Jun 292019
 
 June 29, 2019  Posted by at 10:09 am Finance Tagged with: , , , , , , , , , , ,  


Salvador Dali Paranoiac Woman-Horse (Invisible Sleeping Woman, Lion, Horse) 1930

 

Wall Street Wraps Up Its Best June In Generations (R.)
Not A Rate-Cut Economy (WS)
You Are Nuts To Think A July Interest-Rate Cut Is A Slam Dunk (MW)
Deutsche Bank To Fire Up To 20,000: One In Six Full-Time Positions (ZH)
China and US Agree To Restart Trade Talks (R.)
Russia-India-China Will Be The Big G20 Hit (Escobar)
Trump Offers To Meet Kim Jong-Un At The DMZ (R.)
Boeing 737 Max Likely Grounded Until The End Of The Year (CNBC)
Boeing 787 Dreamliner Caught In Deepening 737 MAX Probe (RT)
EU Leaders Decide Against Weber For Commission Presidency (R.)
Say Anything! (Kunstler)

 

 

And nobody cares that none of it is real… Or that 3/4 of Americans live paycheck to paycheck.

Wall Street Wraps Up Its Best June In Generations (R.)

Wall Street advanced in heavy trading on Friday, with the S&P 500 and the Dow closing the book on their best June in generations, ahead of much-anticipated trade talks between U.S. President Donald Trump and Chinese counterpart Xi Jinping at the G20 summit now underway in Japan. All three major U.S. stock indexes gained ground at the close of the week, month, quarter and first half of the year, during which time the U.S. stock market has had a remarkable run. The S&P 500 had its best June since 1955. The Dow posted its biggest June percentage gain since 1938, the waning days of the Great Depression.


From the start of 2019, after investors fled equities amid fears of a global economic slowdown, which sent stock markets tumbling in December, the benchmark S&P 500 jumped 17.3%, its largest first-half increase since 1997. “The market came to the realization that the world is not going to end,” said John Ham, financial adviser at New England Investment and Retirement Group in North Andover, Massachusetts. “Also, (Federal Reserve chair) Powell did a 180 since (the Fed’s) last (interest) rate hike, which has put wind in our sails in the first half of the year.”

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Mostly it all just sounds stupid to me.

Not A Rate-Cut Economy (WS)

The inflation index that the Fed has anointed to be the yardstick for its inflation target – the PCE price index without the volatile food and energy components – rose 0.19% in May from April, according to the Bureau of Economic Analysis this morning. This increase in “core PCE” was near the top of the range since 2010. It followed the 0.25% jump in April, which had been the third largest increase since 2010. Fed Chair Jerome Powell, at the press conference following the no-rate-hike FOMC meeting last week, gave a clear and succinct summary of the US economy. It was mostly in good shape, he said, in particular where it mattered the most: “All of the underlying fundamentals for the consumer-spending part of the economy, which is 70% of the economy, are quite solid,” he said.

[..] The Fed’s “symmetric” target is a 2% annual increase in the core PCE index, meaning the increase can fluctuate some above or below the target without causing the Fed to act. Core PCE inflation was in the 2%-range for much of last year. But early this year, the increases softened. So in his opening remarks at the press conference, Powell said that “committee participants expressed concerns about the pace of inflation’s return to 2 percent.” [..] a trigger for a rate cut would be a “sustained” period significantly below the 2% target. Inflation data is volatile and jumps up and down. Earlier this year, when core PCE inflation fell significantly below 2%, Powell said that the factors behind this low inflation were “transitory.”


Janet Yellen, when she was still Fed Chair, also used “transitory” to describe the factors that in early and mid-2017 were causing an actual dip in core PCE – which hasn’t happened this year. And a few months later, she was proven right. After today’s data on the increase in the core PCE index, following the jump in April, the three-month increase – March, April, and May – has now hit 0.50%. Annualized, this amounts to 2.0% core PCE inflation over the past three months, in the bull’s eye of the Fed’s symmetrical target, with the last two months being substantially above the Fed’s target. But note the sharp decline in January, February, and March, and how it has now reversed:

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The sooner the Fed is gone the better.

You Are Nuts To Think A July Interest-Rate Cut Is A Slam Dunk (MW)

The markets have gotten so used to the Federal Reserve doing whatever it takes to keep the S&P 500 and bond prices rising that traders and investors are now expecting the Fed to go against its own judgment and aggressively cut interest rates next month. In putting a 100% probability on a cut in the federal funds target rate at the next Fed meeting on July 30 and 31, traders — and the economists who advise them — seem to have forgotten how language and math work. Not to mention economics. Comments by Fed Chairman Jerome Powell in the past 10 days have indicated that the Fed is open to cutting rates if necessary to keep the expansion going, but there’s no sign that policy makers have made up their minds about a July cut — or any cut at all, for that matter.


Powell said it would depend, “you know, on actual data and evolving risks.” The Fed might very well deliver the rate cut that the market is demanding, but only if something significant changes in the next four and a half weeks. The Fed won’t cut rates because it promised to do so at the last Fed meeting (it didn’t). And it won’t cut rates because the U.S. economy is teetering on the edge of recession (it isn’t), or because inflation is dropping (uh-uh), or because fragile financial markets could use a shot of confidence (nope). Before they cut rates, Fed officials would want to see some hard evidence that the outlook for the economy has materially worsened since they met on June 19. About the only thing that would qualify would be a disastrous meeting between Donald Trump and China’s Xi Jinping this weekend.

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No more global player.

Wall Street may have the best June in generations, but not all of Wall Street.

Deutsche Bank To Fire Up To 20,000: One In Six Full-Time Positions (ZH)

While Deutsche Bank finally delivered some good news for a change to its long-suffering investors, when it miraculously failed to fail the latest Fed stress test, on Friday the chronically sick bank reverted to its “cutting into muscle” baseline when the largest German lender with the €45 trillion notional derivatives was said to be preparing “to cut as much as half its global workforce in equities trading as part of a broad restructuring to boost profitability”, according to Bloomberg with the WSJ adding that the total number could be between 15,000 and 20,000 job cuts, or more than one in six full-time positions globally. The cuts being contemplated by senior executives reflect an acceleration of Deutsche Bank’s downsizing and another major pullback from its global ambitions.


If followed through, the reduction would represent 16% to 22% of Deutsche Bank’s workforce of 91,463 employees, as disclosed by the bank as of the end of March. According to the proposed plan the bank will eliminate hundreds of positions in equities trading and research, as well as derivatives trading, and is expected to start informing staff of cuts – including in the U.S. and Asia – as soon as next month. Rates trading is also affected. While the move begs the question just how effective half of the bank’s equity trading desk was, it will likely be welcomed by the market even if by slashing revenue producers the bank confirms that its trading margins have dropped to negative levels, a virtually unheard of event.

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They should always talk.

China and US Agree To Restart Trade Talks (R.)

The United States and China agreed on Saturday to restart trade talks and that Washington would hold off on imposing new tariffs on Chinese exports, signaling a pause in the trade hostilities between the world’s two largest economies. The truce offered relief from a nearly year-long dispute in which the countries have slapped tariffs on billions of dollars of each other’s imports, disrupting global supply lines, roiling markets and dragging on global economic growth. “We’re right back on track and we’ll see what happens,” U.S. President Donald Trump told reporters after an 80-minute meeting with Chinese President Xi Jinping on the sidelines of a summit of leaders of the Group of 20 (G20) major economies in Japan.


