company has faced a barrage of attacks related to the numerous ways the platform has been manipulated to spread false information and for leadership’s insufficient and controversial response, which the New York Times detailed in a lengthy investigative report earlier this month. Some of the almost $200 billion of market value that’s been wiped out since the stock’s peak can be attributed to a broader sell-off in tech stocks, which have plummeted since August amid concern about a slowdown in global economic growth and President Trump’s threats of a trade war.

But Facebook’s slide started well before that and the stock has badly underperformed the Nasdaq and its big-tech peers this year. The problem for Facebook is in finding a way out. Facebook’s business model, which relies on a growing number of users to share more information and for advertisers to continue to pay up to reach them, starts to look shaky as trust in the network deteriorates. Yet at the top of the company, CEO Mark Zuckerberg, 34, has so much ownership and control that the board and shareholders have a very limited ability to exert any influence.

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Might as well give up on people ever understanding that climate change is not an economic problem, and can therefore not be solved by economics.

Whoever links the demise of the planet to solutions offered by the same money that is causing it, is blind.

Fighting Climate Change Can Be America’s New New Deal (R.)

Fighting climate change can be America’s new New Deal. The effects of global warming on virtually all aspects of U.S. society could be devastating, according to a government report released on Friday. Rather than seize on its findings as a way to boost American innovation, economic output and jobs, President Donald Trump’s administration snuck the report out late on Friday after Thanksgiving – and then played down its devastating findings. That’s a big missed opportunity Unchecked, climate change could lop as much as a tenth off the nation’s GDP by the end of the century, according to the authors of Volume II of the Fourth National Climate Assessment.

That overall figure doubtless underestimates regional variances. The overall cost of the wildfires that hit California in 2017, for example, amounted to 6.5 percent of the Golden State’s economic output, estimated AccuWeather. Factor in everything from water scarcity to pollution to energy production to human health, and in some parts of the country the economic impact could be far worse. The cost in financial and human terms drops by up to 70 percent if greenhouse-gas emissions peak before the middle of the century and then drop, the report says. It requires investment, of course – which some Republicans like Senator Mike Lee deride as being harmful to the economy.

That’s clearly a ruse. Fully decarbonizing by 2050 the world’s cement, steel, plastics, trucking, shipping and aviation sectors could require investing some 0.5 percent of global GDP a year using mostly existing technology, according to the Energy Transitions Commission. But it would bring efficiencies, employment and advances in technology that could more than offset the costs. Similarly, modernizing aging infrastructure has multiple benefits. Investing the $800 billion or so needed to upgrade America’s water systems could generate an almost 300 percent return, according to the U.S. Water Alliance – and generate 1.3 million jobs.

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Stefania Maurizi gained access to Assange recently. The cat is gone. So sorry for Julian. Maurizi makes a point that everyone should make: the role of the UK press. I wrote earlier this year about a series of smear pieces the Guardian published. Nothing has changed. These are the same folk that shout out about freedom of the press when Trump is concerned. They’re at the very least no better than he is.

The Detention and Isolation from the World of Julian Assange (Stefania Maurizi)

They are destroying him slowly. They are doing it through an indefinite detention which has been going on for the last eight years with no end in sight. Julian Assange has become one of the most widely known icons of freedom of the press and the struggle against state secrecy. [..] After eight months of failed attempts, la Repubblica was finally able to visit the WikiLeaks founder in the Ecuadorian embassy in London, after the current Ecuadorian president, Lenin Moreno had cut him off from all contacts last March with the exception of his lawyers.

[..] The friendly atmosphere we had always experienced during our visits over the last six years is now gone. The Ecuadorian diplomat who had always supported the WikiLeaks founder, Fidel Narvaez, has been removed. Not even the cat is there anymore. With its funny striped tie and ambushes on the ornaments of the Christmas tree at the embassy’s entrance, the cat had helped defuse tension inside the building for years. But Assange has preferred to spare the cat an isolation which has become unbearable and allow it a healthier life.

The news that surfaced last week, revealing the existence of criminal charges against Julian Assange by the US authorities, charges which were supposed to remain under seal until it was impossible for Assange to evade arrest, vindicates what Assange has feared for years. He is now waiting for the charges to be unsealed, but in the meantime he is silent: the risk that he could suddenly lose Ecuador’s protection due to some public statement is not improbable these days. Two years ago, the UN Working Group on Arbitrary Detention (UNWGAD) established that the UK (at that time Sweden as well) is responsible for detaining Assange arbitrarily: it should free him and compensate him. London did not welcome this decision: they tried to appeal it, but lost the appeal and since then have simply ignored it.

The British media has never called on the UK authorities to comply with the UN body’s decision, quite the opposite: some even lashed out against the UN body. If Julian Assange ends up in the hands of the UK authorities in the upcoming months and the US asks for his extradition, where will the British medial stand? Never before has the life of the WikiLeaks founder been so crucially in the hands of public opinion and in the hands of one of the few powers whose mission it is to reign in the worst instincts of our governments: the press.

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Nov 262018
 
 November 26, 2018  Posted by at 10:57 am Finance Tagged with: , , , , , , , , , ,  


Vincent van Gogh On the Outskirts of Paris 1887

 

Russia Seizes Three Ukrainian Naval Ships In The Black Sea (AP)
Not Remotely Possible For May’s Brexit Deal To Pass Parliament – UK MP (CNBC)
UK High Court To Rule If Brexit Vote ‘Void’ As Early As Christmas (Ind.)
Nineteen Months Of Brexit Wrangling – And That’s Just A Taster (BBC)
Business Leaders Rally Behind May’s Brexit Deal Amid Fears Of Crashing Out (G.)
Texas Is About to Create OPEC’s Worst Nightmare (BBG)
Tesla Was Weeks From Dying Earlier This Year – Elon Musk (MW)
Former Greek FinMin Varoufakis To Run In European Election – In Germany (R.)
Give In To The EU, Greek PM Tsipras Counsels Italian Government (K.)
Russia Space Agency To Check If US Moon Landings Really Happened (Ind.)

 

 

I would think Ukraine is trying to provoke things, but western politicians and media all disagree.

Russia Seizes Three Ukrainian Naval Ships In The Black Sea (AP)

Russia seized three Ukrainian naval ships off the coast of Russia-annexed Crimea on Sunday after opening fire on them and wounding several sailors, a move that risks igniting a dangerous new crisis between the two countries. Russia’s FSB security service said early on Monday its border patrol boats had seized the Ukrainian naval vessels in the Black Sea and used weapons to force them to stop, Russian news agencies reported. The FSB said it had been forced to act because the ships — two small Ukrainian armored artillery vessels and a tug boat — had illegally entered its territorial waters, attempted illegal actions, and ignored warnings to stop while maneuvering dangerously.

“Weapons were used with the aim of forcibly stopping the Ukrainian warships,” the FSB said in a statement circulated to Russian state media. “As a result, all three Ukrainian naval vessels were seized in the Russian Federation’s territorial waters in the Black Sea.” The FSB said three Ukrainian sailors had been wounded in the incident and were getting medical care. Their lives were not in danger, it said. Ukraine denied its ships had done anything wrong, accused Russia of military aggression, and for the international community to mobilize to punish Russia. The United Nations Security Council is due to discuss the developments on Monday at the request of Russia, said Deputy Russian U.N. Ambassador Dmitry Polyanskiy.

Ukrainian President Petro Poroshenko met with his top military and security chiefs. Poroshenko said he would propose that parliament impose martial law. [..] Earlier on Sunday, Russia’s border guard service had accused Ukraine of not informing it in advance of the three ships’ journey, something Kiev denied. Russia said the Ukrainian ships had been maneuvering dangerously and ignoring its instructions with the aim of stirring up tensions. Russian politicians denounced Kiev, saying the incident looked like a calculated bid by Poroshenko to increase his popularity ahead of an election next year. In another sign of rising tensions, Russia’s state-controlled RIA news agency reported on Sunday night that Ukrainian forces had started heavy shelling of residential areas in eastern Ukraine which is controlled by pro-Moscow separatists.

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She needs 320+ votes, has 260.

Not Remotely Possible For May’s Brexit Deal To Pass Parliament – UK MP (CNBC)

It is not “remotely possible” that U.K. Prime Minister Theresa May’s Brexit withdrawal agreement would pass the House of Commons, which is the lower house of Parliament, in a crucial vote that will likely take place in December, a member of Parliament said on Monday. Lawmakers on both sides of the debate over the United Kingdom’s future as part of the European Union are unhappy with the proposals set by May in a 585-page, legally-binding document that lays out the terms of the former’s exit, Sarah Wollaston, who is also a member of the prime minister’s Conservative party, told CNBC’s “Squawk Box.”

“I just don’t think it’s remotely possible that this deal would pass the Commons,” she said, adding that it will likely fall short on the numbers needed to move the agreement forward. “That doesn’t necessarily mean that we would crash out with no deal because, certainly, Parliament, British parliamentarians are very opposed to leaving with no deal at all.” [..] May needs a simple majority of the 650 lawmakers in the House of Commons, but experts have indicated it will be an uphill task for the prime minister. Her Conservative Party holds 315 seats and represents the largest party in the House, but a significant number are against the plan, including some pro-Brexit members. Meanwhile, lawmakers in the opposition have mostly indicated that they will vote against the deal.

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Was the vote fraudulent to begin with?

UK High Court To Rule If Brexit Vote ‘Void’ As Early As Christmas (Ind.)

The High Court will rule as early as Christmas whether Brexit should be declared “void”, in a legal case given a turbo-boost by the criminal investigation into Leave funder Arron Banks. Judges are poised to fast track the potentially explosive challenge, after Theresa May’s refusal to act on the growing evidence of illegality in the 2016 referendum campaign, The Independent can reveal. Lawyers describe that failure as “absolutely extraordinary” – given the National Crime Agency’s (NCA) probe into suspicions of “multiple” criminal offences committed by Mr Banks and the Leave.EU campaign.

Now The Independent understands the case is likely to move to a full hearing and a ruling within weeks of opening on 7 December, with the clock ticking on the UK’s departure from the EU next March. Both its lawyers and a leading academic believe its chances of success have been given a big boost by the unfolding scandal and the government’s refusal to recognise the gravity of what is being exposed. The government is expected to deploy Sir James Eadie QC – the star barrister who led the unsuccessful battle for the government to trigger Article 50 without parliament’s consent – in a sign of the case’s importance.

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We haven’t even started.

Nineteen Months Of Brexit Wrangling – And That’s Just A Taster (BBC)

There was a definite “battle of the tones” at the seal-the-deal Brexit summit with Theresa May. EU leaders were determinedly sombre, while the UK prime minister had to sound upbeat and positive about her country’s Brussels-free future. It shouldn’t be under-estimated. Sunday was a huge day for the EU, signing off on the divorce papers of a departing key member state for the first time in the history of the bloc. In the eyes of many, Brexit counts as an EU failure. At the summit, French President Emmanuel Macron reminded the press of the fragility of European Union. Which is why, time and again, EU leaders in Brussels continue to make so much of the (unusual) show of unity the Brexit process has provoked in EU ranks.

For now, of course, all European eyes turn to the UK to see if the hard-negotiated Brexit deal passes through the House of Commons. If it doesn’t, the President of the European Commission, Jean-Claude Juncker, insists there will be no deal. “This is the deal. This is THE deal,” he told me emphatically, ruling out the possibility of renegotiating the Brexit texts. If he’s true to his word, and parliament votes down the divorce deal, then all 19 months of painful EU-UK negotiations were for naught. And both sides could find themselves staring at the cost and potential chaos of what the EU’s chief Brexit negotiator Michel Barnier calls a non-orderly Brexit. EU leaders are hell-bent on avoiding that.

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May sure scared the money.

Business Leaders Rally Behind May’s Brexit Deal Amid Fears Of Crashing Out (G.)

Business leaders have rallied to support Theresa May’s Brexit deal, even as an independent study showed that the prime minister’s agreement meant the UK stood to lose £100bn a year by 2030 in reduced trade and income. Executives in the City of London warned MPs to vote for the deal negotiated by the prime minister to avoid a no-deal Brexit that would harm the UK economy. TheCityUK, which represents banks and insurers in the Square Mile, said parliament had “a straight choice” between the agreement hammered out in Brussels and a no-deal Brexit, “which offers only higher risk, costs and disruption”.

Miles Celic, the organisation’s boss, said: “The focus must now be on securing the withdrawal agreement and the transition period it brings – which is critical for our industry and many others. There is much still to be negotiated to define the future relationship. The sooner that can get started, the better.” His warning echoed those of industry bodies and small business groups, which have become nervous in recent weeks that No10 would fail to overcome the hurdles towards securing a withdrawal agreement. The Institute of Directors, which has found in polls of its members that they split 50:50 over proposals for a second referendum, said they all objected to an outcome that leaves Britain with no deal.

“The deal the EU approved today provokes a wide range of reactions across the political spectrum, and indeed among business leaders, but the steer from our members is that avoiding no deal must be the main priority,” said Stephen Martin, the director general.

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Hmmm. Problem with shale is debt.

Texas Is About to Create OPEC’s Worst Nightmare (BBG)

OPEC helped create the monster that haunts its sleep. After it flooded the market in 2014, oil prices crashed, forcing surviving U.S. shale producers to get leaner so they could thrive even with lower oil prices. As prices recovered, so did drilling. Now growth is speeding up. In Houston, the U.S. oil capital, shale executives are trying out different superlatives to describe what’s coming. “Tsunami,’’ they call it. A “flooding of Biblical proportions’’ and “onslaught of supply’’ are phrases that get tossed around. Take the hyperbolic industry talk with a pinch of salt, but certainly the American oil industry, particularly in the Permian, has raised a buzz loud enough to keep OPEC awake. “You’ve got an awful lot of production that can come in very economically,’’ said Patricia Yarrington, Chevron’s CFO.

“If you think back four or five years ago, when we didn’t really understand what shale could do, the marginal barrel was priced much higher than what we think the marginal barrel is priced today.’’ That shift makes shale resilient to a price tumble. After touching a four-year high in October, West Texas Intermediate, the U.S. benchmark, has fallen by more than 20 percent. [..] August saw the largest annual increase in U.S. oil production in 98 years, according to government data. The American energy industry added, in crude and other oil liquids, nearly 3 million barrels, roughly the equivalent of what Kuwait pumps, than it did in the same month last year. Total output of 15.9 million barrels a day was more than Russia or Saudi Arabia.

[..] By the end of 2019, total U.S. oil production – including so-called natural gas liquids used in the petrochemical industry – is expected to rise to 17.4 million barrels a day, according to the U.S. Energy Information Administration. At that level, American net imports of petroleum will fall in December 2019 to 320,000 barrels a day, the lowest since 1949, when Harry Truman was in the White House. In the oil-trading community, the expectation is that, perhaps for just a single week, the U.S. will become a net oil exporter, something that hasn’t happened for nearly 75 years.

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Now he tells us.

Tesla Was Weeks From Dying Earlier This Year – Elon Musk (MW)

Tesla Inc. was “bleeding money like crazy” during its Model 3 production ramp-up and almost went under earlier this year, Elon Musk said Sunday. In an interview aired Sunday night on “Axios on HBO,” Tesla’s chief executive said the electric-car company was “within single-digit weeks” of dying. “Essentially, the company was bleeding money like crazy, and if we didn’t solve these problems in a very short period of time, we would die. And it was extremely difficult to solve them,” Musk said. Earlier this year, Musk described “production hell” as Tesla ramped up production to build 5,000 Model 3 sedans a week by the end of June, and said he had been sleeping on the factory floor.

Musk admitted in Sunday’s interview that he had been stretched to the limit. “People should not work this hard,” he said of his stretch working 22-hour days, seven days a week. “This is very painful.” “It hurts my brain and my heart,” Musk said. “It hurts. It is not recommended for anyone. I just did it because if I didn’t do it… there was a good chance Tesla would die.” In late October, Tesla posted a surprise quarterly profit, and earlier this month, Musk said Tesla is not “staring death in the face” anymore, and it will likely be cash-flow positive for all quarters going forward.

