Aug 212019
 
 August 21, 2019  Posted by at 9:38 am Finance Tagged with: , , , , , , , , , ,  7 Responses »


Felix Vallotton On the beach 1899

 

How Negative Interest Rates Screw Up the Economy (WS)
Gundlach Says Federal Reserve Has Lost Control (R.)
Bank Watchdogs Approve Rule To Loosen Ban On Risky Wall Street Trades (Hill)
10 Declassified Russia Collusion Revelations Could Rock DC This Fall (Solomon)
Italian PM Resigns, Denounces Salvini For Sinking Government (R.)
EU Rebuffs Boris Johnson’s Brexit Gambit (R.)
Alibaba Postpones Up To $15 Billion Hong Kong Listing (R.)
China Could Overwhelm US Military In Asia In Hours – Report (CNN)
US Will Act If Tanker Carrying Iranian Oil Delivers Oil: Pompeo (R.)
Trump Scraps Denmark Visit After Danes Say Greenland Not For Sale (AFP)
Canada Election: Parties, Charities Warned Against Climate Change Ads (BBC)
More Than 2,300 Tigers Killed And Trafficked This Century (AFP)
40 Rebuttals To The Media’s Smears Of Julian Assange (Fidel Narváez)

 

 

“Negative interest rates are terrible for banks. They destroy the business model for banks. They make future bank collapses more likely because banks cannot build capital to absorb losses.”

How Negative Interest Rates Screw Up the Economy (WS)

Now there is talk everywhere that the United States too will descend into negative interest rates. And there are people on Wall Street and in the media that are hyping this absurd condition where government bonds and perhaps even corporate bonds, and eventually even junk bonds have negative yields. All of that NIRP absurdity is already the case in Europe and Japan. There is now about $17 trillion – trillion with a T – in negative yielding debt in the world, government and corporate debt combined. This started out as a short-term emergency experiment. And now this short-term emergency experiment has become the new normal. And now more short-term emergency experiments need to be added to it, because, you know, the first batches weren’t big enough and haven’t worked, or have stopped working, or more realistically, have screwed things up so badly that nothing works anymore.

So how will this end? The ECB rumor mill over the past two weeks hyped the possibility of a shock-and-awe stimulus package, on top of the shock-and-awe stimulus packages the ECB has already implemented, namely negative interest rates, liquidity facilities, and QE. The entire German government bond market, even 30-year bonds have negative yields. And the German economy shrank in the last quarter. That gives Germany two out of the last four quarters where its economy shrank – despite negative interest rates from the ECB and despite the negative yields on its government bonds, and despite the negative yields among many corporate bonds. In other words, the German economy, the fourth largest in the world, is hitting the skids despite or because of negative yields. And now the ECB wants to flex its muscles to get yields to become even more negative.

And there are folks who want to prescribe the same kind of killer application to help out the US economy – which is growing just fine. Since the ECB’s shock-and-awe package started to appear in the rumor mill at the beginning of August, the European bank stock index – it includes banks in all EU countries, not just those that use the euro – well, since that shock-and-awe rumor appeared, the stock index for those banks has dropped 11%. Negative interest rates are terrible for banks. They destroy the business model for banks. They make future bank collapses more likely because banks cannot build capital to absorb losses.

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Any control they seemed to have was always fake.

Gundlach Says Federal Reserve Has Lost Control (R.)

The Federal Reserve has lost control of interest rates as evidenced by the federal funds rate trading higher than any part of the U.S. Treasury yield curve, Jeffrey Gundlach, the chief executive of DoubleLine Capital, said on Tuesday. “What else do you need to call it an inversion?” Gundlach said in a telephone interview. “Everyone is parsing all of these little arbitrary things. But we’ve got an inversion.” At around 1.55% and 2.03%, the yield on the benchmark 10-year Treasury note and 30-year Treasury bond, respectively, are below the target federal funds rate of 2.25% to 2.5%. The yield on the two-year Treasury note is currently around 1.51%.


Three weeks ago, Federal Reserve Chairman Jerome Powell characterized the U.S. central bank’s first rate cut since 2008 as a “mid-cycle adjustment to policy,” suggesting the move was not the start of a lengthy series of rate cuts. Gundlach, who oversees more than $140 billion in assets, told Reuters last week that Powell’s message to the markets have been inconsistent. He said Powell “can’t put a back-to-back consistent message together. It is different at every single meeting – the mid-cycle adjustment statement is not going to hold up.”

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Crisis leads to measures which are then watered down which leads to crisis. Rinse and repeat.

Bank Watchdogs Approve Rule To Loosen Ban On Risky Wall Street Trades (Hill)

Two federal bank regulators voted Tuesday to approve a significant rollback of a controversial ban on risky trades passed in the aftermath of the 2008 financial crisis. The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) on Tuesday adopted a weakened version of the so-called “Volcker Rule,” which bans banks from making high-risk bets with their own assets. While the OCC and FDIC are but two of five agencies that must sign off on the new Volcker Rule, their approval of the proposal is the first step in a massive lobbying victory for some of the largest U.S. banks. The Volcker Rule was one of several provisions of the 2010 Dodd-Frank Wall Street reform law designed to ban risky and overly complex investments that helped crash the global financial system in 2008.