Trump said while he would not lift existing import tariffs, he would refrain from slapping new levies on an additional $300 billion worth of Chinese goods – which would have effectively extended tariffs to everything China exports to the America. “We’re holding back on tariffs and they’re going to buy farm products,” he said at a news conference. “If we make a deal, it will be a very historic event.” Trump said China would buy more farm products but did not provide specifics. In a lengthy statement on the talks, China’s foreign ministry said the United States would not add new tariffs on Chinese exports and that negotiators of both countries would discuss specific issues. Xi told Trump he hoped the United States could treat Chinese companies fairly, the statement added.

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India and Iran.

Russia-India-China Will Be The Big G20 Hit (Escobar)

It all started with the Vladimir Putin–Xi Jinping summit in Moscow on June 5. Far from a mere bilateral, this meeting upgraded the Eurasian integration process to another level. The Russian and Chinese presidents discussed everything from the progressive interconnection of the New Silk Roads with the Eurasia Economic Union, especially in and around Central Asia, to their concerted strategy for the Korean Peninsula. A particular theme stood out: They discussed how the connecting role of Persia in the Ancient Silk Road is about to be replicated by Iran in the New Silk Roads, or Belt and Road Initiative (BRI). And that is non-negotiable.

Especially after the Russia-China strategic partnership, less than a month before the Moscow summit, offered explicit support for Tehran signaling that regime change simply won’t be accepted, diplomatic sources say. Putin and Xi solidified the roadmap at the St Petersburg Economic Forum. And the Greater Eurasia interconnection continued to be woven immediately after at the Shanghai Cooperation Organization (SCO) summit in Bishkek, with two essential interlocutors: India, a fellow BRICS (Brazil, Russia, India, China, South Africa) and SCO member, and SCO observer Iran.


At the SCO summit we had Putin, Xi, Narendra Modi, Imran Khan and Iranian President Hassan Rouhani sitting at the same table. Hanging over the proceedings, like concentric Damocles swords, were the US-China trade war, sanctions on Russia, and the explosive situation in the Persian Gulf. Rouhani was forceful – and played his cards masterfully – as he described the mechanism and effects of the US economic blockade on Iran, which led Modi and leaders of the Central Asian “stans” to pay closer attention to Russia-China’s Eurasia roadmap. This occurred as Xi made clear that Chinese investments across Central Asia on myriad BRI projects will be significantly increased.

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“While there, if Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!”

Trump Offers To Meet Kim Jong-Un At The DMZ (R.)

U.S. President Donald Trump said on Saturday he would like to see North Korean leader Kim Jong Un this weekend at the demilitarized zone (DMZ) between North and South Korea, and North Korea said a meeting would be “meaningful” if it happened. Trump, who is in Osaka, Japan, for a Group of 20 summit, is due to arrive in South Korea later on Saturday. He is scheduled to return to Washington on Sunday. If Trump and Kim were to meet, it would be for the third time in just over a year, and four months since their second summit, in Vietnam, broke down with no progress on U.S. efforts to press North Korea to give up its nuclear weapons.


Trump made the offer to meet Kim in a comment on Twitter about his trip to South Korea. “While there, if Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!” he said. Trump later told reporters his offer to Kim was a spur-of-the-moment idea: “I just thought of it this morning.” “We’ll be there and I just put out a feeler because I don’t know where he is right now. He may not be in North Korea,” he said. “If he’s there, we’ll see each other for two minutes, that’s all we can, but that will be fine,” he added. Trump said he and Kim “get along very well”.

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They still pretend it’s about software.

Boeing 737 Max Likely Grounded Until The End Of The Year (CNBC)

Boeing’s 737 Max could stay on the ground until late this year after a new problem emerged with the plane’s in-flight control chip. This latest holdup in the plane’s troubled recertification process has to do with a chip failure that can cause uncommanded movement of a panel on the aircraft’s tail, pointing the plane’s nose downward, a Boeing official said. Subsequent emergency tests to fix the issue showed it took pilots longer than expected to solve the problem, according to The Wall Street Journal. This marks a new problem with the plane unrelated to the issues Boeing is already facing with the plane’s MCAS automated flight control system, an issue the company maintains can be remedied by a software fix.


Boeing hopes to submit all of its fixes to the Federal Aviation Administration this fall, the Boeing official said. “We’re expecting a September time frame for a full software package to fix both MCAS and this new issue,” the official said. “We believe additional items will be remedied by a software fix.” Once that software package is submitted, it will likely take at least another two months before the planes are flying again. The FAA will need time to recertify the planes. Boeing will need to reach agreement with airlines and pilots unions on how much extra training pilots will need. And the airlines will need some time to complete necessary maintenance checks.

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There we go…

Boeing 787 Dreamliner Caught In Deepening 737 MAX Probe (RT)

Federal prosecutors are expanding their Boeing probe, investigating charges the 787 Dreamliner’s manufacture was plagued with the same incompetence that dogged the doomed 737 MAX and resulted in hundreds of deaths. The US Department of Justice has requested records related to 787 Dreamliner production at Boeing’s South Carolina plant, where two sources who spoke to the Seattle Times said there have been allegations of “shoddy work.” A third source confirmed individual employees at the Charleston plant had received subpoenas earlier this month from the “same group” of prosecutors conducting the ongoing probe into the 737 MAX.

Boeing is in the hot seat over alleged poor quality workmanship and cutting corners at the South Carolina plant. Prosecutors are likely concerned with whether “broad cultural problems” pervade the entire company, including pressure to OK shoddy work in order to deliver planes on time, one source told the Seattle Times. The South Carolina plant manufactured 45 percent of Boeing’s 787s last year, but its supersize -10 model is built exclusively there. Prosecutors are on the hunt for “hallmarks of classic fraud,” the source said, such as lying or misrepresentation to customers and regulators. Whistleblowers in the Charleston factory who pointed to debris and even tools left in the engine, near wiring, and in other sensitive locations likely to cause operating issues told the New York Times they were punished by management, and managers reported they had been pushed to churn planes out faster and cover up delays.


[..] A critical fire-fighting system on the Dreamliner was discovered to be dysfunctional earlier this month, leading Boeing to issue a warning that the switch designed to extinguish engine fires had failed in “some cases.” While the FAA warned that “the potential exists for an airline fire to be uncontrollable,” they opted not to ground the 787s, instead ordering airlines to check that the switch was functional every 30 days.

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Tidings from the Empire.

EU Leaders Decide Against Weber For Commission Presidency (R.)

European Union leaders have agreed that conservative German candidate Manfred Weber will not become president of the bloc’s executive Commission, Germany’s Die Welt daily reported on Friday, citing sources familiar with the decision. The decision was reached during talks on the sidelines of the G20 summit in Osaka, Japan, Die Welt said. If confirmed, the compromise would be a blow to Chancellor Angela Merkel, who had backed Weber’s bid to replace Jean-Claude Juncker. French President Emmanuel Macron had opposed Weber’s candidacy, partly because of his lack of experience in high office.

EU leaders failed at a summit earlier this month to agree on who should hold the bloc’s top jobs after European Parliament elections last month, including on the Commission, which has broad powers on matters from trade to competition and climate policy. Weber is the leader of the European People’s Party (EPP), the conservative bloc that won most seats in the election and which includes Merkel’s Christian Democrats (CDU). A senior European diplomat told Reuters that socialist Dutchman Frans Timmermans, a deputy head at the Commission, was the front-runner to succeed Juncker. “Timmermans is the best placed,” the diplomat said.


