Vincent van Gogh Still life with bible 1885
A very communist style economy still.
• China Takes On State-Owned Firms (Balding)
A little-noticed statement last week could portend the next big battle in China’s effort to control its debt. On Aug. 2, the finance ministry issued directives that state-owned companies improve returns, control risks and make sure that “projects are financially viable before decisions are made.” That the government feels the need to spell out such obvious goals tells you the depth of the problem. China’s sprawling array of state-owned enterprises — with millions of employees across all sectors of the economy — may be the biggest obstacle to its broader effort at financial reform. Previous attempts to rein them in have largely failed. But if the government has any hope of real deleveraging, this time will have to be different. SOEs are huge, and so are their liabilities. They’re responsible for non-financial corporate debt equal to 90% of GDP.
Facing limited competitive pressure, they’ve driven the worst of China’s debt-led excess: Return on assets for these firms in 2016 was a paltry 2.9%, compared to 10.2% in the private sector. One reason is that China’s banking industry, which is itself almost exclusively state-owned, channels loans to SOEs in the expectation that they’ll have an implicit government guarantee. SOEs provide only 16% of China’s jobs and less than a third of its output, but they receive an astonishing 30% of all loans. With credit so easily available, they have little incentive to economize. They’re also burdened with conflicts of interest. Despite the new directive to focus on profitability, SOEs are still subject to orders from Party committees that sit above their corporate boards. Some firms have chafed at this arrangement, but in general political objectives – such as maximizing local employment – take priority over profits. Party leaders even refer to privatization as “wrongheaded thinking.”
China’s “Belt and Road” initiative offers a case in point. Even amid a broad crackdown on overseas investment, firms are being prodded to plow hundreds of billions of dollars into the initiative — mostly for unprofitable infrastructure projects — while simultaneously being told to prioritize return on investment. They can be forgiven for being a little confused. Given all these challenges, complying with the new directives will be difficult. Regulators have tried numerous reform strategies in the past. One has been to merge multiple inefficient SOEs, in the unlikely hope that combined they will create one efficient SOE. Another has been to draw distinctions between “commercial” and “public service” SOEs, hoping to give the former some private-sector-like flexibility. But as long as these companies can fall back on favorable bank loans, the impetus to improve efficiency will be limited.
Xi understands. But the risk is he will use it as a rallying cry at the Communist Party Congress in the fall.
BTW, I don’t want to comment on Charlottesville. Other than: there’s so much underlying hatred in America, built up over so many years, and something other than blame seems necessary.
• Trump Warns Xi: Trade War With China Begins Monday (ZH)
As if there weren’t enough geopolitical stress points in the world to fill a lifetime of “sleepy, vacationy” Augusts, late on Friday night President Trump spoke to Chinese President Xi Jinping and told him that he’s preparing to order an investigation into Chinese trade practices next week, according to NBC. Politico confirms that Trump is ready to launch a new trade crackdown on China next week, citing an administration official, a step that Trump delayed two weeks ago under the guidance of his new Chief of Staff Gen. Kelly, but now appears imminent. It is also an escalation which most analysts agree will launch a trade war between Washington and Beijing. As Politico details, Trump on Monday will call for an investigation into China over allegations that the nation violated U.S. intellectual property rights and forced technology transfers, the official said.
While it’s unclear how much detail Trump will get into in the announcement, administration officials expect U.S. Trade Representative Robert Lighthizer to open an investigation against China under Section 301 of the Trade Act of 1974. The ordering of the investigation will not immediately impose sanctions but could lead to steep tariffs on Chinese goods. Trump has expressed frustration in recent months over what he sees as China’s unfair trade policies. As we discussed two weeks ago, Trump had planned to launch the trade investigation more than a week ago, but he delayed the move in favor of securing China’s support for expanded U.N. sanctions against North Korea, the senior administration official said.
The pending announcement also comes amid heightened tension between the United States and China, even after the Trump administration scored a victory in persuading Beijing to sign onto new United Nations sanctions on North Korea. Still, Trump has delayed trade action before, amid pressure from business groups and major trading partners: Two Commerce Department reports examining whether to restrict steel and aluminum imports on national security grounds were expected by the end of June but have been bottled up in an internal review. Trading partners raised threats of retaliation and domestic steel users complained of being hurt by price increases and restricted supply.