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Godspeed. Politics? You sure?

Former Greek FinMin Varoufakis To Run In European Election – In Germany (R.)

Former Greek finance minister Yanis Varoufakis, who was outspoken in his criticism of the austerity policies championed by Berlin at the height of the euro zone’s debt crisis, is to stand in European elections next year – in Germany. The Democracy in Europe Movement 2025 (DiEM25), which he launched in 2016 to “democratize” the continent, picked him on Sunday as a candidate for the elections to the European Parliament in May 2019. “I accept [the nomination] because it epitomizes the new trans-national politics we need in Europe,” he told a news conference in Berlin where his colleagues unfurled a banner with the slogan “European Spring.” “I call on all of you to join us in this pan-European quest for democracy in Europe, democracy in Germany as a condition for prosperity and authentic democracy,” he said.

The motorbike-riding academic-economist, who rose to celebrity status in the euro crisis, once described the austerity measures forced on Greece by creditors as “fiscal waterboarding”. Varoufakis, who frequently clashed with his hardline German counterpart at the time, Wolfgang Schaeuble, said the political center in Germany was under threat because of austerity. “On paper, Germany is drowning in money…but the German people have been victims of the same austerity as the rest of Europe. The result is low levels of investment,” he said. This, he argued, boosted inequality, share prices and house prices. He said his movement wanted to pour cash, raised if necessary via bond issuance, into green policies to tackle climate change.

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‘You’d better do today what they’ll do tomorrow..’

Give In To The EU, Greek PM Tsipras Counsels Italian Government (K.)

Prime Minister Alexis Tsipras has counseled the Italian government to give in to EU demands that it lower its budget deficit, according to newspaper Corriere della Sera. In an analysis piece titled “Tsipras’ advice to Italy: Give in now, then it will be worse,” Federico Fubini writes that Tsipras was sort of apologetic to the Italians for not taking their side in their conflict with the EU Commission. “I can not do anything because I would be the first to arouse suspicion,” Tsipras reportedly said. Rubini adds: “(Tsipras) no doubt remembers that Italy did nothing when he tried desperately to soften the conditions – then draconian – placed by the euro area on Greece.”

“But then Tsipras, mindful of the retreat that he improvised in July 2015 after blocking the bank accounts of the voters to avoid the collapse of the system, has offered advice to Italy. ‘You’d better do today what they’ll do tomorrow,’ he said. ‘If instead you have another idea – he added, perhaps alluding to the euro exit option that he refused – well, then, good luck.’”

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Ha!

Russia Space Agency To Check If US Moon Landings Really Happened (Ind.)

The head of Russia‘s national space agency has proposed a mission to the moon to verify whether the American moon landings really took place. Dmitry Rogozin responded to a question about whether Nasa’s Apollo programme actually put men on the moon back in the 1960s and 1970s during a conversation with the president of Moldova, Igor Dodon. He appeared to be joking, as he smirked and shrugged while answering. But conspiracies surrounding Nasa’s moon missions are common in Russia. In a video of their interaction, posted to his 815,000 Twitter followers, Mr Rogozin says: “We have set this objective to fly and verify whether they’ve been there or not”.

Nasa’s six well-documented official manned missions to the surface of the Moon, beginning with astronauts Neil Armstrong and Buzz Aldrin in July 1969 and continuing with Gene Cernan and Jack Schmitt in December 1972, have been dogged with conspiracy theories. In 2015, a former spokesman for the Russian Investigative Committee called for an investigation into the Nasa moon landings. Vladimir Markin said an enquiry should be launched into the disappearance of original footage from the first moon landing in 1969 and the whereabouts of lunar rock, which was brought back to Earth during several missions.

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Oct 272018
 
 October 27, 2018  Posted by at 9:42 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso Mandolin and glass of Pernod 1911

 

Global Selloff Erased $5 Trillion From Stock And Bond Markets In October (MW)
Dow Down 300 Points, S&P 500 1.7% In Another Wild Day On Wall Street (CNBC)
Jeff Bezos Loses $11 Billion In One Day After Amazon Sales Disappoint (F.)
Trump Adds A Global Pricing Plan To Wide Attack On Drug Prices (Tribble)
Swedish Central Bank Makes U-Turn on Cash as NIRP is Ending (DQ)
FBI Reviews Tesla Model 3 Production Numbers As Part Of Criminal Probe (CNBC)
Varoufakis, Bernie Sanders To Launch Progressives International Movement (RT)
Mexico Offers Caravan Migrants Temporary Work Permits, Housing (BBC)
Hundreds Ready To Go To Jail Over Climate Crisis (G.)
US Withdrawal Of Gillnet Protections For Whales, Turtles Ruled Illegal (R.)

 

 

Or $8 trillion, depending on who you ask.

Global Selloff Erased $5 Trillion From Stock And Bond Markets In October (MW)

The recent stampede by investors has erased about $5 trillion in value from global stock and bond markets in October alone. But that shouldn’t be severe enough to affect the economy, for now, according to economists at Deutsche Bank. Still, unless the markets regain their footing soon, the pressure for the Federal Reserve to reassess their monetary policy will continue to mount, they said. “Academic studies of the wealth effect find that households and companies don’t react to short-term fluctuations in their wealth but instead react to a moving average of where their wealth levels are,” said Torsten Slok, chief international economist at Deutsche Bank Securities, said in a note to clients.

As the chart below illustrates, global markets shed roughly $5 trillion in market cap just this month, but the total value of equity and debt markets has increased $15 trillion from 2017. “The bottom line is that we need a more significant correction before it will begin to have a meaningful impact on the economic outlook,” he said. The Fed said wages and prices are rising in its 12 districts and overall economic activity expanded at a “modest to moderate” pace, according to the Beige Book released on Wednesday. The report, which compiles anecdotal observations about the economy, by and large suggests that the Fed is likely to stay on course to execute its fourth rate rise of 2018 in December and deliver additional increases next year unless there is a more dramatic unwind in the financial markets.

[..] The sharp selloff this month has prompted at least one market expert to suggest that stocks are in the midst of a sustained downward spiral. “With the S&P 500 only five weeks removed from its all-time high, we’ve not been definitive about labeling this move a new cyclical bear market. But it’s very likely we are experiencing one,” said Doug Ramsey, chief investment officer at Leuthold Group, in a report.

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At some point, the word ‘momentum’ will come into play.

Dow Down 300 Points, S&P 500 1.7% In Another Wild Day On Wall Street (CNBC)

Stocks fell sharply on Friday as investors slogged through another volatile session on Wall Street. The Dow Jones Industrial Average closed 296.24 points lower at 24,688.31 after dropping 539 points at its lows of the day. The Nasdaq Composite dropped 2.1 percent to 7,167.21. At its lows, the tech-heavy Nasdaq had fallen more than 3 percent. The S&P 500 fell 1.7 percent to 2,658.69 and briefly entered into correction territory, trading more than 10 percent below its record high reached in September. The average stock market correction, since WWII, results in a 13 percent drop and lasts for four months if it does not turn into a full-fledged bear market. Larry Benedict, CEO of The Opportunistic Trader, said traders “don’t want to be long heading into the weekend.”

He added, “S&P now down on the year and people are more afraid to be long today than they were when market was 10 percent higher.” Seven of the 11 S&P 500 sectors are down at least 10 percent from their 52-week highs, including energy, materials and financials. Around three quarters of the index’s stocks are also in a correction. “The 19.7 percent correction in 2011 is as close to a bear market as we’ve had in recent years. I don’t think we’ll get close to that, but I think we’re heading for a deeper correction than the one we had in January and early February,” said Sam Stovall, chief investment strategist at CFRA Research. He noted investors are realizing that earnings growth will slow down moving forward, thus they are pricing this in.

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How much of Bezos’s wealth comes directly from cheap and easy money?

Jeff Bezos Loses $11 Billion In One Day After Amazon Sales Disappoint (F.)

Easy come, easy go: Jeff Bezos’ fortune dropped by $11 billion on Friday, a day after Amazon came out with quarterly results that fell short of the mark. Shares of the e-commerce behemoth fell almost 8% on Friday, swiftly knocking some $70 billion off the company’s market capitalization. The selloff also dragged down the broader market, which has been flirting with correction territory this week. Bezos’ net worth fell in lockstep, dropping by $11 billion to $135.8 billion. That is down from the $160 billion he was worth as of mid-September. Bezos, who owns 16% of Amazon, is still by far the richest man on the planet. He is trailed by Microsoft cofounder Bill Gates, whose fortune clocks in at $94.8 billion.

Amazon, which briefly became the second U.S. company to fetch a $1 trillion valuation in September, shared third quarter results on Thursday that failed to live up to the high expectations that investors and Wall Street have come to adopt. Sales rose by 29% to $56.6 billion in the third quarter. However, that was a far cry from the $73.9 billion that analysts had projected. Amazon also told investors to brace for a slower holiday season. It expects revenue to grow just 10% to 20% in the fourth quarter, reaching $72.5 billion at most. That would make for Amazon’s worst holiday season since 2014. For the last three straight years it has boasted sales increases of more than 20% during the fourth quarter.

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Makes sense: “Trump proposed having Medicare base what it pays for some expensive drugs on the average prices in other industrialized countries, such as France and Germany..”

Trump Adds A Global Pricing Plan To Wide Attack On Drug Prices (Tribble)

President Donald Trump’s new pledge to crack down on “the global freeloading” in prescription drugs had a sense of déjà vu. Five months ago, Trump unveiled a blueprin to address prohibitive drug prices, and his administration has been feverishly rolling out ideas ranging from posting drug prices on television ads to changing the rebates that flow between drugmakers and industry middlemen. Thursday, Trump proposed having Medicare base what it pays for some expensive drugs on the average prices in other industrialized countries, such as France and Germany, where prices are much lower. The proposal is in the early stages of rule-making and awaiting public comments. The U.S., Trump said, will “confront one of the most unfair practices, almost unimaginable that it hasn’t been taken care of long before this.”

The proposal was met with hope and skepticism, with several experts saying they were happy the administration was taking on Medicare Part B’s rising drug prices but questioning its approach. Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, said in an online post that the administration’s proposed solutions were unclear. And, he said, they would “face insurmountable challenges.” While some industry watchers pointed to the announcement as a political move, Wells Fargo pharmaceutical analyst David Maris said that this is a broader effort by the president and his administration to attack the root causes of high drug prices. “The reality is he could very easily not take this on and do what other administrations have done and let the prices keep rising.”

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Defeat. Good.

Swedish Central Bank Makes U-Turn on Cash as NIRP is Ending (DQ)

Sweden’s Riksbank has become the first central bank in the 21st century to take concrete measures to ensure that cash does not disappear as a means of payment from the financial system. To that end, the Riksbank proposes, in a document published on its website, to make it mandatory for all banks and financial institutions to offer cash services. The pronouncement comes in response to a recent policy suggestion by the Riksbank Committee that only the country’s six major banks should be obligated to continue offering cash services. That prompted a backlash from Sweden’s competition watchdog, which argued that the plan would distort competition as it would affect only a few of the nation’s banks. In response, the Riksbank has opted to apply the rule to “all banks and other credit institutions that offer payment accounts.”

[..] For years, the government and the Riksbank have been pushing for a “cashless society.” The Riksbank has over 1,000 articles posted on its website on the “cashless society“. The emphasis worked: between 2013 and 2017, the amount of cash in circulation dropped by 35%, earning Sweden a reputation as the world’s “most cashless nation”:

Many of Sweden’s bank branches had stopped handling cash altogether. Now, they will have to begin doing so all over again. Many of them are not happy about it. Nor indeed are Sweden’s competition and financial watchdogs, which both oppose the proposal, arguing that access to cash should be the sole responsibility of the state and not private banks. “To secure access to cash is a collective good that the state should reasonably be responsible for,” the Swedish Financial Supervisory Authority said. It’s an opinion that’s shared by ATM provider Bankomat, which argued that it should be the state’s responsibility to ensure that citizens have access to cash since the handing of notes and coins is such an important — and expensive — part of a country’s infrastructure. Bankomat is jointly owned by the five largest banks in Sweden.

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To be continued. Forever.

FBI Reviews Tesla Model 3 Production Numbers As Part Of Criminal Probe (CNBC)

The FBI is reviewing Tesla’s Model 3 production numbers as part of an ongoing criminal probe into whether the company misled investors, according to a Wall Street Journal report published Friday. Federal agents are reviewing Tesla’s stated Model 3 numbers dating back to early 2017, the Journal reports, citing unnamed sources. Tesla had previously said it provided documents to the Department of Justice regarding CEO Elon Musk’s controversial take-private tweet — a blunder that ultimately cost Tesla and Musk a combined $40 million in fraud settlement fees. Now Tesla says it also provided information to the Department of Justice regarding Musk’s public statements regarding production numbers of its Model 3 sedan.

Tesla says the company has not received “a subpoena, a request for testimony, or any other formal process,” but the Journal reported Friday that former Tesla employees have received subpoenas and requests for testimony. Tesla struggled to ramp up Model 3 production as promised, plagued by factory issues and reports of unfit working conditions. Musk set lofty goals and insisted on sticking to them, according to countless media reports. Federal agents are probing whether the company knowingly made public statements of impossible production goals, the Journal reported.

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Godspeed.

Varoufakis, Bernie Sanders To Launch Progressives International Movement (RT)

Former Greek Finance Minister Yanis Varoufakis said he and US Senator Bernie Sanders will in a month formally launch a left-wing counterpart to the nationalist movement being forged by Steve Bannon. A Sanders-Varoufakis team-up was suggested in an recent op-ed by the Greek economist published by the Guardian. The formal creation of Progressives International is to happen in Sanders’ home state of Vemont on November 30, Varoufakis announced during a press conference in Rome on Friday. Varoufakis, who led tough negotiation with European lenders in 2015 before resigning after Athens agreed to EU’s austerity terms, says the world today is facing a crisis of leadership similar to what Europe saw in the 1930s.

With the establishment failing the common people, populist nationalist forces are rising to power, offering quick and simple solutions to problems like social inequality, loss of jobs to countries with cheaper labor and mass migration. Steven Bannon, the former strategist for the Donald Trump 2016 campaign, is currently trying to unite such right-wing forces in various nations into a global movement. For Varoufakis figures like Bannon, Italian Interior Minister Matteo Salvini, Hungarian President Viktor Orban and others pose a threat similar to the fascist movements of the 1930s, according to his Guardian op-ed. He and potential allies like Sanders or UK’s Labour leader Jeremy Corbyn can offer an alternative way out of the crisis, he believes.

But if they are to succeed in a struggle for power against both the globalist establishment and the nationalists, they need to unite across borders. “The financiers are internationalists. The fascists, the nationalists, the racists – like Trump, Bannon, [German Interior Minister Horst] Seehofer, Salvini — they are internationalists,” Varoufakis told BuzzFeed News. “They bind together. The only people who are failing are progressives.”

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Could be part of a solution.

Mexico Offers Caravan Migrants Temporary Work Permits, Housing (BBC)

Mexico has offered temporary work permits to migrants who register for asylum, as a big caravan of Central American migrants makes its way through the country toward the US. The plan also envisages temporary ID cards, medical care and schooling. But to qualify, migrants must remain in Mexico’s southern Chiapas and Oaxaca states. The US has warned that about 800 troops may be sent to the US-Mexico border to stop the migrant caravan. “I am bringing out the military for this National Emergency,” US President Donald Trump said earlier this week. “They [migrants] will be stopped!” The president also threatened cutting aid to Guatemala, El Salvador and Honduras. The caravan set off from Honduras several weeks ago.

The scheme, announced by President Peña Nieto, covers Central Americans who have officially asked for a refugee status in Mexico or are planning to do so in the nearest future. It is called Estas en Tu Casa (“This is Your Home” in Spanish). “Today, Mexico extends you its hand,” President Nieto said. But he added: “This plan is only for those who comply with Mexican laws, and it’s a first step towards a permanent solution for those who are granted refugee status in Mexico.” The plan envisages: • Temporary ID cards and work permits • Medical care • Schooling for migrants’ children • Housing in local hostels. But President Nieto failed to explain what would happen to the migrants if they chose to carry on regardless.