The EU’s 28 national leaders will meet on June 30 to decide who fills the five prominent positions that would help the bloc navigate through internal and external challenges. The jobs include the presidency of the European Central Bank, which has helped the bloc’s economy return to growth after the financial crisis thanks to an extraordinary monetary stimulus programme.

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“..a wayward jellyfish blown hither and yon by Progressive winds..”

Say Anything! (Kunstler)

Apart from the colorful homage to all things Mexican, the signal event of the night was Elizabeth Warren’s stealth political suicide when the popular question of Medicare-for-all came up and NBC’s Lester Holt asked the candidates for a show of hands as to who would abolish private health insurance altogether. Up shot Liz’s hand. Only New York’s mayor, the feckless Bill DeBlasio joined her. If the contest was a game of “Survivor” both would have thereby voted themselves off the island — except Big Bill was never really on the island, just circling around it like a wayward jellyfish blown hither and yon by Progressive winds.


The only “B” Team figure onstage who appeared to be a serious candidate was Hawaiian congressperson Tulsi Gabbard, a major in the US Army Reserve with tours-of-duty in Iraq and Kuwait — especially impressive when smacking down cretinous Ohio congressman Tim Ryan, who mistakenly asserted that the Taliban were behind 9/11. Uh, no, Tulsi informed him, it was al Qaeda (sponsored by our “friend” Saudi Arabia). I predict Tulsi will make the cut to the “A” team, despite the news media’s desperate efforts to shove her off the playing field.

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Mar 012019
 


Salvador Dali Eggs on the plate (without the plate) 1932

 

Tax Cuts A Year Later – Did They Deliver? (Roberts)
The Death Of Cash Has Been Greatly Exaggerated – Look At The $100 Bill (MW)
China Trade Talks Made ‘Fantastic’ Progress Last Week -Kudlow (CNBC)
China’s Shadow Debt Burden Much Larger Than Believed (ZH)
Growing China Downdraft Chills Asia Factory Activity (R.)
CPAC On Socialism, Bernie Sanders And 2020: ‘Trump Will Win, 100%’ (G.)
Claim Trump Had Prior Knowledge Of WikiLeaks Fails Hilariously (Dore)
Trump Says Cohen Lied ‘95% Instead Of 100%’ In Testimony To Congress (G.)
The Case That Could Bring Down Canada’s Justin Trudeau (G.)
Anti-Maduro Allies Regroup After The Fight For Humanitarian Aid (CNBC)
Disclosing Subpoena for Testimony, Chelsea Manning Vows to Fight (NYT)
The Grey Wall Of China: Inside The World’s Concrete Superpower (G.)

 

 

Well, they delivered something. But that’s a much bigger topic than just tax cuts, that’s Fed policy.

Lance is trying to utterly confuse us with an absolute overkill of graphs all in one place. But the gist is clear.

Tax Cuts A Year Later – Did They Deliver? (Roberts)

I received a lot of push back on my views when the “mainstream” analysis was the tax cuts would jump start economic growth. Of course, with 2017’s Q1 economic growth coming in at a meager 0.7% annualized, it would certainly seem to be needed. But as I questioned then: “Do tax reductions lead to higher economic growth, employment and incomes over the long-term as promised?” Speaking to NBC’s Meet the Press, VP Mike Pence argued at the time he was confident that eventually, the deficit would decline as it would be overcome by surging economic “growth” thanks to the tax cuts it will fund. [..] As shown in the chart below, changes to tax rates have a very limited impact on economic growth over the longer term.

Reagan’s tax cuts were effective because they were “timely” due to the economic, fiscal, and valuation backdrop which is diametrically opposed to the situation today. “Importantly, as has been stated, the proposed tax cut by President-elect Trump will be the largest since Ronald Reagan. However, in order to make valid assumptions on the potential impact of the tax cut on the economy, earnings and the markets, we need to review the differences between the Reagan and Trump eras. My colleague, Michael Lebowitz, recently penned the following on this exact issue.

‘Many investors are suddenly comparing Trump’s economic policy proposals to those of Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and potential growth of 1982 was vastly different than it is today.” [..] The differences with today’s economic and market environment could not be starker. The tailwinds provided by initial deregulation, consumer leveraging, declining interest rates, and inflation provided huge tailwinds for corporate profitability growth. The chart below shows the ramp up in government debt since Reagan versus subsequent economic growth and tax rates.

While wages did rise marginally over the last, due more to tightness in the labor market rather than tax cuts, corporations failed to share the wealth. In fact, the ratio of profits to workers wages have materially worsened since the enactment of tax cuts.

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Going to the mattresses. To be honest, it’s always been clear that trying turn the US into a cashless society is the stuff for revolution.

The Death Of Cash Has Been Greatly Exaggerated – Look At The $100 Bill (MW)

The stock market is coming off its best January in years, the economy appears to be holding up well, interest rates are still low, cryptos and mobile payments continue to gain traction — it’s not exactly a cash-friendly climate at the moment. Then what’s going on with the $100 bill? A decade ago, $20 and $1 bills were both far more prevalent than the Benjamins. As you can see by this chart from Deutsche Bank’s Torsten Slok, the currency hierarchy has shifted dramatically since then.

In 2017, the $100 bill took the crown as the most popular U.S. bill, doubling since 2007, which has helped drive the sharp rise in currency and other liquid assets as a share of GDP:

But why? Deutsche Bank’s Slok mulled a few possibilities. “It could be driven by a global fear of negative interest rates in Europe and Japan,” he said. “Or it could be a savings vehicle for U.S. households worried about another financial crisis, or it could be driven by more demand from the global underground economy.” Of course, we know it’s not because more people are using the $100 bill as pocket money. Smaller bills are still far more popular in that regard. Just look at the average lifespan of each bill:

So what’s that telling us? Mattresses everywhere are getting increasingly stuffed with $100 bills instead of being put to work in the stock market or elsewhere. That speaks to the frame of mind of the Average Joe as much as anything else.

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“Lighthizer said after the testimony [..] that formal steps would be taken to abandon plans of raising tariffs on Chinese goods.”

China Trade Talks Made ‘Fantastic’ Progress Last Week -Kudlow (CNBC)

National Economic Council Director Larry Kudlow said Thursday that trade talks between the U.S. and China are going great, noting the two countries are making “fantastic” progress in meetings last week. “Last week was fantastic,” Kudlow told CNBC’s “Squawk on the Street.” “We’re making great headway on nontariff barriers and tariffs regarding various commodities such as soybeans and energy and beef. We have mechanisms with regard to enforcement, which is -I think- unparalleled.” “The progress has been terrific,” Kudlow added. But “we have to hear from the Chinese side. We have to hear from President Xi Jinping, of course. I think we’re headed for a remarkable, historic deal.” U.S. equities briefly pared some of their losses following Kudlow’s remarks.

Kudlow also said China has expressed willingness to make key structural changes to prevent intellectual property theft, a highly contested issue in these negotiations. Kudlow’s comments follow testimony from Robert Lighthizer, the U.S. trade representative. Lighthizer told members of the House Ways and Means Committee that China needed to do more than just buy more U.S. goods for the two countries to strike a permanent trade deal. But Lighthizer said after the testimony, according to The Wall Street Journal, that formal steps would be taken to abandon plans of raising tariffs on Chinese goods. This is a clear signal that a trade deal could come in the near future. “Lighthizer has worked miracles on this Chinese deal,” Kudlow said. “We’ve never come this far on China trade.”

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News item by news item my long held ideas of the importance of the shadow banks for China’s official growth numbers are being confirmed.