The trade investigation will immediately strain relations between the U.S. and China as the two countries wrestle with the unpredictable situation over North Korea. Should Trump follow through, the move will lay the groundwork for Trump to impose tariffs against Chinese imports, which will mark a significant escalation in his efforts to reshape the trade relationship between the world’s two largest economies. In other words, even if there is now conventional war announced with either North Korea or Venezuela, Trump’s next step is to launch a trade war against China.
Bit confusing at times with reagrds to who said what, but the gist is clear.
This is an article written by an Austrian, Klaus Madersbacher, who, somehow, was able to see through the heavy blanket of Amerian propaganda that suffocates the ability to think and to pereive throughout the entirety of Europe. He correctly undersands the Western destruction of Libya as a war crime. Germans were executed by the Nuremberg Tribunal for less. Madersbacher is correct that Libya was a monstrous war crime committed by the Obama regime and Washington’s NATO puppets. However, Libya is a worse crime than the Nazis committed, as is Afghanistan, Iraq, Yeman, Somalia, and parts of Syria. The Germans never destroyed entire countries and murdered the leaderships. Life in Nazi-occupied France was not as pleasant as in unoccupied France, but it was far more pleasant than life today in Afghanistan, Iraq, Libya, Somalis, Yemem, and part of Syria after America “brought democracy” to the countries.
Under the Nuremberg standard, the country (or countries) that originates war is the country that is responsible for the war crimes. The irony is that World War 2 was the responsibility of the British and French who started the war by declaring war on Germany. So under the Nuremberg standard it is Britian and France who are responsible for the war crimes. Madersbacher believes, as I did prior to reading David Irving’s book, Nuremberg, that Robert Jackson, the chief prosecutor, succeeded in establishing the legal principle that it is a war crime to launch a war of aggression. In actual fact, the principle was not established. Irving points out that no other Tribunal was ever formed until the Clinton regime sent the Serbian president, Milosevic, to a tribunal that cleared Milosevic of the orchestrated charges.
Of course, as Madersbacher understands, for now Washington’s “might makes right” prevails, and no one is going to send the criminal regines of Clinton, George W. Bush, Obama, and Trump if he follows their path, to a War Crimes Tribunal. But if Washington one day is militarily defeated or suffers economic collapse that makes the US dependent on foreign support, Washington’s war criminals, who exceed in number Nazi war criminals, could be finally held accountable. As Madersbacher writes, we await a Stalingrad 2.0 that paves the way to a Nuremberg 2.0.
The actual terrorists – Klaus Madersbacher, www.antikrieg.com
”Sometimes I ask myself about the value of a ‘culture’ which isn´t able to provide people with sufficient mental capacity to enable them to recognize if they are lied to as impudently as it is presently done by the media. It doesn´t need to be said that these are targeting the interests of the overwhelming majority of mankind.” I wrote this in July 2011, when three big European nations of culture and civilization together with some smaller ones under the leadership of the cultural superpower bombed peaceful Libya into ruins and systematically devastated the whole country. This is exactly the kind of crime the Nazi leaders have been hanged for. The crime against peace, which apparently only very few seem to know that it does exist at all. The crime against peace – “To initiate a war of aggression, therefore, is not only an international crime, it is the supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole.” – the International Court at Nuremberg declared.
Simply said that means, that the party which initiates a war is responsible for all crimes committed in the context of this war. In the next two paragraphs, Madersbacher is saying, I think, that countries called democracies are excluded as war criminals because a parliament or congress acting for the people fund the war. He disagrees, correctly in my opinion, from this excuse for criminality. It’s not like that, that killing or hurting people in war is no crime, that the destruction of houses etc. is no crime, when carried out by means of high tech war machinery by armies financed by a budget decided by a parliament. Even if such outstanding democratic institutions as the Congress of the United States of America, her Majesties´ Parliament or the German Bundestag authorize such activities, this wouldn´t change a fart of the fact that these are crimes.
Slap on the wrist. Want to bet?