While advocates for banks have fought to loosen several aspects of Dodd-Frank in the nine years since its passage, firms with mammoth trading desks such as Goldman Sachs have paid particular attention to the Volcker Rule. Named after its chief advocate, former Federal Reserve Chairman Paul Volcker, the rule bans banks from certain “proprietary” trades, or investments using the bank’s own capital. Industry advocates insisted that while banks supported stricter limits on risk, the Volcker Rule was too complex and burdensome to be effective. “The new Volcker Rule finalized today is recognition that the original rule was overly complex and unworkable,” said Greg Baer, president and CEO of the Bank Policy Institute, a research and advocacy group representing 17 of the largest banks and financial firms.

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Fighting Intelligence is not easy.

10 Declassified Russia Collusion Revelations Could Rock DC This Fall (Solomon)

Behind the scenes, some major events were set in motion last autumn that could soon change the tenor in Washington, at least as it relates to the debunked Russia collusion narrative that distracted America for nearly three years. It was in September 2018 that President Trump told my Hill.TV colleague Buck Sexton and me that he would order the release of all classified documents showing what the FBI, the Department of Justice (DOJ) and other U.S. intelligence agencies may have done wrong in the Russia probe.


About the same time, the House Permanent Select Committee on Intelligence, under then-Chairman Devin Nunes (R-Calif.), voted unanimously to send 53 nonpublic transcripts of witnesses in its Russia review to the director of national intelligence (DNI) for declassification. The transcripts were officially delivered in November. Now, nearly a year later, neither release has happened. To put that into perspective, it took just a couple of months in 2004 to declassify the final report on the Sept. 11, 2001, terror attacks after a presidential commission finished its work, which contained some of the nation’s most secretive intelligence revelations. But the long wait for transparency may soon end.

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Salvini smells power.

Italian PM Resigns, Denounces Salvini For Sinking Government (R.)

Italy’s prime minister resigned on Tuesday after launching a blistering attack on his own interior minister, Matteo Salvini, accusing him of sinking the ruling coalition and endangering the economy for personal and political gain. Prime Minister Giuseppe Conte, addressing parliament after it was recalled from its summer recess to decide the future of the 14-month-old government, accused the far-right League party chief Salvini of seeking to cash in on his rising popularity. In a shock move on Aug. 8, Salvini declared that his alliance with the anti-establishment 5-Star Movement was dead and called for elections, but the gambit could yet prove a big political blunder and open the door to power for his rivals.


Politicians from 5-Star and the centre-left Democratic Party (PD) are openly discussing forming a new coalition which would push the League into opposition and give Italy a more centrist, pro-European government. “The interior minister has shown that he is following his own interests and those of his party,” Conte told a packed Senate, a stony-faced Salvini sitting by his side. “His decisions pose serious risks for this country.” He described Salvini’s actions as reckless and “liable to tip the country into a spiral of political uncertainty and financial instability”.

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The UK will have to define an alternative to the backstop, but it has nothing so far.

EU Rebuffs Boris Johnson’s Brexit Gambit (R.)

The European Union on Tuesday rebuffed Prime Minister Boris Johnson’s demand that it reopen the Brexit divorce deal, saying Britain had failed to propose any realistic alternative to an agreed insurance policy for the Irish border. After more than three years of Brexit crisis, the United Kingdom is heading towards a showdown with the EU as Johnson has vowed to leave the bloc on Oct. 31 without a deal unless it agrees to renegotiate the divorce terms.


In his opening bid to the EU ahead of meetings with French President Emmanuel Macron and German Chancellor Angela Merkel, Johnson wrote a four-page letter to European Council President Donald Tusk asking to ax the Irish border “backstop”. Johnson proposed that the backstop – part of the Withdrawal Agreement that then-prime minister Theresa May agreed last year – be replaced with a “commitment” to implement alternative arrangements as part of a deal on the post-Brexit relationship. Merkel, Europe’s most powerful leader, said the EU would consider “practical solutions” but that the Withdrawal Agreement, which contains the protocol on the Irish border “backstop”, did not need to be changed.

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The finance hub crumbles. Not good for China either.

Alibaba Postpones Up To $15 Billion Hong Kong Listing (R.)

China’s biggest e-commerce company Alibaba Group Holding Ltd has delayed its up to $15 billion listing in Hong Kong amid growing political unrest in the Asian financial hub, two people with knowledge of the matter told Reuters. Alibaba’s Hong Kong-listing plans are being closely watched by the financial community for indications on the business environment in the Chinese-controlled territory and provides a window into Beijing’s reading of the situation.


While no new timetable has been formally set, Alibaba could potentially launch the deal as early as October, still seeking to raise $10 billion-$15 billion, depending on whether political tensions had eased and market conditions became more favorable, one of the people said. The decision to postpone the deal, initially set to launch in late August, was taken at a board meeting before Alibaba’s earnings release last week, the second person said. The delay was due to the lack of financial and political stability in Hong Kong, the people added, following more than 11 weeks of frequently violent pro-democracy demonstrations which have plunged the city into turmoil.