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But they confuse climate crisis and species extiction. Not the same thing at all.

Hundreds Ready To Go To Jail Over Climate Crisis (G.)

A new group of “concerned citizens” is planning a campaign of mass civil disobedience starting next month and promises it has hundreds of people – from teenagers to pensioners – ready to get arrested in an effort to draw attention to the unfolding climate emergency. The group, called Extinction Rebellion, is today backed by almost 100 senior academics from across the UK, including the former archbishop of Canterbury Rowan Williams. In a letter published in the Guardian they say the failure of politicians to tackle climate breakdown and the growing extinction crisis means “the ‘social contract’ has been broken … [and] it is therefore not only our right, but our moral duty to bypass the government’s inaction and flagrant dereliction of duty, and to rebel to defend life itself.”

Those behind Extinction Rebellion say almost 500 people have signed up to be arrested and that they plan to bring large sections of London to a standstill next month in a campaign of peaceful mass civil disobedience – culminating with a sit-in protest in Parliament Square on 17 November. Roger Hallam, one of the founders of the campaign, said it was calling on the government to reduce carbon emissions to zero by 2025 and establish a “citizens assembly” to devise an emergency plan of action similar to that seen during the second world war. On top of the specific demands, Hallam said he hoped the campaign of “respectful disruption” would change the debate around climate breakdown and signal to those in power that the present course of action will lead to disaster.

“The planet is in ecological crisis – we are in the midst of the sixth mass extinction event this planet has experienced,” he said. “Children alive today in the UK will face the terrible consequences of inaction, from floods to wildfires, extreme weather to crop failures and the inevitable breakdown of society. We have a duty to act.”

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Make America Great Again MUST start with American nature, with protecting species. Major flaw.

US Withdrawal Of Gillnet Protections For Whales, Turtles Ruled Illegal (R.)

The Trump administration unlawfully withdrew a plan to limit the number of whales, turtles and other marine creatures permitted to be inadvertently killed or harmed by drift gillnets used to catch swordfish off California, a federal judge has ruled. The decision requires U.S. fisheries managers to take steps to implement the plan, which calls for placing numerical limits on the “bycatch” of bottlenose dolphins, four whale species and four sea turtle species snared in swordfish gillnets. As currently written, the regulation in question also would mandate suspension of swordfish gillnet operations altogether off Southern California if any one of the bycatch limits were exceeded.

The Pacific Fishery Management Council endorsed the plan in 2015, and it was formally proposed for implementation by the U.S. Commerce Department’s National Marine Fisheries Service the following year. The rule was expected to gain final approval but was abruptly withdrawn instead in June 2017 under President Donald Trump, whose Commerce Department determined the cost to the commercial fishing industry outweighed conservation benefits. The environmental group Oceana sued, accusing the Commerce Department of violating U.S. fisheries laws and the federal Administrative Procedures Act. Oceana also asked the courts to order the agency to put the bycatch limits into effect.

U.S. District Judge R. Gary Klausner declined to force the National Marine Fisheries Service to immediately implement the restrictions in a decision handed down Wednesday in Los Angeles. But he sided with environmentalists in finding the agency’s reversal exceeded its authority and was “arbitrary, capricious or an abuse of its discretion.”

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Oct 252018
 
 October 25, 2018  Posted by at 9:22 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso Circus 1918

 

Donald Trump Attacks Media ‘Hostility’ After Attempted Pipe Bombings (G.)
CNN President Jeff Zucker Blasts Trump White House After Bomb Threat (THR)
Dow Falls 600 Points And Wipes Out 2018 Gains (MW)
Asia Pacific Shares In Freefall Amid Fears Over Global Economy (G.)
Value of Euro Zone Banks Drops by a Third From 2018 Peak (R.)
Spain’s Mortgage Market Seizes Up, Bank Stocks Sink, Legal Uncertainty Reigns
It’s Not Just Italy – France’s 2019 Budget Also A Concern For Brussels (CNBC)
Tesla Shares Soar On Surprise Third-Quarter Profit (CNBC)
Airbnb Can’t Go On Unregulated – It Does Too Much Damage To Cities (G.)
Brexit Deal ‘Progress Is At 0%’ Until Irish Border Solved – Verhofstadt (Ind.)
May Sets November Date To Trigger No-Deal Brexit Preparations (G.)
Disadvantaged Groups Trapped In Poverty And Excluded From UK Society (Ind.)
Ban Entire Pesticide Class To Protect Children’s Health – Experts (G.)
European Parliament Votes To Ban Single-Use Plastics (Ind.)
Humpback Whales Stop Singing When Ships Are Near (AFP)

 

 

Another crazy story. less than 2 weeks before the midterms some loonie allegedly sent crude explosive devices to Democrats and CNN. Obviously, doesn’t appear to help Trump. Who they all fall over each other to blame, absolving themselves from all responsibility in the process. Some details:

Bombs had ISIS-like logo’s on them
At least some contained shards of glass
They were sent to people who don’t open their own mail
None of the bombs went off
Powder in package to CNN was harmless

Seen a lot more like that on Twitter, many people saying the ‘bombs’ are a joke.

Donald Trump Attacks Media ‘Hostility’ After Attempted Pipe Bombings (G.)

Donald Trump has attacked what he called media “hostility” in a speech to a campaign rally following a wave of pipe bombs sent to senior Democrats, prominent critics and the broadcaster CNN. The US president, who earlier said at the White House he condemned the attempted bombings and that a “major federal investigation” was under way, followed this with a plea for unity during a midterms campaign rally in Mosinee, Wisconsin, later on Wednesday. “Any acts or threats of political violence are an attack on our democracy itself,” he told the crowd. “We want all sides to come together in peace and harmony. We can do it … Those engaged in the political arena must stop treating political opponents as morally defective.” But he soon reverted to a familiar scapegoat. The media, he said, has “a responsibility to set a civil tone and to stop the endless hostility and constant negative and oftentimes false attacks and stories”.

[..] Trump, who still assails Clinton at rallies while supporters chant “lock her up” two years after he defeated her, took a softer tone in Wisconsin. “Let’s get along,” he told supporters. “By the way, do you see how nice I’m behaving tonight? Have you ever seen this? We’re all behaving very well and hopefully we can keep it that way, right?” He did not mention the intended recipients of the devices by name but spoke more generally, including in language which could be taken to refer to protests against himself and allies. “No one should carelessly compare political opponents to historical villains, which is done often, it’s done all the time, got to stop. We should not mob people in public places or destroy public property. There is one way to settle our disagreements. It’s called peacefully, at the ballot box.”

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Zucker doesn’t take any responsibility for the political climate. Nor do any of the others. 24/7 blasting Trump for two years has had no influence, apparently. Someone should make a database with all Trump articles at MSM that contain positive things about Trump vs those that are negative.

CNN President Jeff Zucker Blasts Trump White House After Bomb Threat (THR)

CNN president Jeff Zucker, who has long sparred with President Donald Trump throughout their decades of knowing each other, lashed out at him in a statement on Wednesday, hours after his network’s New York office was forced to evacuate due to a bomb threat. “There is a total and complete lack of understanding at the White House about the seriousness of their continued attacks on the media,” Zucker said. “The president, and especially the White House press secretary, should understand their words matter. Thus far, they have shown no comprehension of that.”

The president has been criticized for his slow response to the bomb threat on Wednesday, initially responding only by echoing Vice President Mike Pence’s tweet condemning it. On Wednesday afternoon, Trump spoke directly at a White House event, pledging to take action. “The full weight of our government is being deployed to conduct this investigation and bring those responsible for these despicable acts to justice,” he said. “We will spare no resources or expense in this effort. In these times, we have to unify. We have to come together, and send one clear, strong unmistakable message that acts or threats of political violence of any kind have no place in the United States of America.”

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All over the world.

Dow Falls 600 Points And Wipes Out 2018 Gains (MW)

Stocks ended sharply lower Wednesday, as losses accelerated into the close and put both the Dow and the S&P 500 into the red for the year, and the Nasdaq into correction territory. Upbeat results from Boeing were credited with briefly pushing the Dow higher in early morning trading, before investors took an increasingly defensive stance, fleeing for the relative safety of utilities and consumer nondurable shares. The Dow Jones Industrial Average fell 606.11 points, or 2.4%, to 24,583.42, while The S&P 500 dropped 84.59 points, or 3.1%, to 2,656.10, it’s sixth straight losing session.

Meanwhile, the Nasdaq shed 329.14 points, or 4.4%, to 7108.4, a performance that put the index more than 10% below its Aug. 29 all-time high, meeting the widely used definition of a market correction. The loss also marked the worst day for the Nasdaq since Aug. 18, 2011. October is shaping up to be a brutal month for equities, as expected, with the S&P falling 8.9% month-to-date, the Dow down 7.1%, and the Nasdaq falling 11.7% since the start of the month. Wednesday’s session also sent the Dow into losing territory for the year, with the index down 0.6% in 2018. The blue-chip index is also down for five straight weeks, it’s longest string of weekly losses since July, 11 2008, when the market fell for six straight weeks. The S&P 500 also ended the trading day in the red, down 0.7% year-to-date.

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Broad pessimism.

Asia Pacific Shares In Freefall Amid Fears Over Global Economy (G.)

Shares in Asia Pacific have plunged into bear market territory and wiped billions off the values of companies as one analyst warned that the losses could be a harbinger of a wholesale “capitulation”. After the worst day for tech stocks on Wall Street for seven years, markets were in retreat from Sydney to Shanghai as concerns about the global economy and rising borrowing costs were compounded by local factors. In Australia the benchmark ASX200 closed down 164 points or 2.8% as it suffered its fifth straight day of losses. In Japan the Nikkei was off 3.2% and has now dropped around 13% from a 27-year peak of 24,448.07 touched in early October.

A broad indicator of shares in the region – the MSCI Asia Pacific index – has now fallen 20.3% from the year-to-date high set on 29 January, representing an official bear market. The Vix “fear” index, which measures volatility across the market, has spiked sharply this week and was up 21% overnight. “We haven’t thought that selling would be this steep. This sell-off makes us think the market may be set for capitulation,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center. The contagion looked set to continue into the European trading session with the FTSE100 expected to fall 0.65% at the open.

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Italians, Deutsche. Draghi doing a speech soon.

Value of Euro Zone Banks Drops by a Third From 2018 Peak (R.)

The value of euro zone banks have collapsed by a third since markets touched their peak at the end of January, data showed on Wednesday, as another quarter of disappointing profits at Deutsche Bank dragged the region’s sector down. European banks shares, which have never reclaimed their pre-financial crisis prices, have been the worst performing sector so far in the monetary block this year, down 26.5 percent as investors shed assets seen as most vulnerable to political upheaval. “The fall is not justified by a similar drop in earnings,” commented Farhad Moshiri, an analyst covering European banks at Alphavalue, arguing that political risk had a stronger negative impact than sector results.

Still, Deutsche’s bleak results and revenue forecast on Wednesday, which sent shares down 5 percent for their worst day since end-May, deepened the sector-wide rout. The Spring political crisis in Italy and the following on-going row with the European Commission about the country’s populist government’s budget took a heavy toll, particularly on Italian banks. The latters are heavily exposed to Italian sovereign debt, which has shed value since the country decided to raise spending and put an end to years of fiscal prudence. Slowing economic growth on the continent and elusive monetary normalization, with a first interest rate hike by the European Central Bank (ECB) still far away, also weighed on stock prices.

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A legal issue about taxes on mortgages only makes things worse.

Spain’s Mortgage Market Seizes Up, Bank Stocks Sink, Legal Uncertainty Reigns

In the last five trading days, the shares of Spain’s five largest listed banks have re-energized their plunge that had started at the end of January and now amounts to 40%. The cause for the recent drop? A shock ruling by Spain’s Supreme Court that lenders, rather than mortgage borrowers, should pay the contractual tax on mortgage loans, on the grounds that the lender is the only party with an interest in getting the loan certified by a notary, since this is what enables the bank to begin foreclosure proceedings if the borrower defaults on payments. Even the Supreme Court’s desperate decision last Friday to suspend its own ruling a day after it had announced the ruling, a historic flip-flop that left everything in limbo and its reputation in tatters, failed to stop the rout (data via YCharts):

On Monday, the Supreme Court announced that it won’t decide who has to pay the tax on mortgages — the banks or the borrowers — until November 5. In other words, there will be two more weeks of acute legal uncertainty. This has plunged Spain’s mortgage market into chaos. For years Spanish banks and builders have been desperately trying to breath new life into the market — including, in some cases, by resurrecting 100% mortgages, a high-risk instrument that helped fuel Spain’s madcap property boom. But now, thanks to the pervading legal uncertainty, the market has all but seized up. On Tuesday, sources from a number of large banks told the financial daily Cinco Dias that the only mortgages being signed are with clients who had already arranged to sign the contract before last week’s furor and who don’t mind paying the mortgage tax. “We’re not signing any new ones,” the sources said.

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Italy must insist France gets the same treatment.

It’s Not Just Italy – France’s 2019 Budget Also A Concern For Brussels (CNBC)

Markets have been on the edge regarding Italy’s future spending, but there are other countries challenging European fiscal rules. France, the second-largest economy in Europe, received a letter from Brussels last week, warning that its planned debt reduction in 2019 does not respect the proposals that Paris had agreed previously with the EU. Spain, Belgium, Portugal and Slovenia were also effectively told off by the EU. In the case of France, the 2019 budget plan sees its structural deficit (the difference between spending and revenues, excluding one-off items) falling 0.1 percent this year and 0.3 percent in 2019. Paris had agreed in April to an annual reduction of 0.6 percent of GDP for its structural deficit.

Though the tone of the warning from Brussels to Paris was softer than the tone towards Rome, the two countries have perhaps more similarities than differences. The French 2019 budget “shows that the government relies heavily on very optimistic revenues to achieve fiscal consolidation and that spending is out of control again,” Daniel Lacalle, chief economist and investment officer at Tressis Gestion, told CNBC via email. “In the case of France, it is a very difficult budget to accept by the European Commission because France has not had a balanced budget since 1974 and has missed its own deficit targets more than eleven times,” Lacalle added.

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A curious turnaround. To be continued.

Tesla Shares Soar On Surprise Third-Quarter Profit (CNBC)

Tesla shares soared by more than 12 percent after the company reported a surprise profit for the third quarter as CEO Elon Musk made good on his promise to start turning regular profits in the last half of the year. The company’s earnings report, released after the markets closed Wednesday, also showed better-than expected car sales and a faster timeline on its Model 3 production. The electric car maker said its midsize Model 3 sedan, which it hopes to produce on mass scale, was the best-selling car in the U.S. when measured by revenue and the fifth best-selling car in terms of volume. Musk told analysts on a call it was an “incredibly historic quarter” for the young car company. It was welcome news for investors following an otherwise a tumultuous few months.

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It does. Somone better get serious about this.

Airbnb Can’t Go On Unregulated – It Does Too Much Damage To Cities (G.)

Remember the “sharing economy”? That rhetoric looks more comically disingenuous than ever in light of the news that a single Airbnb user in Barcelona is managing a portfolio of properties that brings in an eye-watering £33,000 a day in high season. Old neighbourhoods are being overrun with short-term tourists and shops selling souvenir tat. Rents for residents are being driven up, in Barcelona as well as Berlin, New York and elsewhere. Airbnb is a parasitic monster that squats over cities and hoovers up vast sums of money through its slimy proboscis. So what can be done?

Airbnb, short for “airbed and breakfast”, originally sold itself as a way for travellers to stay in people’s spare rooms and get an authentic feel of a foreign culture. This friendly idea is still present in the company’s vocabulary – “hosts”, not landlords, and “hospitality” in place of “business” – even though the vast majority of its listings are now for self-contained apartments or houses. In Barcelona, it used to cost €250 (£221) for a short-term rental permit. Now that such permits are no longer being issued, they change hands for up to €80,000. It’s “sharing” for the rich, maybe, but not for the rest of us.