China’s Shadow Debt Burden Much Larger Than Believed (ZH)

[..] a team of S&P credit analysts warned in an October report that China’s debt burden might be much larger than previously believed. Against a backdrop of soaring corporate defaults, the team from S&P warned that investors could safely tack on another ~40% of debt/GDP to China’s total (with even more likely hidden from view) after a careful analysis of a new source of shadow debt being tapped by local governments to further their development plans. These Local Government Financing Vehicles, or LGFVs, represented “an iceberg with titanic credit risks” as local officials had increasingly turned to these sources of shadow financing to finance development projects while bureaucrats in Beijing struggled to turn off the credit taps.

Now that Beijing has reckoned with the idea that now is not the time to try and contain the country’s massive debt load, even as the percentage of bad debt balloons, it increasingly appears that these measures might be too little, too late for investors who financed these LGFVs, as the Wall Street Journal revealed in a report about how a local government in China’s impoverished South had caused a stir by stiffing its creditors after racking up a debt pile – largely through these LGFVs – equivalent to roughly three times the government’s annual revenue.

While putting a number on the amount of shadow debt in the system is difficult due to the opacity of the Chinese financial system, one economist at a domestic think tank estimated that off-balance-sheet borrowings by local governments could be as much as 23.6 trillion yuan, as of the end of 2017, meaning that total is likely higher today, as governments have been forced to tap these vehicles during Beijing’s deleveraging campaign. The proliferation of private funds and other money-raising channels for local governments makes it difficult for economists and for Beijing to track the total amount of borrowings. Official figures pegged the sum of local and central government debt at 29.95 trillion yuan ($4.457 trillion) in 2017, roughly 36% of the economy.

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South Korea “exports contracted 11.1 percent in February from a year earlier, their biggest drop in nearly three years, with shipments to major buyer China slumping 17.4 percent.”

Growing China Downdraft Chills Asia Factory Activity (R.)

Weak demand in China and growing global fallout from the Sino-U.S. trade war took a heavier toll on factories across much of Asia in February, business surveys showed on Friday. Activity in China’s vast manufacturing sector contracted for the third straight month, pointing to more strains on its major trading partners and raising questions over whether Beijing needs to do more to stabilize the slowing economy. In many cases, business conditions were the worst Asian companies have faced since 2016, with demand weakening not only in China but globally. Japan’s factory gauge fell at the sharpest pace in 2-1/2 years as slumping orders prompted plants to cut production, while separate data from South Korea showed its exports plummeted.

“The weakening trend in Chinese import demand weighed heavily on exports across the rest of the region,” said Sian Fenner, lead Asia economist at Oxford Economics. [..] China watchers are looking to Premier Li Keqiang’s work report to the annual meeting of parliament next week for clues on further stimulus plans. Li will set out the government’s economic targets for the year on Tuesday. Sources have told Reuters Beijing will set a 2019 growth target of 6.0-6.5 percent, down from around 6.5 percent in 2018. China reported economic growth cooled to 6.6 percent last year, its weakest pace since 1990, but some analysts believe actual activity is much weaker.

[..] In Japan, the Markit/Nikkei Manufacturing Purchasing Managers Index (PMI) fell into contraction territory as both domestic and foreign orders slumped. “We need to be mindful that uncertainty over the global economic outlook is heightening,” Bank of Japan board member Hitoshi Suzuki said on Thursday, after data showed the biggest drop in industrial output in a year in January. Readings from South Korea — the first economy in Asia to report trade data each month – were equally grim. Its exports contracted 11.1 percent in February from a year earlier, their biggest drop in nearly three years, with shipments to major buyer China slumping 17.4 percent.

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“Once deeply resistant to Trump, CPAC is now like a religious gathering full of Trump idolatry. “Make America Great Again” (Maga) hats and sweaters are much in evidence..”

CPAC On Socialism, Bernie Sanders And 2020: ‘Trump Will Win, 100%’ (G.)

“The favourite in the Democratic race is Bernie Sanders because the way he makes socialism sound,” said Brandon Morris, 32, wearing a Maga cap. “Most citizens don’t know how the system works; once I tell them, they see it will fall apart.” Morris, a nurse from Gainesville, Florida, who is African American, added: “I’m against socialism because I see it as a form of slavery. The rich will get richer and the poor will get poorer. Cory Booker and Kamala Harris talk about Medicare for All and that will kill doctors’ incentives to work hard. Look at Cuba.” Like Trump, Sanders ran in 2016 warning of a rigged system and the downsides of global trade and, like Trump, he thrived in midwestern states against Hillary Clinton. Less than a week after declaring his 2020 candidacy, Sanders had already raised $10m, well ahead of any of his rivals.

Wearing a Maga cap and stars and stripes jacket, Sam Lee, the communications director of conservative group Grand Opportunity USA, said: “I think Sanders has the ability to generate a base. He’s genuine. It’s the same thing as Trump: they’re very upfront about who they are. But Trump will win, 100%.” Lee rejected candidates such as Harris and Elizabeth Warren as “background noise”, adding: “Every election has people who aren’t going to make it and I don’t think they could.” Fran Wendelboe, the treasurer of the conservative organisation the 603 Alliance in New Hampshire, the first state to hold a primary, said: “Among the young voters, Bernie Sanders still seems popular. I think he still has great traction. Elizabeth Warren doesn’t seem to be getting much – she should get out of the race. But they’re all trampling themselves to get as far to the left as they can. Nobody’s going to beat Trump.”

Mike Wertz, a self-employed property appraiser, said: “It’s hard to run against Santa Claus: Bernie Sanders is Santa Claus because he says he would give everything away free. But Trump is still popular.” Wertz, 52, from Stevensville, Maryland, dismissed the prospects of Joe Biden, the former vice-president who is yet to declare whether he will mount a third bid for the White House. “Biden would get exposed. He stumbles around and says silly things. Trump would bring that out of him; he wouldn’t let Biden get away with it. If Biden said something stupid, Trump would tweet it in about 30 seconds.”

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Just to show you my views are not alone. Jimmy Dore and Aaron Maté.

Someone mailed me yesterday talking about the conservatism of my columns. Never saw that before. And I don’t agree. Raging against the empty narratives of the anti-Trump machine does not make me a Trump supporter. People should read more carefully. The world is not divided into two camps.

Claim Trump Had Prior Knowledge Of WikiLeaks Fails Hilariously (Dore)

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Cohen and the Democrats lost it all when he said at the start he never wanted a White House job.

Trump Says Cohen Lied ‘95% Instead Of 100%’ In Testimony To Congress (G.)

Donald Trump claimed on Thursday that Michael Cohen lied about almost everything during his explosive congressional testimony the day before – but told the truth by saying he had no evidence that Trump colluded with Russia. Speaking in Vietnam after meeting the North Korean leader, Kim Jong un, Trump said Cohen, his former legal fixer, lied “95% instead of 100%” of the time during a hearing of the House oversight committee on Wednesday. “I was impressed,” said Trump. Trump falsely claimed several times that Cohen had testified that there had been “no collusion”. In fact, Cohen said he did not know any “direct evidence” of collusion. “But I have my suspicions,” he told members of Congress.

Trump said of Cohen: “He lied a lot, but it was very interesting, because he didn’t lie about one thing. He said no collusion with the Russian hoax. And I said, ‘I wonder why he didn’t just lie about that too, like he lied about everything else.’” Cohen delivered a scathing account of his 10 years as Trump’s enforcer, calling the president a racist conman, implicating him in a series of felonies and estimating that Cohen had threatened 500 people on Trump’s behalf. He said Trump’s eldest son, Donald Jr, had been involved in a criminal conspiracy to pay hush money to a pornographic actor, Stormy Daniels, who alleged she had an affair with the elder Trump. Federal prosecutors in New York continue to investigate.

