Jan 232017
 
 January 23, 2017  Posted by at 10:08 am Finance Tagged with: , , , , , , , , ,  7 Responses »
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DPC Looking south on Fifth Avenue at East 56th Street, NYC 1905


We’ve Been in Decline for 40 Years – Trump is a Chance to Rethink – Eno (G.)
The Coming Unhappiness With Trump – Egon von Greyerz (KWN)
Trump’s Infrastructure, Defense Plans Will Lead To Ruin – Ron Paul (CNBC)
China’s Central Bank ‘Playing Dangerous Game’ To Prop Up Yuan (SCMP)
EU Is Dead But Doesn’t Know This Yet – Marine Le Pen (DS)
We Need An Alternative To Trump’s Nationalism. It’s Not The Status Quo (YV)
George Soros and the Women’s March on Washington (Nomani)
These are the Countries with the Biggest Debt Slaves (WS)
“Billion-Year” Gambian President Was Installed By The CIA (SCF)
Greek Supreme Court To Decide On Fate Of Eight Turkish Servicemen (Kath.)
UK Government ‘Sneaks Out’ Its Own Alarming Report On Climate Change (Ind.)
The Last Time Oceans Got This Warm Sea Levels Were 20 to 30 Feet Higher (LAT)

 

 

Only fitting that the best description of how I feel about this can be found in an interview about music.

We’ve Been in Decline for 40 Years – Trump is a Chance to Rethink – Eno (G.)

He has called himself an optimist. In the past. I ask him if he still is, post-2016. Yes, he says, there is a positive way to look at it. “Most people I know felt that 2016 was the beginning of a long decline with Brexit, then Trump and all these nationalist movements in Europe. It looked like things were going to get worse and worse. I said: ‘Well, what about thinking about it in a different way?’ Actually, it’s the end of a long decline. We’ve been in decline for about 40 years since Thatcher and Reagan and the Ayn Rand infection spread through the political class, and perhaps we’ve bottomed out. My feeling about Brexit was not anger at anybody else, it was anger at myself for not realising what was going on. I thought that all those Ukip people and those National Fronty people were in a little bubble.

Then I thought: ‘Fuck, it was us, we were in the bubble, we didn’t notice it.’ There was a revolution brewing and we didn’t spot it because we didn’t make it. We expected we were going to be the revolution.” He draws me a little diagram to explain how society has changed – productivity and real wages rising in tandem till 1975, then productivity continuing to rise while real wages fell. “It is easily summarised in that Joseph Stiglitz graph.” The trouble now, he says, is the extremes of wealth and poverty. “You have 62 people worth the amount the bottom three and a half billion people are worth. Sixty-two people! You could put them all in one bloody bus … then crash it!” He grins. “Don’t say that bit.” (Since we meet, Oxfam publish a report suggesting that only eight men own as much wealth as the poorest 3.6 billion people in the world – half the world’s population.)

[..] He is still thinking about the political fallout of the past year. “Actually, in retrospect, I’ve started to think I’m pleased about Trump and I’m pleased about Brexit because it gives us a kick up the arse and we needed it because we weren’t going to change anything. Just imagine if Hillary Clinton had won and we’d been business as usual, the whole structure she’d inherited, the whole Clinton family myth. I don’t know that’s a future I would particularly want. It just seems that was grinding slowly to a halt, whereas now, with Trump, there’s a chance of a proper crash, and a chance to really rethink.”

Read more …

Not his fault. As I wrote in November 8’s America is the Poisoned Chalice.

The Coming Unhappiness With Trump – Egon von Greyerz (KWN)

“The new US Administration has taken over with the conviction that they will “make America great again.” I really hope they will succeed because a strong US would be good for the world. Sadly, the odds of achieving that admirable objective are totally stacked against them. At the end of the next 4 years there is a risk that this Administration will be more hated than any government since Carter and probably even more hated than Carter. The coming unhappiness with Trump and his team will not arise because of the actions they take. They will clearly do everything in their might to make America great again. But the probabilities are totally against them to achieve this goal. They are taking over power at a time when debt has grown exponentially since the 1970s. They are also assuming power of a country that has not achieved a proper budget surplus for well over half a century. Even worse, the US has not had a positive trade balance since the early 1970s.

So here we have a country that has been living above its means for decades and has no real chance of changing this vicious cycle. The Federal debt is at $20 trillion and has been growing at the rate of 9% per year for the last 40 odd years. The forecast for the next four years is that the growth of the debt will accelerate. Total US debt is over $70 trillion or over 3.5x GDP. But that is just a fraction of the US liabilities. Unfunded liabilities are over $200 trillion. And you can add to that to the real gross derivative positions of US banks, which most likely more than $500 trillion. The success of a president in the US is closely linked to the performance of the stock market. Therefore, the best chance for a president to be loved by the American people and re-elected is for stocks to go up. P/Es on the S&P index are now at 70% above their historical mean – hardly a position from which it is likely to surge. Corporate borrowings have also surged since the Great Financial Crisis started.

In 2006 US corporate debt was just over $2 trillion. Today it is more than 3x higher at $7 trillion! At the same time, cash as a%age of corporate debt is declining and is now down to 27%. Within this massive increase in debt, there are major defaults looming in many areas like car loans, student loans and the fracking sector where potential write offs could be in the trillions of dollars. Another disaster which is guaranteed to happen in the US and the rest of the world is the coming pension crisis. Most people in the West have zero or a minimal pension. And even for the ones who have proper pension plans, they are greatly underfunded. It is estimated that US state and local government pensions are underfunded to the extent of a mind-blowing $6 trillion. And this is after a long period of surging stocks and bonds. Imagine what will happen to these pensions when stocks and bonds collapse, which is very likely to happen in the next few years.

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Look here, CNBC, introducing Ron Paul as a “well-known Trump critic” is insane. Fake labeling.

Trump’s Infrastructure, Defense Plans Will Lead To Ruin – Ron Paul (CNBC)

For all the fanfare that greeted President Donald Trump at his inauguration on Friday, the next four years of his presidency could very well be marred by a weakening economy as a result of “injurious” policies. That’s according to past Texas Congressman and former presidential candidate Ron Paul, who joined CNBC’s “Futures Now” last week to echo his past sentiments about the new president. Most notably, the well-known Trump critic believes that the President’s proposed plans could overspend the economy into trouble and drive the Federal Reserve to interfere. “With his massive increase in infrastructure and the military, I think there’s going to be a lot more spending,” said Paul. “The debt is going to be much bigger [and] I think that will put more pressure” on the Federal Reserve, he said, with the central bank already planning to tighten interest rates.

“You have good times, and then you have bad times to compensate for the artificially good times,” he added. “So we’ll have a downturn and that will be a real challenge for the new administration.” Although most of Wall Street appears bullish about the short-term economic outlook under Trump’s fiscal policy plans, some economists have been less than sanguine. Paul’s critique echoed that of David Stockman, a former Reagan-era budget director who also warned CNBC last week that Trump’s plans would ultimately lead to financial calamity. Paul had refused to endorse Trump from early on in the election cycle, claiming that the now President would divide the Republican Party. Much of Paul’s criticism of Trump lies with the latter’s proposed border taxes, which Paul believes is actually more of a “tariff” that would block free trade. “I think that right now, I’d fear most the retaliation [from other countries] and the burden it’s going to place on the consumer,” said Paul.

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“Floatation does not mean a large devaluation,” he said. “Actually, a one-off devaluation [of the yuan] doesn’t need to be big

No, I don’t think so. A devaluation must be big, because you can’t risk having to repeat it. And floatation will mean a large loss of value no matter what. When you float, you can’t manipulate anymore.

China’s Central Bank ‘Playing Dangerous Game’ To Prop Up Yuan (SCMP)

China’s central bank is playing a dangerous game using the country’s foreign reserves to defend the yuan because it could leave the nation defenceless in an increasingly volatile world, a state researcher has warned. Zhang Ming, senior fellow at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said the People’s Bank of China (PBOC) should take a hands-off approach to the currency and focus on safeguarding foreign exchange reserves. “Forex reserves are valuable assets that [China] can use at critical times. It’s a pity that they are being sold heavily in the market,” Zhang said. “It should be the last resort.” Zhang said the PBOC was betting on “the weakening of the US dollar and a domestic economic rebound”.

The country’s forex reserves have shrunk by almost a $1 trillion since June 2014 as the central bank has sought to prevent a large fall in the yuan against the U.S. dollar. Zhang call’s for Beijing to reverse tack and abandon its heavy intervention in the foreign exchange market is gaining traction among researchers. Zhang Bin, another researcher at the Chinese Academy of Social Sciences, agreed that Beijing should free up controls on the yuan’s exchange rate by reducing government intervention in the market. “Floatation does not mean a large devaluation,” he said. “Actually, a one-off devaluation [of the yuan] doesn’t need to be big, and [the currency] may rebound as well. By doing this it will help the domestic economy,” he said.

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She’s dead on, I’ve been saying this for years, and she’s getting it handed to her on a silver platter the same way Trump was.

EU Is Dead But Doesn’t Know This Yet – Marine Le Pen (DS)

Far-right National Front leader Marine Le Pen said on Sunday that France has to leave the European Union as she claimed that staying in the bloc is no longer a viable option for the country. Speaking in an interview with France’s BGNES, Le Pen said the EU is dead but it does not know this yet, stating that the bloc has failed economically, socially as well as security-wise. She said the recent economic growth, unemployment and poverty indicators prove the EU’s failure, adding that the bloc is also incapable of protecting its own borders against what she called as “Islamic terrorism”. With voters across Europe moving to the right, most polls currently show a Fillon-Le Pen runoff is the most likely scenario in May. National Front leader Le Pen told a meeting of rightwing populist parties in Germany on Saturday that Europe was about to “wake up” following the victory of Donald Trump in the US election and the British vote to leave the EU.

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I get what Varoufakis thinks and says, but I also think renewed nationalism is backed into the cake by now. Where I differ from most is I don’t see that as a disaster, not necessarily. It’s the EU that is a disaster.

We Need An Alternative To Trump’s Nationalism. It’s Not The Status Quo (YV)

Thatcher’s and Reagan’s neoliberalism had sought to persuade that privatisation of everything would produce a fair and efficient society unimpeded by vested interests or bureaucratic fiat. That narrative, of course, hid from public view what was really happening: a tremendous buildup of super-state bureaucracies, unaccountable supra-state institutions (World Trade Organisation, Nafta, the European Central Bank), behemoth corporations, and a global financial sector heading for the rocks. After the events of 2008 something remarkable happened. For the first time in modern times the establishment no longer cared to persuade the masses that its way was socially optimal.

Overwhelmed by the collapsing financial pyramids, the inexorable buildup of unsustainable debt, a eurozone in an advanced state of disintegration and a China increasingly relying on an impossible credit boom, the establishment’s functionaries set aside the aspiration to persuade or to represent. Instead, they concentrated on clamping down. In the UK, more than a million benefit applicants faced punitive sanctions. In the Eurozone, the troika ruthlessly sought to reduce the pensions of the poorest of the poor. In the United States, both parties promised drastic cuts to social security spending. During our deflationary times none of these policies helped stabilise capitalism at a national or at a global level. So, why were they pursued?

Their purpose was to impose acquiescence to a clueless establishment that had lost its ambition to maintain its legitimacy. When the UK government forced benefit claimants to declare in writing that “my only limits are the ones I set myself”, or when the troika forced the Greek or Irish governments to write letters “requesting” predatory loans from the European Central Bank that benefited Frankfurt-based bankers at the expense of their people, the idea was to maintain power via calculated humiliation. Similarly, in America the establishment habitually blamed the victims of predatory lending and the failed health system.

It was against this insurgency of a cornered establishment that had given up on persuasion that Donald Trump and his European allies rose up with their own populist insurgency. They proved that it is possible to go against the establishment and win. Alas, theirs will be a pyrrhic victory which will, eventually, harm those whom they inspired. The answer to neoliberalism’s Waterloo cannot be the retreat to a barricaded nation-state and the pitting of “our” people against “others” fenced off by tall walls and electrified fences.

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Russia threw out Soros, Hungary wants to, so does FYROM. Who’s next?

George Soros and the Women’s March on Washington (Nomani)

In the pre-dawn darkness of today’s presidential inauguration day, I faced a choice, as a lifelong liberal feminist who voted for Donald Trump for president: lace up my pink Nike sneakers to step forward and take the DC Metro into the nation’s capital for the inauguration of America’s new president, or wait and go tomorrow to the after-party, dubbed the “Women’s March on Washington”? The Guardian has touted the “Women’s March on Washington” as a “spontaneous” action for women’s rights. Another liberal media outlet, Vox, talks about the “huge, spontaneous groundswell” behind the march. On its website, organizers of the march are promoting their work as “a grassroots effort” with “independent” organizers. Even my local yoga studio, Beloved Yoga, is renting a bus and offering seats for $35.

The march’s manifesto says magnificently, “The Rise of the Woman = The Rise of the Nation.” It’s an idea that I, a liberal feminist, would embrace. But I know — and most of America knows — that the organizers of the march haven’t put into their manifesto: the march really isn’t a “women’s march.” It’s a march for women who are anti-Trump. As someone who voted for Trump, I don’t feel welcome, nor do many other women who reject the liberal identity-politics that is the core underpinnings of the march, so far, making white women feel unwelcome, nixing women who oppose abortion and hijacking the agenda. To understand the march better, I stayed up through the nights this week, studying the funding, politics and talking points of the some 403 groups that are “partners” of the march. Is this a non-partisan “Women’s March”?

Roy Speckhardt, executive director of the American Humanist Association, a march “partner,” told me his organization was “nonpartisan” but has “many concerns about the incoming Trump administration that include what we see as a misogynist approach to women.” Nick Fish, national program director of the American Atheists, another march partner, told me, “This is not a ‘partisan’ event.” Dennis Wiley, pastor of Covenant Baptist United Church of Christ, another march “partner,” returned my call and said, “This is not a partisan march.” Really? UniteWomen.org, another partner, features videos with the hashtags #ImWithHer, #DemsInPhily and #ThanksObama. Following the money, I pored through documents of billionaire George Soros and his Open Society philanthropy, because I wondered:

What is the link between one of Hillary Clinton’s largest donors and the “Women’s March”? I found out: plenty. By my draft research, which I’m opening up for crowd-sourcing on GoogleDocs, Soros has funded, or has close relationships with, at least 56 of the march’s “partners,” including “key partners” Planned Parenthood, which opposes Trump’s anti-abortion policy, and the National Resource Defense Council, which opposes Trump’s environmental policies. The other Soros ties with “Women’s March” organizations include the partisan MoveOn.org (which was fiercely pro-Clinton), the National Action Network [..]. Other Soros grantees who are “partners” in the march are the American Civil Liberties Union, Center for Constitutional Rights, Amnesty International and Human Rights Watch.

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Well, they call their debts assets…

These are the Countries with the Biggest Debt Slaves (WS)

Americans have been on a borrowing binge. To buy their favorite cars and trucks, they’ve loaded up on $1.14 trillion in auto loans. Young and not so young Americans are mortgaging their future with student loans that now amount to $1.28 trillion. Credit card and other debts are at $1.12 trillion. And mortgage debt stands at $8.82 trillion. So, total household debt was $12.35 trillion, according to the New York Fed’s Household Debt and Credit Report for the third quarter 2016. That’s a massive amount of debt. Many consumers are struggling with it. Student loans are seeing enormous default rates, and repayment rates are far worse than previously disclosed. And “debt slaves” has become a term in the financial vernacular. But it isn’t nearly enough debt…

Neither for the New York Fed whose President William Dudley, in a speech a few days ago, practically exhorted households to borrow more against the equity in their homes so that they blow this cash and drive up retail sales: “Whatever the timing, a return to a reasonable pattern of home equity extraction would be a positive development for retailers, and would provide a boost to aggregate growth,” he mused, with nostalgic thoughts of 2008. Nor for the global rankings of debt slaves, where US households squeaked into the ignominious 10th place, barely ahead of Portugal! I mean, come on! Portugal!! There are many ways to measure household indebtedness and debt burdens. Comparing total household debt to the overall size of the economy as measured by GDP is one of the measures. And per this household-debt-to-GDP measure, the Americans are 10th place with 78.8% and look practically prudent compared to the peak just before the Financial Crisis.

[..] And here’s some inevitable food for a terrifying thought: The countries with highly indebted households, so the top of the list, are mostly countries were central-bank policy rates are very low or even negative, and where mortgage rates are super low. What happens to those housing markets, the households, the banks, and the overall economies when interest rates rise even a little and that whole equation of perennially ballooning debt falls apart? We already know what happens.

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You might be tempted to name this an unbelievable story, but then you realize this is what the US is good at. Reads like a spy novel, a film script.

“Billion-Year” Gambian President Was Installed By The CIA (SCF)

Gambian President and dictator Yahya Jammeh, facing a combined military force composed of Senegalese army troops, the Nigerian air force, and troops from Mali, Ghana, and Togo, has agreed to relinquish the presidency of Gambia. On December 1, 2016, Jammeh was defeated for re-election in a surprise upset by his little-known rival Adama Barrow. Jammeh received only 45% of the vote. During the election campaign Jammeh vowed in an interview with the BBC to «rule for one billion years». After initially conceding defeat to Barrow, Jammeh reneged on his promise to step down and announced he would remain as president. The Economic Community of West African Countries (ECOWAS) decided that Jammeh had to go, a stance ironically supported by the United States, which had assisted Jammeh in overthrowing Gambia’s democratically-elected president, Sir Dauda K. Jawara, in 1994.

After Jammeh refused ECOWAS’s, the African Union’s, and the United Nations Security Council’s demands to leave office and permit Barrow to assume the presidency, ECOWAS mobilized its military forces. On January 19, 2017, Barrow was sworn in as president in the Gambian embassy in Dakar, the Senegalese capital. Hours later, Senegalese troops began to enter Gambia and Nigerian air force jets buzzed the Gambian capital of Banjul. The presidents of Mauritania and Guinea flew to Banjul to urge Jammeh to leave office peacefully. Jammeh’s fate was sealed when Major General Ousman Badjie, the commander of the Gambian armed forces, recognized Barrow as Gambia’s commander-in-chief.

The demand from the United States for Jammeh to relinquish power was a display of absolute hypocrisy since Washington had not only installed Jammeh into power but two successive U.S. presidents warmly welcomed the military ruler to the White House. Jammeh, who owns a $3.5 million mansion in Potomac, Maryland, was warmly greeted by President Barack Obama at the 2014 and 2015 U.S.-Africa Leaders’ Summits in Washington. President George W. Bush greeted Jammeh at the U.S.-Africa Business Summit in Washington in 2003. With the protection of the State Department’s Diplomatic Security Service, Jammeh’s Moroccan-born wife, Zineb Jammeh, ran up huge totals at the Washington area’s fashionable shopping malls. She also settled on Sam’s Club, a wholesale discount store, to buy massive amounts of household goods. Jammeh is a textbook case of CIA-sponsored kleptocracy on a grand scale.

Under Jammeh, Gambia continued to be a strategic ally of the United States. The kleptocratic Gambian leader permitted the U.S. National Aeronautics and Space Administration (NASA) to maintain an emergency landing site for NASA’s space shuttle in the country and Gambia participated with the U.S. Central Intelligence Agency in the post-9/11 rendition program. Before being installed as Gambia’s dictator, Jammeh had received training from the Pentagon. Merely a lieutenant in the Gambian National Army. In 1993, Jammeh attended the notorious «School of the Americas» in Fort Benning, Georgia. The school has trained some of Latin America’s most notorious military dictators and death squad commanders. While in Fort Benning, Jammeh was made an honorary citizen of the state of Georgia. The following year, and before he launched his coup, Jammeh attended the Military Police Officers Basic Course (MPOBC) at Fort McClellan, Alabama.

[..] It was during the administration of President Bill Clinton that the green light was given for Jammeh to be installed in a CIA-led coup in Gambia. On July 24, 1994, President Jawara was at his palace in Banjul entertaining the commanding officer of the visiting U.S. Navy tank landing ship, the USS La Moure County. Also present was U.S. ambassador to Gambia, Andrew Winter, a career foreign service officer who represented a new breed of U.S. ambassador – one that routinely and publicly involved himself in the domestic political affairs of the nation to which they were posted. While Jawara and the ship’s commander exchanged diplomatic niceties, junior army officers, led by Jammeh, staged a coup against the democratically elected government.

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Only one decision makes any sense.

Greek Supreme Court To Decide On Fate Of Eight Turkish Servicemen (Kath.)

The Greek Supreme Court on Monday is to rule whether eight Turkish servicemen who fled to Greece after July’s failed coup should be extradited. Three separate panels of Greek judges have already ruled that the Turkish officers’ lives may be put at risk if they were to be returned to Turkey, where Prime Minister Recep Tayyip Erdogan has launched a tough crackdown on dissent since the summer’s coup attempt. Diplomatic circles that fear a rejection of Turkey’s request could put a further strain on ties between Athens and Ankara, particularly at a time when Cyprus reunification talks also hang in the balance, have been keeping a close eye on proceedings. The issue has also drawn attention from intellectuals and the media in Greece and other parts of Europe, who see it as a test of the bloc’s fundamental principles and values. All eight servicemen have denied involvement in the coup attempt and say they fear for their lives if they are returned to Turkey.