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Message brought to you by the US military-industrial complex.

China Could Overwhelm US Military In Asia In Hours – Report (CNN)

The US military is no longer the primary force in Asia, and missiles from China’s rapidly improving military could overwhelm its bases in hours, according to a new report. The study by the United States Study Center, at the University of Sydney, in Australia, warned that America’s defense strategy in the Indo-Pacific region “is in the throes of an unprecedented crisis” and could struggle to defend its allies against China. That means Australia, Japan and other US partners need to build up and refocus their forces in the region, and consider increased cooperation with the US, to ensure their security, the study claimed.


The report highlights areas where China’s military is making huge strides in comparison to the US and its Asian allies and partners. Chief among those is in missiles. “China has deployed a formidable array of precision missiles and other counter-intervention systems to undercut America’s military primacy,” the report states. Those missiles number in the thousands, the report says. Almost all US military installations in the Western Pacific, as well as those of its key partners and allies, “could be rendered useless by precision strikes in the opening hours of a conflict,” according to the report. China’s Foreign Ministry said Monday it had not seen the report, but spokesperson Geng Shuang stressed that the country’s military policy was “defensive in nature.”

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Time for Russia or China to send a tanker?!

US Will Act If Tanker Carrying Iranian Oil Delivers Oil: Pompeo (R.)

The United States will take every action it can to prevent an Iranian tanker from delivering oil to Syria in contravention of U.S. sanctions, Secretary of State Mike Pompeo warned on Tuesday. “We have made clear that anyone who touches it, anyone who supports it, anyone who allows a ship to dock is at risk of receiving sanctions from the United States,” Pompeo told reporters. “If that ship again heads to Syria we will take every action we can consistent with those sanctions to prevent that.” The Adrian DArya – formerly the Grace 1 – left Gibraltar on Aug. 18 and ship-tracking data showed the vessel was heading toward the Greek port of Kalamata.

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“The Prime Minister was able to save a great deal of expense and effort for both the United States and Denmark by being so direct..”

Trump Scraps Denmark Visit After Danes Say Greenland Not For Sale (AFP)

US President Donald Trump Tuesday postponed a planned visit to Denmark after Danish officials insisted its autonomous territory of Greenland was not for sale. Trump’s decision confirms just how interested he was in purchasing Greenland, an idea initially dismissed as a joke by some, but which the White House later insisted had a serious purpose because of its strategic location. “Based on Prime Minister Mette Frederiksen’s comments, that she would have no interest in discussing the purchase of Greenland, I will be postponing our meeting scheduled in two weeks for another time,” Trump tweeted.


During a Sunday visit to Greenland — the largest island on Earth — Frederiksen called Trump’s idea “absurd.” “The Prime Minister was able to save a great deal of expense and effort for both the United States and Denmark by being so direct,” Trump tweeted. “I thank her for that and look forward to rescheduling sometime in the future!”.

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One party says climate change is not real, and now all other parties -and third parties- are banned from talking about it. It’s not just ads.

Canada Election: Parties, Charities Warned Against Climate Change Ads (BBC)

Canada’s election watchdog has warned environmentalists that saying climate change is real could break the law. The issue arose because one party running in October’s election denies climate change is a threat. That has led Elections Canada to warn groups that running paid advertisements about climate change could be considered partisan activity. Advocates called the guidance “ludicrous” and say it will dampen urgent climate discussions. The UN has called for decisive political action by 2020 to put an end to climate change. “The guidance is extremely troubling,” Stephen Cornish, the CEO of the David Suzuki Foundation, an environmental charity, told the BBC.

“We would have to bury the scientific consensus around climate change when we should be ramping up our activities.” Canada has strict regulations on partisan advertising during the election period, whether they be from candidates, parties or third-party organisations. Individuals or organisations that take out “issue” advertisements that cost C$500 ($375, £309) or more during the election period have to register with Elections Canada as a third party. “Issue” advertisements are paid media campaigns that take positions on issues related to parties’ platforms but do not explicitly address a particular candidate or party.

The election period will begin when the writ is dropped sometime in September, before Canadians head to the polls on 21 October. Keith Brooks, programme director for advocacy group Environmental Defence, says Elections Canada told him that because one candidate denies that climate change is an issue, any ad urging action on climate change, or calling climate change an emergency, could be considered partisan. Maxime Bernier, the leader of the People’s Party of Canada, has said numerous times that he does not believe climate change is a crisis. “There is no climate change urgency in this country,” Mr Bernier said in June.

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97% of tigers are already gone.

More Than 2,300 Tigers Killed And Trafficked This Century (AFP)

More than 2,300 endangered tigers have been killed and illegally trafficked since the turn of the century, according to a report published Tuesday, urging more action to protect the giant cats. With an average of more than 120 illegally trafficked tigers seized each year – which amounts to over two each week – since year 2000, conservation group Traffic warned there was little sign of respite for the species. Report author Kanitha Krishnasamy, who heads Traffic’s Southeast Asia operations, said the numbers were deeply concerning. “It looks like we are losing this fight,” she told AFP.