Cohen confirmed that Trump was under federal investigation for undisclosed crimes and warned that Trump may try to cling to power even if his re-election campaign fails next year. He also alleged that Trump knew in advance of plans by WikiLeaks to publish Democratic party emails, which US authorities say were stolen by Russian intelligence operatives, and that Donald Jr was to meet with Russians at Trump Tower. But, Cohen said, he knew of no direct evidence that Trump or his campaign colluded with Russia’s interference in the 2016 election campaign. US intelligence agencies concluded that the Russian operation was aimed at boosting Trump’s chances.

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Trudeau’s riding has lots of SNC-Lavalin jobs. But he may have gone too far.

The Case That Could Bring Down Canada’s Justin Trudeau (G.)

What is going on in Canada? Canada’s prime minister, Justin Trudeau, is facing the biggest political scandal of his administration. The affair centres around allegations that his former attorney general, Jody-Wilson Raybould, was improperly pressured by some of his closest advisers to prevent the prosecution of a large Canadian engineering firm over accusations of fraud and bribery. Thus far, the scandal has been politically costly; Gerald Butts, a longtime friend of Trudeau’s, and his closest adviser, resigned two weeks ago. Wilson-Raybould has resigned, too. A handful of polls are showing the scandal is politically unpopular for the governing Liberals – which is worrying for them, given there is a federal election in October.

What is the company accused of? SNC-Lavalin, based in Montreal, is accused of paying C$48m worth of bribes in Libya to Muammar Gaddafi’s family, in order to secure lucrative contracts. The bribery is alleged to have occurred between 2001 and 2011. If found guilty, the company would be barred from bidding on federal projects for a decade. SNC-Lavalin employs nearly 50,000 people worldwide, with 3,400 in Quebec. Company executives have been lobbying fora “deferred prosecution agreement”, which in effect allows them to pay a fine in lieu of a criminal prosecution, with no ban on bidding for contracts. But federal prosectors have decided to pursue a trial.

This is where the scandal is centred: the prime minister and his aides, along with the finance minister, have been accused of pressing Wilson-Raybould to intervene and asking prosecutors to accept a deferred prosecution agreement. Wilson-Raybould declined to override the judgment of her top legal team.

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Nobody is willing to say yes to intervention.

Anti-Maduro Allies Regroup After The Fight For Humanitarian Aid (CNBC)

Venezuela’s opposition has formally urged the international community to keep all options on the table, after deadly clashes broke out in border towns over the weekend. On Saturday, at least three people were killed and hundreds more were left injured, Reuters reported, as opposition activists tried to defy a government ban to bring food supplies, hygiene kits and nutritional supplements into the country. It comes at a time when the South American nation is in the midst of the Western Hemisphere’s worst humanitarian crisis in recent memory. President Donald Trump has consistently refused to rule out the prospect of military intervention in Venezuela and the country’s opposition leader, Juan Guaido, has called on the international community to “keep all options open.”

U.S. Secretary of State Mike Pompeo tweeted over the weekend that Washington would “take action against those who oppose the peaceful restoration of democracy in Venezuela.” To be sure, the prospect of U.S.-led military intervention is clearly being signaled as a form of “action.” “I think large-scale U.S. military intervention remains unlikely, though the chances are increasing — that’s worrying,” Tom Long, assistant professor in the department of politics and international studies at the University of Warwick, told CNBC via email. “More than the deadly clashes, what I worry could push towards military action is the lack of options remaining for the opposition and its international allies to increase pressure,” he added.

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We can only guess as to why Chelsea picks the NYT to divulge details about this. We don’t have to guess as to why the NYT picks it up; it wants to repeat this one again:

” In recent years, Mr. Assange and WikiLeaks have become notorious for their role in disseminating Democratic emails stolen by Russian hackers as part of the Russian government’s covert efforts to damage the 2016 Democratic presidential nominee, Hillary Clinton, and help Donald J. Trump win.”

And Chelsea now helps them do it.

Disclosing Subpoena for Testimony, Chelsea Manning Vows to Fight (NYT)

Chelsea Manning, the former Army intelligence analyst convicted in 2013 of leaking archives of secret military and diplomatic documents to WikiLeaks, revealed in an interview on Thursday that she had been subpoenaed to testify before a grand jury — and vowed to fight it. The subpoena does not say what prosecutors intend to ask her about. But it was issued in the Eastern District of Virginia and comes after prosecutors inadvertently disclosed in November that Julian Assange, the founder of WikiLeaks, has been charged under seal in that district. Ms. Manning, who provided a copy of the subpoena to The New York Times, said that her legal team would file a motion on Friday morning to quash it, arguing that it would violate her constitutional rights to force her to appear.

She declined to say whether she would cooperate if that failed. “Given what is going on, I am opposing this,” she said. “I want to be very forthright I have been subpoenaed. I don’t know the parameters of the subpoena apart from that I am expected to appear. I don’t know what I’m going to be asked.” [..] Ms. Manning said that her lawyers have been talking about the subpoena with an assistant United States attorney in the Eastern District, Gordon D. Kromberg. After an inadvertent court filing revealed that Mr. Assange has been charged under seal, it was Mr. Kromberg who successfully argued before a judge that any such charges remain a secret and should not be unsealed. Moreover, she said, Mr. Kromberg told her lawyers in vague terms that prosecutors wanted to talk to her about her past statements.

During her court-martial, Ms. Manning delivered a lengthy statement about how she came to copy archives of secret documents and send them to WikiLeaks, including her online interactions with someone who was likely Mr. Assange. “It’s disappointing but not surprising that the government is continuing to pursue criminal charges against Julian Assange, apparently for his role in uncovering and providing the public truthful information about matters of great public interest,” said Barry Pollack, a lawyer for Mr. Assange. [..] In recent years, Mr. Assange and WikiLeaks have become notorious for their role in disseminating Democratic emails stolen by Russian hackers as part of the Russian government’s covert efforts to damage the 2016 Democratic presidential nominee, Hillary Clinton, and help Donald J. Trump win.

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“Since 2003, China has poured more cement every two years than the US managed in the entire 20th century.”

The Grey Wall Of China: Inside The World’s Concrete Superpower (G.)

In the suburbs south of Beijing, what could one day be the world’s busiest airport is rapidly taking shape. Nicknamed “the starfish” due to the striking design by Zaha Hadid Architects, the Beijing Daxing international airport is set to open in October, and could eventually handle more than 100 million passengers a year. While the 52,000-tonne steel exoskeleton covering the airport’s six concourses immediately catches the eye, what lies beneath is familiar to many Chinese mega-projects: concrete – 1.6m cubic metres of it. Located 67km south of the capital, the airport sprawls across 780,000 sq metres – about a third of the size of Edinburgh. It aims to process 72 million passengers a year, and will have four runways by 2025, but there is a longer-term vision for additional runways and talk of 200 million passengers. Beijing’s existing international airport in the north-east, which will stay open, already handles around 96 million passengers a year.


Photograph: Sipa Asia/Rex/Shutterstock

The new airport is just the latest chapter in the story of how China became the concrete superpower of the 21st century. Since 2003, China has poured more cement every two years than the US managed in the entire 20th century. Even after a dip in recent years, China uses almost half the world’s concrete. The construction sector – roads, bridges, railways, urban development and other concrete-and-steel projects – accounted for one-third of the expansion of the Chinese economy in 2017. China is already home to the largest concrete structure in the world – the Three Gorges Dam across the Yangtze River. Sometimes touted as China’s “new Great Wall”, the dam includes 27.2m cubic metres of concrete and its hydroelectric power station is the world’s largest power station in terms of capacity.