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What a surprise.

UK Government ‘Sneaks Out’ Its Own Alarming Report On Climate Change (Ind.)

The Government has been accused of trying to bury a major report about the potential dangers of global warming to Britain – including the doubling of the deaths during heatwaves, a “significant risk” to supplies of food and the prospect of infrastructure damage from flooding. The UK Climate Change Risk Assessment Report, which by law has to be produced every five years, was published with little fanfare on the Department for Environment, Food and Rural Affairs’ (Defra) website on 18 January. But, despite its undoubted importance, Environment Secretary Andrea Leadsom made no speech and did not issue her own statement, and even the Defra Twitter account was silent. No mainstream media organisation covered the report.

One leading climate expert accused the Government of “trying to sneak it out” without people noticing, saying he was “astonished” at the way its publication was handled. In the report, the Government admitted there were a number of “urgent priorities” that needed to be addressed. It said it largely agreed with experts’ warnings about the effects of climate change on the UK. These included two “high-risk” issues: the damage expected to be caused by flooding and coastal erosion; and the effect of rising temperatures on people’s health. The report concluded that the number of heat-related deaths in the UK “could more than double by the 2050s from a current baseline of around 2,000 per year”. It said “urgent action” should be taken to address overheating in homes, public buildings and cities generally, and called for further research into the effect on workers’ productivity.

The Government also recognised that climate change “will present significant risks to the availability and supply of food in the UK”, the report said, partly because of extreme weather in some of the world’s main food-growing regions. The report also said the public water supply could be affected by shortages and that the natural environment could be degraded. Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change and the Environment in London, said he was “astonished” at the way such a report had been slipped out. “Defra did very little to publicise it – they didn’t even tweet about it,” he said. “It’s almost as if they were trying to sneak it out without people realising. I have no idea what they were thinking.”
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You better start swimming or you’ll sink like a stone.
For the times they are a-changing.

The Last Time Oceans Got This Warm Sea Levels Were 20 to 30 Feet Higher (LAT)

Ocean temperatures today are about the same as they were more than 100,000 years ago – at a time when sea levels were 20 to 30 feet higher. The findings, published in the journal Science, highlight the key role that human activity has played in global warming and underscore concerns about the future impact of rising sea levels. Over millions and billions of years, the Earth has gone through periods of cooling (when water freezes out of the oceans, causing glaciers to grow and sea levels to fall) and warming (when the ice melts and sea levels rise). Scientists often look for clues hidden in layers of ancient rock and ice to determine what conditions were like in that long-gone climate.

The last interglacial period, which took place some 129,000 to 116,000 years ago, is a particularly intriguing chapter in Earth’s relatively recent history because of what it could tell us about today’s climate, said lead author Jeremy Hoffman, a paleoclimatologist at the Science Museum of Virginia. “The last interglacial is extremely interesting because it’s the last time period in recent Earth history when global temperatures were a little bit higher and global sea level was about 6 to 9 meters higher – but carbon dioxide in the atmosphere was roughly at what it was during the pre-industrial era,” said Hoffman, who conducted the work as a doctoral student at Oregon State University. “So it’s a really interesting scientific question: What is it about the last interglacial that’s so unique, that gave rise to higher sea levels?”

The problem is, researchers often assume climate change happened synchronously across the globe — that is, if it grew warm in one part, it also heated up in the others, and if it cooled in one area, it was cooling everywhere else at the same time. It’s already clear from climate patterns today that this simply isn’t the case, Hoffman said. Even if Earth overall is warming at a given point in time, for example, some spots might be getting cooler while others heat up. “What we know about how climate and temperature change on this planet is, it’s not all at the same time or at the same rate,” he said. “You can see these even today in human-caused climate change, how that’s playing out on a global scale.”

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Jan 222017
 
 January 22, 2017  Posted by at 11:11 am Finance Tagged with: , , , , , , , , , ,  7 Responses »
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Dorothea Lange Resettlement project, Bosque Farms, New Mexico 1935


The Inauguration, and the Counter-Inauguration (Atlantic)
White House Spokesman Slams Media In Bizarre First Briefing (ZH)
The Demons Have Been Unchained (HB)
How the NYT Plays with History (Robert Parry)
Any Country Leaving Euro Zone Must Settle Bill First: ECB’s Draghi (R.)
Trump Team in Talks with UK on Post-Brexit Trade Deal (BBG)
Utopian Ideas On Climate Change Will Get Us Precisely Nowhere (G.)

 

 

The Automatic Earth ‘celebrates’ its 9th birthday today! Thank you Nicole first of all, and thank all of you, so much, for reading, for commenting, being involved, for your kind donations. A true honor and pleasure.

(Someone had to point it out to me, of course I forgot.)

 

 

I’ve tried hard to understand what the women were/are protesting, and what I find is I’m still confused, since it seems they protest anything and everything. Or, as the Atlantic puts it: “the Women’s March was a protest that celebrated protest.” Looks to me like a surefire recipe for handing it to Trump on a platter.

Trump seems to be part of what’s being protested, but what exactly? His “grab the pussy” nonsense? But that was years ago and he was talking about willing women. Stupid and ugly, but it doesn’t make him a threat to all women. His abortion stance? Some of his supporters are pro-lifers for sure, but so far nothing indicates he’ll lead some big turnaround on the issue.

What I think everybody needs to recognize is that there are, and especially will be, very obvious and clearly definable topics linked to this administration that should be vigurously protested and investigated. But this protest doesn’t do any such thing.

Neither does the Democratic party, who can’t locate their own asses anymore. And most of all neither do the media, which for example covered nothing yesterday but a piece of absurd briefing theater about the number of people attending the inauguration. Once again handing the floor to Trump. It’s embarrassing.

Pointing out silly things Trump says that you know everyone in your respective echo chambers will agree with you on is easy, and Trump will keep feeding you. What it is not, though, is journalism. Or politics, for that matter. Or meaningful protest.

The role of Trump, I think, in America, must be that of a wake-up call. But nobody’s waking up.

The Inauguration, and the Counter-Inauguration (Atlantic)

In the middle of the National Mall, on the same spot that had, the day before, hosted the revelers who had come out for the inauguration of Donald Trump, a crowd of people protesting the new presidency spontaneously formed themselves into a circle. They grasped hands. They invited others in. “Join our circle!” one woman shouted, merrily, to a small group of passersby. They obliged. The expanse—a small spot of emptiness in a space otherwise teeming with people—got steadily larger, until it spanned nearly 100 feet across. If you happened to be flying directly above the Mall during the early afternoon of January 21, as the Women’s March on Washington was in full swing, you would have seen a throng of people—about half a million of them, according to the most recent estimates—punctuated, in the middle, by an ad-hoc little bullseye.

“What is this circle about?” a woman asked one of the circle-standers. “Nobody knows!” the circle-stander replied, cheerfully. The space stayed empty for a moment, as people clasped hands and looked around at each other with grins and “what-now?” expressions. And then: A woman ran through the circle, dancing, waving a sign that read “FREE MELANIA.” The crowd nodded approvingly. Another woman did the same with her sign. A group of three teenage boys danced with their “BAD HOMBRE” placards. The crowd whooped. Soon, several people were using the space as a stage. A woman dressed as a plush vulva shimmied around the circle’s perimeter. The circle-standers laughed and clapped and cheered. They held their phones in their air, taking pictures and videos. They cheered some more.

The Women’s March on Washington began in a similarly ad-hoc manner. The protest sprang to life as an errant idea posted to Facebook, right after Trump won the presidency. The notion weathered controversy to evolve into something that, on Saturday, was funereal in purpose but decidedly celebratory in tone. The march, in pretty much every way including the most literal, opposed the inaugural ceremony that had taken place the day before. On the one hand, it protested President Trump. Its participants wore not designer clothes, but jeans and sneakers and—the unofficial uniform of the event—pink knit caps with ears meant to evoke, and synonymize, cats. It had, in place of somber ritual, a festival-like atmosphere. It featured, instead of pomp and circumstance, people spontaneously breaking into dance on a spontaneously formed dance floor.

And yet in many ways, the march was also extremely similar to the inauguration whose infrastructure it had co-opted, symbolically and otherwise, for its own purposes. The Women’s March on Washington shared a setting—the Capitol, the Mall, the erstwhile inaugural parade route—with the ceremonies of January 20. And, following an election in which the victor lost the popular vote, the protest seems to have bested the inauguration itself in terms of (physical) public turnout. During a time of extreme partisanship and division—a time in which the One America the now-former president once spoke of can seem an ever-more-distant possibility—the Women’s March played out as a kind of alternate-reality inauguration: not necessarily of Hillary Clinton, but of the ideas and ideals her candidacy represented. The Women’s March was an installation ceremony of a sort—not of a new president, but of the political resistance to him.

“I DO NOT ACCEPT THIS FILTHY ROTTEN SYSTEM,” read one sign, carried by Lauren Grace, 35, of Philadelphia. She got the quote from Dorothy Day. And she intended it, Grace explained to me, to protest “a system that sort of left me out.” “We’re told that voting is a sacred right in this country,” Grace said. “But even though Hillary won the popular vote, she still lost. I feel pretty conflicted about a country where that could happen.”

The Women’s March was, to be sure, also a protest march in an extremely traditional vein: It featured leaders—celebrities, activists, celebrity activists—who gave speeches and offered performances on a stage with the Capitol in its background; its participants held signs, and chanted (“This-is-what-a-feminist-looks-like!,” “No-person-is-illegal!”), and commiserated. It was also traditional in that its participants were marching not for one specific thing, but for many related aspirations. Women’s reproductive rights. LGBTQ rights. Immigration rights. Feminism in general (“FEMALES ARE STRONG AS HELL,” one sign went, riffing off a famous feminist’s Netflix show). The environment (“CLIMATE CHANGE IS REAL,” “MAKE THE PLANET GREAT AGAIN”). Science (“Y’ALL NEED SCIENCE”). Facts (“MAKE AMERICA FACT-CHECK AGAIN”). Some signs argued for socialism. Some argued against plutocracy. Some argued for Kindness. Some pled for Peace. Some simply argued that America is Already Great.

This was a big-tent protest, in other words—a messy, joyful coalescence of many different movements. The Women’s March deftly employed, in its rhetoric, the biggest of the big-tent tautologies: The point of this protest wasn’t so much the specific things being protested as it was the very bigness of the crowds who were doing the protesting. This was another way the protest alternate-realitied the presidential inauguration: Just as the official ceremony is meant to celebrate not only the person occupying the presidency, but the presidency itself, the Women’s March was a protest that celebrated protest.

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Tyler Durden gets the essence: ..what he is seeing is that he once again is controlling the media narrative, which is focusing on a very immaterial and arbitrary issue, instead of spending time on investigative work and reporting on far more serious issues relating to Trump’s new administration.

White House Spokesman Slams Media In Bizarre First Briefing (ZH)

In a bizarre first briefing, White House press secretary Sean Spicer on Saturday unloaded a blistering attack on the media and accused it of false reporting about the otherwise irrelevant question of why Trump’s inauguration crowd was visibly smaller than that of Obama’s. Spicer used up virtually all the time in his first official appearance in the Press Briefing Room to denounce news organizations’ focus on the inaugural crowd size, saying “these attempts to lessen the enthusiasm of the inauguration are shameful and wrong.” We wouldn’t necessarily use those words: silly should suffice since if Trump really wanted to “defend” why fewer people attended his inauguration, he can simply say many more of his supporters are employed and had to be at work on Friday, than during either Obama’s 2009 or 2013 inauguration events.

However, the press secretary decided that hyperbole is the better part of valor and said “This was the largest audience to ever witness an inauguration, period, both in person and around the world” Spicer made the allegation despite photographs of the event clearly showed that the Mall was not full in the sections Spicer described, with dwindling-to-nonexistent crowds near the Smithsonian Institution Building and west toward the Washington Monument. There was also sparse attendance along the parade route from the Capitol to the White House. He alleged that some photos of the inauguration were “intentionally framed in a way” that minimized the crowd, without providing examples or evidence.

No official agency provides estimates of the size of gatherings on the Mall. But photos taken from the same vantage point at about the same time of day show that the crowds were far smaller than for President Barack Obama’s first inauguration, which Washington city officials estimated at 1.8 million people.Ultimately, the whole press briefing episode had a surreal undertone, one in which Trump, via his speaker, appears to continue to troll the press, now in the White House. As a seemingly perturbed NYU journalism professor Jay Rosen summarized it “Wow. Sean Spicer walked to the podium. Unloaded on the media for bias. Accused reporters of dishonesty. Walked off without taking questions.” The reaction among the rest of the press was similar.

Spicer took no questions from reporters and he did not say specifically how many people the White House believes attended the inauguration. He said three large sections of the Mall that each held at least 200,000 people were “full when the president took the oath of office.” Earlier on Saturday, in remarks at CIA headquarters in Langley, Trump said that from his vantage point at the podium, “it looked like a million, million and a half people. They showed a field where there were practically nobody standing there, and they said Donald Trump did not draw well.” Trump also said parts of the National Mall “all the way back to the Washington Monument” were “packed.”

Quoted by Bloomberg, former White House spokesman Ari Fleischer said on Twitter after Spicer’s remarks that “This is called a statement you’re told to make by the president. And you know the president is watching.” He is indeed, and what he is seeing is that he once again is controlling the media narrative, which is focusing on a very immaterial and arbitrary issue, instead of spending time on investigative work and reporting on far more serious issues relating to Trump’s new administration.

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The German press is just like the American one, clinging to consensus, hanging on to what is already lost: “Not only Democrats are hoping for an impeachment proceeding.”

The Demons Have Been Unchained (HB)

That was no presidential speech; that was a veritable declaration of war. Threatening in tone. Cold and calculating in logic. Change minus the hope. Donald Trump used the traditional Inauguration Day address to settle a score with the U.S. political establishment going back decades. With four ex-presidents sitting a few feet behind him, the 45th president delivered a populist manifesto. Until his victory, the nation’s political elite used days like these, he told America, to celebrate amongst themselves. Their triumph was not your triumph. Their well-being was not your well-being. But this time, power would transfer not just from one party to the other, but from Washington back to the people. In the people’s name, he will put America “first.” In their name, he will “take back” America’s factories.

In their name, he will “exterminate” Islamic terrorism, end inner-city drug gang “bloodbaths” and get NATO partners like Germany to pay more for Europe’s security. In domestic policy, the Trump agenda sounds like a blueprint for civil war; in foreign policy, it sounds like the dawn of a new ice age. Not that he’s cold-bloodedly planning either one, but he knows where his fiery rhetoric will lead him. The new president loves a good fight, not consensus. He doesn’t want to hug, but to smother, to overwhelm. Yesterday was his day, but the days that follow may belong to his opponents. There are three main opponents that could bring him down politically.

Opponent No. 1: The other America. Across the country, an anti-Trump movement is growing. While only 10,000 people came to an open-air concert in Washington celebrating his victory on the night before the inauguration, 20,000 people took to the streets in New York to protest his elevation. Their signs shouted: Not My President. The security and surveillance costs around Trump Tower on Fifth Avenue, at the corner of 56th Street, is costing taxpayers about a half million dollars – each day.

Opponent No. 2: The Media. Among publishers, producers, filmmakers and journalists, Trump has hardly any friends. CNN, The Washington Post, The New York Times and Hollywood couldn’t warm to the volcanic personality of the new president. Even an unbroken Twitter assault has no chance against such a monolithic wall of media rejection. He hates them, and they hate him right back. He pushes forward his agenda, and they push back unabashedly with theirs. Trump enters The White House with the lowest approval rating ever of an elected president.

Opponent No. 3: The Political Party System. Washington is having an allergic reaction to Trump. Democrats and even Republicans are cooperating on Capitol Hill to investigate the Trump team’s contacts to Russia in a special committee. House Speaker Paul Ryan doesn’t see himself as a Trump follower but as a Trump successor. He is the wolf in sheep’s clothing, biding his time, waiting for an opening. Put another way: Not only Democrats are hoping for an impeachment proceeding. America is now on the brink of a new period of polarization. The demons in this fraternal battle have been unchained. The greatness that Trump seeks will not be borne under these conditions. An icy wind is blowing across the land.

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Good overview by veteran Parry of late 20th century false news campaigns, Nixon vs Johnson, Reagan vs Carter and more.

How the NYT Plays with History (Robert Parry)

Whenever The New York Times or some other mainstream news outlet holds itself out as a paragon of professional journalism – by wagging a finger at some pro-Trump “fake news” or some Internet “conspiracy theory” – I cringe at the self-delusion and hypocrisy. No one hates fake news and fact-free conspiracy theories more than I do, but the sad truth is that the mainstream press has opened the door to such fantasies by losing the confidence of the American people and becoming little more than the mouthpiece for the Establishment, which spins its own self-serving narratives and tells its own lies. Rather than acting as a watchdog against these deceptions, the Times and its mainstream fellow-travelers have transformed themselves into little more than the Establishment’s apologists and propagandists.

If Iraq is the “enemy,” we are told wild tales about how Iraq’s non-existent WMD is a danger to us all. If Syria is in Washington’s crosshairs, we are given a one-sided account of what’s happening there, black hats for the “regime” and white hats for the “rebels”? If the State Department is backing a coup in Ukraine to oust an elected leader, we are regaled with tales of his corruption and how overthrowing a democratically chosen leader is somehow “democracy promotion.” Currently, we are getting uncritical stenography on every conceivable charge that the U.S. government lodges against Russia. Yet, while this crisis in American journalism has grown more severe in recent years, the pattern is not entirely new. It is reflected in how the mainstream media has missed many of the most significant news stories of modern history and has, more often than not, been an obstacle to getting at the truth.

Then, if the evidence finally becomes so overwhelming that continued denials are no longer tenable, the mainstream media tries to reclaim its tattered credibility by seizing on some new tidbit of evidence and declaring that all that went before were just rumors but now we can take the long whispered story seriously — because the Times says so.

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How long before Brussels starts begging countries to stay, offering deals and discounts?

Any Country Leaving Euro Zone Must Settle Bill First: ECB’s Draghi (R.)

Any country leaving the euro zone would need to settle its claims or debts with the bloc’s payments system before severing ties, ECB President Mario Draghi said. The comment – a rare reference by Draghi to the possibility of the currency zone losing members – came in a letter to two Italian lawmakers in the European Parliament released on Friday. It coincides with a groundswell of anti-euro sentiment in Italy and other euro zone states, fueled in part by last June’s unprecedented decision by Britain to leave the European Union. “If a country were to leave the Eurosystem, its national central bank’s claims on or liabilities to the ECB would need to be settled in full,” Draghi said in the letter.

Based on data to end-November from the Target 2 payment system, that would leave Italy with a €358.6 billion ($383.1 billion) bill. The system records flows of payments between euro zone countries. The threat of defaults on cross-border debts has often been credited as one element keeping the euro zone together throughout the financial crisis. As these payments are not generally settled, weaker economies including Italy, Spain and Greece have accumulated huge liabilities towards Target 2 while Germany stands out as the biggest creditor with net claims of €754.1 billion. Target 2 imbalances have worsened in recent months, with Harvard economist Carmen Reinhart warning of capital flight from Italy.

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Am I wrong in thinking the UK will have a very hard time signing any deal as long as it’s part of the EU? What are the odds of that even being legal in the first place?

Trump Team in Talks with UK on Post-Brexit Trade Deal (BBG)

The Trump administration this week will begin laying groundwork for a trade deal between the U.S. and the U.K. that would take effect after Britain leaves the European Union, a White House aide said. Prime Minister Theresa May last week declared Britain is “open for business” as she announced plans to pursue a clean break with the EU, paving the way for the U.K. to eventually strike new trade accords with the continent and other countries. May is to visit Washington this week. Trump officials believe their discussions with her government encouraged May to be more aggressive in exiting the union. She can use any American support to argue the U.K. will prosper outside the bloc although she risks inflaming tensions with EU leaders if they suspect her government is actively negotiating trade deals while still an EU member.

Two of President Donald Trump’s senior advisers, Steve Bannon and son-in-law Jared Kushner, met with U.K. Foreign Secretary Boris Johnson in New York on Jan. 8. The three are preparing for the future pact, the aide said, requesting anonymity because the discussions aren’t public. Bannon, Trump’s National Security Adviser Michael Flynn, and other administration officials have also met with British defense and intelligence leaders, the aide said. President Barack Obama warned in April that if the U.K. pursued Brexit, the country would go to the “back of the queue” for U.S. trade deals. U.K. voters chose to leave the EU anyway in a June referendum, and Trump now appears to be scrapping Obama’s position on the matter. Trump’s team is also considering a deal to reduce barriers between U.S. and British banks, the Sunday Telegraph reported, citing officials from both sides.