• How Money Launderers Used Commonwealth Bank of Australia (CNBC)
In a run-down mall in one of Sydney’s biggest Chinese neighborhoods in 2015, 29-year-old Jizhang Lu showed up at the top-floor offices of a meat export company carrying a carrier bag stuffed with hundreds of thousands of dollars in cash. According to police documents filed in court and reviewed by Reuters, Lu said he made the trip to the shopfront of CC&B International eight times over three weeks. Each time a CC&B employee would hand him a receipt showing a different company had bought tens of thousands of kilograms of meat. The cash — as much as A$530,200 ($416,840) at a time — was then deposited at a Commonwealth Bank of Australia (CBA) branch, according to the police statement of facts agreed by Lu.
But the apparent purchases were fake, and last year Lu was jailed for two years after pleading guilty to helping launder A$3.2 million of what police allege were proceeds from an unidentified international drug syndicate. The court records reviewed by Reuters did not name Lu’s lawyer. Lu could not immediately be contacted directly because he was in custody. The police case against Lu is now one of several being cited by financial intelligence agency AUSTRAC in its statement of claim against CBA, the largest civil court action of its kind in Australian corporate history.
AUSTRAC has accused CBA of “serious and systemic” breaches of money-laundering and counter-terrorism financing rules, alleging the country’s second biggest mortgage lender failed to detect suspicious transactions nearly 54,000 times. It faces fines potentially amounting to billions of dollars. CBA has said it will fight the AUSTRAC lawsuit, saying it would never deliberately undertake action that enables any form of crime. CBA said a coding error with new automated teller machines was behind most of the breaches but that it recognized there were “other serious allegations” in AUSTRAC’s claim were unrelated to that software problem.
Europe needs to step back from these ever more Europe plans.
• The Euro Area Is Due for a Reboot. Here’s What Is Being Proposed
When France elected Emmanuel Macron in May, the prospects of mending the euro’s inherent flaws suddenly brightened. Adopted in 1999, the common European currency was intended as a political project to foster unity, but the crisis in Greece a decade later exposed the euro’s inability to enforce shared rules, principally on government debt and spending. The French president is pushing for greater fiscal integration among the 19 nations that now use the euro as a way to address at least some of those shortcomings. With Germany indicating an openness to Macron’s calls, the political stars may be aligning to overhaul the euro, and so reboot the European Union.
A common budget Macron has proposed the creation of a euro-area budget, aiming to help fund investments to boost growth, provide emergency financial assistance and streamline the bloc’s response to economic crises. While nations would still have discretion over their own budgets, this common pool of resources could be a boon during periods of financial turmoil and would reduce reliance on the European Central Bank to stimulate the euro-zone economy. Access to this budget would be contingent on states sticking to the bloc’s rules. German Chancellor Angela Merkel has said she’s open to the idea. “I’ve personally always said: it depends on how,” Merkel said during a July 13 press conference in Paris. “I have nothing against a euro-area budget. I have proposed in 2012 a smaller euro-area budget and failed miserably.” “I’m very glad that this idea is being introduced again,” she said.
A single finance minister Macron has also proposed creating the role of a finance chief for the euro area, an idea long supported by German Finance Minister Wolfgang Schaeuble. This person would be responsible for a budget and could operate under the supervision of the European Parliament. Schaeuble has said that such a change would require adjusting EU treaties, which isn’t realistic at the moment.
Debt sharing Perhaps the most controversial proposal is the issuance of debt that would be guaranteed by the euro states, an idea that has been rejected by Schaeuble as putting too much risk on taxpayers. In an effort to quell objections, the commission floated the creation of so-called European Safe Assets, a financial instrument that would bundle sovereign debt from across the currency bloc so it can be sold to investors as one product.
A European Monetary Fund One idea supported by large euro-area members including Germany is to turn the Luxembourg-based European Stability Mechanism – the euro-area bailout fund – into a European Monetary Fund by giving it greater power on fiscal monitoring and more say over future rescue programs. This would allow the fund to monitor the finances of countries that are in trouble and oversee future bailouts, a move that could take some powers away from the European Commission, which is in charge of fiscal surveillance. Giving the ESM a broader remit would also hand more powers to the fund’s board of governors — euro-area finance ministers themselves. Germany is in favor, pushing to strengthen the role of the fund, while the commission would most likely prefer to keep as many of its powers concentrated in Brussels.