Like all of China’s concrete achievements, the Three Gorges Dam has been mired in controversy. Around 1.4 million people were displaced by the project, and there were complaints that the rehousing settlements were inadequate or that compensation money disappeared into local government coffers. More than 100 workers died in the construction process, and archaeological and cultural sites were flooded. None of this prevented Li Yongan, general manager of the Three Gorges Corporation, from declaring in 2006 that the dam was “the grandest project the Chinese people have undertaken in thousands of years”.

Li only had to wait seven more years to be outdone by yet another Chinese feat of concrete. In 2013, the eastern route of the South-to-North Water Diversion Project opened, connecting the Grand Canal in China’s east with the capital in the north. The project is a multi-decade plan to divert the water from China’s lush south to its arid north, where water scarcity is an acute problem. The waterway has already cost around $80bn (£61bn), making it the most expensive infrastructure project in the world. In the first phase alone, it has used more than double the amount of concrete in the Three Gorges Dam: 65m cubic metres. The project ultimately aims to transport fresh water a distance of more than 4,300km.

Read more …

Feb 252019
 


M. C. Escher Reptiles 1943

 

EU Explores Plans To Delay Brexit Until 2021 (G.)
May Delays ‘Meaningful’ Parliament Vote On Brexit Till March 12 (BBC)
Schiff Threatens To Call Mueller To Testify If Report Not Made Public (AP)
Trump To Delay China Tariff Hike After Trade Talks ‘Progress’ (AFP)
Global LNG Trade To Rise 11% This Year – Shell (R.)
Spain Surpasses Italy To Become “World’s Healthiest Country” (ZH)
African Union Seeks To Kill EU Plan To Process Migrants In Africa (G.)
One Million Tonnes Of Sludge To Be Dumped In Great Barrier Reef (BBC)
Concrete: The Most Destructive Material On Earth (G.)
Dearth Of Worms Blamed For Dramatic Decline In UK Songbird Population (Ind.)
Poachers Kill Elephant In Cambodia Wildlife Sanctuary (AFP)
Dozens Of Dead Elephants Discovered In Poaching Hot Spots In Botswana (BBC)

 

 

May is likely to ask for a few months’ delay, but Brussels won’t have that.

EU Explores Plans To Delay Brexit Until 2021 (G.)

Brexit could be delayed until 2021 under plans being explored by the EU’s most senior officials, at a time of growing exasperation over Theresa May’s handling of the talks, the Guardian can reveal. A lengthy extension of the negotiating period is gaining traction as the EU’s default position should the Commons continue to reject May’s deal, and a request emerge. Replacing the 21-month transition period with extra time as a member state would allow the UK and the EU to develop their plans for the future relationship with the aim of making the contentious Irish backstop redundant. Brussels is determined to avoid offering a short extension only to have to revisit the issue in the summer when the government again fails to win round parliament.

“If leaders see any purpose in extending, which is not a certainty given the situation in the UK, they will not do a rolling cliff-edge but go long to ensure a decent period to solve the outstanding issues or batten down the hatches,” one EU diplomat said. “A 21-month extension makes sense as it would cover the multi-financial framework [the EU’s budget period] and make things easier. Provided leaders are not completely down with Brexit fatigue, and a three-month technical extension won’t cut it, I would expect a 21-month kick [of the can]. It is doing the rounds in Brussels corridors. Martin Selmayr [the European commission’s secretary-general], among others, also fond of the idea.”

Exasperation with May’s handling of Brexit is growing in Brussels as senior insiders put the chance of the UK crashing out without a deal at “more than 50%”. Informed sources say there is dismay that senior government figures are focused on seeking domestic political advantage and appear wilfully blind to the opposition to reopening the withdrawal agreement. [..] There is also bewilderment that the recent flurry of meetings in Brussels involving May’s Brexit secretary, Stephen Barclay, and the attorney general, Geoffrey Cox, are being characterised in London as “negotiations” when the reality is the EU is still waiting for the prime minister to show them the alternative arrangements for the Irish backstop for which she claims to have a majority in support.

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Why is May not in London, but in Egypt with the EU she wants to leave in a month and change? Arms deals?

May Delays ‘Meaningful’ Parliament Vote On Brexit Till March 12 (BBC)

MPs will be able to have a fresh vote on the Brexit deal by 12 March, Prime Minister Theresa May has said. Speaking as she travelled to an EU-Arab League summit in Egypt, Mrs May ruled out holding another so-called “meaningful vote” this week. But she said “positive” talks with the EU were “still ongoing” and leaving on 29 March was “within our grasp”. Labour leader Jeremy Corbyn accused the prime minister of “recklessly running down the clock”. In a tweet, he said the move was intended to “force MPs to choose between her bad deal and a disastrous no deal”.

Labour, he said, would “work with MPs across the Commons to prevent no deal, break the deadlock and build support for our alternative plan”. On the plane to Sharm el-Sheikh for a summit between EU and Arab league leaders, Mrs May said her team would be returning to the Belgian capital on Tuesday for further talks. “As a result of that, we won’t bring a meaningful vote to Parliament this week, but we will ensure that that happens by 12 March,” she added.

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He wants No Collusion fully documented. Oh, wait, no, he wants to see if there are any scraps left that can serve to divert attention from the fact that there’s No Collusion.

Schiff Threatens To Call Mueller To Testify If Report Not Made Public (AP)

A top Democrat threatened on Sunday to call special counsel Robert Mueller to testify on Capitol Hill, subpoena documents and take the Trump administration to court if necessary, if the full report on the Russia investigation is not made public. House intelligence committee chair Adam Schiff told ABC’s This Week his committee will be watching Attorney General William Barr to see if he were “to try to bury any part of this report”. There will be intense scrutiny and pressure on Barr, he said, to fully release the report. “We will take it to court if necessary,” Schiff said. “If he were to try to withhold, to try to bury any part of this report, that will be his legacy and it will be a tarnished legacy.

So I think there’ll be immense pressure not only on the department, but on the attorney general to be forthcoming.” Schiff is not alone in calling for the report to be made public, or in promising aggressive investigations by Democrat-controlled committees. He himself has made such calls. But the pressure is mounting as Mueller is showing signs of wrapping up his nearly two-year-old investigation into possible coordination between Trump associates and Russian efforts to sway the 2016 election. Barr, who oversees the investigation, has said he wants to release as much information as he can. But during his confirmation hearing last month, he also made clear that he ultimately will decide what the public sees and that any report will be in his words, not Mueller’s.

On Sunday, Schiff suggested that anything short of Mueller’s full report will not be enough to satisfy Democrats. He pointed to a public interest in seeing some of the underlying evidence, such as information gathered from searches conducted on longtime Trump adviser Roger Stone and Paul Manafort, a former Trump campaign chairman. Schiff has said his committee planned to expand its own investigations by examining, for instance, whether foreign governments have leverage over Trump, his relatives or associates.

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From negotiations to dancing.

Trump To Delay China Tariff Hike After Trade Talks ‘Progress’ (AFP)

US President Donald Trump has vowed to delay a planned tariff increase on Chinese exports after both sides hailed “substantial progress” in trade talks, raising the prospect of a summit with President Xi Jinping to seal the deal. Trump said Sunday there could be “very big news” in the next two weeks, and he planned to meet with Xi at the US leader’s Mar-a-Lago resort in Florida if more progress is made. Top negotiators met in Washington for four days of talks that ended on Sunday in an effort to resolve a months-long trade war that analysts feared could torpedo the global economy.