Trump has tapped Woody Johnson, the billionaire owner of the New York Jets NFL team, to serve as U.S. ambassador to the U.K., a person familiar with the matter said on Jan. 19. May and Mexican President Enrique Pena Nieto will make visits to the U.S. this month to meet with Trump, White House officials said. May will meet with Trump on Jan. 27, White House Deputy Press Secretary Sarah Huckabee said on Saturday. Pena Nieto will meet with Trump on Jan. 31, said White House Press Secretary Sean Spicer.

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The author starts out promising, then gets lost in the woods.

Utopian Ideas On Climate Change Will Get Us Precisely Nowhere (G.)

Urging people to stop consuming stuff in order to slow the rate of climate change is a gambit that is doomed to fail. It would be helpful if shoppers put off buying a suit or installing a new kitchen, but it’s not going to happen. Demonising those who fly to Barcelona for a long weekend is another tactic that will have almost no impact. It’s not for nothing that economists base many of their assumptions on populations having unlimited wants. Most people strain to acquire stuff that the rich have long taken for granted. Telling them to switch off this desire has never worked and is unlikely to do so now, even when the future of the planet is at stake. In this vein, the accession of Donald Trump to the presidential throne should not be read as a spectacular one-off reaction by a narrow, if electorally important group who missed out on GDP growth.

Consumption is how most people measure progress, and that will still be the case next year and in 10 years’ time, when Trump is long gone. Take a look at the figures for flights in and out of the UK, home of some the world’s busiest airports. City Airport, which is embarking on a £344m expansion, saw 4.3 million passengers in 2015. Heathrow, which has the government’s blessing for its own multibillion-pound development, welcomed 75 million passengers in the same year, Gatwick broke 40 million, and Stansted hit double-digit growth with 22.5 million passengers. Last year, Manchester airport boasted annual growth of 11% after it attracted 23.7 million passengers. And these figures don’t include the huge amount of imported and exported goods that flow through Britain’s airports.

If it’s true that trade is in the UK’s DNA – and the figures support this – any government, of whatever colour, will think twice before standing in the way of airport expansion. That doesn’t mean governments should not think about air travel when searching for ways to tackle climate change. Aircraft makers should be forced to make their planes more efficient, and airport owners must clean up the pollution they create. But this is an exercise in minimising the impact of flying, given that its expansion is inevitable. The same analysis should have applied to the country’s steel plants –and to its other polluting industries. Without a reduction in steel consumption, we must live with its continued production.

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Jan 212017
 
 January 21, 2017  Posted by at 10:57 am Finance Tagged with: , , , , , , , ,  3 Responses »
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Bettmann/Getty Minimum Wage 1963


Trump’s Declaration of War (Paul Craig Roberts)
The Audacity of Trump (WSJ)
Trump Trade Strategy Starts With Quitting TPP – White House (R.)
Trump, in Oval Office, Signs First Order on Obamacare (R.)
Trump Reverses Obama’s Mortgage Fee Cuts on First Day (BBG)
Far-Right Leaders Meet To Discuss ‘Free Europe’ Vision (R.)
As Housing Bubble Pops, Chinese Real Estate Firms Halt Monthly Pricing Data (ZH)
The Curse of Econ 101 (Atlantic)
Economics, Society, And The Environment (EI)
Turkish Parliament Approves Constitutional Reform, Expanded Powers For Erdogan
With New Constitution, Erdogan Eyes For One-Man Rule (GP)
Greek Have Lost Wealth Worth One Year’s GDP Since 2009 (Kath.)

 

 

Who are Trump’s real enemies? There’s no easy answer. PCR concludes: “President Trump has declared a war far more dangerous to himself than if he had declared war against Russia or China.”

Trump’s Declaration of War (Paul Craig Roberts)

President Trump’s brief inaugural speech was a declaration of war against the entirety of the American Ruling Establishment. All of it. Trump made it abundantly clear that Americans’ enemies are right here at home: globalists, neoliberal economists, neoconservatives and other unilateralists accustomed to imposing the US on the world and involving us in endless and expensive wars, politicians who serve the Ruling Establishment rather than the American people, indeed, the entire canopy of private interests that have run America into the ground while getting rich in the process. If truth can be said, President Trump has declared a war far more dangerous to himself than if he had declared war against Russia or China.

The interest groups designated by Trump as The Enemy are well entrenched and accustomed to being in charge. Their powerful networks are still in place. Although there are Republican majorities in the House and Senate, most of those in Congress are answerable to the ruling interest groups that provide their campaign funds and not to the American people or to the President. The military/security complex, offshoring corporations, Wall Street and the banks are not going to roll over for Trump. And neither is the presstitute media, which is owned by the interest groups whose power Trump challenges. Trump made it clear that he stands for every American, black, brown, and white. Little doubt his declaration of inclusiveness will be ignored by the haters on the left who will continue to call him a racist just as the $50 per hour paid protesters are doing as I write.

Indeed, black leadership, for example, is enculturated into the victimization role from which it would be hard for them to escape. How do you pull together people who all their lives have been taught that whites are racists and that they are the victims of racists? Can it be done? I was just on a program briefly with Press TV in which we were supposed to provide analysis of Trump’s inaugural speech. The other commentator was a black American in Washington, DC. Trump’s inclusiveness speech made no impression on him, and the show host was only interested in showing the hired protesters as a way of discrediting America. So many people have an economic interest in speaking in behalf of victims that inclusiveness puts them out of jobs and causes.

So along with the globalists, the CIA, the offshoring corporations, the armaments industries, the NATO establishment in Europe, and foreign politicians accustomed to being well paid for supporting Washington’s interventionist foreign policy, Trump will have arrayed against him the leaders of the victimized peoples, the blacks, the hispanics, the feminists, the illegals, the homosexuals and transgendered. This long list, of course, includes the white liberals as well, as they are convinced that flyover America is the habitat of white racists, misogynists, homophobes, and gun nuts. As far as they are concerned, this 84% of geographical US should be quarantined or interred.

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WSJ licking up to power?

The Audacity of Trump (WSJ)

Donald J. Trump takes the oath of office on Friday facing unprecedented opposition but also an extraordinary opportunity. He confronts the paradox of a country skeptical that he has the personal traits for the Presidency but still hopeful he can fulfill his promise to shake up a government that is increasingly powerful even as it fails to work. In this respect he is the opposite of President Obama, whom Americans admire personally but see as a failure in delivering on his promises. Mr. Trump begins his Presidency without a reservoir of personal goodwill, so more than most Commanders in Chief he will have to win over Americans with results. He will have to do this, moreover, against a political opposition that is blunt and relentless in wanting him to fail. Inaugurations are typically moments of political unity and appeals to larger national purpose, but Mr. Trump will get no honeymoon.

Democratic leaders are calling his election illegitimate, and most of the media wants Mr. Trump to implode—for reasons of partisanship, ideology or simply to vindicate their view during the campaign that he couldn’t and shouldn’t win. No President since Nixon will face a more hostile resistance in the press and permanent bureaucracy. Yet rather than rage against this hostility, Mr. Trump should view it as an opportunity. So many elites expect him to fail that even small early successes will confound them. So many on the left are predicting the rise of fascism that he can make them look foolish by working well with Congress. So many in the media will portray him as the leader of a gang of billionaires that he can turn the tables with an up-from-poverty and education choice campaign.

Mr. Trump owes his narrow election victory to center-right and independent voters who decided he was a risk worth taking. Notably, they seem to be reserving judgment. In the new Wall Street Journal/NBC News poll, Mr. Trump’s personal popularity rating is 10 points underwater, 38% positive, 48% negative—the lowest of any modern President at inauguration. But as notably, the public is better disposed to Mr. Trump’s agenda than to his character and temperament. Tax reform, a faster campaign against Islamic State, improving roads and bridges, and fixing health care enjoy widespread support. If voters are ambivalent about Mr. Trump personally, he has a policy opening to earn their support.

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Hard not to be happy about this.

Trump Trade Strategy Starts With Quitting TPP – White House (R.)

The new U.S. administration of President Donald Trump said on Friday its trade strategy to protect American jobs would start with withdrawal from the 12-nation Trans-Pacific Partnership (TPP) trade pact. A White House statement issued soon after Trump’s inauguration said the United States would also “crack down on those nations that violate trade agreements and harm American workers in the process.” The statement said Trump was committed to renegotiating another trade deal, NAFTA, which was signed in 1994 by the United States, Canada and Mexico. “For too long, Americans have been forced to accept trade deals that put the interests of insiders and the Washington elite over the hard-working men and women of this country,” it said.

“As a result, blue-collar towns and cities have watched their factories close and good-paying jobs move overseas, while Americans face a mounting trade deficit and a devastated manufacturing base.” The statement said “tough and fair agreements” on trade could be used to grow the U.S. economy and return millions of jobs to America. “This strategy starts by withdrawing from the Trans-Pacific Partnership and making certain that any new trade deals are in the interests of American workers.” If NAFTA partners refused to give American workers a fair deal in a renegotiated agreement, “the President will give notice of the United States’ intent to withdraw from NAFTA,” the statement added.

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Better get a replacement fast. You don’t want stories of people dying due to lack of access to health care, in your first weeks or months.

Trump, in Oval Office, Signs First Order on Obamacare (R.)

President Donald Trump directed government agencies on Friday to freeze regulations and take steps to weaken Obamacare, using his first hours in the White House to make good on a campaign promise to start dismantling his predecessor’s healthcare law. Heading into the Oval Office shortly after the conclusion of his inaugural parade, Trump signed an order on the Affordable Care Act that urged government departments to “waive, defer, grant exemptions from, or delay the implementation” of provisions that imposed fiscal burdens on states, companies or individuals. It also called for efforts to give states greater flexibility in implementing healthcare programs while developing “a free and open market in interstate commerce for the offering of healthcare services and health insurance.”

Health experts had speculated that Trump could expand exemptions from the so-called individual mandate, which requires Americans to carry insurance or face a penalty, or the requirement that employers offer coverage. Experts also believe the administration could try to reduce the “essential benefits,” such as maternity care and mental health services, that insurance plans must cover. The White House did not provide further details about the executive order. Trump’s spokesman Sean Spicer said the White House also directed an immediate regulatory freeze for all government agencies in a memo from Trump’s chief of staff, Reince Priebus. He did not offer details. Repealing and replacing the Affordable Care Act, one of former President Barack Obama’s signature laws, was a central pledge for Trump during the presidential election campaign.

Republicans in the U.S. Congress have not yet laid out a plan to recast the insurance program. In a hastily arranged ceremony, surrounded by some of his aides, Trump sat behind the presidential Resolute Desk and signed the order. He also signed commissions for his newly confirmed defense secretary, James Mattis, and his homeland security secretary, John Kelly. Trump spoke briefly about his day with reporters. “It was busy, but good. It was a beautiful day,” he said. Vice President Mike Pence then swore in Mattis and Kelly in a separate ceremony. There were other signs of change in the Oval Office, which Obama vacated on Friday morning. Golden drapes hung where crimson ones had earlier in the day and new furniture dotted the room.

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The entire US housing system is such a mess it’s hard to know where to begin. Whatever happens, it will be painful.

Trump Reverses Obama’s Mortgage Fee Cuts on First Day (BBG)

Soon after Donald Trump was sworn in as president, his administration undid one of Barack Obama’s last-minute economic-policy actions: a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers. The new administration on Friday said it’s canceling a reduction in the Federal Housing Administration’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year. The reversal comes after Trump’s team criticized the Obama administration for adopting new policies as it prepared to leave office. In the waning days of the administration, the White House announced new Russia sanctions, a ban on drilling in parts of the Arctic and many other regulations.

Last week, Obama’s Housing and Urban Development secretary, Julian Castro, said the FHA would cut its fees. The administration didn’t consult Trump’s team before the announcement. Republicans have argued in the past that reductions put taxpayers at risk by lowering the funds the FHA has to deal with mortgage defaults. [..] A letter Friday from HUD to lenders and others in the real-estate industry said, “more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.” Senate Democratic leader Chuck Schumer of New York took to the chamber’s floor to denounce the reversal. “It took only an hour after his positive words on the inaugural platform for his actions to ring hollow,” Schumer said. “One hour after talking about helping working people and ending the cabal in Washington that hurts people, he signs a regulation that makes it more expensive for new homeowners to buy mortgages.”

Mark Calabria, director of financial regulation studies for the libertarian Cato Institute, said it was appropriate for the administration to examine last-minute decisions by its predecessor, “especially when those decisions appear to be purely motivated by politics.” Ben Carson, Trump’s nominee to lead HUD, FHA’s parent agency, said at his confirmation hearing last week that he was disappointed the cut was announced in Obama’s final days in office. The FHA sells insurance to protect against defaults and doesn’t issue mortgages. It is a popular program among first-time home buyers because it allows borrowers to make a down payment of as low as 3.5% with a credit score of 580, on a scale of 300 to 850. The Obama administration announced last week it would cut the insurance premium by a quarter of a %age point to 0.60%, effective on Jan. 27.

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The products of a failed consensus system. Or in other words: “While you were sleeping”. Obama’s last phone call from the White House was to Merkel, not a coincidence.

Far-Right Leaders Meet To Discuss ‘Free Europe’ Vision (R.)

Far-right populist leaders from Germany, France, Italy and the Netherlands meet in the German city of Koblenz on Saturday to present their vision for “a free Europe” that would dismantle the European Union. Marine Le Pen, who is expected to make it into a May 7 second-round run-off for the French presidency, is due to speak at the meeting, along with Frauke Petry of the anti-immigration Alternative for Germany (AfD). They will be joined by Geert Wilders, leader of the Dutch far-right Freedom Party (PVV) who was last month convicted of discrimination against Moroccans, and Matteo Salvini of the Northern League who wants to take Italy out of the euro. Emboldened by Britons’ vote last year to leave the European Union, the leaders are meeting under the slogan “Freedom for Europe” and aim to strengthen ties between their like-minded parties, whose nationalist tendencies have hampered close collaboration in the past.

“This gives us an opportunity to see how we stand with other European parties,” a spokeswoman for Salvini said. Le Pen told France’s Radio Classique that the meeting was proof that her party was not isolated. “It is therefore the revolution of the people that we are taking part in. It is obviously very important to show that the cooperative Europe we want to achieve (is reflected) in our cooperation,” she said. Several leading German media have been barred from the meeting, which is being organized by the Europe of Nations and Freedom (ENF), the smallest group in the European Parliament, in a year when the parties are hoping for electoral breakthroughs. Populist anti-immigration parties are on the rise across Europe as high unemployment and austerity, the arrival of record numbers of refugees and militant attacks in France, Belgium and Germany feed voter disillusionment with traditional parties.

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“Judged by current conditions, we won’t publish it in the future..”

As Housing Bubble Pops, Chinese Real Estate Firms Halt Monthly Pricing Data (ZH)

That didn’t take long. Earlier this week we reported that after 19 straight months of continued acceleration in home prices, China’s latest housing bubble may have finally burst (again) after December prices in the 70 cities tracked by the NBS, rose by 12.7%, below the 12.9% annual growth rate in the previous month – the first annual decline in nearly 2 years. Fast forward to Friday, when at least two major Chinese private providers of home price data stopped publishing the figures, just as the housing market is stating to cool off at a dramatic pace across all Tier cities. According to Reuters, the China Index Academy, a unit of U.S.-listed Fang Holdings, has stopped distributing monthly housing price index data for 100 cities that it usually issued at the start of the month. The academy said it had suspended distribution indefinitely, without giving a reason for the suspension.

“I don’t know who exactly is making the order, and it’s not mandatory,” said a source with knowledge of the matter, who declined to be identified as the topic is a sensitive one. Home price data from private providers tends to show sharper increases than official data from the National Bureau of Statistics (NBS), which publishes monthly and annual %age changes in 70 major cities. It also overextends on the downside, which according to official data, has now begun, and may explain the self-imposed censorship. Since last summer, in an attempt to cool the overheating housing market, China’s government had levied curbs on buying and ownership to rein in soaring prices and limit asset bubble risks. E-house China, another influential private real estate consultancy also indefinitely suspended its monthly housing price index for 288 cities.

“Judged by current conditions, we won’t publish it in the future,” said Cherilyn Tsui, a public relations officer at CRIC, the consultancy’s real estate research branch. “We stopped distributing prices data a few months ago. At first it was just no external distribution, but now even internally we don’t distribute any more,” she told Reuters. While Tsui said she did not know the reason for the halt, she added that data on sales volumes and inventories would still be published. “Housing prices are an extremely sensitive matter right now,” a second source with knowledge of the matter told Reuters. Perhaps the reason is that having created a massive bubble to the upside, Beijing is hoping to delay the descent in prices in order to attain a smooth landing at a time when China is already faced with record capital outflows, a plunging currency and all time high levels of debt.

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Treating people like tradable resources is always a bad idea.

The Curse of Econ 101 (Atlantic)

In a rich, post-industrial society, where most people walk around with supercomputers in their pockets and a person can have virtually anything delivered to his or her doorstep overnight, it seems wrong that people who work should have to live in poverty. Yet in America, there are more than ten million members of the working poor: people in the workforce whose household income is below the poverty line. Looking around, it isn’t hard to understand why. The two most common occupations in the United States are retail salesperson and cashier. Eight million people have one of those two jobs, which typically pay about $9–$10 per hour. It’s hard to make ends meet on such meager wages. A few years ago, McDonald’s was embarrassed by the revelation that its internal help line was recommending that even a full-time restaurant employee apply for various forms of public assistance.

Poverty in the midst of plenty exists because many working people simply don’t make very much money. This is possible because the minimum wage that businesses must pay is low: only $7.25 per hour in the United States in 2016 (although it is higher in some states and cities). At that rate, a person working full-time for a whole year, with no vacations or holidays, earns about $15,000—which is below the poverty line for a family of two, let alone a family of four. A minimum-wage employee is poor enough to qualify for food stamps and, in most states, Medicaid. Adjusted for inflation, the federal minimum is roughly the same as in the 1960s and 1970s, despite significant increases in average living standards over that period. The United States currently has the lowest minimum wage, as a proportion of its average wage, of any advanced economy, contributing to today’s soaring levels of inequality. At first glance, it seems that raising the minimum wage would be a good way to combat poverty.

The argument against increasing the minimum wage often relies on what I call “economism”—the misleading application of basic lessons from Economics 101 to real-world problems, creating the illusion of consensus and reducing a complex topic to a simple, open-and-shut case. According to economism, a pair of supply and demand curves proves that a minimum wage increases unemployment and hurts exactly the low-wage workers it is supposed to help. The argument goes like this: Low-skilled labor is bought and sold in a market, just like any good or service, and its price should be set by supply and demand. A minimum wage, however, upsets this happy equilibrium because it sets a price floor in the market for labor. If it is below the natural wage rate, then nothing changes. But if the minimum (say, $7.25 an hour) is above the natural wage (say, $6 per hour), it distorts the market. More people want jobs at $7.25 than at $6, but companies want to hire fewer employees. The result: more unemployment.

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I could write a lot about this. For now let’s just say that the lack of virtually any discussion of energy shows just how poor a field economics is. One other thing: one must at least bring to the table that the 2nd law of thermodynamics contradicts the very term ‘sustainable’.

Economics, Society, And The Environment (EI)

A common view of some is that the relationship between economics and the environment is that environmental considerations are “externalities” for economic systems. In other words, effects produced by economic activity in the environment result from a limited overlap between the economic “system” and the environment, such as the diagram shown (from Giddings, Hopewood and O’Brien): The diagram above is adopted by some to describe the fields of enivonmental economics and environmental science. EnviromentalScience.org describes their discipline: “Environmental economics is an area of economics dealing with the relationship between the economy and the environment. Environmental economists study the economics of natural resources from both sides – their extraction and use, and the waste products returned to the environment. They also study how economic incentives hurt or help the environment, and how they can be used to create sustainable policies and environmental solutions.”

This seems a resonable description. But the accompanying diagram indicates a lack of understanding of the scope of the field. Giddings, Hopewood and O’Brien point out the logical shortcomings of the traditional concept above, and suggest a more correct way of conceptualizing the relationships: “A more accurate presentation of the relationship between society, economy and environment than the usual three rings is of the economy nested within society, which in turn is nested within the environment (Figure 2). Placing the economy in the centre does not mean that it should be seen as the hub around which the other sectors and activities revolve. Rather it is a subset of the others and is dependent upon them. Human society depends on environment although in contrast the environment would continue without society (Lovelock, 1988). The economy depends on society and the environment although society for many people did and still does (although under siege) exist without the economy.”

The importance of recognizing that all of society is a subset of functions within the environment is that society cannot violate the proven physical laws of the physical world (actually universe, but we will return to that thought later). Likewise, the economy exists totally within society so economics must also obey the same physical laws. Steve Keen has argued that the forgotten parameter in economics is energy. Whereas economists develop models and theories based on labor and capital as the components of production, energy should also be explicitly defined as separate and co-variant with labor and capital. Keen argues that failure to do so has led economists to propose models and theories which violate the fundamental laws of our environment, the Laws of Thermodynamics.