During their early rapid growth, sharing economy companies started operations around the world without regard to local laws on the basis that existing regulations had not envisaged the radical and disruptive new ideas they embodied. But the tide slowly turned as the whizzy tech rhetoric wore off and it became clear that Uber was in fact a taxi company and Airbnb was in effect a hotel business.

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Don’t like Verhofstadt, but it’s time for honesty.

Brexit Deal ‘Progress Is At 0%’ Until Irish Border Solved – Verhofstadt (Ind.)

The European Parliament’s Brexit coordinator has rejected Theresa May’s suggestion that a deal is “95 per cent done”, as Brussels warned it will not be bounced into an agreement. Guy Verhofstadt said the withdrawal agreement needed to prevent no deal was “0 per cent done” as far as MEPs were concerned, because of the lack of a solution to the Irish border issue. “Progress on the Brexit negotiations can be 90 per cent, 95 per cent or even 99 per cent,” Mr Verhofstadt said. “But as long as there is no solution for the Irish border, as long as the Good Friday agreement is not fully secured, for us in our parliament progress is 0 per cent.”

The European Parliament has a veto on the final Brexit deal and has said it would kill any agreement that does not prevent a hard border between Ireland and Northern Ireland. Speaking in a debate at the parliament’s Strasbourg seat on Wednesday morning, the second in command of the European Commission Frans Timmermans also warned that the block would not “rush a deal through at the expense of our principles”. “As was clear after the European Council the bottom line is that we do not have the decisive progress that we need,” Jean-Claude Juncker’s deputy said. “The good will and the determination to find a deal as soon as possible are there. But it is also clear that we will not rush a deal through at the expense of our principles or our agreed commitments, most notably on the Irish border question.

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Watch the pound when she makes it official.

May Sets November Date To Trigger No-Deal Brexit Preparations (G.)

Theresa May has set a date for Whitehall to trigger a series of no-deal Brexit preparations as her government faces up to the possibility that there will be no agreement with the EU about Britain’s departure. With less than six months to go before the UK leaves the bloc, the cabinet has agreed that a flurry of activity will be triggered in the second week of November as the government prepares to crash out of the EU, informed sources said. Civil servants have also accelerated plans to lay down new laws and secondary legislation so that UK businesses and both British and EU citizens can prepare. The move follows concerns across government that preparations for how the UK might cope with crashing out the EU are still uncertain.

The Brexit secretary, Dominic Raab, told cabinet colleagues on Tuesday that Whitehall departments needed to step up their efforts next month and move “from warning businesses to telling them to act”. Whitehall has until now concentrated on the publication of more than 100 technical notices detailing the potential impact on particular industries but not on individual businesses and people. A source said that there would be an acceleration of preparations after MPs return from a short break on 12 November. “We have to get on with no-deal legislation. At the moment, we’re looking at the same legislation for a deal as no deal. In the case of no deal it would need royal assent before we leave. “There will be an awful lot to discuss. It will concentrate minds. Obviously we don’t want to upset the negotiations, but the clock is ticking and it will get harder and harder the later we leave it,” the source said.

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This is Theresa May’s country, her accomplishment.

Disadvantaged Groups Trapped In Poverty And Excluded From UK Society (Ind.)

Britain is a divided nation as the poor are increasingly trapped in poverty and excluded from mainstream society because of their social status, the human rights watchdog has warned. A major report from the Equality and Human Rights Commission (EHRC) found a continued decline in prospects for disadvantaged groups has cemented a “two-speed society” in the UK which leaves many behind. The watchdog found that in just three years “alarming backward steps” have left disabled people, ethnic minorities and children from poorer backgrounds struggling to make headway in a society where “significant barriers still remain”.

Charities accused Theresa May of breaking the promise she made in her first speech as prime minister to tackle “burning injustices” in British society. It comes just days before Philip Hammond, the chancellor, is to set out a budget with critics waiting for spending commitments that will deliver on the prime minister’s conference promise that austerity is finally coming to an end. In a speech on Thursday, shadow chancellor John McDonnell will say that schools, councils and the UK’s social care system are “crying out for investment” and called on the government to “stump up the cash”. David Isaac, chair of the EHRC, said Britain was facing a “defining moment in the pursuit of equality”.

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Stop using pesticides altogether.

Ban Entire Pesticide Class To Protect Children’s Health – Experts (G.)

Evidence that an entire class of pesticides threatens the health of children and pregnant women is now so arresting that the substances should be banned, an expert panel of toxicologists has said. Exposure to organophosphates (OPs) increases the risk of reduced IQs, memory and attention deficits, and autism for prenatal children, according to the paper, published in Plos Medicine. More than 10,000 tonnes of OP pesticides are sprayed in 24 European countries each year and usage is higher in the US, where the Trump administration is appealing against a federal court ban on chlorpyrifos, one of the most popular agricultural insecticides.

Irva Hertz-Picciotto, the paper’s lead author and director of the UC Davis environmental health sciences centre, said: “We have compelling evidence from dozens of human studies that exposures of pregnant women to very low levels of organophosphate pesticides put children and foetuses at risk for developmental problems that may last a lifetime. By law, the EPA cannot ignore such clear findings: It’s time for a ban not just on chlorpyrifos, but all organophosphate pesticides.” The meta-review of data and literature on OPs analysed and cross-referenced scores of reviews and epidemiological studies with a UN database that covers 71 countries, and other research material.

In the process, the scientists discovered that US regulators had already quietly banned 26 out of 40 OP pesticides considered hazardous to human health. In Europe, the figure was 33 out of 39. However, 200,000 people still die each year from pesticide poisonings, according to UN estimates, about 99% of them in the developing world. A further 110,000 suicides using pesticides take place each year.

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Not bad, but too late.

European Parliament Votes To Ban Single-Use Plastics (Ind.)

Fragments of plastic have been found everywhere from Arctic sea ice to fertilisers being applied to farmland. Animals as small as plankton and as large as whales are known to eat plastic, and as tiny shards enter the human food chain they seem to be ending up inside humans as well. While much still remains unknown about the impact plastic is having on the environment and human health, environmentalists have called for urgent measures from industry and governments to curb the flow of plastic. “We have adopted the most ambitious legislation against single-use plastics. It is up to us now to stay the course in the upcoming negotiations with the council, due to start as early as November,” said Belgian liberal Frederique Ries, who was responsible for the bill.

Under the new rules, member states would have to ensure that tobacco companies cover the cost of cigarette butt collection and processing in a bid to reduce the number entering the environment by 80 per cent in the next 12 years. Similar measures would apply to producers of fishing gear, who would have to help ensure at least 50 per cent of lost or abandoned fishing gear containing plastic is collected per year. Fishing gear accounts for over a quarter of waste found on Europe’s beaches, and “ghost fishing” is thought to be responsible for thousands of whales, seals and birds dying every year. EU states would also be obliged to recycle 90 per cent of plastic bottles by 2025, and producers would have to help cover costs of waste management.

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But they don’t mean sailing ships.

Humpback Whales Stop Singing When Ships Are Near (AFP)

Humpback whales are famous for their eerie, underwater songs. But researchers in Japan said Wednesday these massive marine creatures stop singing, at least temporarily, when human-driven ships are nearby. Researchers focused on the remote Ogasawara Islands in Japan, some 620 miles (1,000 kilometers) south of Tokyo, where a single passenger-cargo liner passed through the area once per day. Male humpback whales sing as a way to communicate and attract mates. But by plunging a pair of hydrophones into the water to listen to the whales’ reaction — about 26 of whom were detected in the study area — researchers found that the approach of a ship silenced them.

“The main reaction of humpback whales was to stop singing either when the ship approached or after it passed by,” said the study in the journal PLOS ONE, led by Koki Tsujii from Ogasawara Whale Watching Association and Hokkaido University. Fewer male humpbacks sang in the area within 500 yards (meters) of the shipping lane than elsewhere. “After the ship passed by, whales within around 1,200 meters tended to temporarily reduce singing or stop singing altogether,” said the study. Many whales did not start to sing again until a half hour after the ship was gone from the area. Since ocean noise has been on the rise in recent decades, some experts said the findings raise new questions about what other whale behaviors might be changing due to mounting human presence on the high seas.

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Oct 012018
 
 October 1, 2018  Posted by at 9:15 am Finance Tagged with: , , , , , , , , ,  


Paul Gauguin Bathing, Dieppe 1885

 

White House Questioned Over Scope Of FBI Investigation Into Kavanaugh (WSJ)
Trump Helps Publishers Sell Millions Of Books – Both Pro And Con (AFP)
Canada, US Deal Saves NAFTA As Trilateral Pact (R.)
May Fights To Assert Authority At Tory Conference (G.)
Six Months Before Brexit, The UK Government Is Attacking The EU (CNBC)
China Manufacturing Activity Slows As Trade War Rages (AFP)
Tesla’s SEC Deal Provides Ammunition For US Probe, Investor Lawsuits (R.)
The Banks That Helped Danske Bank Estonia Launder Russian Money (Coppola)
The Distribution Of Wealth Has More To Do With Power Than Productivity (OD)
Tim Berners-Lees Aims To Radically Decentralize The Internet (ZH)
FYROM Leader Vows To Press On With Name Change Despite Referendum Failure (R.)
Treated Water At Fukushima Nuclear Plant Still Radioactive (AP)
Which Cities Will Sink Into The Sea First? (G.)

 

 

It is essential that they keep sighting each other. People love that.

White House Questioned Over Scope Of FBI Investigation Into Kavanaugh (WSJ)

A political cease-fire achieved by a further FBI investigation into allegations of sexual misconduct against Judge Brett Kavanaugh evaporated over the weekend, as the White House fended off accusations it had placed overly restrictive limitations on the probe of its Supreme Court nominee. The one-week-at-most inquiry by the Federal Bureau of Investigation, brokered as a last-minute deal Friday between Republican Sen. Jeff Flake and Democrats on the Senate Judiciary Committee, was intended to satisfy concerns that allegations against Kavanaugh weren’t being fully vetted before the full Senate took up his nomination.

But early signs that the FBI probe would be on a short leash inflamed Democratic criticism that President Donald Trump and fellow Republicans weren’t out to explore fully the allegations, while the White House, Senate and FBI all appeared to shift responsibility for the scope of the probe elsewhere. “The FBI’s hands must not be tied in this investigation,” Sen. Dianne Feinstein of California, the top Democrat on the Judiciary panel, wrote on Twitter. Later Sunday, Feinstein asked White House counsel Don McGahn and the director of the FBI to release a copy of the directive sent by the White House to the bureau outlining the scope of the investigation.

The contours of the FBI investigation weren’t clear and appeared at times to shift, as Trump and senior administration officials pushed back against reports that the White House directed who would be interviewed as part of a reopening of Kavanaugh’s background investigation. Administration officials said they were taking cues from the Senate. Leading the process for the West Wing is McGahn, who helped prepare Kavanaugh for the questions he would face in Judiciary Committee hearings. The lack of clarity extended to what investigators could ask witnesses, such as whether they would examine the accuracy of Kavanaugh’s testimony last week on his drinking habits as a teen.

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Most important article about US politics in a long time. The title says Pro and Con, but really, it’s all con. Because that sells. More books are coming. Because they will sell.

Trump Helps Publishers Sell Millions Of Books – Both Pro And Con (AFP)

“Fire and Fury,” “A Higher Loyalty,” “Fear”: three books about Donald Trump have each sold more than a million copies in the United States, a first that reflects Americans’ fascination with their ever-surprising president. The great majority of successful books on politics have been written by politicians themselves — or by ghostwriters working with them. Barack Obama set the standard in the genre, selling a combined 4.6 million copies of his autobiographical books “Dreams From My Father” and “The Audacity of Hope.” In their time, Bill Clinton, George W. Bush, Jimmy Carter, Hillary Clinton and even Sarah Palin all topped the best-seller lists at least for a few weeks, while not reaching Obama’s lofty level.

And in 1976, Washington Post journalist Bob Woodward sold 630,000 copies of his “The Final Days,” chronicling the dramatic unwinding of the Nixon presidency. After that, however, there have been no chart-toppers about a president. But in just nine months, “Fire and Fury” by journalist and author Michael Wolff, “A Higher Loyalty” by former FBI chief James Comey, and Woodward’s “Fear” have sold a combined total of more than five million copies, according to numbers reviewed by AFP. “I’m not surprised,” said David Corn, co-author of “Russian Roulette,” a book about Russian interference in the American presidential campaign. “There is deep desire on the part of many Americans for an understanding of what happened in this country” during the 2016 presidential campaign, he said, and also of “what’s going on now within the Trump White House.”

In the past, books about a presidency were generally published only after it was over, leaving sources freer to talk and allowing greater historical perspective. But, “as ever, Trump has sped everything up,” Jon Meacham, the author of several best-selling political and historical books, told MSNBC. “It’s almost as if we had a webcam” providing live coverage of events inside the White House. [..] “The Fifth Risk” by Michael Lewis (author of “Liar’s Poker” and “The Big Short”), “The Apprentice” by Washington Post journalist Greg Miller, and the Stormy Daniels book “Full Disclosure,” about the adult film star’s alleged sexual liaison with Trump, are all set to reach bookstores on Tuesday. “One potential problem is that people get too accustomed to the outrages of the Trump administration,” Corn said, “and therefore become less interested in books like these. “But I don’t see that happening any time soon.”

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Mere days after declaring the talks near dead, everybody’s happy again.

Canada, US Deal Saves NAFTA As Trilateral Pact (R.)

The United States and Canada forged a last-gasp deal on Sunday to salvage NAFTA as a trilateral pact with Mexico, rescuing a three-country, $1.2 trillion open-trade zone that had been about to collapse after nearly a quarter century. In a big victory for his agenda to shake-up an era of global free trade that many associate with the signing of NAFTA in 1994, President Donald Trump coerced Canada and Mexico to accept more restrictive commerce with their main export partner. Trump’s primary objective in reworking NAFTA was to bring down U.S. trade deficits, a goal he has also pursued with China, by imposing hundreds of billions of dollars in tariffs on imported goods from the Asian giant.

While the new United States-Mexico-Canada Agreement (USMCA) avoids tariffs, it will make it harder for global auto makers to build cars cheaply in Mexico and is aimed at bringing more jobs into the United States. Since talks began more than a year ago, it was clear Canada and Mexico would have to make concessions in the face of Trump’s threats to tear up NAFTA and relief was palpable in both countries on Sunday that the deal was largely intact and had not fractured supply chains between weaker bilateral agreements. “It’s a good day for Canada,” Prime Minister Justin Trudeau told reporters after a late-night cabinet meeting to discuss the deal, which triggered a jump in global financial markets.

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“Rees-Mogg said the plan was the “deadest of dying ducks”..”

May Fights To Assert Authority At Tory Conference (G.)

Deep divisions over Brexit overshadowed the opening day of the Conservative party conference on Sunday as Theresa May attempted to wrestle back the focus on to her domestic agenda. The bitter infighting that has crippled the Conservative party was laid bare as Boris Johnson and Jacob Rees-Mogg laid into the prime minister’s Brexit plans as thousands of delegates gathered in Birmingham. The chancellor, Philip Hammond, launched a scathing attack on Johnson, suggesting the former foreign secretary could not do “grown-up politics” and saying he did not expect him to become prime minister. May appealed to Tory MPs and the party’s grassroots to back her Chequers proposal as she was forced to hit back at Johnson, her former foreign secretary, who questioned her belief in leaving the European Union.

“I do believe in Brexit, but crucially I believe in delivering Brexit in a way that respects the vote and delivers on behalf of the British people, while also protecting our union, protecting jobs and ensuring we make a success of it,” she told the BBC’s Andrew Marr. However, May risked infuriating the party’s pro-Brexit grassroots by appearing to refuse to rule out further compromises to her Chequers plan in order to broker a final deal. It came after Johnson used a newspaper interview to launch a renewed attack on May’s entire Brexit plan, dismissing it as “deranged” while suggesting the proposal for Britain and the EU to collect each other’s tariffs was “entirely preposterous”. Rees-Mogg, the leader of the hard Brexiter European Research Group, said the plan was the “deadest of dying ducks” at a packed fringe meeting with hundreds of delegates..