Completing the banking union Many officials argue that the most crucial reforms are in the field of financial regulation. This primarily means concluding the so-called third leg of the banking union: a common deposit guarantee framework. Germany has so far resisted, concerned that its taxpayers might end up responsible for problems lurking on bank balance sheets in other countries. Instead, Berlin is seeking risk reduction among member states through limiting lenders’ exposure to government debt. But this idea has few supporters (beyond Germany, only Finland and the Netherlands have been in favor) and has been vehemently opposed by other countries such as Italy. States are also trying to complete the establishment of a common financial backstop to the single resolution fund, an entity designed to foot the bill for winding down failed banks. While the commission and countries including France and Italy have been pushing for the ESM to offer a credit line for that backstop, Germany has been strongly opposed.
Something tells me it’s much worse than this.
• Italy’s Midsummer Dream: Shaking Off Sick Man of Europe Label (BBG)
Italy is working hard to shake off the sick man tag. Through government tensions, bank rescues and a migrant crisis, business sentiment has improved and the economy managed to maintain consistent growth after multiple false dawns. A report on second-quarter economic expansion this week is expected to top off a streak of encouraging numbers ranging from the labor market to exports. Yet, the country still has challenges from a drought that hit farming and – longer term – a less favorable monetary policy and elections next year that may produce a hung parliament. GDP probably rose 0.4% in the three months through June, economists forecast, matching the pace of the previous quarter. That gain would boost expectations that full-year growth could top 1% for first time since 2010, helping the economy regain ground lost in the financial crisis of a decade ago.
Italy’s recovery from a record-long recession is still lagging behind growth in euro-area peers Germany, France and Spain, while the economy faces more uncertainty in the coming months. Elections are due in the first half of next year and about the same time the ECB is expected to start rolling back its stimulus, progressively reducing its purchase of Italy’s government bonds. Finance Minister Pier Carlo Padoan has downplayed the effect of less expansionary monetary conditions, telling SkyTg24 television on Aug. 3 that the economy is strong enough to withstand higher interest rates and bond yields. According to UniCredit economist Loredana Federico, a 0.4% quarterly growth pace would help Italy reduce its debt ratio, which at more than 130% of GDP is the second highest in the euro area. “It would certainly allow it to weather the possible difficulties of higher debt-financing costs” as quantitative easing ends, she said.
Keep walking in chains.
• Greece Seen Needing Credit Line To Exit Program (K.)
Not everyone in the government shares the optimism that Prime Minister Alexis Tsipras expressed recently that Greece will be able to achieve a “clean exit” from the bailout program in August 2018, in other words without the support of a credit line. Finance Ministry officials are preparing for the start of the third review, which involves pushing through a number of prior actions that have to be completed. They are also preparing new legislation and planning for the possibility of Greece needing a credit line after the bailout program ends. This would come with conditions, although they would be less strict than the terms Athens currently has to meet. In its strictest form, the European Stability Mechanism’s credit line, or ECCL, foresees a quarterly review. It is said that finance ministers are always more conservative than their prime ministers and it appears that Euclid Tsakalotos is no exception.
For Greece to make a clean exit from its program, it needs the full confidence of the markets so that it can borrow at a reasonable rate. Sources on the institutions’ side do not believe this will be possible. The credit line would provide some security, helping secure better borrowing terms from the market. Exactly what will happen, though, is still under discussion. The third review is expected to begin after the German elections, which are scheduled for September 24. According to sources, though, the Greek negotiating team will hold preliminary talks with the lenders toward the end of August or beginning of September either via teleconference or in Brussels. The aim of the meeting will be to set a timetable for the negotiations.
[..] The Finance Ministry does not foresee the IMF asking for additional measures in 2018, even though the IMF does not expect Greece to reach its 3.5% of GDP primary surplus target. Athens does not rule out the possibility that the IMF will ask for the reduction to the tax-free threshold to be brought forward by a year and implemented in 2019, along with the planned pension cuts.
No one has more responsibility for what happened to Greece than Merkel, but: “We should not generalize and say that Greeks cannot work, or that the Germans have a fetish with austerity. Every person has its own dignity..”
• Stop Targeting the Greeks, says Merkel in First Pre-Election Rally (GR)
Chancellor Angela Merkel kicked off her re-election campaign on Saturday with a plea to European solidarity and the values that govern the European Union. Speaking in Dortmund, she focused mainly on the economy, but she also highlighted the importance of the EU for Germany. “It should be clear that, despite the difficulties, it is in our own interest, in the interests of peace and prosperity that we remain engaged in Europe,” she said. In this context and referring to the values that govern the EU – “freedom, solidarity, justice, social market economy, protection of human dignity” – the Chancellor asked everyone to refrain from targeting other nations and stop categorizing them.