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This will not end well.

Turkish Parliament Approves Constitutional Reform, Expanded Powers For Erdogan

In a night-long session, lawmakers voted in favor of a set of amendments presented by the ruling Justice and Development Party (AKP), which was founded by current President Recep Tayyip Erdogan in 2003. The reform bill is designed to widen Erdogan’s powers, who presently only occupies a largely ceremonial role. The bill cleared the minimum parliamentary threshold necessary to put the measures to a national referendum for final approval, which could be held as early as in the spring. The vote took place with 488 lawmakers out of the 550-seat assembly in attendance. A total of 339 parliamentarians voted in favor of the motion and 142 against it, while five cast empty ballots and two of the votes were ruled out as invalid.

The measure required at least 330 votes to be approved and be put forward to a plebiscite. Some of the lawmakers not attending the vote were absent on account of remaining in detention; as part of a wide-ranging purge on dissidents Turkey has detained opposition HDP politicians, whom it accuses of having ties to the outlawed Kurdistan Workers’ Party (PKK). Turkish Prime Minister Binali Yildirim celebrated the result saying “we are now entrusting this to the people, its actual owners. Now it’s the people’s word. It is the people’s decision.” Critics, however, say the amendments will weaken checks and balances in Turkey’s democracy, leading to too much power being consolidated in the office of the president.

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More detail; looks Google translated, but may just be poorly written.

With New Constitution, Erdogan Eyes For One-Man Rule (GP)

The Turkish Republic is on the throes of a radical transformation, even regime change, as Parliament completed 2nd round of voting 18-article constitutional reform bill, which gives expanded powers to President Recep Tayyip Erdogan in a way that removes last vestiges of separation of powers. While the world watch inauguration ceremony of U.S. President Donald J. Trump, Turkish Parliament paved way for a referendum to significantly expand powers of Mr. Erdogan, the president’s long-held political ambition. The breathtaking speed of the first round vote was a clear-cut indication of a strong will on behalf of government and its ardent backer, opposition Nationalist Movement Party (MHP) to quickly push through the controversial package.

The vote reflected the emergence of a new alignment in the Turkish political landscape, formation of an Islamist-nationalist front that harbor similar views on a number of political issues concerning the fate of the country. While the first round of voting was a scene of brawls among men, the 2nd round was women’s turn. The fighting among differing factions in Parliament reflected the deep divide the voting created in the society, with critics blasting the government for transforming the country’s regime from a parliamentary democracy into a the rule of a strongman. Aylin Nazliaka, an independent lawmaker, handcuffed herself to the rostrum to protest the voting, prompting a scuffle that hospitalized several female lawmakers. What constitutional bill brings to Turkey is at the core of ensuing debates amid ongoing emergency rule that rendered free discussion of the proposed changes in public sphere near impossible.

While dozens of national TV channels live aired Mr. Erdogan’s address to village administrators in the presidential palace a few days ago, almost no TV station broadcasted the parliamentary session where lawmakers squabbling over momentous decisions that have the power of shattering roots of the republic’s established system. A CHP lawmaker set his own “studio” in Parliament to bypass the censorship. For supporters of the bill, the shift to executive presidency long sought by President Erdogan will provide a bulwark against return to fragile coalition governments of the past. But for the critics of the proposal, it will cement Erdogan’s power and turn Turkey into a dictatorship with scrapping checks and balances, regarded as central pillars of any democratic system. Main opposition CHP says the new scheme will create one-man dictatorship.

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Not sure that reporting “data show that the net wealth per adult Greek inhabitant amounted to €114,000 in 2009” helps. Let alone that it’s correct.

Greek Have Lost Wealth Worth One Year’s GDP Since 2009 (Kath.)

The wealth of Greeks shrank by €167 billion during the years of the financial crisis – i.e. almost one year’s GDP – according to a survey by Credit Suisse included in the weekly bulletin of the Hellenic Federation of Enterprises (SEV). The Swiss bank estimates the net wealth of Greeks – that is with their loans deducted – at €856 billion, against €1,023 billion in 2009, just before the country entered the bailout process.The data show that the net wealth per adult Greek inhabitant amounted to €114,000 in 2009, while in the rest of Europe it came to €93,000 per adult inhabitant. According to SEV, what puts Greece in a different category to the rest of Europe is the excessive borrowing.

SEV stresses that what is not obvious in the data on the fortune of Greek people and is not sufficiently presented is the huge deficits of the local social security system that will continue to absorb considerable resources in the future, putting a lid on the country’s growth unless tackled sufficiently. In practice, the older generations have not just borrowed from the savings of fellow Europeans, but also from the future savings of their children.

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Jan 202017
 
 January 20, 2017  Posted by at 10:02 am Finance Tagged with: , , , , , , , , ,  3 Responses »
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Unknown Masterpiece 2016-7


Trump’s Tweets Are Little Different From FDR’s Fireside Chats (MW)
Fortress Washington Braces For Anti-Trump Protests, New Yorkers March (R.)
Executive Actions Ready To Go As Trump Prepares To Take Office (R.)
Mnuchin Says Long-Term Strength of US Dollar Is Important (BBG)
German Opposition Leader Calls For Security Union With Russia, End Of NATO (DW)
The ‘Ever Closer European Union’ Principle Is “Buried And Gone” (MT)
Chinese Growth Slips To 6.7% In 2016, The Slowest For 26 Years (AFP)
China GDP Beats Expectations But Debt Risks Loom (R.)
There’s an Unexplained $9 Billion Gap in India’s Cash Supply (BBG)
Amazon Is Going To Kill More American Jobs Than China Did (MW)
Stiglitz Tells Davos Elite US Should “Get Rid Of Currency” (Black)
US Government Caught Massively Fabricating Student Loan Default Data (ZH)
EU Migration Commissioner Urges NGOs To Manage Funds With Transparency (KTG)

 

 

Nice angle. Circumventing the press is nothing new.

Trump’s Tweets Are Little Different From FDR’s Fireside Chats (MW)

Donald Trump, arguably, has already changed the office of the presidency forever, with his prolific tweets, some of which, at least in the lead-up to his Friday inauguration, have endorsed specific companies, lashed out at impersonations and in some case even laid the groundwork for complex policies. Cabinet appointees have found themselves walking back his remarks with some regularity this week. Some observers embrace the transparency of the unfiltered Trump experienced on Twitter. The public wasn’t ruffled one bit when a newly elected Trump’s staff blew off the protocol for press pool reports and end-of-day signoffs. Trump’s delivery mechanism may be relatively new, but the motivation isn’t.

Circumventing the press, and even the carefully crafted press release, is a presidential tack that can be traced as far back as Franklin Delano Roosevelt’s “fireside chats,” which leveraged the radio medium to deliver Roosevelt directly into American living rooms, said Andrew Card, in an MSNBC interview. Card, White House chief of staff to the second President Bush, also served in the administrations of Ronald Reagan and George H.W. Bush. FDR delivered his first radio address on March 12, 1933, in the middle of the crisis of confidence over the U.S. banking system. The intent? Reassure the public as if the president had stopped by personally. It was only after the broadcast’s relative success that they eventually earned the “fireside chat” familiarity. Trump’s tweets are the president-elect’s way to get closer to Americans, too, said Card. And that’s not without risk. Trump’s words represent “empathy” but don’t always reflect “judgment,” said Card.

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Are they all protesting the same thing? Where were they 8 years ago?

Fortress Washington Braces For Anti-Trump Protests (R.)

Washington turned into a virtual fortress on Thursday ahead of Donald Trump’s presidential inauguration, while thousands of people took to the streets of New York and Washington to express their displeasure with his coming administration. Some 900,000 people, both Trump backers and opponents, are expected to flood Washington for Friday’s inauguration ceremony, according to organizers’ estimates. Events include the swearing-in ceremony on the steps of the U.S. Capitol and a parade to the White House along streets thronged with spectators. The number of planned protests and rallies this year is far above what has been typical at recent presidential inaugurations, with some 30 permits granted in Washington for anti-Trump rallies and sympathy protests planned in cities from Boston to Los Angeles, and outside the U.S. in cities including London and Sydney.

The night before the inauguration, thousands of people turned out in New York for a rally at the Trump International Hotel and Tower, and then marched a few blocks from the Trump Tower where the businessman lives. The rally featured a lineup of politicians, activists and celebrities including Mayor Bill de Blasio and actor Alec Baldwin, who trotted out the Trump parody he performs on “Saturday Night Live.” “Donald Trump may control Washington, but we control our destiny as Americans,” de Blasio said. “We don’t fear the future. We think the future is bright, if the people’s voices are heard.” In Washington, a group made up of hundreds of protesters clashed with police clad in riot gear who used pepper spray against some of the crowd on Thursday night, according to footage on social media. The confrontation occurred outside the National Press Club building, where inside a so-called “DeploraBall” event was being held in support of Trump, the footage showed.


JFK inaugural parade 1961

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Nice detail: “Trump plans on Saturday to visit the headquarters of the CIA in Langley, Virginia…”

Executive Actions Ready To Go As Trump Prepares To Take Office (R.)

Donald Trump is preparing to sign executive actions on his first day in the White House on Friday to take the opening steps to crack down on immigration, build a wall on the U.S.-Mexican border and roll back outgoing President Barack Obama’s policies. Trump, a Republican elected on Nov. 8 to succeed Democrat Obama, arrived in Washington on a military plane with his family a day before he will be sworn in during a ceremony at the U.S. Capitol. Aides said Trump would not wait to wield one of the most powerful tools of his office, the presidential pen, to sign several executive actions that can be implemented without the input of Congress.

“He is committed to not just Day 1, but Day 2, Day 3 of enacting an agenda of real change, and I think that you’re going to see that in the days and weeks to come,” Trump spokesman Sean Spicer said on Thursday, telling reporters to expect activity on Friday, during the weekend and early next week. Trump plans on Saturday to visit the headquarters of the CIA in Langley, Virginia. He has harshly criticized the agency and its outgoing chief, first questioning the CIA’s conclusion that Russia was involved in cyber hacking during the U.S. election campaign, before later accepting the verdict.

Trump also likened U.S. intelligence agencies to Nazi Germany. Trump’s advisers vetted more than 200 potential executive orders for him to consider signing on healthcare, climate policy, immigration, energy and numerous other issues, but it was not clear how many orders he would initially approve, according to a member of the Trump transition team who was not authorized to talk to the press. Signing off on orders puts Trump, who has presided over a sprawling business empire but has never before held public office, in a familiar place similar to the CEO role that made him famous, and will give him some early victories before he has to turn to the lumbering process of getting Congress to pass bills.

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The contradictions people seek don’t appear to exist.

Mnuchin Says Long-Term Strength of US Dollar Is Important (BBG)

Treasury Secretary nominee Steven Mnuchin told lawmakers the long-term strength of the U.S. dollar is important and said President-elect Donald Trump’s comments that the currency was too high weren’t meant as a longer-run policy. The dollar’s “long-term strength – over long periods of time – is important,” Mnuchin said in response to questions at his confirmation hearing Thursday before the Senate Finance Committee in Washington. “The U.S. currency has been the most attractive currency to be in for very, very long periods of time. I think that it’s important and I think you see that now more than ever.” At the same time, he said the greenback is currently “very, very strong, and what you see is people from all over the world wanting to invest in the U.S. currency.”

The Bloomberg Dollar Spot Index extended its gains on Thursday. The currency has appreciated more than 5% since Trump won the Nov. 8 election on expectations he will boost economic growth through tax cuts and spending increases. Trump expressed concern about the dollar’s recent appreciation in an interview with the Wall Street Journal this month, saying the currency was “too strong.” That prompted speculation that his administration might reverse longstanding tradition in the U.S. to support a strong-dollar policy. “When the president-elect made a comment on the U.S. currency, it wasn’t meant to be a long-term comment,” Mnuchin said. “It was meant to be that perhaps in the short term the strength in the currency, as a result of free markets and people wanting to invest here, may have had some negative impacts on our ability in trade.”

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You can’t keep Germany vested against Russia for too long for opaque reasons. History says so.

German Opposition Leader Calls For Security Union With Russia, End Of NATO (DW)

The parliamentary leader of Germany’s largest opposition party has urged the dissolution of the NATO alliance. Her remarks come after US president-elect Donald Trump described it as “obsolete.” German opposition leader Sahra Wagenknecht on Tuesday added her voice to calls to dissolve NATO in the wake of US President-elect Donald Trump’s controversial remarks concerning the military alliance “NATO must be dissolved and replaced by a collective security system including Russia,” Wagenknecht told Germany’s “Funke” media group. Wagenknecht, who leads the opposition Left Party in parliament, added that comments made by the future US president “mercilessly reveal the mistakes and failures of the [German] federal government.”

In an interview published by German tabloid “Bild,” Trump described NATO as an “obsolete” organization. “I said a long time ago that NATO had problems. Number one it was obsolete, because it was designed many, many years ago,” he said. “We’re supposed to protect countries. But a lot of these countries aren’t paying what they’re supposed to be paying, which I think is very unfair to the United States,” Trump added. Germany’s Left Party has previously called for warmer ties with Russia and scrapping the security alliance, measures which appear to be policy concerns for the incoming US administration. The Left Party is Germany’s largest opposition group in parliament, and holds seats in several state legislatures.

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Rutte is smart enough to feel the ghost of the times contradicting everything he ran on in the past, but he wants to use it to remain in power. Pragmatism?! It all plays into the hands of Wilders. 2 months to Dutch elections.

The ‘Ever Closer European Union’ Principle Is “Buried And Gone” (MT)

Dutch Prime Minister Mark Rutte and former European Parliament President Martin Schulz clashed over the strategy to relaunch the Union, illustrating the deep division at Europe’s helm in front of the global audience of the World Economic Forum 19 January. Hundreds of business leaders and political figures attending the Davos forum witnessed how fundamentally disunited Europeans are when they are confronted with challenges and the solutions needed to overcome them. Schulz, who stepped down as president of the European Parliament this week, praised the achievements of the past and the need to push forward EU integration. But Rutte told the Socialists and Democrats (S&D group) MEP to “leave out those romantic ideas”, adding that “that is the fastest way to dismantle Europe”.

Europe needs a “pragmatic approach and to stop lofty speeches”, Rutte said. He called for tangible results on migration, security or the internal market in the effort to create jobs. He even went as far to say that the ‘ever closer union’ principle is “buried and gone”. The ‘ever closer union’ goal is seen as the driving force behind the EU project. It was enshrined in the founding Treaty of Rome that celebrates its 60th anniversary this year. While the Dutchman said that the experiences of Helmut Kohl and François Mitterrand could not be “a model for the future”, Schulz punched back responding he was not a “romantic” but a “German”. He got an applause when he recalled how the emotional ties after World War II brought peace and prosperity to the continent.

The fight between the two started right from the get-go as Rutte insisted more efforts from France and Italy to reform their economies are needed to save Europe. He warned that if countries failed to meet their promises, it would be harder for Northern leaders like him to convince their citizens about the need to tighten their belts. “At the end, this will have a devastating impact on EU integration”, he warned. But Schulz told the Dutch leader to be “very prudent” about dictating to other countries what they should do, as this could further divide the European bloc. He said that it is the European Commission and Council, and not “several member states”, who are responsible for fiscal and macroeconomic recommendations made to national governments.

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Fake news.

Chinese Growth Slips To 6.7% In 2016, The Slowest For 26 Years (AFP)

China’s economy has grown at its slowest rate in more than a quarter-century as Beijing braces itself for an uncertain outlook that could see a trade stand-off with Donald Trump. After a tumultuous start to 2016, the country’s leaders used huge monetary stimulus to steer the world’s number two economy to hit their annual target and also record the first quarterly pick-up in two years. The Asian superpower is a crucial driver of global growth but Beijing is trying to reduce its heavy reliance on exports and state-backed investment and instead focus on domestic consumer spending to drive expansion. However, the transition has proved bumpy, with the crucial manufacturing sector struggling in the face of sagging global demand for its products and excess industrial capacity left over from an infrastructure boom.

This led to the economy growing 6.7% last year, in line with forecasts but down from 6.9% in 2015, and the worst reading since 1990. The government targeted 6.5-7.0%. The October-December increase of 6.8% also marked the first quarterly improvement since the final three months of 2014. The national statistics bureau called the figure a “good start” for the government’s goal of achieving 6.5% annual growth through to 2020. “China’s economy was within a proper range with improved quality and efficiency. However, we should also be aware that the domestic and external conditions are still complicated and severe,” the bureau said in a statement. It added that the coal and steel industries had cut overcapacity, but structural reform should be the “mainline” this year, urging policymakers to focus on “fending off risks” to stability.

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Beats expectations with a 26-year low. Wow.

China GDP Beats Expectations But Debt Risks Loom (R.)

China’s economy grew a faster-than-expected 6.8% in the fourth quarter, boosted by higher government spending and record bank lending, giving it a tailwind heading into what is expected to be a turbulent year. But Beijing’s decision to prioritize its official growth target could exact a high price, as policymakers grapple with financial risks created by an explosive growth in debt. China’s debt to GDP ratio rose to 277% at the end of 2016 from 254% the previous year, with an increasing share of new credit being used to pay debt servicing costs, UBS analysts said in a note. The fourth quarter was the first time in two years that the world’s second-largest economy has shown an uptick in economic growth, but this year it faces further pressure to cool its housing market, the impact of government efforts at structural reforms, and a potentially testy relationship with a new U.S. administration.

“We do not expect this (Q4 GDP) rebound to extend far into 2017, when a slowdown in the property market and steps to address supply shortages in the commodity sector ought to drag again on demand and output,” said Tom Rafferty, regional China manager for the Economist Intelligence Unit. The economy expanded 6.7% in 2016, the National Bureau of Statistics said on Friday, near the middle of the government’s 6.5-7% growth target but still the slowest pace in 26 years. Economists polled by Reuters had expected 6.7% growth for both the fourth quarter and the full year. Housing helped prop up growth again in the fourth quarter, with property investment rising a surprisingly strong 11.1% in December from 5.7% in November, even as house prices showed signs of cooling in some major cities.

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The mayhem is far from over.

There’s an Unexplained $9 Billion Gap in India’s Cash Supply (BBG)

India’s unprecedented ban on high-denomination currency bills has led to a mismatch in cash supply that has flummoxed some economists and data crunchers. Indians withdrew about 600 billion rupees ($9 billion) more than the 9.1 trillion rupees of currency in circulation as of Jan. 13, according to a report submitted by the Reserve Bank of India to a parliamentary panel on Wednesday. A copy of the document was seen by Bloomberg News. “This is usually not the case,” said Sujan Hajra, chief economist at Anand Rathi Securities in Mumbai, who was a director at the RBI from 1993-2006. He added that cash with public should be lower than currency in circulation “but then you don’t have demonetization usually.”

Clarity will emerge only once the central bank reconciles and publishes final figures, he said. The central bank has refused to share the amount of invalidated bills that have been deposited and said on Jan. 5 that it is still counting the notes to eliminate errors. In a shock move late on Nov. 8, Prime Minister Narendra Modi canceled 15.4 trillion rupees of the 17.7 trillion rupees in circulation and pledged to swap the worthless notes with fresh bills. Between Nov. 9 to Jan. 13, the RBI printed about 5.53 trillion rupees of new notes and put in circulation 25,197 million bank notes aggregating 6.78 trillion rupees, taking total currency in circulation to about 9.1 trillion rupees, according to the RBI’s document on Wednesday. As on Jan. 13 the public had withdrawn close to 9.7 trillion rupees from bank counters and cash-dispensing machines, the document said.

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Apples and oranges, but still. Amazon sucks money out of communities. Support your local dealer!

Amazon Is Going To Kill More American Jobs Than China Did (MW)

Amazon.com has been crowing about its plans to create 100,000 American jobs in the next year, but as with other recent job-creation announcements, that figure is meaningless without context. What Amazon won’t tell us is that every job created at Amazon destroys one or two or three others. What Jeff Bezos doesn’t want you to know is that Amazon is going to destroy more American jobs than China ever did. Amazon has revolutionized the way Americans consume. Those who want to shop for everything from books to diapers increasingly go online instead of to the malls. And for about half of those online purchases, the transaction goes through Amazon.

For the consumer, Amazon has brought lower prices and unimaginable convenience. I can buy almost any consumer product I want just by clicking on my phone or computer — or even easier, by just saying: “Alexa: buy me one” — and it will be shipped to my door within days or even hours for free. I can buy books for my Kindle, or music for my phone instantly. I can watch movies or TV shows on demand. But for retail workers, Amazon is a grave threat. Just ask the 10,100 workers who are losing their jobs at Macy’s. Or the 4,000 at The Limited. Or the thousands of workers at Sears and Kmart, which just announced 150 stores will be closing. Or the 125,000 retail workers who’ve been laid off over the past two years.