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2 years of doing nothing, what else is there to do?

Six Months Before Brexit, The UK Government Is Attacking The EU (CNBC)

The U.K. government is demanding action from the European Union (EU) amid strong frustration over the lack of proposals from Brussels on a post-Brexit relationship. The U.K. is set to leave the EU in March 2019 and negotiators are working against the clock, trying to hammer a deal that will allow businesses to continue trading under relatively low tariffs. However, key differences, including the future of the Irish border with Northern Ireland, remain – leading many to believe that a no-deal is the more likely outcome. Speaking to CNBC over the weekend, several members of the U.K. government appeared frustrated about the lack of help coming from the European Union.

“At the moment, it is very much a question of the European Union responding with its proposals. At the moment, there is nothing on the table,” Chris Grayling, transport secretary told CNBC’s Steve Sedgwick at the Conservative Party conference currently taking place in Birmingham. Liam Fox, Trade secretary and an outspoken Brexit supporter, told CNBC on Sunday that it is the EU’s “duty” to help the U.K. and put forward their proposals. “They said they were not very happy with what the U.K. offered, in which case let them bring forward their own proposals,” he said. “Under Article 50 (the legislation that allows a EU country to leave the Union), we have the right to leave the European Union and they have a duty to help us in that future relationship. Let’s see them now deliver what they promised to do in that treaty,” Fox said.

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The trade war isn’t raging. Yet.

China Manufacturing Activity Slows As Trade War Rages (AFP)

Chinese factory activity slowed in September, official data showed Sunday, as the Asian giant’s trade war with the United States showed no sign of abating. The Purchasing Managers’ Index (PMI), a key gauge of factory conditions, came in at 50.8 for the month, down from 51.3 in August, the National Bureau of Statistics said. The figure was below the 51.2 reading tipped in a Bloomberg News survey of economists. Although the numbers indicated a slowdown, they remained above the 50-point mark that separates expansion from contraction. A separate manufacturing index, calculated independently by the Caixin media group, also showed a deceleration.

“Exports increasingly dragged down performance and continued softening demand began to have an impact on companies’ production,” said Caixin analyst Zhengsheng Zhong. “In addition, the employment situation worsened further. Downward pressure on China’s economy was significant.”

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Musk can pay big fines.

Tesla’s SEC Deal Provides Ammunition For US Probe, Investor Lawsuits (R.)

Tesla Inc’s settlement with U.S. regulators will help soothe investors calling for more oversight of Chief Executive Elon Musk, experts said, even as it gives ammunition to short-sellers pursing separate cases and to a probe by the Justice Department. Musk and Tesla will pay $20 million each, bring in two independent directors and have the billionaire step down as board chairman to settle U.S. Securities and Exchange Commission charges that Musk misled investors by tweeting he had financing for a go-private deal. That settlement must still be approved by a court, and does not end the Justice Department probe disclosed by Tesla into Musk’s tweets or lawsuits by short-sellers and other investors alleging losses and securities law violations.

“The real worry for the company is not the SEC but private actions that follow a settlement like this,” said Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “By paying that size fine, it bolsters investors’” claims over stock market losses, he said. [..] Musk settled with the SEC after advisers persuaded him the terms were favorable and a lengthy court fight would not be in the best interest of the company, a person familiar with the deal said. Musk had wanted to personally pay the fine for money-losing Tesla but the SEC rejected that proposal, the person said.

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That would be all of them. And all claim innocence.

The Banks That Helped Danske Bank Estonia Launder Russian Money (Coppola)

Money laundering is a multi-bank phenomenon. Danske Bank Estonia has been revealed as the hub of a $234bn money laundering scheme involving Russian and Eastern European customers. But Danske Bank Estonia couldn’t do this by itself. Much of the money was paid in U.S. dollars, and for that, it needed help from other banks. Banks that had access to Fedwire, the Federal Reserve’s electronic settlement system. Big banks, in other words. It appears that four big banks helped Danske Bank Estonia make its dodgy transactions. J.P. Morgan, Bank of America and Deutsche Bank AG all made dollar transfers on behalf of the Estonian branch’s non-resident customers. And according to the Wall Street Journal, Citigroup’s Moscow branch may have been involved in some financial transfers in and out of Danske Bank Estonia.

But how much responsibility do these banks bear for these transfers? Could they reasonably have been expected to know – or suspect – that the money was dirty? Banks that make transactions on behalf of customers of other banks are known as “correspondent banks”. In the past, correspondent banks often had little information about the originator or final recipient of the money they were transmitting. They simply trusted that their customer bank was acting legally and that its customers were above board. Old habits die very hard: in 2016, the correspondent banks involved in the FIFA corruption case, which include Citigroup, HSBC, Wells Fargo and Barclays, all claimed that they could not have known that the transfers were corrupt.

But these days, banks are expected to “know their customers’ customers”. They are supposed to conduct their own checks to make sure that they are not unwittingly being used to launder dirty money. In the case of Danske Bank Estonia, one of the correspondent banks did suspect something was wrong. In 2013, J.P. Morgan terminated its correspondent banking relationship with Danske Bank Estonia because it was concerned that it was being used as a conduit for dodgy funds. Deutsche Bank, however, blithely continued to make U.S. dollar wire transfers on behalf of the Estonia branch’s non-resident customers after J.P. Morgan’s departure. So did Bank of America, which replaced J.P. Morgan.

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The housing bubble has made Britian ‘rich’ while productivity falls behind.

The Distribution Of Wealth Has More To Do With Power Than Productivity (OD)

According to a new OECD working paper, Britain is one of the wealthiest countries in the world. Net wealth is estimated to stand at around $500,000 per household – more than double the equivalent figure in Germany, and triple that in the Netherlands. Only Luxembourg and the USA are wealthier among OECD countries. On one level, this isn’t too surprising – Britain has long been a wealthy country. But in recent decades Britain’s economic performance has been poor. Decades of economic mismanagement have left the UK lagging far behind other advanced economies. British workers are now 29% less productive than workers in France, and 35% less than in Germany. How can this discrepancy between high levels of wealth and low levels of productivity be explained?

[..] Let’s start with land: Germany has among the strongest tenant protection laws in Europe, and many German cities also impose rent controls. This, along with a banking sector that favours real economy lending over property lending, means that Germany has not experienced the rampant house price inflation that the UK has. Remarkably, the house price-to-income ratio is lower in Germany today than it was in 1995, while in the UK it has nearly tripled over the same time period. The fact that houses are not lucrative financial assets, and renting is more secure and affordable, means that the majority of people choose to rent rather than own a home in Germany – and therefore do not own any property wealth.

In Britain, the story couldn’t be more different. Over the past five decades Britain has become a property owners’ paradise, as successive governments have sought to encourage people onto the property ladder. Taxes on land and property have been removed, and subsidies for homeownership introduced. The deregulation of the mortgage credit market in the 1980s meant that banks quickly became hooked on mortgage lending – unleashing a flood of new credit into the housing market. Rent controls were abolished, and the private rental market was deregulated. Today tenant protection is weaker than almost anywhere else in Europe. Meanwhile, the London property market has served as a laundromat for the world’s dirty money. As Donald Toon, head of the National Crime Agency, has described: “Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK”.

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If one man can do it…

Tim Berners-Lees Aims To Radically Decentralize The Internet (ZH)

The man who created the world wide web by implementing the first ever successful communication between a Hypertext Transfer Protocol (HTTP) client and server via the internet in 1989 lamented that his creation has been abused by powerful entities for everything mass surveillance to fake news to psychological manipulation to corporations commodifying individuals’ information. But he’s long been at work on a new project to take the web back, described in depth by the business technology magazine Fast Company: This week, Berners-Lee will launch, Inrupt, a startup that he has been building, in stealth mode, for the past nine months.

Backed by Glasswing Ventures, its mission is to turbocharge a broader movement afoot, among developers around the world, to decentralize the web and take back power from the forces that have profited from centralizing it. In other words, it’s game on for Facebook, Google, Amazon. “We have to do it now,” Berners-Lee said of the newly launched project. “It’s a historical moment.” He identified the main impetus behind his recent announcement that he’ll be going on sabbatical from his research professor post at MIT to work full-time on the project as the recent revelation that Facebook allowed political operatives to gain access to some 50 million users’ private data.

At MIT Berners-Lee has for years led a team on designing and building a decentralized web platform called ‘Solid’ — which will underlie the Inrupt platform. The Inrupt venture will serve as users’ first access to the new Solid decentralized web: If all goes as planned, Inrupt will be to Solid what Netscape once was for many first-time users of the web: an easy way in. And like with Netscape, Berners-Lee hopes Inrupt will be just the first of many companies to emerge from Solid. “I have been imagining this for a very long time,” says Berners-Lee.

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Even the president told people not to vote.

FYROM Leader Vows To Press On With Name Change Despite Referendum Failure (R.)

Macedonia’s prime minister pledged on Sunday to press on with a vote in parliament to change the country’s name to resolve a decades-old dispute with Greece, despite failing to secure the 50 percent turnout at a referendum required to make it valid. The proposed name change is part of an agreement reached in June by pro-Western Prime Minister Zoran Zaev with Greece to resolve the dispute over the country’s name, which had prevented Macedonia from joining NATO or the EU. With 85 percent of votes counted, official turnout was just 36 percent, and election officials made clear there was no chance the threshold would be cleared. “On this referendum, it is clear that the decision has not been made,” election commission head Oliver Derkoski told reporters.

The people who did vote overwhelmingly backed the name change — more than 90 percent voted yes with 63 percent of polling stations reporting. But that had never been in doubt, since opponents of the change had urged followers not to vote, rather than vote no. “It is clear that the agreement with Greece has not received the green light from the people,” main nationalist opposition VMRO-DPMNE party leader Hristiajn Mickoski told journalists. The referendum was itself not legally binding, but lawmakers had pledged to abide by it, and the failure to reach the turnout threshold means opponents can now freely vote against the deal. The nationalist opposition holds 49 seats in the 120-seat parliament, enough to block the two-thirds majority required to change the constitution.

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Letting TEPCO police itself is a bad idea.

Treated Water At Fukushima Nuclear Plant Still Radioactive (AP)

The operator of the Fukushima No. 1 nuclear plant has said that much of the radioactive water stored at the plant isn’t clean enough and needs further treatment if it is to be released into the ocean. Tokyo Electric Power Company Holdings Inc. and the government had said that treatment of the water had removed all radioactive elements except tritium, which experts say is safe in small amounts. They called it “tritium water,” but it actually wasn’t. Tepco said Friday that studies found the water still contains other elements, including radioactive iodine, cesium and strontium. It said more than 80 percent of the 900,000 tons of water stored in large, densely packed tanks contains radioactivity exceeding limits for release into the environment.

Tepco general manager Junichi Matsumoto said radioactive elements remained, especially earlier in the crisis when plant workers had to deal with large amounts of contaminated water leaking from the wrecked reactors and could not afford time to stop the treatment machines to change filters frequently. “We had to prioritize processing large amounts of water as quickly as possible to reduce the overall risk,” Matsumoto said. About 161,000 tons of the treated water has 10 to 100 times the limit for release into the environment, and another 65,200 tons has up to nearly 20,000 times the limit, Tepco said.

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The earth as a complex system.

Which Cities Will Sink Into The Sea First? (G.)

[..] are sea levels going up or down? The answer seems clear when you consider that Antarctica has lost 3 trillion tonnes of ice in the last 25 years. Yet to understand what is going on we first have to recognise that the Earth isn’t solid. It started life as a ball of hot liquid about 4.5bn years ago and our planet has been cooling ever since. Right at the centre of the Earth is a solid core of metal made of iron and nickel at a temperature of approximately 5,000C. But this core is surrounded by an approximately 2,000km-thick ocean of molten metal, again mostly iron and nickel.

Surrounding this is a layer of rock called the mantle that is between 500C to 900C, and at these red-hot temperatures the rock behaves like a solid over short periods of time (seconds, hours, and days) but like a liquid over longer time periods (months to years) – so the rock flows, even though it is not molten. On top of the fluid mantle floats the crust, which is like the skin of the Earth. It is a relatively thin layer of cool rock that is between 30 to 100km thick and contains all the mountains, forests, rivers, seas, continents – our world.

Since the crust is floating on the fluid mantle, if you increase its weight by, for instance, building up kilometres of ice on top of it, then it sinks further into the mantle. This is what has happened to the landmasses of Antarctica and Greenland, which are both covered in 2km to 3km of thick ice. If global warming were to cause all that ice to melt, then the sea level of the oceans would rise by more than 50 metres, submerging all the coastal cities of the world and making hundreds of millions of people homeless. This seems obvious. What is less obvious is how it might unfold.

Read more …

Sep 302018
 
 September 30, 2018  Posted by at 9:30 am Finance Tagged with: , , , , , , , , , , ,  


M. C. Escher Bond of union 1956

 

White House Directs FBI to Interview Two Kavanaugh Accusers, Not Third (WSJ)
Where Does Our Attention Belong: Kavanaugh or Yemen? (PCR)
“Dirty Money” Crackdown As Vancouver Housing Market Grinds To A Halt (ZH)
May Acts To Tackle Housing Crisis By Imposing Levy On Foreign Buyers (O.)
Brexit Costing Britain £500m A Week And Rising (O.)
Steve Bannon Thinks Michael Avenatti Has A Serious Shot In 2020 (ZH)
New WikiLeaks Release: Corruption in UAE Arms Deal Fueling War on Yemen (MPN)
Musk Out As Tesla Chair, Remains CEO in $40M SEC Settlement (AP)
How Facebook Was Hacked And Why It’s A Disaster For Internet Security (F.)
Fearing Debt Trap, Pakistan Rethinks Chinese ‘Silk Road’ Projects (R.)
FYROM Citizens Go to the Polls to Decide on Name Change (GR)
Indonesia Earthquake: Huge Surge In Death Toll (BBC)

 

 

Swetnick’s gang rape story looks far-fetched. And not one person corroborates it.

White House Directs FBI to Interview Two Kavanaugh Accusers, Not Third (WSJ)

The Federal Bureau of Investigation has been instructed by the White House to interview two of the women who have alleged sexual misconduct by Brett Kavanaugh, according to people familiar with the matter. The parameters of the FBI probe don’t include interviewing Julie Swetnick, who said this week the Supreme Court nominee attended a party decades ago where she was gang-raped, according to one of the people. The focus on the first two accusations suggests that the White House doesn’t consider Ms. Swetnick’s accusations credible, people familiar with the instructions said, a decision that drew criticism from Ms. Swetnick’s attorney, Michael Avenatti.

The Wall Street Journal has attempted to corroborate Ms. Swetnick’s account, contacting dozens of former classmates and colleagues, but couldn’t reach anyone with knowledge of her allegations. No friends have come forward to publicly support her claims. She has recorded a TV interview to be aired Sunday, the first woman making accusations against the Supreme Court nominee to do so. NBC’s “Morning Joe” on Thursday aired a clip of her interview with John Heilemann of Showtime’s “The Circus,” in which Ms. Swetnick called for an investigation into the allegations against Judge Kavanaugh.

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Paul Craig Roberts is right, but undermines himself by saying women should have more responsible sex.

Where Does Our Attention Belong: Kavanaugh or Yemen? (PCR)

There are reports that the Washington-initiated and militarily- supported Saudi Arabian war against Yemen have a starving Yemeni population eating leaves. The Saudis, with Washington’s GPS support, continue to target school busses, massacring children as an element of the terror assault against the population, trying to break Yemeni resistance by murdering children on school busses. Washington continues to supply the Saudis with the weapons to target school buses and the diplomatic support to protect the criminal Saudi regime from war crimes charges. The European cowards turn their heads. Even Russia is silent. Putin’s “partnership” with the criminal state of Saudi Arabia is more important.