“We should not generalize and say that Greeks cannot work, or that the Germans have a fetish with austerity. Every person has its own dignity…In Germany, as in any other nation, there are both lazy and hardworking people,” she said. Merkel is far ahead of her rivals in opinion polls but, wary of complacency setting in among her supporters, she plans 50 rallies in towns and cities across Germany in the run-up to the September 24 election, when she will seek a fourth term in office.
Horses and barns.
• Canada Orders Ships To Reduce Speed To Prevent Whale Deaths
Certain ships are being ordered to reduce speed because of the deaths of at least 10 North Atlantic right whales in Canada’s Gulf of St Lawrence during the past two months, the government said on Friday. The deaths have made 2017 the deadliest year for the endangered marine mammal since scientists began tracking their numbers in the 1980s, researchers said. The ministries of transport and fisheries issued a temporary order for vessels 20 meters or longer to slow to a maximum of 10 knots in the western portion of the Gulf, which stretches from Quebec to north of Prince Edward Island. There have been an increase in right whales in the area over the last three to four years, said Tonya Wimmer, director of the Marine Animal Response Society.
Human activity has caused at least some of the deaths. Three whales died from blunt force trauma consistent with being struck by a large vessel and one was entangled in fishing nets. Wimmer said reducing ship speeds can improve the chance of survival for the whales. The whales can weigh up to 96,000 kilograms (105.8 tons). The order will be enforced by Transport Canada inspectors and the Canadian Coast Guard. It is effective immediately and will be lifted once the whales have migrated from the area, usually by the time of the northern winter. Ships violating the order could be fined up to C$25,000 ($19,706.76). There are only 300 to 500 North Atlantic right whales left, and despite conservation efforts since the 1930s, there is no evidence of population growth, according to the World Wide Fund for Nature (WWF).
“..the densest region of volcanoes in the world..”
• Scientists Discover 91 Volcanoes Below Antarctic Ice Sheet (G.)
Scientists have uncovered the largest volcanic region on Earth – two kilometres below the surface of the vast ice sheet that covers west Antarctica. The project, by Edinburgh University researchers, has revealed almost 100 volcanoes – with the highest as tall as the Eiger, which stands at almost 4,000 metres in Switzerland. Geologists say this huge region is likely to dwarf that of east Africa’s volcanic ridge, currently rated the densest concentration of volcanoes in the world. And the activity of this range could have worrying consequences, they have warned. “If one of these volcanoes were to erupt it could further destabilise west Antarctica’s ice sheets,” said glacier expert Robert Bingham, one of the paper’s authors. “Anything that causes the melting of ice – which an eruption certainly would – is likely to speed up the flow of ice into the sea. “The big question is: how active are these volcanoes? That is something we need to determine as quickly as possible.”
The Edinburgh volcano survey, reported in the Geological Society’s special publications series, involved studying the underside of the west Antarctica ice sheet for hidden peaks of basalt rock similar to those produced by the region’s other volcanoes. Their tips actually lie above the ice and have been spotted by polar explorers over the past century. But how many lie below the ice? This question was originally asked by the team’s youngest member, Max Van Wyk de Vries, an undergraduate at the university’s school of geosciences and a self-confessed volcano fanatic. He set up the project with the help of Bingham. Their study involved analysing measurements made by previous surveys, which involved the use of ice-penetrating radar, carried either by planes or land vehicles, to survey strips of the west Antarctic ice.
[..] These newly discovered volcanoes range in height from 100 to 3,850 metres. All are covered in ice, which sometimes lies in layers that are more than 4km thick in the region. These active peaks are concentrated in a region known as the west Antarctic rift system, which stretches 3,500km from Antarctica’s Ross ice shelf to the Antarctic peninsula. “We were amazed,” Bingham said. “We had not expected to find anything like that number. We have almost trebled the number of volcanoes known to exist in west Antarctica. We also suspect there are even more on the bed of the sea that lies under the Ross ice shelf, so that I think it is very likely this region will turn out to be the densest region of volcanoes in the world, greater even than east Africa, where mounts Nyiragongo, Kilimanjaro, Longonot and all the other active volcanoes are concentrated.”