Amazon and other online sellers have decimated some sectors of the retail industry in the past few years. For instance, employment at department stores has plunged by 250,000 (or 14%) since 2012. Employment at clothing and electronics stores is down sharply from the earlier peaks as more sales move online. “Consumers’ affinity for digital shopping felt like it hit a tipping point in Holiday 2014 and has rapidly accelerated this year,” Ken Perkins, the president of Retail Metrics, wrote in a research note in December. And when he says “digital shopping,” he really means Amazon, which has increased its share of online purchases from about 10% five years ago to nearly 40% in the 2016 holiday season. It’s only going to go higher, as Amazon aggressively targets other sectors such as groceries and even restaurants with delivery services for restaurant-prepared meals.

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Important points by Simon Black.

Stiglitz Tells Davos Elite US Should “Get Rid Of Currency” (Black)

half a world away at the World Economic Forum in Davos, Switzerland, Nobel Laureate economist Joseph Stiglitz made remarks earlier this week that the US should “get rid of currency.” He means paper currency, as in the US should not only get rid of $100 bills… but ALL paper currency– 50s, 20s, 10s, 5s, and even 1s. You guessed it. Stiglitz suggests that regular people don’t need paper money, and that it’s only useful for drug dealers, terrorists, tax evaders, and money launders. This thinking is so 20th century, and it’s simply wrong. ISIS is a great example. The US military has literally blown up more than a billion dollars worth of ISIS’s stockpiles of physical cash during airstrikes. But this hasn’t affected their terrorist activities one bit. That’s because the most notorious terrorist group on the planet famously uses both the world’s oldest currency (gold) and the world’s newest currency (Bitcoin).

Professor Stiglitz has likely never been anywhere near a terrorist, so he likely doesn’t have a clue how they conduct financial transactions. Stiglitz also relies on the old claim that cash facilitates illicit activity. Again, this thinking only highlights a Dark Ages mentality. In the today’s world, drug dealers and prostitutes accept credit cards. No matter what you’re selling on a street corner, whether it’s hot dogs or marijuana, there are plenty of solutions (like Stripe, Square, or PayPal) to easily allow anyone to accept credit card payments. But these intellectuals seem stuck in a Pablo Escobar fantasy that drug dealers have entire rooms filled with cash. What Stiglitz, and perhaps many law enforcement agencies, fail to realize is that one of the biggest tools in masking illegal activity is actually Amazon.com. Specifically, Amazon gift cards.

[..] These guys just don’t get it. Cash isn’t about tax evasion or illegal activity. It’s about having a choice. Any rational person who actually looks at the numbers in the banking system has to be concerned. In many parts of the world, banks are pitifully capitalized and EXTREMELY illiquid. This is especially the case in Europe right now where entire nations’ banking systems are teetering on insolvency. In the United States, liquidity is also quite low, and banks play all sorts of accounting games to hide their true financial condition. Plus, never forget that the moment you deposit funds at a bank, it’s no longer YOUR money. It’s the bank’s money. As a depositor, you’re nothing more than an unsecured creditor of the bank, and they have the power to freeze you out of your life’s savings without even giving you a courtesy call. Physical cash provides consumers another option. If you don’t want to keep 100% of your savings tied up in a system that’s rigged against you and has a long history of screwing its customers, you can instead choose to hold physical cash.

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Wonder what the new administration will make of this.

US Government Caught Massively Fabricating Student Loan Default Data (ZH)

Ever since 2012 we have warned that one of the biggest threats arising from the US student loan bubble – which is no longer disputed by anyone except perhaps members of the outgoing administration – is not that it is soaring at an unprecedented pace, that’s obvious for anyone with the latest loan total number over $1.4 trillion, rising at a pace of nearly $100 billion per year, but that the government – either on purpose or due to honest miscalculation – was not correctly accounting for the true extent of delinquencies and defaults. Today, we finally got confirmation that, as speculated, the US government was indeed fabricating student loan default data, making it appear far lower than it was in reality. An the WSJ reported overnight “many more students have defaulted on or failed to pay back their college loans than the U.S. government previously believed.”

The admission came last Friday, when the Education Department released a memo saying that it had overstated student loan repayment rates at most colleges and trade schools and provided updated numbers. This also means that the number of loan defaults in various cohorts is far greater than previously revealed. A spokeswoman for the Education Department said that the problem resulted from a “technical programming error.” And so, the infamous “glitch” strikes again. How bad was the data fabrication? When The Wall Street Journal analyzed the new numbers, the data revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country. In other words, virtually every single number was made to appear better than it actually was. And people mock China for its own “fake data.”

According to an analysis of the revised data, at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years. This is a stunning number and suggests that the student loan crisis is far greater than anyone had anticipated previously. It also means that the US taxpayer will be on the hook for hundreds of billions in government-funded loans once attention finally turns to who is expected to foot the bill for years of flawed lending practices.

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Translation: the EU has no idea, none at all, where its hundreds of millions in taxpayer funds have gone. It’s how the aid industry is set up. And the refugees still suffer for no reason other than profit, politics and greed.

EU Migration Commissioner Urges NGOs To Manage Funds With Transparency (KTG)

EU Migration Commissioner Dimitris Avramopoulos urged non-governmental organizations involved in the care of refugees and migrants to manage funds with more transparency. “NGOs must manage available funds with transparency,” Avramopoulos said on Wednesday and called on international organizations operating in the country “to step up their efforts to provide immediate assistance to those in need in the islands.” Avramopoulos was visiting the hot spot of Moria and the refugee camp of Kara on Lesvos together with Migration Minister Yannis Mouzalas and EU’s official responsible for NGOs funding, Philippe de Broers.

On his part, Mouzalas said “We covered 70% of the needs in the camps with less money than the money received by NGOs and institutional organizations.” Mouzalas added that the European Commission needed to take tight control of the funds given to NGOs for refugees and migrants. “We have asked the European Commission and the DG Echo (i.e. DG EU Humanitarian Aid and Civil Protection)” for tighter control “and we have stated that we can not we control to this money” he said. Criticism against the NGOs and international organizations comes after a bad weather front left thousands of refugees and migrants exposed to extreme weather conditions with heavy snow fall and polar cold.

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Jan 192017
 
 January 19, 2017  Posted by at 11:27 am Finance Tagged with: , , , , , , , , ,  10 Responses »
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Photograph: Palani Mohan/Getty Images


Anxious European Leaders Seek An Early Audience With Trump, Before Putin (AP)
Hands off EU, Trump; We Don’t Back Ohio Secession: Juncker (R.)
Jamie Dimon Says Eurozone May Not Survive (BBG)
In Europe We See Only One Loser From Brexit – And It Won’t Be Us (Quatremer)
Marine Le Pen Centers Presidential Run on Getting France Out of Eurozone (WSJ)
By Ripping NATO, Trump Makes Europe Nervous and Arms Trade Happy (BBG)
Steve Keen Exposes Next Global Economic Shockwaves (FinFeed)
How Deutsche Bank Made €367 Million Disappear at Monte dei Paschi (BBG)
Earth Breaks Heat Record In 2016 For Third Year In A Row (AFP)
‘A Cat In Hell’s Chance’ (Simms)
Over Half of World’s Wild Primate Species Face Extinction (G.)
If you were an elephant … (Foster)

 

 

I’m sorry, I’m trying, but I just can’t NOT find this funny. My article earlier today: He’s Just Not That Into You.

Anxious European Leaders Seek An Early Audience With Trump, Before Putin (AP)

European leaders, anxious over Donald Trump’s unpredictability and kind words for the Kremlin, are scrambling to get face time with the new American president before he can meet with Russian President Vladimir Putin, whose provocations have set the continent on edge. One leader has raised with Trump the prospect of a U.S.-EU summit early this year, and the head of NATO — the powerful military alliance Trump has deemed “obsolete” – is angling for an in-person meeting ahead of Putin as well. British Prime Minister Theresa May is working to arrange a meeting in Washington soon after Friday’s inauguration. For European leaders, a meeting with a new American president is always a sought-after – and usually easy-to-obtain – invitation.

But Trump has repeatedly defied precedent, making them deeply uncertain about their standing once he takes office. Throughout his campaign and in recent interviews, Trump has challenged the viability of the EU and NATO, while praising Putin and staking out positions more in line with Moscow than Brussels. “There are efforts on the side of the Europeans to arrange a meeting with Trump as quickly as possible,” Norbert Roettgen, the head of the German Parliament’s foreign committee and a member of Chancellor Angela Merkel’s party, told AP. In fact, eager to stage an early show of Trans-Atlantic solidarity, Donald Tusk – the former Polish prime minister who heads the EU’s Council of member state governments – invited Trump to meet with the EU early in his administration, according to a EU official.

But a senior Trump adviser essentially rebuffed the offer, telling the AP this week that such a gathering would not be a priority for the incoming president, who wants to focus on meetings with individual countries, not the 28-nation bloc. Trump backs Britain’s exit from the EU, casting the populist, anti-establishment movement as a precursor to his own victory. In a recent joint interview with two European newspapers, Trump said of the EU, “I don’t think it matters much for the United States.” Such rhetoric alone was enough to set off alarm bells in Europe. And Trump’s praise for Putin and promise of closer ties to Moscow have deepened the uncertainty.

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“..he was sure no EU state wanted to follow Britain’s example and leave the bloc..”

Hands off EU, Trump; We Don’t Back Ohio Secession: Juncker (R.)

Donald Trump should lay off talking about the break-up of the European Union, the bloc’s chief executive said on Wednesday, pointing out that Europeans do not push for Ohio to secede from the United States. In pointed remarks on the eve of Trump’s inauguration as U.S. president, Jean-Claude Juncker said the new administration would realize it should not damage transatlantic relations but added it remained unclear what policies Trump would now pursue. Juncker told Germany’s BR television, according to a transcript from the Munich station, that he was sure no EU state wanted to follow Britain’s example and leave the bloc, despite Trump’s forecast this week that others would quit:

“Mr. Trump should also not be indirectly encouraging them to do that,” Juncker said. “We don’t go around calling on Ohio to pull out of the United States.” Juncker, the president of the European Commission, said he had yet to speak to Trump — contrary to what the President-elect said earlier this week. Juncker said Trump had confused him with European Council President Donald Tusk. “Trump spoke to Mr. Tusk and mixed us up,” said Juncker, taking a jab at the American billionaire’s grasp of his new role. “That’s the thing about international politics,” he said. “It’s all in the detail.”

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If even Jamie Dimon can understand it…

Jamie Dimon Says Eurozone May Not Survive (BBG)

The euro region could break up if political leaders don’t get to grips with the discontent that’s spurring support for populist leaders across the continent, JPMorgan Chase CEO Jamie Dimon said. Dimon said he had hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes. That hasn’t happened, and if nationalist politicians including France’s Marine Le Pen rise to power in elections across the region “the euro zone may not survive,” Dimon, 60, said in a Bloomberg Television interview with John Micklethwait. “What went wrong is going wrong for everybody, not just going wrong for Britain, but in some ways it looks like they’re kind of doubling down,” Dimon said in the interview Wednesday at the annual meeting of the World Economic Forum in Davos.

Unless leaders address underlying concerns, “you’re going to have the same political things about immigration, the laws of the country, how much power goes to Brussels.” Dimon’s remarks on Europe were unusually pessimistic, coming in a wide-ranging interview in which he also criticized regulations that he said stunt economic growth. But he reiterated optimism for President-elect Donald Trump. Minutes later, Goldman Sachs CEO Lloyd Blankfein also expressed concern about Europe, telling CNBC that leaders are facing a backlash in the midst of a long, complicated process to create an economic bloc. “That’s complicated, that’s very hard to do,” said Blankfein. “It’s not done, and it’s not accomplished. We’re finding the pain of that.” [..] The bottom line is that Europe must become more competitive, Dimon said. “I say this out of respect for the European people, but they’re going to have to change,” he said. “They may be forced by politics, they may be forced by new leadership.”

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Journalist Jean Quatremer is Mr. Europe. He’s been called an ‘ayatollah of European federalism’.

In Europe We See Only One Loser From Brexit – And It Won’t Be Us (Quatremer)

When someone wants the impossible, in French we say that they want “the butter, the money from the butter, and the dairymaid’s smile”. In more vulgar usage we say they want something rather more from the dairymaid than a smile. This is precisely what we can take away from Theresa May’s speech on the “hard Brexit” she wants. It is “hard” only for the other 27 states but “soft” for Britain – because May wants to keep all the benefits of EU membership and concede nothing in return. That is not really a surprise since she had already announced it in October during the Conservative party conference. She even considers that any other kind of agreement would be unacceptable, because it would amount to “punishing” the British.

May is threatening to turn Britain into a tax haven by way of retaliation, if, by some misfortune, the Europeans refuse to bend to the demands of Her Glorious Majesty’s subjects. We might think we are dreaming, but no: it is either arrogance or recklessness (or, more likely, a mixture of the two). Let’s sum up: on the one hand, of course, May would like a clear, “clean break” with the union, which means no longer sitting in its institutions, contributing to the budget or respecting EU law. On the other hand, she does not want the status of some kind of “partial or associate” member, which would imply having to meet EU’s requirements in all kinds of areas.

Thus far, we get it: the UK will be treated like any other third country – Zimbabwe, for instance. That’s clear and “clean”. But after that it gets complicated, at least for a continental mind that lacks the subtleties of reflection of a product of Oxbridge. Because May considers it possible for British companies to retain the greatest possible access to the single market, in particular to negotiate sectoral customs agreements with the union. And that’s where things get interesting. Because customs duty or no, importing goods into a market presupposes compliance with local norms and standards: to be clear, if the British want to export their cars (which are in fact German or Japanese cars) to the continent, they need to respect European laws. That means submitting (I know, what an awful word) to those laws. So in reality, the clear, “clean break” could only concern one part of UK industry – the part that manufactures for the local market.

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Le Pen is smartening up. She’s a true contender now.

Marine Le Pen Centers Presidential Run on Getting France Out of Eurozone (WSJ)

National Front leader Marine Le Pen is seeking to turn May’s presidential election into a referendum on the European Union by detailing a strategy to pull France from the bloc and its single currency if she wins. She last ran in 2012 with an initial promise of a sharp and sudden break from the euro, but this time Ms. Le Pen has sought broader support from a splintered French electorate. She says she would organize an orderly exit rather than crashing out with unpredictable consequences. If elected, she and top National Front officials say, her administration will spend its first six months negotiating the creation, along with other disappointed euro nations, of a basket of shadow European currencies. A newly reinstated franc, she says, would eventually be pegged to that basket, replacing the euro.

Ms. Le Pen says other countries struggling to meet European rules would be willing to enter into talks on pulling the EU apart. The threat of having to leave the euro, she says, has been used to blackmail Greece and other Southern European countries into implementing austerity programs their people reject. “The euro has not been used as a currency, but as a weapon—a knife stuck in the ribs of a country to force it to go where the people don’t want to go,” Ms. Le Pen said this month. “Do you think we accept living under this threat, this tutelage? It’s absolutely out of the question.”

[..] An attempt by France, the eurozone’s second-largest economy, to pull out would be far more challenging than Brexit, which doesn’t touch on currency questions. A “Frexit” would likely unleash chaos across the currency union and undermine the broader EU in a way Britain’s departure wouldn’t. No country has attempted to leave the euro, and French polls show that while people want to claw back control from Brussels, a majority wouldn’t vote to leave the currency. The complications of an exit weren’t as clear to Ms. Le Pen in 2012, when she garnered only 17.9% of the presidential vote with her push for a clean break with the euro. “We set off on the idea in 2012 of an immediate exit, slamming the door,” said Jean-Richard Sulzer, a senior economic adviser to Ms. Le Pen. “Things were said too quickly, but this time Marine is much more prudent.”

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Yeah, why not blame Trump for that too.

By Ripping NATO, Trump Makes Europe Nervous and Arms Trade Happy (BBG)

Donald Trump is right to say America’s NATO allies aren’t paying their fair share. But, to the delight of the arms industry, that may be changing. Trump himself is the change-maker. He reaffirmed his skepticism about the North Atlantic Treaty Organization, and his readiness to make deals with Russia, in European media interviews published last weekend. Trump isn’t famous for his policy consistency, but those positions have held fairly steady – leaving European leaders wondering whether they can still rely on the American security umbrella. “Let’s not fool ourselves,” German Chancellor Angela Merkel said last week. “There is no infinite guarantee.”

So Merkel’s Germany, and many other European nations, are boosting military budgets. The plans predate Trump, and under NATO rules they should’ve been carried out long ago. The alliance expects its members to spend 2% of GDP on defense. But it’s no secret that most of them don’t. The shortfall added up to about $121 billion last year at 2010 prices, according to Bloomberg calculations based on NATO country estimates.

Since Trump is promising to increase America’s already enormous military budget too, the prospect of a European arms-shopping spree is a win-win for suppliers. Investors have noticed: From Raytheon to Lockheed Martin to Thales, defense contractors have hit all-time highs since Trump’s election. “This is the best market for defense in many years, across the board,” said Richard Aboulafia, an aerospace analyst with the Teal Group in Fairfax, Virginia. NATO was established after World War II to protect western democracies against the Soviet Union. A key tenet is that an attack on any alliance member is considered an attack on all. And that’s what Trump has questioned. If Russia moved against one of NATO’s Baltic members, Trump told the New York Times in July, he’d come to their aid only after reviewing whether they have “fulfilled their obligations to us.”

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Brilliant! Please don’t miss this!

It’s just that I thought Steve made his own Melania doll (no kidding.) And then she started talking.

Steve Keen Exposes Next Global Economic Shockwaves (FinFeed)

Steve, who is Trump going to be pouring drinks for, as in economic growth and benefits, in 2017?

Steve Keen: He is trying to pour it just for his own economy. And this is going to be the dramatic challenge he faces. Because he is someone who actually knows a lot about money and banks and debt, having used it extensively in his own professional career.

Lelde Smits: And succeeded and failed and hopefully learnt from the failures.

Steve Keen: He’s turned failure into success in many, many ways, and let’s not go there in terms of how beneficial that was for his various suppliers but he understands going bankrupt, he understand re-organisation, he understands finance.

Lelde Smits: So where is this liquid in 2017?

Steve Keen: He’s going to realise at some point he owns his own bank now. Because he’s running the country he is going to spend.

Lelde Smits: So we have the Federal Reserve right?

Steve Keen: The Federal Reserve is there and can top him up as much as it likes.

Lelde Smits: So when does this stop Steve? That’s the magic question.

Steve Keen: It never has to stop. He’s going to enable the American economy to spend dramatically. Taxation is going to be cut. There will be an increase in government spending. There will be a large deficit coming out of that. So the government is going to be creating a lot of money and running a lot of infrastructure projects and so on. There are 4 million Americans who aren’t employed now who were employed in 2000. They are people who are going to get jobs in construction and start spending domestically and so on. And Trump is going to see that as boosting up the American economy. It’s all about Buy America, Made in America and so on.

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How different do we think this is from what happened with Goldman and Greece? How to hide losses 101.

How Deutsche Bank Made €367 Million Disappear at Monte dei Paschi (BBG)

On Dec. 1, 2008, most of the world’s banks were still panicking through the financial crisis. Lehman Brothers had collapsed. Merrill Lynch had been sold. Citigroup and others had required multibillion-dollar bailouts to survive. But not every institution appeared to be in free fall. That afternoon, at the London outpost of Deutsche Bank, the stolid-seeming, €2 trillion German powerhouse, a group of financiers met to consider a proposal from a team led by a trim, 40-year-old banker named Michele Faissola. The scion of an Italian banking family, Faissola was the head of Deutsche’s global rates unit, a division that created and sold financial instruments tied to interest rates. He’d been studying the problems of one of Deutsche’s clients, Italy’s Banca Monte dei Paschi di Siena, which, as the crisis raged, was down €367 million ($462 million at the time) on a single investment.

Losing that much money was bad; having to include it in the bank’s yearend report to the public, as required by Italian law, was arguably much worse. Monte dei Paschi was the world’s oldest bank. It had been operating since 1472 [..] . If investors were to find out the extent of its losses in the 2008 credit crisis, the consequences would be unpredictable and grave: a run on the bank, a government takeover, or worse. At the Deutsche meeting, Faissola’s team said it had come up with a miraculous solution: a new trade that would make Paschi’s loss disappear. The bankers in the room had seen some financial sleight of hand in their day, but the maneuver that Faissola’s staffers proposed was audacious.

They described a simple trade in two parts. For one half of the deal, Paschi would make a sure-thing, moneymaking bet with Deutsche Bank and use those winnings to extinguish its 2008 trading losses. Of course, Deutsche doesn’t give away money for free, so for the second half of the deal, the Italians would make a bet that was sure to lose. But while the first transaction was immediate, the second would play out slowly, over many years. No sign of the €367 million sinkhole would need to show up when Paschi compiled its yearend financial reports.