Isn’t this a far greater offense, an offense that most definitely does not lack evidence, than the accusation that Kavanaugh, a nominee to the US Supreme Court attempted to rape a women 30 or 40 years ago, for which there is no evidence, only accusation, an accusation that the female defense atttorney who questioned for the Senate committee the woman claiming abuse found insufficient for an indictment.

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Signs the housing bubbles are nearing their end. This article and the next.

“Dirty Money” Crackdown As Vancouver Housing Market Grinds To A Halt (ZH)

Thanks to an influx of demand from Chinese nationals and other foreigners, Vancouver’s housing market soared in the post-crisis years, with prices more than doubling to levels that were clearly unsustainable, cementing the Pacific Northwest metropolis’ status as the most unaffordable housing market in North America. But the torrid growth ground to a halt earlier this year as home sales plummeted, along with construction of new homes and apartments. The typical single-family home in Vancouver costs more than C$1.5 million ($1.15 million) – roughly 20x the median household income. In an effort to let some air out of one of the continent’s most egregious property bubbles, British Columbia’s government has announced an unprecedented crackdown on money laundering in Vancouver’s property market in an attempt to stop a housing-market collapse from taking the city’s GDP with it.

The initiative, launched by Attorney General Daid Eby, seeks to create more transparency to expose all the “numbered corporations” (often used as fronts for foreign investors) buying property in Vancouver. The probe will also examine horse-racing and luxury car sales. Attorney General David Eby said that his office is launching an independent review into potential money laundering in real estate, horse-racing and luxury car sales. The review comes in response to recommendations from a previous review into money laundering in the province’s casinos. In addition, Finance Minister Carole James has appointed an expert panel to look directly at money laundering in the housing sector. Both probes will be done by March.

“There is good reason to believe the bulk of the cash we saw in casinos is a fraction of the cash generated through illicit activities that may be circulating in British Columbia’s economy,” Eby told reporters Thursday in the capital of Victoria. “We cannot ignore red flags that came out of the casino reviews of connections between individuals bringing bulk cash to casinos, and our real estate market.” […] “Our goal is simple, as you’ve heard: Get dirty money out of our housing market,” James said. “When the real estate market is vulnerable to illicit activity and unethical behavior, people, our communities and our economies suffer. This is something we have to tackle.”

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Foreign buyers have carried the boom for years. And now you act?

May Acts To Tackle Housing Crisis By Imposing Levy On Foreign Buyers (O.)

Foreign buyers of properties in the UK will have to pay a new levy, in a renewed attempt by Theresa May to tackle the housing crisis. With concern growing among senior Tories that the party has allowed Brexit to drown out a compelling domestic agenda, plans unveiled on Saturday night will see foreign buyers pay extra stamp duty to fund a drive to tackle rough sleeping. The announcement marks the start of the party’s conference in Birmingham, where the prime minister is desperate to avoid another row over her Brexit plans that might threaten to engulf her premiership. Ministers are also concerned that the party has been failing to respond to the radicalism of some of Labour’s economic programme, set out at its own conference in Liverpool last week.

On Sunday the prime minister will attempt to return to her vow to tackle social injustices and champion what she describes as the “British dream” – the idea that the next generation should do better than the last. Fixing the housing market is a major part of the programme. It comes as the latest Opinium poll for the Observer suggest the Conservatives take a three-point lead into their conference. Despite being carried out during the Labour conference week, which can often provide a poll bounce, the poll puts the Tories on 39% support, with Labour on 36%. According to Opinium, Labour had entered its conference with a two-point lead.

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Just the start.

Brexit Costing Britain £500m A Week And Rising (O.)

Brexit is already costing the public purse £500m a week, new research has found – a stark contrast to the £350m “dividend” promised by the Leave campaign. The Centre for European Reform’s analysis also suggests that the government’s austerity drive would be on the way to completion had Britain voted to stay in the European Union. It shows that the UK economy is already 2.5% smaller than it would have been had Remain won the referendum. Public finances have been dented by £26bn a year, more than half of the defence budget. This translates to a penalty of £500m a week, a figure that is growing. The stark finding comes as the Tory conference begins in Birmingham, with Theresa May’s premiership under severe strain.

The prime minister faces competing proposals from cabinet ministers over how she should resolve the Brexit impasse with the EU. The febrile conference coincides with explosive claims that the boss of one UK-based carmaker has been flown by private jet to meet President Emmanuel Macron, in an attempt to persuade the company to move manufacturing to France after Brexit. Carolyn Fairbairn, director general of the Confederation of British Industry, told the Observer this development was a sign of the economic damage Britain faces from the wrong Brexit deal. While some cabinet ministers are pushing for a loose, Canada-style trade deal, support is growing in May’s ministerial team and on her backbenches for a deal under which Britain would stay closely tied to the EU for a limited period.

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A three way race.

Steve Bannon Thinks Michael Avenatti Has A Serious Shot In 2020 (ZH)

Former Trump strategist Steve Bannon said on Friday that attorney Michael Avenatti could become the Democratic nominee for president in 2020. Speaking with Bill Maher about the state of the Democratic party, Bannon agreed with the HBO host that Avenatti – lawyer to porn star Stormy Daniels and Judge Brett Kavanaugh’s “gang rape” accuser – can capture the left with his bravado and plain spoken language. “The guy who’s the outsider, who like blows through the regular politician because he looks different and he’s got balls,” said Maher – to which Bannon replied: “If Bernie Sanders had an ounce of Avenatti’s fearlessness, he would have been the Democratic nominee and we would have had a much tougher time beating him.”

“Bernie doesn’t have fearlessness?” asked Maher. “Not like Avenatti,” Bannon replied. “I’ve not done any due diligence on this guy, but I tell you he’s got a fearlessness and he’s a fighter. I think he’ll go through a lot of this field if he decides to stick with it.” “I don’t happen to think a professional politician is going to be there at the end of the day. I’ve always said it’s going to be an Oprah or an Avenatti — somebody who’s more media savvy,” said Bannon. “You’re gonna have Trump on the right, a politician, maybe a Kamala Harris or somebody on the left, and I think you’ll have a Bloomberg or a Romney or somebody in the center,” Bannon concluded. “I think it will be a three-way race.”

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Assange is no longer in charge, which makes room for more releases. This is about Germany and France.

New WikiLeaks Release Exposes Corruption in UAE Arms Deal Fueling War on Yemen

The transparency organization WikiLeaks just released a new document that sheds light on the corruption behind a lucrative French-German arms deal with the United Arab Emirates (UAE), weapons that are currently being used to wage a disastrous and genocidal war against the people of Yemen. The document details a court case from the International Chamber of Commerce (ICC) International Court of Arbitration regarding a dispute over a “commission payment” made to Abbas Ibrahim Yousef Al-Yousef, an Emirati businessman, as part of a $3.6 billion arms deal between France’s state-owned weapons company Nexter Systems (then GIAT Industries SA) and the UAE.

Per the deal, which was signed in 1993 and set to conclude in 2008, the UAE purchased 388 Leclerc combat tanks, 46 armored vehicles, 2 training tanks, and spare parts, as well as ammunition. Those weapons have been an important part of the UAE and Saudi coalition’s war in Yemen since it began in 2015. The war has killed over ten thousand civilians, largely the result of the Saudi/UAE bombing campaign, which has targeted and crippled the country’s civilian infrastructure. The result of those bombings, as well as of the UAE/Saudi blockade of Yemen, has been over 17 million people near starvation – including 5.2 million children – and preventable disease epidemics that have claimed tens of thousands of additional lives.

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Big surge in share prices Monday, from whish Musk will profit?

Musk Out As Tesla Chair, Remains CEO in $40M SEC Settlement (AP)

Tesla and its CEO Elon Musk have agreed to pay a total of $40 million and make a series of concessions to settle a government lawsuit alleging Musk duped investors with misleading statements about a proposed buyout of the company. The settlement with the Securities and Exchange Commission allows Musk to remain CEO of the electric car company but requires him to relinquish his role as chairman for at least three years. Tesla must hire an independent chairman to oversee the company, something that should please a number of shareholders who have criticized Tesla’s board for being too beholden to Musk. The deal was announced Saturday, just two days after SEC filed its case seeking to oust Musk as CEO.

Musk, who has an estimated $20 billion fortune, and Tesla, a company that ended June with $2.2 billion in cash, each are paying $20 million to resolve the case, which stemmed from a tweet Musk sent on Aug. 7 indicating he had the financing in place to take Tesla private at a price of $420 per share. “A reckless tweet cost a lot of money — the $20-million tweet,” said Michelle Krebs, executive analyst at Autotrader. [..] Tesla’s stock plummeted 14 percent Friday after the SEC filed its lawsuit, erasing more than $7 billion in shareholder wealth. Many analysts predicted the shares were bound to fall even further if Musk had been forced to step down. Tesla’s stock has dropped 30 percent since Aug. 7, closing Friday at $264.77.

The steep downturn in Tesla’s market value may have influenced Musk to have an apparent change of heart and negotiate a settlement. Musk had rejected a similar settlement offer before the SEC sued Thursday, maintaining he had done nothing wrong when he posted a tweet declaring that he had secured the financing to lead a buyout of Tesla.

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Serious. Incompetent.

How Facebook Was Hacked And Why It’s A Disaster For Internet Security (F.)

Facebook dropped a bombshell on Friday when it revealed an unknown hacker had breached the site, compromising the accounts of 50 million users. The company’s security team found three bugs were used in the attacks, saying they were used in combination to successfully break into Facebook accounts. Forbes spoke with professional web app hacker and cybersecurity researcher Thomas Shadwell, who pieced together a likely hypothesis on how the mystery hacker or hackers carried out what’s believed to be the most significant ever attack to have hit the social media beast. The perpetrator’s ultimate aim was to steal what are known as “OAuth bearer tokens.” Essentially, these tokens prove the Facebook user is the rightful owner of an account and denote what they have access to.

As Shadwell describes them: “OAuth tokens are like car keys, if you’re holding them you can use them, there’s no discrimination of the holder.” And in the context of this attack, those keys unlocked not just Facebook accounts, but any site that affected users accessed with a Facebook login. That might include Instagram or news websites. To get those keys, the hackers abused a feature in Facebook called “View As.” It allows any user to see what another can access on their profile. For instance, if you’ve blocked your dad from looking at your photos, you can check it’s working by effectively impersonating your father and viewing your profile. “It looks like when Facebook built the View As feature, they did this by making it a modification of how Facebook would work if actually viewed by that other user,” said Shadwell.

“Which of course means if there’s a mistake they might end up sending the impersonated user’s credentials to the user of the ‘View As’ feature.” This is where things get a bit weirder. If a user, via View As, impersonated a friend who themselves had a friend who had a birthday, the feature would also show a box prompting them to post a “happy birthday” video. Thanks to an error made by Facebook in July 2017, the video provided the user with one of those precious tokens, Shadwell said. More specifically, the video player generated and sent the user a token, one that would log them into the Facebook mobile app as if they were the person they were impersonating via View As. From there the user (in this case a malicious hacker) would have total access over that other person’s account.

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Increasingly, the reality of the model shines through.

Fearing Debt Trap, Pakistan Rethinks Chinese ‘Silk Road’ Projects (R.)

After lengthy delays, an $8.2 billion revamp of a colonial-era rail line snaking from the Arabian Sea to the foothills of the Hindu Kush has become a test of Pakistan’s ability to rethink signature Chinese “Silk Road” projects due to debt concerns. The rail megaproject linking the coastal metropolis of Karachi to the northwestern city of Peshawar is China’s biggest Belt and Road Initiative (BRI) project in Pakistan, but Islamabad has balked at the cost and financing terms. Resistance has stiffened under the new government of populist Prime Minister Imran Khan, who has voiced alarm about rising debt levels and says the country must wean itself off foreign loans.

“We are seeing how to develop a model so the government of Pakistan wouldn’t have all the risk,” Khusro Bakhtyar, minister in Pakistan’s planning ministry, told reporters recently. The cooling of enthusiasm for China’s investments mirrors the unease of incoming governments in Sri Lanka, Malaysia and Maldives, where new administrations have come to power wary of Chinese deals struck by their predecessors. Pakistan’s new government had wanted to review all BRI contracts. Officials say there are concerns the deals were badly negotiated, too expensive or overly favored China. But to Islamabad’s frustration, Beijing is only willing to review projects that have not yet begun, three senior government officials have told Reuters.

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Pushed through by EU and US so Balkan can join NATO. Still very contested in Greece.

FYROM Citizens Go to the Polls to Decide on Name Change (GR)

FYROM citizens are going to the polls today (Sunday) to vote on the referendum on the name change to “Republic of North Macedonia”, as agreed between their government and Greece on June 17. The question of the referendum to which Macedonian voters are asked to answer is: “Are you in favor of membership in NATO and the European Union by accepting the deal between (the) Republic of Macedonia and Republic of Greece?” Opinion polls so far show that a “Yes” in the referendum is most likely, as the majority of the Former Yugoslav Republic of Macedonia citizens are in favor of NATO and EU membership.

However, the question of the Zoran Zaev government is whether the participation is satisfactory. Specifically, 50 percent plus one of registered voters are needed to cast a ballot for the referendum results to be valid. In his referendum campaign, Prime Minister Zoran Zaev stressed the NATO and EU membership prospects for the Balkan country. Meanwhile, opponents, including the country’s president, Gjorge Ivanov, have called for a boycott of the referendum, describing the Prespa agreement with Greece a “flagrant violation of sovereignty.”

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A lot of people live there.

Indonesia Earthquake: Huge Surge In Death Toll (BBC)

At least 832 people were killed in the devastating earthquake and tsunami that hit the Indonesian island of Sulawesi, the national disaster agency says. It added that the affected area was bigger than initially thought. Many people were reported trapped in the rubble of buildings that collapsed in Friday’s 7.5-magnitude earthquake, agency spokesman Sutopo Purwo Nugroho told a news conference. The quake triggered tsunami waves as high as 6m (20ft), he added. Rescuers have been digging by hand in the frantic search for survivors in the city of Palu.

“What we now desperately need is heavy machinery to clear the rubble. I have my staff on the ground, but it’s impossible just to rely on their strength alone to clear this,” Muhammad Syaugi, head of the national search-and-rescue agency, told AFP news agency. There have also been concerns about the town of Donggala, where the impact is still unclear. The Red Cross estimates that more than 1.6 million people have been affected by the earthquake and tsunami which it described as a tragedy that “could get much worse”. Indonesia’s Vice-President Jusuf Kalla said the final death toll could be in the thousands.

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Sep 292018
 
 September 29, 2018  Posted by at 9:20 am Finance Tagged with: , , , , , , , , , ,  


M. C. Escher Corte, Corsica 1928

 

Trump Orders New FBI Probe Into Kavanaugh Following Senate Request (Ind.)
The Return Of The Inquisition (Simon Black)
Fiscal Irresponsibility (Roberts)
Junk Bonds Set For Record Winning Streak, High Grade Worst Since 2008 (ZH)
Elon Musk Believed He Had Verbal Deal With Saudis To Take Tesla Private (WSJ)
Labour Claims Theresa May’s Government ‘The Most Divided Ever’ (Ind.)
Boris Johnson’s ‘Super Canada’ Alternative Brexit Plan Rubbished (G.)
Democratizing Brexit (Varoufakis)
Facebook Says Nearly 50m Users Compromised In Huge Security Breach (G.)
Melting Arctic Ice Opens New Route From Europe To East Asia (AP)

 

 

“This country is being ripped apart here,” Mr Flake told the committee…

Trump Orders New FBI Probe Into Kavanaugh Following Senate Request (Ind.)

Donald Trump has ordered the FBI to carry out a fresh investigation into his nominee for the Supreme Court, after Republicans were obliged to delay a full confirmation vote after being blind-sided by one of their own senators. During a day of blurred and frequently confusing drama on Capitol Hill, the Senate Judiciary Committee on Friday voted 11-10 to approve Brett Kavanaugh for a confirmation vote in the full senate. But it did so, only after an 11th hour intervention from Jeff Flake, a senator from Arizona, who said his support in the later confirmation vote was dependent on the FBI being given a week to carry out an investigation into Mr Kavanaugh, the subject of sexual assault allegations from several women, all of which he denies.