The United States had been due to increase tariffs on more than $200 billion in Chinese goods on March 1, but Trump said he would now delay the punitive duties following the “very productive talks”. “I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues,” Trump wrote on Twitter. The official Xinhua news agency used almost the exact same language, reporting “substantial progress” on those thorny issues in the talks led by Xi’s top trade negotiator, Vice Premier Liu He.

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Warning: someone will try to sell this to you as a positive for green.

Global LNG Trade To Rise 11% This Year – Shell (R.)

Global liquefied natural gas (LNG) trade will rise 11 percent to 354 million tonnes this year as new facilities increase supplies to Europe and Asia, Royal Dutch Shell said in an annual LNG report on Monday. Shell, the largest buyer and seller of LNG in the world, said trade rose by 27 million tonnes last year, with Chinese demand growth accounting for 16 million tonnes of those volumes. Shell’s forecasts, which see LNG demand climbing to 384 million tonnes next year, reflect a burgeoning industry with new production facilities opening in Australia, the United States and Russia and more countries becoming importers by constructing receiving terminals. Asia dominates the market with Japan remaining the top buyer.

China became the second largest in 2017 as demand soared due to a government-mandated push for power stations to switch from coal to cleaner-burning gas to help reduce pollution. Due to the uneven progress of developing liquefaction-export facilities on the one hand and regasification-import terminals on the other, many analysts see the global market becoming oversupplied if not this year then next year. But most also see a supply crunch around the mid-2020s because, at the moment, there are not enough liquefaction facilities being planned, financed and built. Such projects are underpinned by long-term supply contracts struck years in advance by their operators. Between 2014 and 2017 buyers were signing shorter-duration contracts for smaller volumes, making financing difficult to complete.

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Actually, it’s perhaps mostly about primary care.

Spain Surpasses Italy To Become “World’s Healthiest Country” (ZH)

As the US struggles with declining life expectancy (as deaths from suicides, drug overdoses and other “deaths of despair” climb), rising infant mortality and ballooning health-care costs that preclude access to preventative care for millions of Americans – not to mention the attendant ills of rampant obesity and tobacco use), America has seen its position among the world’s healthiest nations deteriorate, while, across the Atlantic, more European nations are claiming spots in the highest echelons of the global rankings. According to Bloomberg’s 2019 World Health Rankings, Spain has supplanted Italy as the world’s healthiest country. In the most ranking, published in 2017, Spain had placed sixth.

Four other European nations ranked among the top 10 in 2019: Iceland (third place), Switzerland (fifth), Sweden (sixth) and Norway (ninth). Japan was the healthiest Asian nation, climbing three ranks to place fourth overall, and supplanting Singapore, which dropped to eighth. Rounding out the top ten were Australia and Israel, which ranked seventh and 10th, respectively. Variables including life expectancy are used to rank countries, while factors like tobacco use and obesity work against the overall ranking. Environmental factors like access to clean water and sanitation are also taken into consideration. Spain has the highest life expectancy at birth among EU nations. Out of all 169 nations that BBG tracks, only Japan and Switzerland rank higher. By 2040, Spain is forecast to have the highest lifespan, at roughly 86 years, followed by Japan, Singapore and Switzerland.

The reason? Access to primary care. “Primary care is essentially provided by public providers, specialized family doctors and staff nurses, who provide preventive services to children, women and elderly patients, and acute and chronic care,” according to the European Observatory on Health Systems and Policies 2018 review of Spain. Over the past decade, this has helped bring about a decline in deaths from heart disease and cancer. While China ranked 52nd overall, it’s on track to surpass the US by 2040, according to the Institute for health metrics and evaluation.

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“When the EU wants something, it usually gets it..”

African Union Seeks To Kill EU Plan To Process Migrants In Africa (G.)

The African Union is seeking to kill off the EU’s latest blueprint for stemming migration, claiming that it would breach international law by establishing “de facto detention centres” on African soil, trampling over the rights of those being held. A “common African position paper” leaked to the Guardian reveals the determination of the 55-member state body, currently headed by Egypt, to dissuade any of its coastal states from cooperating with Brussels on the plan. The EU set plans for “regional disembarkation platforms” in motion last summer to allow migrants found in European waters to have their asylum requests processed on African soil.

Brussels has a similar arrangement in place with Libya, where there are 800,000 migrants, 20,000 of whom are being held in government detention centres. The Libyan authorities have been accused of multiple and grave human rights abuses. A UN report recently stated that migrants in the country faced “unimaginable horrors”. Some northern states, including Morocco, have already rejected the EU’s proposal over the new “platforms”, but there are concerns within the African Union (AU) that other member governments could be persuaded by the offer of development funds.

Italy’s far-right interior minister Matteo Salvini has called for the centres to be based around the Sahel region, in Niger, Chad, Mali and Sudan. An inaugural summit between the EU and the League of Arab States is being held in Sharm el-Sheikh in Egypt on Sunday and Monday, and migration is expected to be discussed. “When the EU wants something, it usually gets it,” said a senior AU official. “African capitals worry that this plan will see the establishment of something like modern-day slave markets, with the ‘best’ Africans being allowed into Europe and the rest tossed back – and it is not far from the truth.”

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I’m sure this means Australia is going for some kind of award. Just don’t know which one.

One Million Tonnes Of Sludge To Be Dumped In Great Barrier Reef (BBC)

Australia plans to dump one million tonnes of sludge in the Great Barrier Reef. Despite strict laws on dumping waste, the Great Barrier Reef Marine Park Authority (GBRMPA) gave the go-ahead. A loophole was found – the laws don’t apply to materials generated from port maintenance work. It comes one week after flood water from Queensland spread into the reef, which scientists say will “smother” the coral. The industrial residue is dredged from the bottom of the sea floor near Hay Point Port – one of the world’s largest coal exports and a substantial economic source for the country. Larissa Waters, senator for Queensland and co-deputy leader of the Greens Party, called for the license to be revoked.

“The last thing the reef needs is more sludge dumped on it, after being slammed by the floods recently,” she told the Guardian. “One million tonnes of dumping dredged sludge into world heritage waters treats our reef like a rubbish tip.” It’s just “another nail in the coffin” for the World Heritage-listed Great Barrier Reef, which is already under stress due to climate change, according to Dr Simon Boxall from the National Oceanography Centre Southampton. “If they are dumping it over the coral reef itself, it will have quite a devastating effect. The sludge is basically blanketing over the coral. “The coral relies on the algae, that’s what give them their colour and what helps them feed – without this partnership the coral will suffer dramatically.”

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“..we may have already passed the point where concrete outweighs the combined carbon mass of every tree, bush and shrub on the planet. ”

Concrete: The Most Destructive Material On Earth (G.)

In the time it takes you to read this sentence, the global building industry will have poured more than 19,000 bathtubs of concrete. By the time you are halfway through this article, the volume would fill the Albert Hall and spill out into Hyde Park. In a day it would be almost the size of China’s Three Gorges Dam. In a single year, there is enough to patio over every hill, dale, nook and cranny in England. After water, concrete is the most widely used substance on Earth. If the cement industry were a country, it would be the third largest carbon dioxide emitter in the world with around 2.8bn tonnes, surpassed only by China and the US.