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New records set in 2005, 2010, 2014, 2015 and 2016.

Earth Breaks Heat Record In 2016 For Third Year In A Row (AFP)

Last year, the Earth sweltered under the hottest temperatures in modern times for the third year in a row, US scientists said Wednesday, raising new concerns about the quickening pace of climate change. Temperatures spiked to new national highs in parts of India, Kuwait and Iran, while sea ice melted faster than ever in the fragile Arctic, said the report by the National Oceanic and Atmospheric Administration. Taking a global average of the land and sea surface temperatures for the entire year, NOAA found the data for “2016 was the highest since record keeping began in 1880,” said the announcement. The global average temperature last year was 1.69 Fahrenheit (0.94 Celsius) above the 20th century average, and 0.07 degrees F (0.04 C) warmer than in 2015, the last record-setting year, according to NOAA.

This was “not a huge margin to set a new record but it is larger than the typical margin,” Deke Arndt, chief of NOAA global climate monitoring, said on a conference call with reporters. A separate analysis by the US space agency NASA also found that 2016 was the hottest on record. The World Meteorological Organization in Geneva confirmed the US findings, and noted that atmospheric concentrations of both carbon dioxide and methane reached new highs. The main reason for the rise is the burning of fossil fuels like oil and gas, which send carbon dioxide, methane and other pollutants known as greenhouse gasses into the atmosphere and warm the planet. The mounting toll of industrialization on the Earth’s natural balance is increasingly apparent in the record books of recent decades. “Since the start of the 21st century, the annual global temperature record has been broken five times (2005, 2010, 2014, 2015 and 2016),” said NOAA.

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Denial is a river in the Arctic.

‘A Cat In Hell’s Chance’ (Simms)

What’s so special about 2C? The simple answer is that it is a target that could be politically agreed on the international stage. It was first suggested in 1975 by the environmental economist William Nordhaus as an upper threshold beyond which we would arrive at a climate unrecognisable to humans. In 1990, the Stockholm Environment Institute recommended 2C as the maximum that should be tolerated, but noted: “Temperature increases beyond 1C may elicit rapid, unpredictable and non-linear responses that could lead to extensive ecosystem damage.” To date, temperatures have risen by almost 1C since 1880. The effects of this warming are already being observed in melting ice, ocean levels rising, worse heat waves and other extreme weather events.

There are negative impacts on farming, the disruption of plant and animal species on land and in the sea, extinctions, the disturbance of water supplies and food production and increased vulnerability, especially among people in poverty in low-income countries. But effects are global. So 2C was never seen as necessarily safe, just a guardrail between dangerous and very dangerous change. To get a sense of what a 2C shift can do, just look in Earth’s rear-view mirror. When the planet was 2C colder than during the industrial revolution, we were in the grip of an ice age and a mile-thick North American ice sheet reached as far south as New York. The same warming again will intensify and accelerate human-driven changes already under way and has been described by James Hansen, one of the first scientists to call global attention to climate change, as a “prescription for long-term disaster”, including an ice-free Arctic.

Nevertheless, in 1996, a European Council of environment ministers, that included a young Angela Merkel, adopted 2C as a target for the EU. International negotiators agreed the same in 2010 in Cancun. It was a commitment repeated in the Paris Climate Accord of 2015 where, pushed by a new group of countries called the Climate Vulnerable Forum, ambitions went one step further, agreeing to hold temperature rises to “well below 2C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5C”.

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I don’t know how much longer I can witness this. At what point do we set up a private army?

“The industries at work in tropical forest areas are expected to be served by an extra 25 million km of roads by 2050..”

Over Half of World’s Wild Primate Species Face Extinction (G.)


Top row l-r: brown-headed spider monkey, chimpanzee, Western gorilla; Bottom row l-r: Bornean orangutan, Siau Island tarsier, ring-tailed lemur. Composite: Alamy and Getty Images

More than half of the world’s apes, monkeys, lemurs and lorises are now threatened with extinction as agriculture and industrial activities destroy forest habitats and the animals’ populations are hit by hunting and trade. In the most bleak assessment of primates to date, conservationists found that 60% of the wild species are on course to die out, with three quarters already in steady decline. The report casts doubt on the future of about 300 primate species, including gorillas, chimps, gibbons, marmosets, tarsiers, lemurs and lorises. Anthony Rylands, a senior research scientist at Conservation International who helped to compile the report, said he was “horrified” at the grim picture revealed in the review which drew on the International Union for the Conservation of Nature (IUCN) red list, peer-reviewed science reports and UN databases.

“The scale of this is massive,” Rylands told the Guardian. “Considering the large number of species currently threatened and experiencing population declines, the world will soon be facing a major extinction event if effective action is not implemented immediately,” he writes in the journal Science Advances, with colleagues at the University of Illinois and the National Autonomous University of Mexico. The most dramatic impact on primates has come from agricultural growth. From 1990 to 2010 it has claimed 1.5 million square kilometres of primate habitats, an area three times the size of France. In Sumatra and Borneo, the destruction of forests for oil palm plantations has driven severe declines in orangutan populations. In China, the expansion of rubber plantations has led to the near extinction of the northern white-cheeked crested gibbon and the Hainan gibbon, of which only about 30 or animals survive.

More rubber plantations in India have hit the Bengal slow loris, the western hoolock gibbon and Phayre’s leaf monkey. Primates are spread throughout 90 countries, but two thirds of the species live in just four: Brazil, Madagascar, Indonesia and the Democratic Republic of the Congo (DRC). In Madagascar, 87% of primate species face extinction, along with 73% in Asia, the report states. It adds that humans have “one last opportunity” to reduce or remove the threats facing the animals, to build conservation efforts, and raise worldwide awareness of their predicament. The market for tropical timber has driven up industrial logging and damaged forest areas in Asia, Africa and the neotropics. Mining for minerals and diamonds have also taken a toll. On Dinagat island in the Philippines, gold, nickel and copper mining endanger the Philippine tarsier. In the DRC, hunters working around the tin, gold and diamond mine industry are the greatest threat to the region’s Grauer’s gorilla. The industries at work in tropical forest areas are expected to be served by an extra 25 million km of roads by 2050, further fragmenting the primates’ habitats.

Read more …

If you were an elephant … You would still feel love, hurt and grief.

“Perhaps one of the reasons we’re so keen to deny non-human creatures minds, consciousness and personhood is that, if they’re people, they’re embarrassingly better people than we are. They build better communities; they live at peace with themselves and aren’t, unlike us, actively psychopathic towards other species. ”

If you were an elephant … (Foster)

If you were an elephant living wild in a western city, you’d be confused and disgusted. You’d have one two-fingered hand swinging from your face – a hand as sensitive as tumescent genitals, but which could smash a wall or pick a cherry. With that hand you’d explore your best friends’ mouths, just for the sake of friendship. With that hand you’d smell water miles away and the flowers at your feet. You’d sift it all, triaging. Category 1: immediate danger. Category 2: potential threat. Category 3: food and water. Category 4: weather forecasts – short and long range. Category 5: pleasure. Grumbles from trucks and cabs would shudder through the toxic ground, tickle the lamellar corpuscles in your feet and ricochet up your bones. You’d hear with your feet, and your femurs would be microphones.

As you walked 10 miles for your breakfast you’d chatter with your friends in 10 octaves. A nearby human would throb like a bodhran as subsonic waves bounced around her chest. Even if it swayed with grass instead of being covered in concrete and dog shit, the city would be far, far too small for you. You’d feel the ring roads like a corset. You’d smell succulent fields outside, and be wistful. But you’d make the most of what you had. You’d follow a labyrinth of old roads, relying on the wisdom of long-dead elephants, now passed down to your matriarch. You’d have the happiest kind of political system, run by wise old women, appointed for their knowledge of the world and their judgment, uninterested in hierarchy for hierarchy’s sake, and seeking the greatest good for the greatest number.

No room here for the infantile phallocentric Nietzscheanism that is destroying modern human culture. If you were a boy you’d be on the margins, drifting between family groups (but never allowed to disrupt them) or shacked up with your bachelor pals in the elephant equivalent of an unswept bedsit (though usually your behaviour would be gentler, more convivial and more urbane than cohabiting human males). Your function would be to inseminate, and that’s all. Government would be the business of the females. You’d be a communitarian. Relationality would be everything. It’s not that you couldn’t survive alone, although there would certainly be a survival benefit from being a member of a community, just as humans live longer if they are plugged into a church, a mosque or a bowling club.

Yes, at some level your altruism might be reciprocal altruism, where you scratch my back if I scratch yours, or kin selection, where you are somehow persuaded to sacrifice yourself if your death or disadvantage will preserve a gene in a sufficiently closely related gene-bearer. But at a much more obvious and important level you’d be relational – joyously shouldering the duties that come with community – because it made you happy. Why do elephants seek out other elephants? Not primarily for sex, or for an extra arsenal of receptors to pick up the scent of poachers, or because they assume that the others will have found particularly nutritious food, but because they like other elephants.

[..] As an elephant, you’d have a mind. You would, no doubt at all, be conscious. All the evidence agrees. None – absolutely none – disagrees. You’d have a sense of yourself as distinct from other things. When you looked out contemptuously at humans, wondering why they ate obviously contaminated food, opted to be miserable and alone, or wasted energy on pointless aggression and anxiety, it would be your contempt, as opposed to generic elephantine contempt, or reflexive contempt that bypassed your cerebral cortex, or the contempt of your sister. It would be you looking out, and you’d know it was you.


Photograph: Palani Mohan/Getty Images

Read more …

Jan 192017
 
 January 19, 2017  Posted by at 7:25 am Finance Tagged with: , , , , , , , , ,  7 Responses »
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Marlon Brando screentest 1951

I’m trying, I swear, to get into the fold, but I just can’t NOT find this hilarious. On the eve of his presidency, Donald Trump tells European leaders, by not telling them diddly-squat, that he doesn’t think they matter all that much. It’s not just that his vision of the EU, and its importance, is very different from theirs, he also remembers very well what many of them have said about him in the run-up to his election for the presidency.

Europe’s leaders, with the exception of Nigel Farage and Marine Le Pen, have been ridiculing and outright demonizing Trump ever since he declared his candidacy. They’ve said similar things about him that they say about Vladimir Putin, and in the 2016 fake news avalanche they’ve thrown the two together in various ways and for reasons they claim are obvious, with quite a few Hitler quips thrown in for good measure.

Now, for some reason they all seem to think it’s important to meet with Trump before he meets with Putin, as if his view of the world, and that of his entire government, is so unbalanced it could be decided at the toss of a coin. Trump is having none of it. After having been compared to anything that’s considered worst under the sun, who’s going to blame him?

Donald Trump feels, and largely rightly so, that the principle of innocence before being proven guilty was abandoned with much fervor by many, and certainly across the EU. The result is that now he’s simply not that into them. He’s been shown no respect at all, and he has not forgotten that. And it leads to a situation that’s brilliantly entertaining.

The EU, like the Obama/Clinton cabal, have dug in their heels and then dug some more when it comes to Putin, and by -their, not his- association also to Trump. They never thought he’d be elected, and now that he has been they don’t know what to do with themselves (how about an apology for starters?).

AP reports, even if once again you have to read between all the innuendo and opinionated humbug (grow up, AP!):

Anxious European Leaders Seek An Early Audience With Trump

European leaders, anxious over Donald Trump’s unpredictability and kind words for the Kremlin, are scrambling to get face time with the new American president before he can meet with Russian President Vladimir Putin, whose provocations have set the continent on edge. One leader has raised with Trump the prospect of a U.S.-EU summit early this year, and the head of NATO — the powerful military alliance Trump has deemed “obsolete” — is angling for an in-person meeting ahead of Putin as well. British Prime Minister Theresa May is working to arrange a meeting in Washington soon after Friday’s inauguration.

For European leaders, a meeting with a new American president is always a sought-after — and usually easy-to-obtain — invitation. But Trump has repeatedly defied precedent, making them deeply uncertain about their standing once he takes office. Throughout his campaign and in recent interviews, Trump has challenged the viability of the EU and NATO, while praising Putin and staking out positions more in line with Moscow than Brussels. “There are efforts on the side of the Europeans to arrange a meeting with Trump as quickly as possible,” Norbert Roettgen, the head of the German Parliament’s foreign committee and a member of Chancellor Angela Merkel’s party, told AP.

In fact, eager to stage an early show of Trans-Atlantic solidarity, Donald Tusk — the former Polish prime minister who heads the EU’s Council of member state governments— invited Trump to meet with the EU early in his administration, according to a European Union official. But a senior Trump adviser essentially rebuffed the offer, telling the AP this week that such a gathering would not be a priority for the incoming president, who wants to focus on meetings with individual countries, not the 28-nation bloc.

Trump backs Britain’s exit from the European Union, casting the populist, anti-establishment movement as a precursor to his own victory. In a recent joint interview with two European newspapers, Trump said of the EU, “I don’t think it matters much for the United States.”

So far so good, but then the rhetoric starts again. Only, it does so by calling Trump’s words ‘rhetoric’:

Such rhetoric alone was enough to set off alarm bells in Europe. And Trump’s praise for Putin and promise of closer ties to Moscow have deepened the uncertainty. Trump has raised the prospect of dropping U.S. sanctions on Moscow and has appeared indifferent to Russia’s annexation of territory from Ukraine. The hacking of his opponents during the U.S. election, and Trump’s dismissal of the CIA’s warnings about Russia’s involvement, added a dose of spy drama.

Trump’s sentiments mark a dramatic shift in Republican views of Europe, just a generation after George H.W. Bush famously greeted the collapse of the Iron Curtain by calling for a “Europe whole and free.” Trump’s top national security adviser has been in close contact with the Russian ambassador to the U.S., conversations that have involved setting up a phone call between the Putin and the president-elect, transition officials have said. But Trump currently has no plans to meet with Putin, according to the senior adviser, who insisted on anonymity in order to discuss the transition team’s internal planning.

Why on earth would Trump NOT meet with Putin? Because of all the unsubstantiated blubber his opponents have showered over him in their attempts to derail his campaign? If anything, that would probably make him all the more determined to set up such a meeting. Moreover, there’s a lot of damage that needs to be repaired in US-Russia relations, damage done by the former administration and the press it has a love relationship with.

[..] Aides have signaled that one of Trump’s first foreign leader meetings at the White House will be with May, who became prime minister following Britain’s vote to leave the EU. The president-elect’s team is also working on early invitations to Washington for the leaders of Mexico and Canada, according to the Trump adviser. Barring other arrangements, Trump and Putin’s first meeting of the year might not come until July when the Group of 20 leaders gather in Hamburg, Germany — though Trump has yet to say whether he plans to attend international summits.

If he does, some European leaders could get an audience with him in May at a planned NATO summit and a gathering of the more elite Group of Seven in Italy. Russia had been a member of that group, but the U.S. and Europe ousted Putin after the annexation of Crimea from Ukraine. One of the first tests of Trump’s loyalties may well be whether he seeks to bring Russia back into that fold.

“If we start to equate democracies and non-democracies, allies and adversaries, this is setting a very dangerous precedent,” said Heather Conley, director of the Europe program at the Center for Strategic and International Studies. She said that if Trump were to reach out to Putin ahead of the Europeans upon taking office, “it would be a real cautionary note” for long-standing U.S. allies.

Guys! You lost! You lost big. Get a grip. It’s a different world out there. Adapt accordingly or fade away. Something tells us the adaptation process will prove too much for most of Europe’s current leaders. That will necessarily mean that most won’t be leaders for long.

Europe will have to move closer to Putin as Trump does so. The war mongering posture of the past decade or so will have to go. This will be very hard to do for those leaders who have called both men everything awful in the world. Those who can’t will have to leave. Like Juncker:

Hands off EU, Trump; We Don’t Back Ohio Secession: Juncker

Donald Trump should lay off talking about the break-up of the European Union, the bloc’s chief executive said on Wednesday, pointing out that Europeans do not push for Ohio to secede from the United States. In pointed remarks on the eve of Trump’s inauguration as U.S. president, Jean-Claude Juncker said the new administration would realize it should not damage transatlantic relations but added it remained unclear what policies Trump would now pursue.

Juncker told Germany’s BR television, according to a transcript from the Munich station, that he was sure no EU state wanted to follow Britain’s example and leave the bloc, despite Trump’s forecast this week that others would quit: “Mr. Trump should also not be indirectly encouraging them to do that,” Juncker said. “We don’t go around calling on Ohio to pull out of the United States.”

Juncker, the president of the European Commission, said he had yet to speak to Trump – contrary to what the President-elect said earlier this week. Juncker said Trump had confused him with European Council President Donald Tusk. “Trump spoke to Mr. Tusk and mixed us up,” said Juncker, taking a jab at the American billionaire’s grasp of his new role. “That’s the thing about international politics,” he said. “It’s all in the detail.”

It’s clear that in many countries, growing segments of both the population and the political sphere are thinking and talking about following Britain’s example. Juncker had better address their concerns than trying to ignore and deny them, or he will guarantee to achieve the opposite of what he wants.

That Donald Trump was elected in the first place is a surefire sign that many things were going very wrong in the world. Brexit is a sign of the exact same thing. Elections and other votes coming up in Europe will be the next in line, and it doesn’t even matter who wins them; many will be far too close for comfort for the existing order.

Meanwhile, watching the spectacle unfold from a distance, we find it impossible not to be highly amused by the former world order seeing their own words and actions backfire on them. And that has nothing to do with being pro-Trump or pro-Le Pen.

Jan 182017
 
 January 18, 2017  Posted by at 3:31 pm Finance Tagged with: , , , , , , , , ,  13 Responses »
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René Magritte The Art of Conversation 1963

Sometimes you best fight fire with fire. This knowledge goes back to the advent of agriculture. Australian aboriginees have used it since as long as their stories of dream time can remember. For Native Americans it was an essential part of their lives. These days, we need Trump to fight the fire of an elite class world power that is a threat to all of us.

Be stirring as the time; be fire with fire;
Threaten the threatener and outface the brow
Of bragging horror

Shapespeare: King John, 1595

Been greatly enjoying Donald Trump’s pair of interviews with the European press this weekend, in the shape of German scandal paper Bild’s chief, very-right Kai Diekmann, and disgraced Brexiteer Michael Gove for the Sunday Times. What a pair of choices, by the way, what’s next, a Russian interview conducted by Zhirinovsky?. Who picked those clowns? Let’s just hope it was the Trump campaign.

Enjoying it not in the least because Trump is right in just about everything he says. At least, as per what we at the Automatic Earth have been saying about some of the topics involved all along. And we’re not Trump fans, we just think the others are more wrong than he is, and that it’s high time to abolish the EU, and NATO, and sure, the CIA too.

Speaking of which: Chuck Shumer has made it all the way to Senate leader for the Democrats, right? And then he says about Trump’s criticism of US intel and the Steele ‘report’:

“Let me tell you: You take on the intelligence community, they have six ways from Sunday at getting back at you. For a practical, supposedly hard-nosed businessman, he’s being really dumb to do this.”

Want to take any of that back, Chuck? While you still can? Because, you know, threatening the president-elect with the might of the CIA, what does that say about your view of who actually rules the country, Charlie? That’s not a gaffe, that’s what would in America’s better days have been a career buster, buster. But your own rudderless party won’t call you on it, and Trump would love for you to keep your seat; one less worry. Still, c’mon, you just can’t say sh*t like that. It’s beyond any pale. Or, you know, it once was.

What did Trump get right? Here’s what. First, NATO should not exist anymore, since as we’ve said 1000 times, and Ron Paul said 10 times more, it’s merely a hammer looking for a nail, having turned for the purpose, since the dissolution of the Soviet Union, from a defensive collaboration into the planet’s worst aggressor. The 1000s of additional US troops gathered at or close to the Russian border recently are more than plenty evidence of that.

Trump wants far fewer nukes on the planet, and proposes to negotiate a deal with Russia to achieve that goal. Ergo, 30 years after Reagan met Gorbachev in Reykjavik to accomplish just that, Trump must meet Putin in that same spot to do it all over again?! That’s the legacy of NATO. It would be mighty symbolic, though we might want to remember the 1972 Spasski-Bobby Fisher chess ‘world cup’ there, and the American’s paranoia at the time. Not a good example. But they’ll meet someplace, for sure.

Second, Trump likes Brexit. So do we. Beautiful Brexit. Because it is a preliminary step towards the dissolution of the EU, which, as Trump very correctly remarks, has degenerated into a “vehicle for Germany” to compete with the US as a global trading force.

And of course Germany would deny this. After all, didn’t the notorious FinMin Schäuble say -again- just a few days ago that Europe’s problem is not Germany’s surplus, but the weakness of other nations? This week, German foreign ministry spokesman Martin Schäfer added:“For the German government, Europe has never been a means to an end, but a community of fate which, in times of collapsing old orders, is more important than ever.” A community of ‘fate’? An ‘old order’ vs a ‘new order’? Are we taking notes?