“This country is being ripped apart here,” Mr Flake told the committee, after a vote scheduled for 1.30pm was delayed. “We ought to do what we can to make sure that we do all due diligence with a nomination this important.” Mr Flake’s deeds sent senior Republicans scrambling to decide how best to proceed. The senate’s Republican chairman, Chuck Grassley, who has long said he did not see the need for an additional investigation into Mr Kavanaugh, said it was the decision of Senate majority leader Mitch McConnell on when to hold the confirmation vote.

Within a matter of hours, Mr Grassley issued a statement saying he would ask the White House to request the FBI carry out an additional background check. Shortly afterwards, White House press secretary Sarah Huckabee Sanders released a statement from the president, which read: “I’ve ordered the FBI to conduct a supplemental investigation to update Judge Kavanaugh’s file. As the senate has requested, this update must be limited in scope and completed in less than one week.”

[..] Mr Flake may have been motivated to act by the words of two protesters who confronted him in a senate elevator after it was initially announced he would back Mr Kavanaugh. “What you are doing is allowing someone who actually violated a woman to sit on the Supreme Court. This is not tolerable. You have children in your family. Think about them. I have two children,” shouted one of the women, Ana Maria Archila. “I cannot imagine that for the next 50 years they will have to have someone in the Supreme Court who has been accused of violating a young girl. What are you doing, sir?”

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Plenty angles: … trial by social media…

The Return Of The Inquisition (Simon Black)

Senator Maize Hirono of Hawaii recently stated, “Not only do women like [Kavanaugh’s accuser], who bravely come forward, need to be heard, but they need to be believed.” By definition this is neither fair nor impartial, and turns the entire process into a Kangaroo Court… which is what the Senate has become. At a certain point yesterday, one Senator introduced multiple pieces of evidence on behalf of the accuser, including ‘expert reports’ that justify her inability to remember details from the assault. This is truly bizarre. These Senators are playing the role of judge in this matter. It seems impossible to do this while simultaneously acting as advocate for the accuser.

Another Senator sat smugly and sanctimoniously, leering down at Brett Kavanaugh and demanding explanations about code words for beer and flatulence that date back to Kavanaugh’s high school days. The fact that a United States Senator would actually consider this important evidence is an utter embarrassment. Another disgusting perversion of justice is that the United States Senate actually felt compelled to negotiate with the accuser about when/how she would testify. For example, the accuser wanted to prohibit certain questions, control who could/could not ask questions, determine the order of witness testimony, etc. This is simply NOT how the justice system is supposed to work.

[..] the saddest part – this manner of Inquisition… trial by social media… has now been condoned and advanced by the United States Senate, an institution whose members have ALL taken a solemn oath to support and defend the Constitution which they are now violating in the worst way. Clearly the Senate is no longer an assembly of kings… but a brood of bickering, immature weaklings. (The only resilience displayed has been from the accused and accuser, both of whom have had to endure insane public scrutiny.) There’s obviously an agenda here.

Perhaps some Senators are trying to win points with the #metoo movement for the upcoming elections. Or they’re intentionally blocking Kavanaugh simply because he is a Trump nominee. Whatever their reasons, they may be victorious in achieving their desired outcome. But it will be a Pyrrhic victory… for it will come at the expense of establishing a dangerous new standard that destroys the most important principles of Justice.

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As deficits grow, liquidity is shrinking.

Fiscal Irresponsibility (Roberts)

Without much fanfare or public discussion, Congress has decided to push the U.S. into deeper fiscal responsibility. Earlier this week, the House passed another Continuing Resolution (CR) to keep the government from “shutting down” prior to the mid-term elections. “The House on Wednesday passed an $854 billion spending bill to avert an October shutdown, funding large swaths of the government while pushing the funding deadline for others until Dec. 7. The bill passed by 361-61, a week after the Senate passed an identical measure by a vote of 93-7.” For almost a decade, Congress has failed to pass, and operate, underneath a budget.

Of course, without any repercussions from voters in demanding that Congress “does their job,” the path to fiscal insolvency continues to grow. The Committee For A Responsible Federal Budget made the following statement: “We’re pleased policymakers have likely avoided a shutdown and actually appropriated most of this year’s discretionary budget on time. But let’s not forgot that Congress did so without a budget and had to grease the wheels with $153 billion to pass these bills. That isn’t function; it’s a fiscal free-for-all.” Of course, with trillion-dollar deficits just around the corner, the negative impact from unbridled spending and debt increases will begin to reverse the positive effects from deregulation and tax reform.

The bigger problem with the $854 billion CR just passed by the House, and awaiting the President’s signature, is that it only covers spending from now until December. Such means that by the time we get the full 2019 budget funded, with the annual automatic increases still in place, we will be looking at more than $2 Trillion in annual spending. Such will require further increases in debt issuance at a time when there are potentially fewer buys of Treasuries readily available. As shown in the chart below, with the major Central Banks reducing their balance sheets simultaneously, some of the more major buyers are being removed from the market. “Central bank balance sheets have shrunk by over half-a-trillion dollars since March. This decrease in global liquidity – in the face of a global slowdown – raises the risk of policy mistakes much higher than is commonly assumed.” – ECRI

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Courtesy of your friendly neighborhood central bank.

Junk Bonds Set For Record Winning Streak, High Grade Worst Since 2008 (ZH)

For the latest confirmation of the upside down market, look no further than corporate bonds where the riskiest, CCC-rated junk bonds are set to make a positive return for the 3rd consecutive year, the longest winning streak since records began in 1997. Not only have the lowest quality junk bonds, those rated CCC or lower, generating respectable absolute returns of 5.8% YTD, they have also outperformed higher quality debt with a 1% total return so far this month, according to Bloomberg and ICE data. Additionally, the lowest rated junk bonds have also outperformed the broader junk bond index, which has returned 1.9% YTD.

And while the key contributor to the outperformance of lowest-rated bonds is demand for, well, higher yielding paper as investors continue to chase returns, a key structural issue has been the lack of HY supply, which at $150 billion YTD is the lowest since 2009. Meanwhile, as investors scramble for any paper that promises a material yield, regardless of underlying fundamentals, investment grade corporate bond returns have, in the worlds of Bloomberg’s James Crombie “fallen from darling to deadbeat.”

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Perhaps the biggest risk is that Tesla shares fall and loans have to be rolled over.

Elon Musk Believed He Had Verbal Deal With Saudis To Take Tesla Private (WSJ)

Tesla Inc. CEO Elon Musk believes he had a verbal agreement in place with Saudi Arabia’s sovereign-wealth fund to help finance a plan to take the auto maker private, according to a person familiar with the matter, a contention that could preview how he will fight regulators’ accusation that he misled shareholders. Musk was sued Thursday by the Securities and Exchange Commission, which alleged that he misled investors when he tweeted last month that he had funding secured to lead a Tesla buyout. The agency, which is seeking to oust Musk from Tesla, said in its complaint that he “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.”

Musk believes the SEC’s effort is flawed in assuming that a written agreement and fixed price were necessary for a deal, the person said. Musk also thinks regulators aren’t taking into account that Middle Eastern businesses routinely operate using verbal agreements in principle, the person said. In addition, Musk has told people that he could have led a go-private transaction using his own stake in SpaceX, if major Tesla investors were on board. SpaceX is the privately held aerospace firm that Mr. Musk controls and is valued at tens of billions of dollars.

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Tory conference soon. Spectacle.

Labour Claims Theresa May’s Government ‘The Most Divided Ever’ (Ind.)

Labour has accused Theresa May of leading “the most divided government ever” as it released a dossier claiming a third of Conservative MPs have publicly criticised either the government or a Tory colleague within the last year. On the eve of the Conservatives’ annual conference, Labour said more than 100 Tory MPs have recently turned their fire on a colleague or on government policy. The report said 80 per cent of the attacks were directed at Ms May or her government, with 83 MPs having criticised one of the two. The dossier was released as a number of senior Conservatives spoke out against Ms May’s leadership and voiced fears about the prospects of the party.

Much of the criticism outlined in the Labour document relates to Ms May’s Chequers plan for Brexit, which has been widely condemned by both Eurosceptics and Remain supporters on the Tory benches. It has been called “unworkable” by Justine Greening, the pro-European former education secretary, while former Brexit minister Steve Baker said it could lead to a “catastrophic split” in the Conservative Party. Mike Penning, previously seen as an ally of Ms May, described the plan as “dead as a dodo”, and former cabinet minister Priti Patel said it would be “a disaster for our country”. Ms May is facing mounting pressure to ditch the proposals, which are also highly unpopular with Tory members and have been rejected by EU leaders.

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EU has already thrown out Chequers.

Boris Johnson’s ‘Super Canada’ Alternative Brexit Plan Rubbished (G.)

Furious ministers rounded on Boris Johnson for suggesting the UK could renege on its Brexit agreements over the Irish border, calling it unworkable and criticising the former foreign secretary for denouncing agreements made while he was a cabinet minister. The Department for Exiting the European Union issued a defiant statement rejecting Johnson’s alternative, laid out in a 4,000-word Telegraph article, saying it was “not a workable or negotiable plan,” less that two days before the start of the Conservative party conference in Birmingham. Government sources mocked Johnson’s disavowal of the December withdrawal agreement, when he had been part of the cabinet that approved it, dismissing his intervention as “another very lengthy article which doesn’t offer any answers”.

Speaking ahead of the conference, May said the government was on the verge of a Brexit deal, despite admitting after the EU summit in Salzburg that the two sides remained some distance apart on customs and the Northern Irish border. “The right deal is close – and with it the opportunity to make life better for ordinary working people,” she said. But Johnson continued his public intervention with a series of television interviews – his first since quitting over Chequers – criticising the prime minister, warning May that she risked betraying the wishes of leave voters if she persisted with the Chequers deal but stopping short of calling her to go. Johnson told the BBC: “If you stick with Chequers, the electorate of this country will look at what we have produced and think how on Earth was that the outcome of voting leave.”

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If people want a second vote, isn’t that democratic?

Democratizing Brexit (Varoufakis)

As deadlines approach and red lines are redrawn in the United Kingdom’s impending withdrawal from the European Union, it is imperative for the people of Britain to regain democratic control over a process that is opaque and ludicrously irrational. The question is: How? Democracy can never aspire to being more than a work in progress. Decisions made collectively must constantly be reappraised collectively in the light of new evidence. Yet, in the UK’s current circumstances, nothing would be more poisonous to democracy than revisiting Brexit by means of a second referendum.

Both sides, Leavers and Remainers, feel betrayed. Even though Brexit was meant to restore its sovereignty, Parliament has no real say in a process that will mark Britain for decades to come. The Scots and the people of Northern Ireland are hostages to a distinctly English feud that could do them serious damage. The young feel the old have hijacked their future, while the old feel that their accumulated wisdom and legitimate concerns are being ignored by insiders striking bad deals behind closed doors on behalf of vested interests. In short, British democracy is failing its latest and most stringent test.

But a fresh referendum cannot be the answer to the unfolding disaster triggered by the original referendum. In June 2016, a stark choice was available to the people of Britain: leave the EU or stay in. While one can question the wisdom of making such a collective choice via a referendum, the logical coherence of the enterprise was beyond dispute. Once the verdict came in, and the process stipulated by the Treaty of Lisbon’s Article 50 was triggered, no binary yes-or-no choice to steer Britain out of its mess became available. In fact, there are now at least five options that must be collectively appraised.

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Oh, yeah, that has them worried. They want their friends spying on you, and nobody else.

Facebook Says Nearly 50m Users Compromised In Huge Security Breach (G.)

Nearly 50m Facebook accounts were compromised by an attack that gave hackers the ability to take over users’ accounts, Facebook revealed on Friday. The breach was discovered by Facebook engineers on Tuesday 25 September, the company said, and patched on Thursday. Users whose accounts were affected will be notified by Facebook. Those users will be logged out of their accounts and required to log back in. “I’m glad we found this and fixed the vulnerability,” Mark Zuckerberg said on a conference call with reporters on Friday morning. “But it definitely is an issue that this happened in the first place. I think this underscores the attacks that our community and our services face.”

The security breach is believed to be the largest in Facebook’s history and is particularly severe because the attackers stole “access tokens”, a kind of security key that allows users to stay logged into Facebook over multiple browsing sessions without entering their password every time. Possessing a token allows an attacker to take full control of the victim’s account, including logging into third-party applications that use Facebook Login. The security breach comes at a time of significant strife for the social media company, which has faced mounting criticism over issues including foreign election interference, the flow of misinformation, hate speech, and data privacy.

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I kid you not: there will be many voices labeling this as ‘opportunity’.

Melting Arctic Ice Opens New Route From Europe To East Asia (AP)

A Danish-flagged cargo ship has successfully passed through the Russian Arctic, in a trial voyage showing that melting sea ice could potentially open a new trade route from Europe to east Asia. The Venta Maersk made the journey as a one-off trial, said Palle Laursen, the chief technical officer of A.P. Moller-Maersk, the world’s biggest shipping group. The ship, carrying a cargo of frozen fish, arrived in St Petersburg on Friday, after leaving Russia’s Pacific port city of Vladivostok on 22 August. “The trial allowed us to gain exceptional operational experience,” said Laursen, adding the ship had performed well in the unfamiliar environment.

The Northern Sea route could be a shorter journey for ships travelling from east Asia to Europe than the Northwest Passage over Canada because it will likely be free of ice sooner due to climate change. Experts say it could reduce the travel distance from east Asia to Europe from the 21,000 kilometres (13,000 miles) it takes to go via the Suez Canal, to 12,800 kilometres (8,000 miles). This would cut transit time by 10 to 15 days. It’s not the first time a cargo vessel has completed the Russian Arctic route, and Maersk underlined that the journey was “to gain operational experience in a new area and to test vessel systems”. “Currently, we do not see the Northern Sea route as a viable commercial alternative to existing east-west routes,” Laursen said.

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Sep 282018
 
 September 28, 2018  Posted by at 9:29 am Finance Tagged with: , , , , , , , , , , , , , , ,  


Pablo Picasso Carnival Bistro [Study] 1908

 

Well, I Think We Found Our Supreme Court Justice Today… (F.)
BIS’s Claudio Borio Says the World Economy Is About to Get Very Sick (Auerback)
Italy Agrees High Public Spending Reforms In Potential Clash With EU (G.)
Irish Banks’ Loan Losses Hit €140 Billion In 10 Years After Crash (IT)
Janet Yellen Says It’s Time For “Alarm” As Loan Bubble Runs Amok (ZH)
Why Do Debt Crises Come in Cycles? (Dalio)
Elon Musk Tore Up Last Minute SEC Settlement, Decided To Fight Instead (ZH)
Corbyn Talks With EU Officials Spark Fresh No-Deal Brexit Fears (G.)
Britain, Ecuador Seeking An End To The Assange Standoff (AP)
Seattle Judges Throw Out 15 Years Of Marijuana Convictions (BBC)
Austrian Fruit Grower Sentenced To Prison Over Bee Deaths (AFP)
Orca ‘Apocalypse’: Half Of Killer Whales Doomed To Die From Pollution (G.)

 

 

No, not what I would write. But might as well take an odd approach. One thing that hearing made clear: “..we as a nation are losing our way”.

Well, I Think We Found Our Supreme Court Justice Today… (F.)

Well, I think we found our Supreme Court Justice today. This should be very good news for Republicans, who seem to be in an awful hurry to get this done quickly. It doesn’t look like we have to wait any longer. Let’s all take a deep breath and step back for a moment. All crazy partisan politics aside, let’s consider the qualities a good justice should have. A good justice should be objective and fair-minded, not guided by strong preconceived opinions. A good justice should be empathetic, not focused on oneself. A good justice should be calm, not angry. A good justice should show grace under pressure, not be easily rattled. A good justice should be even-tempered, not short-tempered. A good justice should be thoughtful, not strident. A good justice should in the face of adversity show courage, not petulance.