In 1900, more than 100,000 tigers were estimated to roam the planet. But that fell to a record low of 3,200 globally in 2010. Since then, population numbers have inched upwards, but there are still estimated to be fewer than 3,900 tigers left in the wild. “This pernicious trafficking,evidenced by the continuously high number of whole skins, whole animals – both dead and alive – and bones is testament to the ongoing demand for Tiger parts,” Krishnasamy said. “The time for talking is over: words must be turned into action to prevent further Tiger loss,” she said in a statement. Traffic, which campaigns to protect endangered animals and help governments catch those who trade in their parts, published a new analysis looking at 19-years of tiger seizure data from across the globe.


It found that an estimated total equivalent to 2,359 individual tigers were seized from 2000 to 2018 across 32 countries and territories. Skins are the single most frequently seized tiger part, with on average 58 whole tiger skins seized each year, the report found, also noting a clear increase in seizures of whole animals, both dead and alive. The study also highlighted the growing role breeding centres play in fuelling the illegal tiger trade, especially in Southeast Asia. The tiger farm industry often argues the trade in captive animals helps to relieve the pressure on wild felines, but wildlife groups argue it reduces the stigma around buying the animals or their body parts and could create new markets for them.

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Fidel Narváez served as consul and then first secretary at the Ecuadorian embassy in London from 2010 until July 2018.

40 Rebuttals To The Media’s Smears Of Julian Assange (Fidel Narváez)

The Western corporate media has shown extreme bias against the whistleblowing publication WikiLeaks and its publisher Julian Assange. Nowhere is this more evident than in a recent CNN article on the imprisoned journalist, which completely botches the facts. On July 15, CNN published an exclusive report that sent shock waves through the press: “Security reports reveal how Assange turned an embassy into a command post for election meddling.” This two-pronged hit piece mixes character assassination with a clumsy attempt to show that he and WikiLeaks supposedly served as agents of chaos for the Kremlin during the 2016 US presidential election.

But the article contains numerous errors, omissions, examples of bias, speculations, and simply false information. CNN’s attempts to shape the narrative on WikiLeaks and Julian Assange are not new. On March 28, the TV program Conclusiones, on CNN Español, claimed — without evidence — that Assange had published the famous INA Papers leak, exposing the corruption of Ecuadorian President Lenin Moreno and his family. The fact that WikiLeaks never published a single document or image of Moreno or his family did not matter to CNN Español. The intentions of the show were immediately transparent from the loaded questions made by the reporters: “How long will Julian Assange remain at the Ecuadorian embassy in London?” “Aren’t you going to kick him out?” “What has Julian Assange brought to Lenin Moreno’s government but headaches?”

This baseless accusation was subsequently used two weeks later by the Ecuadorian government to justify expelling Assange from its London embassy, in a flagrant violation of international law. This pattern of smear pieces against WikiLeaks and its publisher begs the question: Why CNN is shaping public opinion against Julian Assange, as he prepares to defend himself from continued political persecution by the US government?

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Feb 192019
 


Alfred Eisenstaedt The kiss (V-J Day in Times Square) 1945

 

16 States Sue Over Trump’s National Emergency Declaration (NPR)
US Deputy Attorney General Rod Rosenstein To Leave Office Soon (AFP)
Scott Pelley Commits Career Suicide (Kunstler)
US Auto Industry Lines Up Against Possible Tariffs (R.)
China Car Sales Plunge Most In 7 Years (ZH)
Honda Confirms UK Swindon Plant Will Close In 2021 (G.)
Germany Tops Japan With World’s Largest Current Account Surplus In 2018 (R.)
Euroskeptic Parties Could Paralyze EU (K.)
More MPs Ready To Quit Labour, Corbyn Warned (Ind.)
The First Step For Labour’s Exiles: Bring 29 More With Them (G.)
Museums Grapple With Rise In Pleas For Return Of Foreign Treasures (G.)
Majority Of European Firms Have No CO2 Reduction Targets (G.)
How The World Got Hooked On Palm Oil (G.)

 

 

Way ahead of you: “We will possibly get a bad ruling, and then we’ll get another bad ruling, and then we’ll end up in the Supreme Court, and hopefully we’ll get a fair shake.”

16 States Sue Over Trump’s National Emergency Declaration (NPR)

A group of 16 states has filed a lawsuit in a Northern California federal court against President Trump’s declaration of a national emergency, calling the president’s decision to use executive power to fund a border wall unconstitutional. The complaint filed Monday in the U.S. District Court for the Northern District of California seeks to bar the administration from using emergency powers to divert money from other programs to a wall on the U.S.-Mexico border, marking the start of a legal battle anticipated by both the president and his opponents. “The President has used the pretext of a manufactured ‘crisis’ of unlawful immigration to declare a national emergency,” the plaintiffs wrote in California et al. v. Trump et al.

The lawsuit, spearheaded by California Attorney General Xavier Becerra, says that the Constitution gives Congress alone the power to control spending, not the president. Trump declared the emergency on Friday to free up billions of dollars for construction of a long-promised border wall, after Congress passed a spending bill that allocated just $1.375 billion for its construction. The president says he plans to allocate a total of $8 billion to the wall, including redirecting $3.6 billion in military construction funds and $2.5 billion from the Department of Defense’s counter-drug activities. Trump acknowledged the likelihood of legal challenges, saying on Friday, “We will possibly get a bad ruling, and then we’ll get another bad ruling, and then we’ll end up in the Supreme Court, and hopefully we’ll get a fair shake.”