The material is the foundation of modern development, putting roofs over the heads of billions, fortifying our defences against natural disaster and providing a structure for healthcare, education, transport, energy and industry. Concrete is how we try to tame nature. Our slabs protect us from the elements. They keep the rain from our heads, the cold from our bones and the mud from our feet. But they also entomb vast tracts of fertile soil, constipate rivers, choke habitats and – acting as a rock-hard second skin – desensitise us from what is happening outside our urban fortresses. Our blue and green world is becoming greyer by the second. By one calculation, we may have already passed the point where concrete outweighs the combined carbon mass of every tree, bush and shrub on the planet.

Our built environment is, in these terms, outgrowing the natural one. Unlike the natural world, however, it does not actually grow. Instead, its chief quality is to harden and then degrade, extremely slowly. All the plastic produced over the past 60 years amounts to 8bn tonnes. The concrete industry pumps out more than that every two years. But though the problem is bigger than plastic, it is generally seen as less severe. Concrete is not derived from fossil fuels. It is not being found in the stomachs of whales and seagulls. Doctors aren’t discovering traces of it in our blood. Nor do we see it tangled in oak trees or contributing to subterranean fatbergs. We know where we are with concrete. Or to be more precise, we know where it is going: nowhere. Which is exactly why we have come to rely on it.

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For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the message was lost.
For want of a message the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.

Dearth Of Worms Blamed For Dramatic Decline In UK Songbird Population (Ind.)

Britain’s first farmland worm survey has revealed that nearly half of English fields lack key types of earthworm and may help explain the alarming decline of one of the country’s most loved songbirds. The citizen science project, in which farmers dug for worms in their own fields, has prompted 57 per cent of them to pledge to change their soil management practices – a move that may benefit the song thrush, for whom worms are a vital food source. The English population of the song thrush, popular for both its voice and its habit of using stones as an “anvil” to smash the shells of its other favourite food – snails – declined by more than 50 per cent between 1970 and 1995, leading to it being listed as a species of conservation concern.

The #60minworms survey, led by Dr Jackie Stroud, a Natural Environment Research Council (Nerc) soil security fellow at the Rothamsted Research centre, adds to the evidence that the song thrush is being affected by a reduction in farmland earthworm populations, along with the loss of hedgerow nesting sites. In a statement about the survey, Rothamsted Research said: “The results indicate widespread, historical over-cultivation, and may explain observed declines in other wildlife, such as the song thrush, that feed on these worms.” Stressing the importance of earthworms, Dr Stroud added: “Earthworms play vital roles in plant productivity and are great bird food as well. They are really important in our soil systems. “They influence carbon cycling, water infiltration, pesticide movement, greenhouse gas emissions, plant productivity, the breeding success of birds and even the susceptibility of plants to insect attack.

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Stop any and all trade with any and all countries where animal parts are traded.

Poachers Kill Elephant In Cambodia Wildlife Sanctuary (AFP)

An elephant has been found dead with its tusks and tail sliced off in a wildlife sanctuary in Cambodia, where wild elephant numbers have dwindled to just a few hundred due to poaching and deforestation. The Southeast Asian nation has emerged in recent years as a key transit hub for the multi-billion dollar illicit wildlife trade, with demand for products made from tusks, pangolin scales and rhino horns high in China and neighbouring Vietnam. According to the Mondulkiri Project, an animal rescue NGO, there are about 400 elephants in the wild in Cambodia, and about 50 held in captivity.

The body of the male Asian elephant was found on Sunday in a wildlife sanctuary in northeastern Mondulkiri province, said Environment Ministry spokesman Neth Pheaktra. “The elephant’s tusks were missing and its tail was also cut off,” he told AFP on Monday, adding the animal was killed about 10 days ago. “There was a wound from a gunshot under its right eye,” Neth Pheaktra said, adding authorities are still hunting for the poachers. A baby elephant was found dead last year in the same sanctuary when it was caught in a trap set by poachers, he said. The Asian elephant is hunted for its precious tusks, while its tail hair is considered lucky and embedded in rings and bracelets.


The body of a male Asian elephant was found in a wildlife sanctuary in northeastern Cambodia on Sunday (AFP Photo/Handout)

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“..Tanzania lost 60% of its elephant population in five years..”

Dozens Of Dead Elephants Discovered In Poaching Hot Spots In Botswana (BBC)

One of the last elephant sanctuaries in Africa has “a significant elephant-poaching problem”, according to the final results of an aerial wildlife survey in Botswana seen by the BBC. Elephants Without Borders, which conducted the four-yearly survey with the government, said there was a six-fold increase in the number of “fresh” or “recent” elephant carcasses in northern Botswana amid “obvious signs” of poaching. Mike Chase, the scientist who carried out the survey, sparked a fierce debate in the country when he went public half-way through his study in August last year with accusations there was a poaching problem and alleging the authorities were ignoring him. He told the BBC at the time that while flying over northern Botswana, he had discovered 87 recently killed elephants in one “hotspot” area – a number now revised to 88 – and 128 overall.

The government called his figures “false and misleading” and criticised “unsubstantiated and sensational media reports”. He received death threats and has since had one of his two research licences suspended by the government. President Mokgweetsi Masisi at the time described the allegations as the “biggest hoax of the 21st Century” and denied there had been a spike in poaching in the country. But the final report identifies four poaching hotspots, provides photographic evidence from ground surveys and has been peer-reviewed by nine international elephant experts. “The response from… various people was to try and deny or whitewash – label me a traitor and a liar – without having actually verified the evidence we bore witness to,” said Mr Chase.

Botswana is home to 130,000 elephants – a third of the total number in Africa – and it is an obvious target for poachers. Even when extrapolating poaching figures from the sample found in the survey, the numbers killed will not have a major impact on such a large population. “If we are talking about a number of carcasses that have accumulated over a period of two years, given the population of elephants in Botswana it doesn’t really raise eyebrows,” said national parks director Mr Tiroyamodimo. This was not satisfactory for Mr Chase. “At what point do we say we have a problem?” he asked.

“Is it at 10? 50? 100? 150? 1,000? Lessons have taught us – when we look at Tanzania that lost 60% of its elephant population in five years – that’s how quickly poaching can settle into a population. “We saw with our own eyes 157 confirmed poached elephants. We estimate that the total poached in the last year is at least 385 and probably far more because that is based on what we actually saw and have not had time or finances to visit all carcasses on the ground.”

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Jan 072019
 
 January 7, 2019  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , , ,  


Berthe Morisot Julie and her boat 1884

 

China Has a Dangerous Dollar Debt Addiction (Balding)
China Drops Hints Of Trade Pain Ahead (BV)
US and China To Resume Trade Talks With Both Eager For Compromise (G.)
May To Hold Parliamentary Brexit Vote On January 15 (R.)
Theresa May Pleads For EU To Give Ground And Rescue Brexit Deal (G.)
Germany and Ireland Step Up Efforts To Find Brexit Border ‘Fix’ (G.)
Average UK Unsecured Household Debt Hits Record £15,400 (G.)
UK Car Sales Record Biggest Fall Since Financial Crisis (R.)
France’s Macron Reeling As Tough Stance Against ‘Yellow Vests’ Backfires (R.)
The Euro: A Mindless Idea – Ashoka Mody (Spiked)

 

 

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

China Has a Dangerous Dollar Debt Addiction (Balding)

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

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

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

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More trickle down fails.

China Drops Hints Of Trade Pain Ahead (BV)

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

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

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

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Tariffs rose Jan 1. It’s getting urgent.

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

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

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

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

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

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

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In case you were still wondering who will be blamed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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They’re going to stay home?!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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