There are classic lines from Shakespeare’s The Merchant of Venice about mercy and justice: The quality of mercy is not strained. It droppeth as the gentle rain from heaven Upon the place beneath. At the end of the day good leadership is about temperament. Having the kind of calm demeanor and even temperament that enables one to make sound thoughtful decisions under pressure. Not decisions that are reflexive, impulsive, angry or politically driven. When one thinks of the sea of strident bitter recriminations that have engulfed this whole Supreme Court nomination process, and the partisan political football the Supreme Court has become, it feels like we’ve completely lost sight of what a Supreme Court ought to be. It feels, sadly, like we as a nation are losing our way.

Well, cheer up, the good news at least is I think we found someone today with the right temperament to make a fine Supreme Court Justice. Her name is Christine Blasey Ford.

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And it’s the exact same disease.

BIS’s Claudio Borio Says the World Economy Is About to Get Very Sick (Auerback)

When Claudio Borio speaks, the big bankers and investors, the economics profession, and senior policymakers listen quite carefully—even if his sentiments don’t reach the shores of the popular media. Borio, the chief economist for the Bank for International Settlements (BIS), the central bankers’ central bank, recently remarked on the fragility of the global economy, and suggested that we were on the verge of a significant relapsesimilar to the global crash experienced 10 years ago. Among the parallels he perceives: the proliferation of “collateralized loan obligations (CLOs), which are ‘close cousins’ of the infamous instruments known as collateralized debt obligations, or CDOs, and securities backed by residential mortgages,” the prevalence of which helped to crater the credit system in 2008.

Mindful as central bankers have been about the ready availability of liquidity, they have (as I have written before) omitted to “proactively… [charging] private market participants variable risk premiums commensurate with the risk of the underlying activity they are undertaking when providing credit.” Furthermore, Borio implies that the monetary and fiscal authorities expended excessive efforts toward restoring the status quo ante, instead of directing policy toward broader job creation and income generation, which would place the economy on sounder footing when the next downturn inevitably comes. Finally, the BIS’s chief economist also publicly mooted whether additional “medicine” of the kind that we used last time will be in sufficient supply to respond adequately when the next crisis emerges.

So is Dr. Borio correct in both his diagnosis and concomitant concern about the lack of readily available cures for the prevailing illness? And are there any key omissions in his analysis that could help to mitigate the inevitable relapse that he forecasts?

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UBI vs austerity.

Italy Agrees High Public Spending Reforms In Potential Clash With EU (G.)

The Italian government agreed to a 2019 budget deficit target at 2.4% of GDP on Thursday night in a move that was celebrated by leaders but could bring the heavily indebted country into conflict with the European Union. The economy minister Giovanni Tria succumbed to pressure from the government’s two deputy prime ministers – Luigi Di Maio, the leader of the anti-establishment Five Star Movement (M5S), and Matteo Salvini, who heads up the far-right League – to increase the target in order to pay for election campaign promises such as a universal basic income, flat tax and pension reforms. Tria, an academic who is not affiliated to either party, had been seeking a more conservative 1.9% in order to avoid adding to Italy’s debt pile, which currently stands at around 131% of GDP, the second highest in the eurozone after Greece.

Speculation that Tria would resign has been denied. “There is an accord within the whole government for 2.4%, we are satisfied, this is a budget for change,” Di Maio and Salvini said in a joint statement. Di Maio wrote on Facebook that the agreement marked a historic day and was a victory for Italian citizens, not the government. The means-tested basic income, which will cost €10bn, was a key feature of his party’s election campaign. “For the first time in the history of this country we will erase poverty thanks to the basic income,” he said. “We will finally give a future to the 6.5 million people, who until now have lived in poverty and been completely ignored.”

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“..three-quarters of the size of the Irish economy in 2008.”

Irish Banks’ Loan Losses Hit €140 Billion In 10 Years After Crash (IT)

The State’s main 11 banks and building societies racked up a total of €140 billion in loan losses in the decade since western Europe’s worst property crash, according to data compiled by The Irish Times. That equates to about three-quarters of the size of the Irish economy in 2008. The figures include bad-loan charges that lenders took between 2008 and 2017, as well as losses on the sale of batches of loans to overseas investment firms and the National Asset Management Agency (Nama). As Saturday marks the 10th anniversary of the snap guarantee of the Republic’s banking system, property developer Sean Mulryan and former Central Bank governor Patrick Honohan have warned in interviews with The Irish Times of risks facing the recovering housing market and State finances.

The guarantee of six Dublin-based lenders would cost taxpayers €64 billion in bailouts and tip the State into an international bailout. Foreign-owned Bank of Scotland (Ireland), Ulster Bank and KBC Bank Ireland also required multibillion-euro capital injections from their parents during the financial crisis. The 11 banks’ net loan losses over the past decade amount to €134.2 billion – or 25 per cent of their total 2008 loans – according to the data, compiled from banks’ annual reports and regulatory filings. [..] Only five of the original lenders remain as standalone companies, as the State continues to grapple with the legacy of the crash. Housebuilding is running at half of estimated annual demand for 35,000 homes and banks are still dealing with high levels of distressed loans.

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These people only warn when they’ve left the job. While in the job, they do exactly what they later warn against.

“Powell said that “overall vulnerabilities” were “moderate”. He also stated that banks today “take much less risk than they used to”.”

Janet Yellen Says It’s Time For “Alarm” As Loan Bubble Runs Amok (ZH)

As rates move higher like they are now, the loans – whose interest rates reference such floating instruments as LIBOR or Prime – pay out more. As a result, as the Fed tightens the money supply, defaults tend to increase as the interest expenses rise and as the overall cost of capital increases. And because an increasing amount of the financing for these loans is done outside of the traditional banking sector, regulators and agencies like the Federal Reserve aren’t able to do much to rein it in. The market for leveraged loans and junk bonds is now over $2 trillion. Escalating the risk of the unbridled loan explosion, none other than Janet Yellen – who is directly responsible for the current loan bubble – recently told Bloomberg that “regulators should sound the alarm. They should make it clear to the public and the Congress there are things they are concerned about and they don’t have the tools to fix it.”

As we noted recently, the risks of such loans defaulting are obvious, including loss of jobs and risk to companies on both the borrowing and the lending side. Tobias Adrian, a former senior vice president at the New York Fed who’s now the IMF’s financial markets chief, told Bloomberg: “…supporting growth is important, but future downside risks also need to be considered.” He also stated that regulators had “limited tools to rein in nonbank credit”. But you’d never know this by listening to the Federal Reserve. According to Fed chairman Jerome Powell, during his press conference Wednesday, the Fed doesn’t see any risks right now. Powell said that “overall vulnerabilities” were “moderate”. He also stated that banks today “take much less risk than they used to”.

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h/t Tyler. Monopoly on steroids.

Why Do Debt Crises Come in Cycles? (Dalio)

If you understand the game of Monopoly®, you can pretty well understand how credit cycles work on the level of a whole economy. Early in the game, people have a lot of cash and only a few properties, so it pays to convert your cash into property. As the game progresses and players acquire more and more houses and hotels, more and more cash is needed to pay the rents that are charged when you land on a property that has a lot of them. Some players are forced to sell their property at discounted prices to raise that cash. So early in the game, “property is king” and later in the game, “cash is king.” Those who play the game best understand how to hold the right mix of property and cash as the game progresses.

Now, let’s imagine how this Monopoly® game would work if we allowed the bank to make loans and take deposits. Players would be able to borrow money to buy property, and, rather than holding their cash idly, they would deposit it at the bank to earn interest, which in turn would provide the bank with more money to lend. Let’s also imagine that players in this game could buy and sell properties from each other on credit (i.e., by promising to pay back the money with interest at a later date). If Monopoly® were played this way, it would provide an almost perfect model for the way our economy operates. The amount of debt-financed spending on hotels would quickly grow to multiples of the amount of money in existence.

Down the road, the debtors who hold those hotels will become short on the cash they need to pay their rents and service their debt. The bank will also get into trouble as their depositors’ rising need for cash will cause them to withdraw it, even as more and more debtors are falling behind on their payments. If nothing is done to intervene, both banks and debtors will go broke and the economy will contract. Over time, as these cycles of expansion and contraction occur repeatedly, the conditions are created for a big, long-term debt crisis.

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The board is behing Musk. But is that enough? It’s not just the SEC, the DOJ is on the case too.

Elon Musk Tore Up Last Minute SEC Settlement, Decided To Fight Instead (ZH)

To many it was clear from the beginning: “It’s an easy case,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “He said in the tweet he had financing, and apparently he didn’t. … It’s about as straightforward as you can get.” And on Thursday afternoon, the SEC confirmed that indeed just those two words blasted to the entire world and contained in Elon Musk’s infamous “funding secured” tweet – it would emerge just days later that funding was not, in fact, secured- would serve as the basis for a securities fraud litigation against Elon Musk; and while Tesla wasn’t named in the suit as a defendant, the SEC is seeking to bar Musk, Tesla’s largest shareholder and its top executive, from serving as an officer or director of any U.S. public company.

It almost didn’t happen that way: according to the WSJ, the SEC complaint only came after a last-minute decision by Musk and his lawyers to fight the case rather than settle the charges. The SEC had crafted a settlement with Mr. Musk—approved by the agency’s commissioners—that it was preparing to file Thursday morning when Mr. Musk’s lawyers called to tell the SEC lawyers in San Francisco that they were no longer interested in proceeding with the agreement, according to people familiar with the matter. After the phone call, the SEC rushed to pull together the complaint that it subsequently filed, the people said. Considering that this is an open and shut case, one wonders if Musk was once again on drugs when he decided that instead of settling, he would fight the charges. Or he simply saw the “playbook” and decided to roll the dice…

In any case, a fighting Elon is just what the SEC – its reputation in tatters after years of not pursuing “big name” stock manipulators – needs to restore its image. The case ranks as one of the highest-profile civil securities-fraud cases in years. Its filing less than two months after the Aug. 7 tweets by Mr. Musk also marks an unusually rapid turnaround by an agency that has been under fire for its perceived failure to promptly bring significant cases in the financial crisis and other episodes. “It means there was not that much investigation they needed to do to get comfortable that it was a case they should bring, but also a case they can win,” said Michael Liftik, a former SEC enforcement lawyer now at Quinn, Emanuel, Urquhart & Sullivan LLP.

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“.. he will vote down anything that fails to deliver the same benefits as membership of the single market and customs union.”

Corbyn Talks With EU Officials Spark Fresh No-Deal Brexit Fears (G.)

Jeremy Corbyn has sparked fresh fears in Brussels of a no-deal Brexit after saying during talks with senior EU Brexit officials that he will vote down anything that fails to deliver the same benefits as membership of the single market and customs union. The Labour leader spent two hours with Michel Barnier, the EU’s chief negotiator, and Martin Selmayr, the most senior official in charge of planning for a cliff-edge Brexit. Emerging from the European commission headquarters, Corbyn said Barnier “was interested to know what our views are in the six tests”, referring to the criteria Labour has said must be met to ensure its MPs back a deal. The EU is increasingly concerned that the UK parliament will vote down any deal put forward by Theresa May.

One of Labour’s tests is that an agreement must offer the “exact same benefits” as membership of the single market and customs union. The Labour leader had initially planned a low-key visit to Brussels to attend the naming of a square in the Belgian capital in honour of the murdered Labour MP Jo Cox. It is understood, however, that the EU’s most senior officials were anxious to hear directly from Corbyn about his party’s plans, and invited him for a session of talks. After meeting Barnier and Selmayr, who is the secretary general of the European commission and in charge of no-deal planning, Corbyn insisted he was “not negotiating” but that there was an informal agreement that both sides would continue to talk.

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AP makes an ‘error’ and corrects: “The Associated Press reported erroneously that Assange over the past two years had continued to hack the accounts of politicians around the world. It should’ve said Assange had published material from hacked politicians’ accounts.”

Britain, Ecuador Seeking An End To The Assange Standoff (AP)

Ecuador’s president said Wednesday that his country and Britain are working on a legal solution for Julian Assange to allow the Wikileaks founder to leave the Ecuadorian Embassy in London in “the medium term.” President Lenin Moreno told The Associated Press that Assange’s lawyers were aware of the negotiations. He declined to provide more details because of the sensitivity of the case. [..] Moreno said his country will work for Assange’s safety and the preservation of his human rights as it seeks a way for him to leave the embassy. “Being five or six years in an embassy already violates his human rights,” Moreno said on the sidelines of the UN General Assembly. “But his presence in the embassy is also a problem.”

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Now the rest of the nation. How about New York State?

Seattle Judges Throw Out 15 Years Of Marijuana Convictions (BBC)

Judges in Seattle have decided to quash convictions for marijuana possession for anyone prosecuted in the city between 1996 and 2010. City Attorney Pete Homes asked the court to take the step “to right the injustices of a drug war that has primarily targeted people of colour.” Possession of marijuana became legal in the state of Washington in 2012. Officials estimate that more than 542 people could have their convictions dismissed by mid-November. Mr Holmes said the city should “take a moment to recognise the significance” of the court’s ruling. “We’ve come a long way, and I hope this action inspires other jurisdictions to follow suit,” he said. Mayor Jenny Durkan also welcomed the ruling, which she said would offer residents a “clean slate.” “For too many who call Seattle home, a misdemeanour marijuana conviction or charge has created barriers to opportunity – good jobs, housing, loans and education,” she said.

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Here’s what it will take.

Austrian Fruit Grower Sentenced To Prison Over Bee Deaths (AFP)

An Austrian fruit grower was handed a rare prison sentence Wednesday for having illegally spread an insecticide which led to the deaths of dozens of neighbouring bee colonies. The 47-year-old man had spread a powerful insecticide called chlorpyrifos over his trees in the Lavanttal area of Carinthia province, at a time when their blossoms were still attracting bees. More than 50 colonies belonging to two neighbouring apiarists perished. The court in the city of Klagenfurt found the fruit grower guilty of “deliberately damaging the environment”, pointing to his experience and role in training others in his field as evidence that he knew the consequences of his actions.

He was sentenced to a year in prison, of which four months will be without probation. Ordered to pay more than 20,000 euros ($23,500) in compensation, he said he will appeal. The court said it hoped the sentence would serve as a deterrent and to remind others that the “use of pesticides needs to strike a balance between the environment and economics”. The widespread use of pesticides has been blamed for a steep rise in deaths among bees and other pollinating insects. In April the EU voted to outlaw the use of certain pesticides from the neonicotinoid family blamed for killing off bee populations.

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And we’re still allowing glyphosate? We must insists on precautionary principle.

Orca ‘Apocalypse’: Half Of Killer Whales Doomed To Die From Pollution (G.)

At least half of the world’s killer whale populations are doomed to extinction due to toxic and persistent pollution of the oceans, according to a major new study. Although the poisonous chemicals, PCBs, have been banned for decades, they are still leaking into the seas. They become concentrated up the food chain; as a result, killer whales, the top predators, are the most contaminated animals on the planet. Worse, their fat-rich milk passes on very high doses to their newborn calves. PCB concentrations found in killer whales can be 100 times safe levels and severely damage reproductive organs, cause cancer and damage the immune system. The new research analysed the prospects for killer whale populations over the next century and found those offshore from industrialised nations could vanish as soon as 30-50 years.

Among those most at risk are the UK’s last pod, where a recent death revealed one of the highest PCB levels ever recorded. Others off Gibraltar, Japan and Brazil and in the north-east Pacific are also in great danger. Killer whales are one of the most widespread mammals on earth but have already been lost in the North Sea, around Spain and many other places. “It is like a killer whale apocalypse,” said Paul Jepson at the Zoological Society of London, part of the international research team behind the new study. “Even in a pristine condition they are very slow to reproduce.” Healthy killer whales take 20 years to reach peak sexual maturity and 18 months to gestate a calf.

PCBs were used around the world since the 1930s in electrical components, plastics and paints but their toxicity has been known for 50 years. They were banned by nations in the 1970s and 1980s but 80% of the 1m tonnes produced have yet to be destroyed and are still leaking into the seas from landfills and other sources.


Photograph: Audun Rikardsen/Science

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