The White House has argued that the move is routine. According to the Brennan Center for Justice, presidents have declared national emergencies 60 times, including Trump, since the power was codified in the National Emergencies Act of 1976. But Democratic critics, including House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer, have advanced the same argument as the California-led lawsuit, claiming Trump’s declaration violates lawmakers’ power to set spending priorities. Experts seem to think the courts are likely to defer to the president on the question of whether there is an emergency, NPR’s Nina Totenberg has reported, and the legal fight is likely to boil down to whether the president has the right under existing law to “reprogram” money Congress has appropriated.

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I meant to do that.

US Deputy Attorney General Rod Rosenstein To Leave Office Soon (AFP)

The US Justice Department official who once oversaw the Russia probe, Rod Rosenstein, plans to resign in mid-March, US news outlets reported. Rosenstein’s departure from his post as deputy attorney general has been expected for some time. CNN late Monday quoted a department official as saying it has nothing to do with recent explosive claims by the former acting director of the FBI, Andrew McCabe. McCabe has said that Rosenstein raised the idea of wearing a wire to tape President Donald Trump and talked about removing him from office under the 25th Amendment after Trump fired FBI director James Comey in May 2017.

CNN said Rosenstein has widely been expected to leave his job after Bill Barr is confirmed to fill the vacant post of attorney general. The network said that a departure by Rosenstein next month could suggest the Russia probe being carried out by special counsel Robert Mueller is nearing completion. Trump abruptly fired Comey as pressure rose over the Russia investigation, setting off alarm bells in the FBI and Justice Department. According to McCabe, in a lengthy interview that aired Sunday on CBS’s “60 Minutes,” Rosenstein brought up the possibility of invoking the 25th Amendment of the US Constitution, which provides for the removal of a sitting president for incapacity.

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“..the attempt by CBS-News to sell “the sterling career” story of Andrew McCabe (as Mr. Pelley put it), is really just a way for the network to cover its own ass..”

Scott Pelley Commits Career Suicide (Kunstler)

Apparently, one of the main objectives in the 60-Minutes story was to paint Mr. McCabe as an heroic patriot defending America against the wicked, shape-shifting, all-powerful Russia, which had made Mr. Trump its captive. The 60-Minutes piece happens to coincide exactly with the release of Mr. McCabe’s ass-covering book: The Threat: How the FBI Protects America in the Age of Terror and Trump. (Real superheroes fight both.) It also sets up a nice contrapuntal battle between the enigmatic Rod Rosenstein and Mr. McCabe vis-à-vis the idea of “wearing a wire” to record the President en route to running him over with the 25th Amendment. According to Mr. McCabe, there was a lot of lively discussion around this plan.

Mr. Rosenstein has brushed it off as a gag. Mr. McCabe, apparently, thought it was dead serious. They never did get their stories straight. In the meantime, Mr. McCabe’s own colleagues in the FBI’s ethics office and its Inspector General charged him with lying repeatedly about his role in this matter. You had to wonder whether the attempt by CBS-News to sell “the sterling career” story of Andrew McCabe (as Mr. Pelley put it), is really just a way for the network to cover its own ass in acting as a propaganda patsy in the long-running RussiaGate affair. The 60-Minutes segment also coincided with William Barr’s confirmation last week by the senate as the Attorney General, as well as official reports issued by both house and senate committees stating that they found no evidence for the Trump/Russia collusion story.

The ground is shifting under all this seditious hugger-mugger. Whether you are a Trump cheerleader or not (I’m not), there is a reality-based chain of events behind the FBI’s actions from early 2016 on — and the actions of other official players in government — that can only be clarified now in the courts, and chances are pretty good that they will be. It concerns me because the specter of massive institutional failure in federal law enforcement and the news media bodes very darkly for this country’s future.

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Let’s start with no longer calling it a growth industry. And then execute a controlled demolition. There are enough cars already.

US Auto Industry Lines Up Against Possible Tariffs (R.)

The U.S. auto industry urged President Donald Trump’s administration on Monday not to saddle imported cars and auto parts with steep tariffs, after the U.S. Commerce Department sent a confidential report to the White House late on Sunday with its recommendations for how to proceed. Some trade organizations also blasted the Commerce Department for keeping the details of its “Section 232” national security report shrouded in secrecy, which will make it much harder for the industry to react during the next 90 days Trump will have to review it.

“Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs,” the Motor and Equipment Manufacturers Association said in a statement, adding that it was “alarmed and dismayed.” “It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades.” The industry has warned that possible tariffs of up to 25 percent on millions of imported cars and parts would add thousands of dollars to vehicle costs and potentially devastate the U.S economy by slashing jobs.

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Actually, “For 2018, the drop was 4.1%, marking the first decrease since the early 1990s.”