Anyway, this is cheap quatsch as long as a huge part of Germany’s surplus comes from its trade with co-EU nations. Because in that scenario, there’s only so much surplus to go around, and the rest will all of necessity run deficits. If that is hard to understand, let’s dive up these stats again, and close that discussion once and for all:

 

 

The EU very much IS a vehicle for Germany, and it eats people alive. That has nothing to do with Germany taking in immigrants, it has to do with economic and power policies, with the destruction of Greece and Italy. The structure of the EU makes it possible, inevitable even, that the strongest partner forces all the others to do its will. That really is all you need to know about why the EU is doomed to failure. All the rest is just about describing the process of how that failure unfolds.

Setting and keeping the euro at a rate that is beneficial to Germany condemns poorer EU nations to ever deeper poverty. That’s what those numbers say. And if anyone thinks Schäuble is not aware of either the numbers or the principle itself, get help. Merkel and Schäuble have been elected to represent Germans, but then they wind up making decisions for 400 million other people, who are the victims of the very policies that benefit Germany. There’s nothing difficult about it.

‘Community of Fate’.. Let’s just hope something was lost in translation there. Point is, Trump is right on the money, and he’s about the first person to put it as simply and poignantly as that. The EU is a vehicle for trade domination. It’s a means for Germany and Holland to acquire access to a huge market for their products, free of just about any trade restrictions. Promoted with the flogged dead horse of the ‘tide that lifts all boats’. It does no such thing.

Other than times of open warfare, for countries like Greece and Italy the EU is the worst thing that ever happened to them in a long time. Brussels stands for economic warfare labeled as a unifying force for peace. It’s a blatant lie wrapped in sheep’s clothing. And of course more nations will want to get out, they’d be crazy not to.

Which is what’s so painfully missing from all the Brexit talk in the UK: everyone goes with the idea that the EU will continue to exist as is, just without Britain. The chance of others leaving, and the effect that will have on the ‘Union’, is never discussed. Though it might put the exit from it in a whole different light, politically and especially economically.

German Vice-Chancellor en Economy Minister Sigmar Gabriel puts his foot in his mouth in much the same way Schumer does, in a reaction to Trump’s interviews. As Tyler Durden describes Gabriel’s ‘Trump shock’:

Responding to Trump’s comments that Merkel had made an “utterly catastrophic mistake by letting all these illegals into the country”, Gabriel said the increase in the number of people fleeing the Middle East to seek asylum in Europe had partially been a result of US-led wars destabilising the region.

Slamming US foreign policy – and thus the Obama regime, not to mention Angela Merkel’s close friend Hillary Clinton – as a culprit for the European refugee crisis, Gabriel said that “there is a link between America’s flawed interventionist policy, especially the Iraq war, and the refugee crisis, that’s why my advice would be that we shouldn’t tell each other what we have done right or wrong, but that we look into establishing peace in that region and do everything to make sure people can find a home there again,” Gabriel said.

First, if you are against America’s deeply flawed and ‘deeply deadly’ regime change policies of the last few decades, as Gabriel pretends to be, you should be pro-Trump, because the man who will be the next US president a little over 50 hours from now is not only of the same opinion, he will be in a position to do something about it. And while you’re at it, why not tell us of all the heroics Merkel has performed over the past decade of her reign, to make it stop?

And do yourself one better: describe in detail the role your EU partners France and Britain have played in these failures. In which untold trillions were spent and untold millions of lives lost, but in which the arms industries of these nations, and certainly Germany’s too, have made mind-boggling profits. Once you’ve done all that, Mr. Gabriel, feel free to criticize the 45th president of the United States.

“In that area Germany and Europe are already making enormous achievements – and that’s why I also thought it wasn’t right to talk about defence spending, where Mr Trump says we are spending too little to finance Nato. We are making gigantic financial contributions to refugee shelters in the region, and these are also the results of US interventionist policy.” Gabriel, who will likely run as the centre-left candidate against Merkel in Germany’s federal elections in September, said Trump’s election should encourage Europeans to stand up for themselves.

Here is where Gabriel’s foot enters his mouth:

“On the one hand, Trump is an elected president. When he is in office, we will have to work with him and his government – respect for a democratic election alone demands that,” Gabriel said. “On the other hand, you need to have enough self-confidence. This isn’t about making ourselves submissive.

What he says about trade issues, how he might treat German carmakers, the question about Nato, his view on the European Union – all these require a self-confident position, not just on behalf of us Germans but all Europeans. We are not inferior to him, we have something to bring to the table too. “Especially in this phase in which Europe is rather weak, we will have to pull ourselves together and act with self-confidence and stand up for our own interests.”

If that is your idea of exuding confidence, of being and/or appearing strong, Trump will have you for breakfast. “in this phase in which Europe is rather weak, we will have to pull ourselves together” , “you need to have enough self-confidence. This isn’t about making ourselves submissive.” Or how about some genuine pouting: “We are not inferior to him, we have something to bring to the table too.”

No, Mr. Gabriel is not the horse you want to place your bets on. He’s a left wing leader sitting in a government with right wing Merkel, in the kind of flawed consensus model that haunts both the EU and its member states, leaving large groups of people without anyone addressing their issues. This is where ‘populists’ are born. In the US, it gave us Trump.

Gabriel is just one of many who are all wedded to the broken Obama/Merkel/Hillary ideal, financed by a deep state class that profits greatly from the fake notion that what is good for the rich is also good for the poor. Should have given them bread and circuses, guys.

Jan 182017
 
 January 18, 2017  Posted by at 10:08 am Finance Tagged with: , , , , , , , , , ,  4 Responses »
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Albert Freeman Effect of gasoline shortage in Washington, DC 1942


Why Theresa May Is Right To Take A Huge Gamble On Hard Brexit (MW)
Trump Is Waving Adios To The Longstanding ‘Strong Dollar Policy’ (MW)
The Issue Is Not Trump, It’s Us (John Pilger)
Focus Turns To Julian Assange After US Decision To Free Chelsea Manning (G.)
Russia Extends Snowden’s Residency Permit ‘By A Couple Of Years’ (R.)
Putin Mocks Claims That Trump Was Spied On (AFP)
PBOC Cash Injections Surge To Record $60 Billion Before Holidays (BBG)
China New Home Prices Rise 12.4% Y/Y In December (R.)
Rustbelt China Province Admits It Faked Fiscal Data For Years (BBG)
Saudis Claim Victory Over US Shale Industry (AEP)
Rising U.S. Shale-Oil Output Threatens OPEC’s Production Pact (MW)
Italian Conservative Tajani Wins Race To Head European Parliament (R.)
The Bankers Who Fixed The World’s Most Important Number (G.)
Percentage of World Population Age 65+ in 2015 and 2050 (BR)

 

 

While I tend to largely agree with this, I also think what makes these discussions obsolete is that I haven’t seen a single person talk about the possibility that EU will not survive as is, or the single market, and what that would in turn mean for Brexit. Not a single one. Meanwhile, Britain has declared mudslinging its new national sport, and that will continue to make predicting anything at all very hard.

Why Theresa May Is Right To Take A Huge Gamble On Hard Brexit (MW)

First, there is very little evidence that membership of the Single Market is worth the costs. Every country in the world has access to the single market, under WTO Rules, although occasionally subject to some very minor tariffs. What you lose by leaving is any voice in how the rules of that market are set, and the hassle and paperwork involved in exporting. How much that is really worth, it is hard to judge. What we do know is that ever since the single market was launched in 1992, the EU has been one of the slowest-growing regions in the world, and that trade between its member states has started to decline. If it is so important to an economy, that is, to put it mildly, a bit odd. The only honest position is to say we have absolutely no idea what difference it will make. No country has left the single market before. But given the obligations that come with it — especially open borders and budget contributions — it may well not be worth much.

Second, it strengthens the U.K.’s negotiating position. If Britain goes into the haggling over the terms of departure saying it has decided to leave the single market, and that there is nothing it really wants from Brussels, then suddenly the conversation changes. After all, there are two things the EU wants from the U.K.: the net budget contribution, which accounts for 7% of its total spending, and access to our market, given that the U.K. runs a massive trade deficit with Europe. The EU doesn’t have to have either — it will get by OK without them. But they are helpful. If the U.K. can offer both, while asking for virtually nothing in return, it is more likely to get what it genuinely wants — which is mainly free access to Europe for its financial sector.

Finally, the politics look right. The Conservative Party has remarkably and quickly reassembled itself as the Brexit Party. That might be the right or the wrong decision, but it is where the majority of the country is right now. After all, Leave won the referendum despite fierce warnings of catastrophe from the rest of the world. Of its opponents, the Liberal Democrats want to go back in, and Labour is hopelessly undecided. If Brexit is a reasonable success — and that simply means it regains control of its borders, and the economy keeps expanding even if it is at a lower rate than before — then the Tories will be rewarded with power for a generation. That makes it a prize worth fighting for.

True, the risks are great. The potential disruption to the economy may be a lot worse than anyone yet realizes. The pound could collapse, inflation could soar, and joblessness start to rise. If any of that happens, May will go down as a catastrophic prime minister. But it is more likely she has called this right — and a hard Brexit will turn out to be best the best option available.

Read more …

Question is, how much can teh US do as long as the USD is the reserve currency and so much global debt is denominated in it?

Trump Is Waving Adios To The Longstanding ‘Strong Dollar Policy’ (MW)

The strong dollar policy—a mantra of Democratic and Republican administrations for more than two decades—may be headed for the scrap heap once Donald Trump is sworn in as president on Friday. Indeed, Trump sent the dollar skittering lower Tuesday after he told The Wall Street Journal that the U.S. currency was “too strong,” in part due to Chinese efforts to hold down the yuan. But while much is made of Trump’s questioning of the need for NATO or the lasting power of the EU, an administration-level push for a weaker currency would hardly be without precedent. It would, however, be an adjustment a generation of investors and traders who came of age in an era when the executive branch at least paid lip service to the notion that a strong dollar was a desirable aim.

The tide last shifted during the Clinton administration after Robert Rubin, the former Goldman Sachs chief, took over as Treasury secretary from Lloyd Bentsen in early 1995. Before that, Bentsen and U.S. Trade Representative Mickey Kantor had often used language that inadvertently—or not—tended to weaken the dollar. Bentsen got the ball rolling early in Clinton’s first term, calling for a stronger yen in a February 1993 appearance and shocking currency traders who duly bid up the Japanese currency. As recounted in a 2001 paper by economists Brad DeLong and Barry Eichengreen, Bentsen saw the stronger yen as potentially helpful in alleviating the U.S. trade deficit, while Kantor saw a weaker dollar providing leverage in trade talks. That may sound a bit familiar. Trump made the U.S. trade deficit a centerpiece of his campaign, using it to argue that it was proof the nation is getting its lunch eaten by competitors in a zero-sum world.

[..] Douglas Borthwick, managing director of Chapdelaine Foreign Exchange, argued in a note earlier this month that an incoming Trump administration, by throwing out the strong dollar policy, could use the currency as a linchpin in implementing its economic agenda: “With a removal of the Strong USD Policy, the US Dollar will weaken against its global counterparts. This will give the FED the ability to normalize US interest rates, as they can use the weaker USD and the resulting inflation as an excuse for raising rates. The FED will then be used by the Administration as a brake on US Dollar weakness. The weaker USD will also force other countries struggling to get their economies moving to rewrite trade agreements in a way that is more advantageous to the US. In other words, we will see a normalization of US Interest rates, and better negotiated trade deals. Both a win for the new Administration.”

Read more …

Pilger’s not a fan of Obama. Good read.

The Issue Is Not Trump, It’s Us (John Pilger)

One of the persistent strands in U.S. political life is a cultish extremism that approaches fascism. This was given expression and reinforced during the two terms of Barack Obama. “I believe in American exceptionalism with every fiber of my being,” said Obama, who expanded the United States’ favorite military pastime: bombing and death squads (“special operations”) as no other president has done since the Cold War. According to a Council on Foreign Relations survey, in 2016 alone Obama dropped 26,171 bombs. That is 72 bombs every day. He bombed the poorest people on earth, in Afghanistan, Libya, Yemen, Somalia, Syria, Iraq, Pakistan. Every Tuesday — reported the New York Times — he personally selected those who would be murdered by mostly hellfire missiles fired from drones.

Weddings, funerals, shepherds were attacked, along with those attempting to collect the body parts festooning the “terrorist target.” A leading Republican senator, Lindsey Graham, estimated, approvingly, that Obama’s drones killed 4,700 people. “Sometimes you hit innocent people and I hate that,” he said, “but we’ve taken out some very senior members of Al Qaeda.” Like the fascism of the 1930s, big lies are delivered with the precision of a metronome, thanks to an omnipresent media whose description now fits that of the Nuremberg prosecutor: “Before each major aggression, with some few exceptions based on expediency, they initiated a press campaign calculated to weaken their victims and to prepare the German people psychologically … In the propaganda system … it was the daily press and the radio that were the most important weapons.”

Read more …

Assange doesn’t lie. But he may demand the US clarify its positions.

Focus Turns To Julian Assange After US Decision To Free Chelsea Manning (G.)

The decision by the US president, Barack Obama, to commute the sentence of Chelsea Manning has brought fresh attention to the fate of Julian Assange. On Twitter last week, Assange’s anti-secrecy site WikiLeaks posted: “If Obama grants Manning clemency Assange will agree to US extradition despite clear unconstitutionality of DoJ [Department of Justice] case.” Obama’s move will test the promise. The president commuted Manning’s 35-year sentence, freeing her in May, nearly three decades early. In a statement on Tuesday, Assange said Manning should never have been convicted and described her as “a hero, whose bravery should have been applauded not condemned”. Assange went on to demand that the US government “immediately end its war on whistleblowers and publishers, such as WikiLeaks and myself”, but made no mention of the Twitter pledge.

His lawyer said he has been pressing the Justice Department for updates on an investigation concerning WikiLeaks. The transgender former intelligence analyst, born Bradley Manning, was convicted in August 2013 of espionage and other offences after admitting to leaking 700,000 sensitive military and diplomatic classified documents to WikiLeaks in 2010. Assange has been holed up for more than four years at the Ecuadorian embassy in London. He has refused to meet prosecutors in Sweden, where he remains wanted on an allegation of rape, fearing he would be extradited to the US to face espionage charges if he leaves the embassy. In a statement on Tuesday, a lawyer for Assange did not address whether Assange intended to come to the US.

“For many months, I have asked the DoJ to clarify Mr Assange’s status. I hope it will soon,” Assange’s lawyer, Barry Pollack, said in the statement. “The Department of Justice should not pursue any charges against Mr Assange based on his publication of truthful information and should close its criminal investigation of him immediately.” Another Assange lawyer, Melinda Taylor, said: “Julian’s US lawyers have repeatedly asked the Department of Justice to clarify Julian Assange’s status and would like them to do so now by announcing it is closing the investigation and pursuing no charges.”

Read more …

Only right thing to do.

Russia Extends Snowden’s Residency Permit ‘By A Couple Of Years’ (R.)

Former U.S. intelligence contractor Edward Snowden has been given leave to remain in Russia for another couple of years, a spokeswoman for the Russian foreign ministry said. “Snowden’s residency in Russia has just been extended by another couple of years,” the spokeswoman, Maria Zakharova, said in a post on Facebook.

Read more …

He must be having so much fun with this. And he’s right: “This shows a significant level of degradation of the political elite in the West.”

Putin Mocks Claims That Trump Was Spied On (AFP)

President Vladimir Putin cracked raunchy jokes on Tuesday as he poked fun at claims that Russian secret services filmed US President-elect Donald Trump with prostitutes. Showing he is familiar with the claims in the explosive dossier, Putin launched into a series of ribald jokes about prostitutes, riffing on Trump’s former role as owner of the Miss Universe beauty contest. The unsubstantiated dossier published by American media last week alleged that Russia had gathered compromising information on Trump, namely videos involving prostitutes at a luxury Moscow hotel, supposedly as a potential means for blackmail. In his first public comments on the claims, Putin rubbished the idea that Russian secret services would have spied on Trump during his 2013 visit to Moscow for the Miss Universe final, as alleged in the dossier.

“Trump when he came to Moscow… wasn’t any kind of political figure, we didn’t even know of his political ambitions,” Putin said, responding to a journalist’s question at a news conference. “Does anyone think that our special services chase every American billionaire? Of course not, it’s just completely ridiculous.” Putin also questioned why Trump would feel the need to hire prostitutes, given his opportunities to meet beautiful women at the Miss Universe contest. “He’s a grown-up for a start and secondly a man who spent his whole life organising beauty contests and meeting the most beautiful women in the world,” Putin said. “I can hardly imagine that he ran off to a hotel to meet our girls of ‘lowered social responsibility’,” said Putin, adding jokingly “although they are of course the best in the world. “I doubt Trump fell for that.”

Putin went on to compare those behind the dossier unfavourably with prostitutes. “The people who order falsifications of the kind that are now circulating against the US president-elect – they are worse than prostitutes, they don’t have any moral limits at all. “The fact that such methods are being used against the US president-elect is a unique case: nothing like this has happened before. “This shows a significant level of degradation of the political elite in the West.”

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Xi ordered no market selloffs while he’s in Davos. Joke.

PBOC Cash Injections Surge To Record $60 Billion Before Holidays (BBG)

China’s benchmark money-market rate surged the most in 19 months, with record central bank cash injections being overwhelmed by demand before the Lunar New Year holidays. The People’s Bank of China put in a net 410 billion yuan ($60 billion) through open-market operations on Wednesday, the biggest daily addition since Bloomberg began compiling the data in 2004. That brings the total injections so far this week to 845 billion yuan. The interbank seven-day repurchase rate jumped 17 basis points, the most since June 2015, to 2.58% as of 1:18 p.m. in Shanghai, according to weighted average prices. Demand for cash tends to increase before the Lunar New Year holidays, when households withdraw money to pay for gifts and get-togethers.

Month-end corporate tax payments are adding to the pressure this time, with the break running from Jan. 27 through Feb. 2. The PBOC offered 200 billion yuan of seven-day reverse repos and 260 billion yuan of 28-day contracts, compared with 50 billion yuan of loans maturing on Wednesday. “The PBOC aims to ensure that the liquidity situation remains adequate, while the 28-day reverse repo is apparently targeted at covering the holidays,” said Frances Cheung at Societe Generale. “There could also be preparation for any indirect tightening impact from potential outflows.” China’s central bank has been offering more 28-day reverse repos than one-week loans in the past two weeks, while curbing the injection of cheaper, short-term funds amid efforts to lower leverage in the financial system. It drained a net 595 billion yuan in the first week of January, before switching to a net injection of 100 billion yuan last week as the seasonal funding demand started to emerge.

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The result of cash injections.

China New Home Prices Rise 12.4% Y/Y In December (R.)

Average new home prices in China’s 70 major cities rose 12.4% in December from a year earlier, slowing slightly from a 12.6% increase in November, an official survey showed on Wednesday. Compared with a month earlier, home prices rose 0.3% nationwide, slowing from November’s 0.6%, according to Reuters calculations from data issued by the National Bureau of Statistics (NBS). Shenzhen, Shanghai and Beijing prices rose 23.5%, 26.5% and 25.9%, respectively, from a year earlier. Monthly growth in Shanghai and Shenzhen slowed but was unchanged in Beijing as local governments’ tightening measures took effect.

China relied heavily on a surging real estate market and government stimulus to help drive economic growth in 2016, but policymakers have grown concerned that the property frenzy will fuel price bubbles and risk a market crash, with serious consequences for the broader economy. Soaring home prices have prompted more than 20 Chinese cities to tighten lending requirements on house purchases, while regulators have told banks to strengthen their risk management on property loans.

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Scapegoating. You pick one to make the rest look good in comparison. But this is endemic, in a variety of forms.

Rustbelt China Province Admits It Faked Fiscal Data For Years (BBG)

The rust-belt province of Liaoning fabricated fiscal numbers from 2011 to 2014, local officials have said, raising fresh doubts about the accuracy of China’s economic data just days ahead of the release of the nation’s full-year growth report. City and county governments in the northwestern region committed fiscal data fraud in the period, Governor Chen Qiufa said at a meeting with provincial lawmakers Tuesday, according to state-run People’s Daily. Fiscal revenues were inflated by at least 20 percent, and some other economic data were also false, the paper said, without specifying categories. Chen said the data were made up because officials wanted to advance their careers. The fraud misled the central government’s judgment of Liaoning’s economic status, he said, citing a report from the National Audit Office in 2016.

With growth now moderating, officials have sought to improve the credibility of economic data as diffusing financial risks becomes a key policy consideration, along with keeping growth ticking along at a rapid clip. Ning Jizhe, head of the National Bureau of Statistics, has said China should prevent fake economic data and increase the quality of its statistics. Liaoning has seen an unprecedented purge of more than 500 deputies from its legislature. The deputies were implicated in vote buying and bribery in the first provincial-level case of its kind in the Communist Party’s almost seven-decade rule, according to the official Xinhua News Agency. Former provincial party chief Wang Min, who led Liaoning from 2009 until 2015, was earlier expelled following corruption allegations by China’s top anti-graft watchdog.