China Car Sales Plunge Most In 7 Years (ZH)

Car sales in China continued their relentless descent in January, falling 17.7%, as we recently expected would happen when discussing Europe’s tumbling January auto sales. This follows the country’s first full year slump (2018) in more than two decades and it puts further pressure on the state of the global automotive market. The drop marked the eighth monthly retail sales decline in a row and was the biggest one-month drop in seven years. Gu Yatao, a Beijing-based auto analyst with Roland Berger, confirmed to Bloomberg that the “downward pressure is still there. The government isn’t adopting stimulating policies to give the market a shot in the arm.”

The contraction in China comes at the same time that auto markets in Europe and North America continue to shrink as a result of car sharing services and slowing economies. As we have been reporting for months, the slowdown in China continues to be a result of the country’s slowing economy, coupled with the lagging trade war with the United States. Even discounts for the Chinese New Year, which traditionally can help spur sales, weren’t enough to keep consumers in showrooms early this year. It’s a “historic slump” for China: the wholesale decline in January, to 2.02 million units, accelerated from December’s 15.8% slump. For 2018, the drop was 4.1%, marking the first decrease since the early 1990s.

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Boohoohoo.

Honda Confirms UK Swindon Plant Will Close In 2021 (G.)

Honda has confirmed the closure of its Swindon factory with the loss of 3,500 jobs, dealing another huge blow to Britain’s car industry in the run-up to Brexit. The Japanese carmaker announced it would shut the factory, its only European production site, in 2021, when the current model’s production cycle ends. The Swindon factory produces 150,000 Honda Civics a year – most of them for export to the EU – amounting to about a tenth of total UK vehicle production. It employs 3,500 people but supports many more jobs in the supply chain. Greg Clark, the UK business secretary, said Honda’s plan was “a devastating decision” for Swindon and the UK. “This news is a particularly bitter blow to the thousands of skilled and dedicated staff who work at the factory, their families and all of those employed in the supply chain.”

He said Honda’s move was a “commercial decision based on unprecedented changes in the global market”. Katsushi Inoue, the chief officer for European regional operations and president of Honda Motor Europe, said: “In light of the unprecedented changes that are affecting our industry, it is vital that we accelerate our electrification strategy and restructure our global operations accordingly. “As a result, we have had to take this difficult decision to consult our workforce on how we might prepare our manufacturing network for the future. This has not been taken lightly and we deeply regret how unsettling today’s announcement will be for our people.”

 

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Talking about cars…

How Reuters can write this without indicating with whom Germany has its main surpluses is a valid question.

Germany Tops Japan With World’s Largest Current Account Surplus In 2018 (R.)

Germany’s current account surplus shrank but remained by far the world’s largest last year due to strong exports, according to data from the Ifo institute on Tuesday that is likely to renew criticism of Chancellor Angela Merkel’s fiscal policies. The IMF and the European Commission have urged Germany for years to do more to lift domestic demand as a way to boost imports, stimulate growth elsewhere and reduce global economic imbalances. Since he took office, U.S. President Donald Trump has also criticized Germany’s export strength.

Germany’s current account surplus, which measures the flow of goods, services and investments, was the world’s largest for the third year running in 2018 at $294 billion, followed by Japan with $173 billion, the Ifo figures showed. Russia came in third with a surplus of $116 billion. When measured in relation to economic output, Germany’s current account surplus shrank for the third year in a row, however, falling to 7.4 percent in 2018 from 7.9 percent the previous year, according to the Ifo figures. Since 2011, Germany’s current account balance has been consistently above the European Commission’s indicative threshold of 6 percent of GDP and the surplus reached a record high of 8.9 percent in 2015.

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And according to the report, that would be a bad thing.

Euroskeptic Parties Could Paralyze EU (K.)

A new survey by the European Council on Foreign Relations (ECFR) ahead of European Parliament elections in May has found that Euroskeptic parties are on course to win a third of the seats in the assembly, which could potentially undermine the European Union’s cohesion and security. “In the longer term, their ability to paralyze decision-making at the center of the EU would defuse pro-Europeans’ argument that the project is imperfect but capable of reform. At this point, the EU would be living on borrowed time,” said the report, “The 2019 European Elections: How anti-Europeans plan to wreck Europe and what can be done to stop it.” Mark Leonard, director of the London-based think-tank, said that the warning contained in the report, that anti-European parties are gaining strength and could paralyze the EU, should focus the minds of pro-Europeans.

“They must not become trapped into becoming defenders of the status quo in Europe or allowing the election to become a referendum on the issue of migration – which is exactly the battleground that the anti-Europeans want,” he said. “Instead, pro-Europeans need to unmute the silent majority by fighting different elections that Europe’s different publics will vote on – such as the climate change election, the ‘Facebook’ election for those concerned about their data and privacy, the election for those worried about Russian aggression, the prosperity election for those worried about stalled living standards, the rule of law election for those worried about democratic backsliding, and the ‘saving Europe’ election for the EU’s most ardent defenders.”

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Antisemitism sells as much as Trump does. People eat it up.

More MPs Ready To Quit Labour, Corbyn Warned (Ind.)

Jeremy Corbyn faces a historic Labour rupture after being warned that more MPs are ready to follow the seven who dramatically quit his party on Monday. The leader publicly appealed for unity while his supporters launched savage attacks on the MPs, branding them “cowards”, “traitors” and “splitters” and demanding they give up their seats. But as the crisis deepened, deputy leader Tom Watson said other MPs are also considering leaving Labour, a party he admitted he sometimes no longer recognises, amid visceral anger over antisemitism, Brexit and Mr Corbyn’s leadership. The breakaway MPs headed by prominent backbenchers Chuka Umunna and Luciana Berger said they would form a new “Independent Group” in the House of Commons and invited people from other parties to join.

There were some early signs on Monday evening that they might attract support from disenfranchised Conservatives to the new centre-ground anti-Brexit grouping in the chamber. The group who left Labour, in the first major split of a British political party since the SDP were formed in 1981, also included Angela Smith, Gavin Shuker, Mike Gapes, Chris Leslie and Ann Coffey. Shortly after the announcement, Mr Corbyn wrote to every party member expressing his disappointment that a “small group” had left and urged the party “must be united”. But in a longer filmed statement, Mr Watson lamented their departure and in particular the antisemtic abuse suffered by Ms Berger that had preceded her announcement.

He said: “Even a single incident of antisemitism in the Labour Party shames us. Now we have lost Luciana, one of our most dedicated and courageous MPs. “If someone like Luciana no longer believes there is a home for her in the Labour Party then many other colleagues will be asking themselves how they can stay. “That’s why time is short for us. To confront the scale of the problem and meet the consequences. To keep others from leaving.” [..] As she resigned, Ms Berger said Labour had become “institutionally antisemitic”, while Mr Gapes, a former chairman of the Commons Foreign Affairs Committee, told the press conference Labour is now a “racist, antisemitic party”. He added: “Jeremy Corbyn and those around him are on the wrong side on so many international issues – from Russia, to Syria, to Venezuela. A Corbyn Labour government would threaten our national security and international alliances.”

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Less than 40 days before Brexit. So what do you do? Of course.

The First Step For Labour’s Exiles: Bring 29 More With Them (G.)

It has no name, no logo, no staff and no money. Yet those who packed into the tiny room above Westminster Bridge as seven MPs announced they were quitting the Labour party were left in no doubt that this was the beginning of a new political party. “The crucial word is yet,” one of the MPs said afterwards. “We are not a new party – yet.” As of Monday, the group are independents with no special status in the House of Commons. They hope to be something much more concrete, depending on their success in persuading other MPs to join them. In the short term the group has one central task – to convince 29 more disgruntled MPs from any party colour to join their group.

That would give them official third party status – overtaking the SNP and access not just to more “Short money” but also a prized guaranteed slot for the group’s leader at every PMQs, replacing the SNP Westminster leader Ian Blackford. Those MPs involved in the new group’s organisation stress that they hope this week will be dominated by several news cycles’ worth of new developments, including an expectation of more defections. If they do not materialise, the group will find it hard to maintain momentum. Two names mentioned as the most likely Conservative targets are the Tory MPs Heidi Allen and Sarah Wollaston, both independent-minded and supporters of the People’s Vote campaign.

The most crucial name on the list of seven is Luciana Berger, the MP for Liverpool Wavertree who has faced a slew of antisemitic abuse including death threats that have seen more than one abuser put behind bars. Berger, who is nine months pregnant, had not often been talked about in the same breath as MPs like Chuka Umunna and Chris Leslie who have been on the brink of quitting for many months over the party’s Brexit policy. Yet it was she who strode into the room first and chaired the event, looking the most like the group’s leader.

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What more to say about this display of dumb f*ckery? The entire article doesn’t mention the Parthenon Marbles even once. But between the lines groups them together with a giant sloth. And some art historian says “[museums] are going to have to figure it out or someone is going to figure it out for them..” Nonsense. Just give it back. You stole it.

Museums Grapple With Rise In Pleas For Return Of Foreign Treasures (G.)

Neanderthal skulls and the remains of an extinct sloth named after Charles Darwin are among the items requested for repatriation from British institutions, as documents reveal museums are facing calls to return some of their most treasured items to their places of origin. The pressure on museums to grapple with the provenance of their collections has been revealed by freedom of information requests submitted by the Guardian. A series of high-profile restitution claims have been received by institutions including the British Museum and the Natural History Museum in recent months. They include a call from the government of Gibraltar for the return of Neanderthal remains, including the first adult skull to be discovered by scientists, and a request from Chile for the repatriation of the remains of a now extinct giant ground sloth.

The letters, almost all of which resulted in the requests being rejected, show that long-running restitution claims for high-profile exhibits such as the Parthenon marbles are the tip of the iceberg as debate rages over the right of museums to keep hold of contested collection items. Last month the Egyptian government called on the National Museum of Scotland to produce certification documents for its Egyptian antiquities after a row broke out over plans to display a casing stone from the Great Pyramid of Giza. In October last year, the British Museum faced calls to return Hoa Hakananai’a, a basalt statue taken from Easter Island in 1868 and given to the museum by Queen Victoria the following year. In April, the ministry of cultural heritage in Italy requested the return of a marble relief depicting the freedmen Publius Licinius Philonicus and Publius Licinius Demetrius.


The Hoa Hakananai’a statue from Easter Island is among the artefacts displayed in the British Museum asked to be returned. Photograph: Neil Hall/EPA

The art historian Alice Procter, whose Uncomfortable Art Tours seek to inform visitors about the colonial history of museums, said British institutions would increasingly be forced into “soul-searching” about the provenance of their items – and whether they should be returned. “This is a really critical time for museums to work out where they stand on these questions,” she said. “Stop hiding behind historical acts. They have little justification for continuing to cite something like the British Museum Act.” Procter referred to a recent report commissioned by the French president, Emmanuel Macron, which caused a stir in the museum world last November with a call for thousands of African artworks held by French museums to be returned to their countries of origin. “It’s one of those situations where [museums] are going to have to figure it out or someone is going to figure it out for them,” said Procter.

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But 47% already reward their CEOs for climate performance. Wonder what pot of money that comes out of.

Majority Of European Firms Have No CO2 Reduction Targets (G.)

Most European companies have no target for reducing their greenhouse gas emissions even though 80% see climate change as a business risk, a survey has found. Among those that have set climate goals, only one in three stretch beyond 2025, according to the annual Carbon Disclosure Project report. Instead, corporate action has focused in the boardroom, with 47% of firms rewarding their CEOs for climate performance, and a quarter tying incentives to environmental goals. European firms now make up half of the CDP’s environmental “A-list” and the managing director for Europe, Steven Tebbe, praised climate disclosure’s entry into the financial mainstream.

“The next decade is vital if our shift to a sustainable economy is to be successful, and companies lie at the heart of this transition,” he said. A-list companies on the Stoxx global climate change leaders index outperformed their peers by 5.5% per annum this decade, he noted. Although 53% of companies surveyed did not yet have climate goals, 58% reported carbon cuts in 2018, amounting to a total reduction of the equivalent of 85m tonnes of CO2 – as much as Austria’s annual emissions. One third of companies reported increased emissions. One A-listed property management firm, Landsec, has cut its greenhouse gases by 17% since 2014 – on the way to a planned 40% tail-off by 2030.

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There is essentially zero need for palm oil. But Europe throws it in its biofuels. And all of its food. Because Sumatran tigers, Sumatran rhinos and orangutans don’t protest.

Zombies ‘R’ Us. We kill anything for profit, including ourselves.

How The World Got Hooked On Palm Oil (G.)

Once upon a time in a land far, far away, there grew a magical fruit. This fruit could be squeezed to produce a very special kind of oil that made cookies more healthy, soap more bubbly and crisps more crispy. The oil could even make lipstick smoother and keep ice-cream from melting. Because of these wondrous qualities, people came from around the world to buy the fruit and its oil. In the places where the fruit came from, people burned down the forest so they could plant more trees that grew the fruit – making lots of nasty smoke and sending all of the creatures of the forest scurrying away. When the trees were burned, they emitted a gas that heated up the air. Then everybody was upset, because they loved the forest’s creatures and thought the temperature was warm enough already. A few people decided they shouldn’t use the oil any more, but mostly things went on as before, and the forest kept burning.

This is a true story. Except that it is not magic. The fruit of the oil palm tree (Elaeis guineensis), which grows in tropical climates, contains the world’s most versatile vegetable oil. It can handle frying without spoiling, and blends well with other oils. Its combination of different types of fats and its consistency after refining make it a popular ingredient in packaged baked goods. Its low production costs make it cheaper than frying oils such as cottonseed or sunflower. It provides the foaming agent in virtually every shampoo, liquid soap or detergent. Cosmetics manufacturers prefer it to animal tallow for its ease of application and low price. It is increasingly used as a cheap raw material for biofuels, especially in the European Union.


Orangutans rescued near a palm oil plantation in Kalimantan, Indonesia. Photograph: Vier Pfoten/Four Paws/Rex

It functions as a natural preservative in processed foods, and actually does raise the melting point of ice-cream. Palm oil can be used as an adhesive that binds together the particles in fibreboard. Oil palm trunks and fronds can be made into everything from plywood to the composite body of Malaysia’s national automobile. Worldwide production of palm oil has been climbing steadily for five decades. Between 1995 and 2015, annual production quadrupled, from 15.2m tonnes to 62.6m tonnes. By 2050, it is expected to quadruple again, reaching 240m tonnes. The footprint of palm oil production is astounding: plantations to produce it account for 10% of all global cropland. Today, 3 billion people in 150 countries use products containing palm oil. Globally, we each consume an average of 8kg of palm oil a year.

Of this, 85% comes from Malaysia and Indonesia, where worldwide demand for palm oil has lifted incomes, especially in rural areas – but at the cost of tremendous environmental devastation and often with attendant labour and human rights abuses. Fires set to clear forests and create land for more palm plantations are the top source of greenhouse gas emissions in Indonesia, a country of 261 million people. The financial incentive to produce more palm oil is helping to warm the planet, while destroying the only habitat of Sumatran tigers, Sumatran rhinos and orangutans – driving them towards extinction.

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