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Wonderful pair of articles. Take your pick. Ambrose has one view, while…

Saudis Claim Victory Over US Shale Industry (AEP)

Saudi Arabia’s oil sheikhs insisted defiantly in Davos that they have defeated the challenge of the American shale industry and restored the balance to the global oil markets after two years of trauma and glut. The country’s energy minister Khalid Al-Falih said US oil frackers had survived only by tapping the most prolific wells and would face surging costs once again as recovery builds, while cannibalisation of their plant will prevent a rapid rebound in US output. “Their supply infrastructure has been decimated,” he said, speaking at the World Economic Forum. Mr Al-Falih admitted for the first time that Saudi Arabia’s decision to flood the world crude markets in 2014 and force a collapse in prices was essentially aimed at US shale frackers, a claim always denied in the past.

“If we had cut production and kept prices at three-digit levels, they would have kept adding one million barrels a day each year, for year after year. Saudi production would have been three million barrels day less in 2017 under that scenario. It was not sustainable,” he said. US drillers bridle at the suggestion that the Saudis won, insisting that they held Opec and Russia to a standstill, forcing them to capitulate last November with an agreement by 22 states to trim output by 1.2m barrels a day, and even that may not prove enough. “Opec engaged in a price war against US producers and they lost,” said Kenneth Hersh from Energy Capital. “This has brought the cost structure down for the whole world. There is no longer a cartel any more.”

Amin Nasser, head of Saudi Aramco, insisted that the job of knocking back shale is largely accomplished and that the market would rebalance by the first half of this year. The cycle is now switching to the opposite extreme. He warned that the world needs $1 trillion of fresh investment in oil projects each year just to keep up with growing demand, and the risk of “price spikes” later this decade is rising fast. The warning was echoed by Fatih Birol, head of the International Energy Agency, who fears a looming oil shortage after an unprecedented collapse in spending on exploration and development over the last two years. “Alarm bells will be ringing if there is no major new investment this year,” he said.

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….MarketWatch has the exact opposite.

Rising U.S. Shale-Oil Output Threatens OPEC’s Production Pact (MW)

The oil market got a stark reminder Tuesday that rising oil production in the U.S. could upend efforts by major producers to bring global supply and demand for crude back in to balance. Just ahead of the settlement for oil futures prices on the New York Mercantile Exchange on Tuesday, the Energy Information Administration released a report on drilling productivity—forecasting a monthly rise of 41,000 barrels a day in February oil production to 4.748 million barrels a day. “That is bearish for oil and a concern for OPEC,” said James Williams, energy economist at WTRG Economics, pointing out that the volume of new oil per rig has climbed because of gains in efficiency.

“If maintained, the expected February production gain means production from the shale plays will be up at least a half million barrels per day by the end of the year,” said Williams. Prices for February West Texas Intermediate crude lost the bulk of the day’s gain on Tuesday to settle with a modest 11-cent climb at $52.48 a barrel. “Since rigs are higher now than in December and should continue to increase, that means a half million [barrel-per-day] gain in production by year-end is a conservative estimate,” Williams said. “Most OPEC members expected this, but U.S. shale production will be the closest monitored data after OPEC’s own compliance with quotas,” he said.

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Backroom dealmaking. Why the EU is on its way out.

Italian Conservative Tajani Wins Race To Head European Parliament (R.)

Centre-right politician Antonio Tajani was elected the new president of the European Parliament on Tuesday after defeating his socialist rival, a fellow Italian, in a daylong series of votes. The new speaker, 63, a former EU commissioner and an ally of former premier Silvio Berlusconi, succeeds German Social Democrat Martin Schulz at a time of crisis for the European Union. Britain wants a divorce deal that needs the legislature’s blessing while old adversary Russia and old ally the United States both pose new threats to EU survivors holding together. Schulz’s tenure saw close cooperation with the centre-right head of the EU executive, Jean-Claude Juncker, but ended with recriminations over the end of a left-right grand coalition. That could spell trouble for the smooth passage of EU laws on a range of issues.

And the win for Tajani, who beat centre-left leader and fellow Italian Gianni Pittella by 351 votes to 282 in a fourth-round runoff, gives the right a lock on three pivotal EU political institutions. That has stirred some calls for change from either Juncker at the European Commission or Donald Tusk, who chairs the European Council of national leaders. However, there is no clear consensus for such changes. Tajani, mindful of the scars left by an unusually bruising battle over a post which can be a powerful influence on which EU rules are made, promised to be “a president for all of you”. His eventual victory came with backing from pro-EU liberals as well as from the ruling conservative parties of Britain and Poland, both of them sharply critical of the EU’s failings. They bristle at the EU impinging on national sovereignty and see it as bureaucratic and wasteful.

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Not THE world, but THEIR world.

The Bankers Who Fixed The World’s Most Important Number (G.)

By the time the market opened in London, Lehman’s demise was official. Hayes instant-messaged one of his trusted brokers in the City to tell him what direction he wanted Libor to move. Typically, he skipped any pleasantries. “Cash mate, really need it lower,” Hayes typed. “What’s the score?” The broker sent his assurances and, over the next few hours, followed a well-worn routine. Whenever one of the Libor-setting banks called and asked his opinion on what the benchmark would do, the broker said – incredibly, given the calamitous news – that the rate was likely to fall. Libor may have featured in hundreds of trillions of dollars of loans and derivatives, but this was how it was set: conversations among men who were, depending on the day, indifferent, optimistic or frightened.

When Hayes checked the official figures later that night, he saw to his relief that yen Libor had fallen. Hayes was not out of danger yet. Over the next three days, he barely left the office, surviving on three hours of sleep a night. As the market convulsed, his profit and loss jumped around from minus $20 million to plus $8 million in just hours, but Hayes had another ace up his sleeve. ICAP, the world’s biggest inter-dealer broker, sent out a “Libor prediction” email each day at around 7am to the individuals at the banks responsible for submitting Libor. Hayes messaged an insider at ICAP and instructed him to skew the predictions lower. Amid the chaos, Libor was the one thing Hayes believed he had some control over. He cranked his network to the max, offering his brokers extra payments for their cooperation and calling in favours at banks around the world.

By Thursday, 18 September, Hayes was exhausted. This was the moment he had been working towards all week. If Libor jumped today, all his puppeteering would have been for nothing. Libor moves in increments called basis points, equal to one one-hundredth of a percentage point, and every tick was worth roughly $750,000 to his bottom line. For the umpteenth time since Lehman faltered, Hayes reached out to his brokers in London. “I need you to keep it as low as possible, all right?” he told one of them in a message. “I’ll pay you, you know, $50,000, $100,000, whatever. Whatever you want, all right?” “All right,” the broker repeated. “I’m a man of my word,” Hayes said. “I know you are. No, that’s done, right, leave it to me,” the broker said.

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Yes, you should be scared. For your children.

Percentage of World Population Age 65+ in 2015 and 2050 (BR)

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Jan 172017
 
 January 17, 2017  Posted by at 9:17 am Finance Tagged with: , , , , , , , , ,  5 Responses »
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Arthur Rothstein Texas Panhandle Dust Bowl Mar 1936


The Cheeto Cometh (Jim Kunstler)
Donald Trump Must Stop Cheering For Brexit, Says Top EU Official (Pol.)
Abolish The CIA (Rozeff)
Theresa May To Confirm UK Exit From EU Single Market (G.)
Corbyn Labeled Russian ‘Collaborator’ for Questioning NATO Troop Build-Up (I’C)
Carney: UK Rates Could Rise Or Fall (BBC)
France Is The Least-Trusted Country In The World (CNBC)
Deutsche Bank Holding Back 90% Of Bonuses This Year (NYP)
China To Target Around 6.5% Growth In 2017 (R.)
China’s Found a New Way to Pump Record Credit (BBG)
China’s Oil Collapse Is Unintentionally Helping OPEC (BBG)
Size Matters – No Country Should Be Bigger Than This (Mises Inst.)
Greek Migration Ministry Running Out Of Options On Islands (Kath.)
Second Man Dies On Freezing Migrant Route Near Turkey In Greece (AP)

 

 

Vinatage Jim. “I’m not aware that George Washington, Thomas Jefferson, James Madison, or Andrew Jackson put their slaves in a blind trust after they became president.

The Cheeto Cometh (Jim Kunstler)

I dunno about you, but I rather enjoy watching the praetorian Deep State go batshit crazy as the day of Trump’s apotheosis approacheth. I imagine a lot of men and women running down the halls of Langley and the Pentagon and a hundred other secret operational redoubts with their hair on fire, wondering how on earth they can neutralize the fucker in the four days remaining. What’s left in their trick-bag? Bake a poison cheesecake for the inaugural lunch? CIA Chief John Brennan has been reduced to blowing raspberries at the incoming president. Maybe some code cowboys In the Utah NSA fortress can find a way to crash all the markets on Friday as an inauguration present. What does it take? A few strategic HFT spoofs? There will be lots of police sharpshooters on the DC rooftops that day. What might go wrong?

Civil War Two is underway, with an interesting echo of Civil War One: Trump dissed Civil Rights sacred icon Georgia congressman John Lewis, descendant of slaves, after said icon castigated Trump as “not a legitimate president.” That now prompts a congressional walk-out of the swearing-in ceremony. The New York Times is acting like a Manhattan socialite in a divorce proceeding, with fresh hysterics every day, reminding readers in a front-page story on Monday that “[Martin Luther] King’s birthday falls within days of the birthdays of two Confederate generals, Robert E. Lee and Stonewall Jackson.” Jeez! Who you gonna call? Ghostbusters? There’s not much Trump can do until Friday noon except tweet out his tweets, but one can’t help but wonder what the Deep State can do after that magic moment passes.

I’ve maintained for nearly a year that, if elected, Trump would be removed by a coup d’état within sixty days of assuming office, and I still think that’s a pretty good call — though I hope it doesn’t come to that, of course. My view of this was only confirmed by Trump’s performance at last week’s press conference, which seemed, shall we say, a little light on presidential decorum. Perhaps it befits this particular Deep State to go down in the manner of an opéra bouffe. History repeats itself, first as tragedy, then as farce, old Karl Marx observed. What does the Union stand for this time? The rights of former SEC employees to sell their services to CitiBank? The rights of competing pharma companies to jack the price of insulin up from $20 to $250 a vial? The rights of DIA subcontractors to sell Semtex plastic explosives to the “moderate” jihadis of the Middle East?

So the theme of the moment is that Donald Trump is a bigger crook than the servants and vassals of the Deep State. He ran for president so he could sell more steaks and whiskey under the Trump brand. He’s in violation of the emoluments clause in the constitution. Well, I’m not aware that George Washington, Thomas Jefferson, James Madison, or Andrew Jackson put their slaves in a blind trust after they became president. Anyway, at this point in our history, nobody can beat the Deep State for financial turpitude, certainly not a single real estate and hotel magnate.

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Is this an invitation to double down? Because something tells me it might just work.

Donald Trump Must Stop Cheering For Brexit, Says Top EU Official (Pol.)

US President-elect Donald Trump’s praise for Brexit and cheerleading for further divisions between European states are unacceptable, a top EU official said Monday. “Having an [U.S.] administration that hopes for the dismantling of Europe is simply not possible,” Pierre Moscovici, European commissioner for economic and financial affairs, taxation and customs, told reporters in Paris. “I don’t accept this vision of things, and I don’t think that comments which in some way glorify the division of the [European] Union, including by predicting further departures, is the best thing for Euro-Atlantic relations.” He added: “I expect from President Trump that he will be at Europe’s side in this strong relationship. I hope we will not always have to debate in this fashion.”

Moscovici was reacting to a joint interview that Trump gave to the U.K.’s Times and Germany’s Bild in which the president-elect called Brexit a “great thing” and said he expected that other EU peoples would also seek to assert their identity. He also repeated his assertion that the NATO military alliance was “obsolete,” and that he wanted the United States to sign a bilateral trade deal with Britain. Moscovici retorted that no free trade deal between the United States and Britain was conceivable until Brexit actually happened. “Even in the case of a hard Brexit, this will take plenty of time,” he said, adding: “We would expect our American partners not to rejoice over this [Brexit].”

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Abolish NATO, the EU, and the CIA. And abolish Schumer while you’re at it. That was ONE DUMB remark. And he’s the Democrats’ Senate leader? Boy, they have problems.

“Let me tell you: You take on the intelligence community, they have six ways from Sunday at getting back at you. For a practical, supposedly hard-nosed businessman, he’s being really dumb to do this.”

“Schumer is saying that the CIA is so powerful that a president should not attempt to control it or else!”

Abolish The CIA (Rozeff)

Every American who looks at the CIA objectively or in a balanced way and judges it by any number of criteria, such as moral, legal and pragmatic, should reach the conclusion that the CIA should be abolished. JFK wanted to break it into a million pieces. Trump is right to dismiss its intelligence reports about DNC hacking. The CIA war on Trump shows us immediately that the CIA is a rogue organization within the U.S. government and a severe threat to America. The CIA is an internal threat to the rule of law and to the government that it supposedly serves. Senator Schumer acknowledges the CIA’s unbridled power, its subversive power, its power to undermine even a president, especially one that wishes to control or alter the organization, when he says:

“Let me tell you: You take on the intelligence community, they have six ways from Sunday at getting back at you. For a practical, supposedly hard-nosed businessman, he’s being really dumb to do this.” Schumer is saying that the CIA is so powerful that a president should not attempt to control it or else! The CIA is so powerful that elections do not matter when it comes to the CIA. The CIA stands alone. The Constitution that empowers the president as the Executive, the boss of government operations, does not matter. Basic American institutions and laws must bow before the threats that the CIA possesses. This is the assessment of a Senator beginning his 4th term and who is the highest ranking Democrat in the Senate in his post as minority leader.

The CIA is an organization that perpetually undermines traditional American values and moral values. It consistently kills innocent people. It continually causes instability and wars. It undermines other societies and our own. It interferes constantly in foreign nations, to the detriment of them and us. It is an unelected power that challenges elected officials. It favors abuses of power, including torture. Its actual value at generating usable intelligence is minimal, often wrong, often misleading, inaccurate and harmful as in the WMD that were never found in Iraq.

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Britain is incapable of conducting a grown up discussion on Brexit. Makes me fearful.

Theresa May To Confirm UK Exit From EU Single Market (G.)

Theresa May is expected to use the most important speech of her premiership to confirm that Britain will be leaving the single market while insisting that it wants to remain “the best friend” to European partners. In remarks that critics will cite as evidence that the government is pursuing a hard Brexit, the prime minister will set out 12 key priorities for the EU negotiations, with no compromise over the ability to control borders and regain sovereignty. Speaking to an audience at Lancaster House, Westminster, including ambassadors from across the world, May will stress her ambition to reach out beyond the continent to build new trading relationships in a move that suggests the UK will also leave the customs union.

However, the prime minister is likely to restate an argument that she does not see it as an either/or choice and say that whatever final deal on trade and customs duties is struck, lorries will be able to pass through Dover and other ports unhindered, despite warnings from others on the issue. “We seek a new and equal partnership – between an independent, self-governing, global Britain and our friends and allies in the EU. Not partial membership of the European Union, associate membership of the European Union or anything that leaves us half-in, half-out,” May is expected to say. “We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do.”

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To wit. The guy who said it of course should have been fired right away, but these days such comments are fully acceptable.

Corbyn Labeled Russian ‘Collaborator’ for Questioning NATO Troop Build-Up (I’C)

The leader of the UK’s Labour Party, Jeremy Corbyn, called for a “de-escalation” of tensions between NATO and Russia, adding in a BBC interview on Thursday: “I want to see a de-militarisation of the border between them.” Along with the U.S., the UK has been rapidly building up its military presence in the Baltic region, including states which border Russia, and is now about to send another 800 troops to Estonia, 500 of which will be permanently based. In response, Russia has moved its own troops within its country near those borders, causing serious military tensions to rise among multiple nuclear-armed powers. Throughout 2016, the Russian and U.S. militaries have engaged in increasingly provocative and aggressive maneuvers against one another. This week, the U.S. began deploying 4,000 troops to Poland, “the biggest deployment of US troops in Europe since the end of the cold war.”

It was in this context that Corbyn said it is “unfortunate that troops have gone up to the border on both sides,” adding that “he wanted to see better relations between Russia, NATO and the EU.” The Labour leader explained that while Russia has engaged in serious human rights abuses both domestically and in Syria, there must be a “better relationships between both sides . . . there cannot be a return to a Cold War mentality.” The response to Corbyn’s call for better relations and de-escalation of tensions with Moscow was swift and predictable. The armed forces minister for Britain’s right-wing government, Mike Penning, accused Corbyn of being a collaborator with the Kremlin:

“These comments suggest that the Labour leader would rather collaborate with Russian aggression than mutually support Britain’s Nato allies. As with Trident, everything Labour says and does shows that they cannot be trusted with Britain’s national security.” This is the same propagandistic formulation that has been used for decades in the west to equate opposition to militarism with some form of disloyalty or treason: if you oppose military confrontation with a foreign adversary or advocate better relations with it, then you are accused of harboring secret sympathy and even support for those foreign leaders, and are often suspected of being an active “collaborator” with (or “stooge” for) them.

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Obviously, worth every penny of his salary. Razor-sharp analysis.

Carney: UK Rates Could Rise Or Fall (BBC)

UK households have continued spending strongly since the referendum, but face headwinds this year, Bank of England governor Mark Carney has warned. Consumers appeared to be “entirely looking through Brexit-related uncertainties”, he said in a speech at the London School of Economics. However, Mr Carney again warned that consumer spending could be hit by rising prices from the weaker pound. He also sounded a cautionary note on the growth in household debt. Mr Carney said that in the year to November, total household borrowing had risen 4%, while consumer credit had gone up by more than 10%, ” the fastest rate since 2005″. Increasingly, the UK was relying on consumer spending for economic growth – rather than exports or investment – which boded poorly for the future, Mr Carney said on Monday.

Gerard Lyons, a UK economist who backed Brexit, said Mr Carney “did rightly highlight the extent to which growth has become more consumer led”. The UK had one of the world’s fastest-growing advanced economies last year, but the Bank of England has forecast growth will slow in 2017 as higher inflation weighs on consumer spending. “We do see a slowing in the economy and household spending this year… that’s a slowing, not a stopping,” he emphasised. Economic forecasters have predicted that inflation could rise above the Bank’s 2% target as a result of the pound’s weakness since the Brexit vote. Sterling fell against most major currencies on Monday as markets anticipated that Prime Minister Theresa May would use a major speech on Tuesday to advocate a so-called “hard Brexit” in which the UK would leave the EU’s single market and customs union. The UK was entering a “period of somewhat higher consumer price inflation”, Mr Carney said. As a result, the next interest rate move could be either up or down, he said.

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By its own people. Brilliant! And people claim Le Pen doesn’t stand a chance.

France Is The Least-Trusted Country In The World (CNBC)

France has claimed the position of the country least trusted by its people, according to an influential survey by the world’s largest public relations firm. A thumping 72% of the French population agree that the institutional system is failing them, placing the country in joint last position alongside neighboring Italy, according to the 2017 Edelman Trust Barometer. Immigration, globalization and eroding social values are highlighted as underpinning the negative results, revealing a disheartening sentiment ahead of this spring’s French presidential election.

The research warns of the consequences playing out in both France and other countries where public disillusion is heightened. “Countries that combine a lack of faith in the system with deep societal fears, such as France, Italy, South Africa, the U.S. and Mexico, are electing or moving towards populist candidates,” reads the research. The disappointment also extends beyond the least enfranchised to the better-off elements of French society. While only a very weak 38% of the mass population trust institutions in France, a mere 56% of the category described as the ‘informed public’ still maintains its faith in the same institutions.

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Don’t worry, the big boys rescued their own: “Only the top 10% of revenue generators may get a bonus for 2016..”

Deutsche Bank Holding Back 90% Of Bonuses This Year (NYP)

Deutsche Bank, the former Wall Street powerhouse, may hold back on giving out bonuses to as many as 90% of bankers and traders, The Post has learned. Only the top 10% of revenue generators may get a bonus for 2016 — and even then it will be paid out over the next five years, according to a source briefed on internal discussions. The bonus plans are still in discussion, another source cautioned, and could still change in the coming weeks. Deutsche was hit hard last month when it settled a mortgage bond probe with the Justice Department for $7.2 billion — which was only about half of what the government initially wanted. While reports have suggested that the settlement could affect the bank’s ability to pay bonuses, it couldn’t be confirmed if the bank had used incentive compensation for the settlement. This wouldn’t be the first time that John Cryan, Deutsche’s CEO, has cut bonuses since taking over in 2014. Last year, the bank cut the bonus pool by 11% and delayed paying its employees until March.

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And just to make sure, they’ll print and borrow it. Can’t miss. AKA fake news.

China To Target Around 6.5% Growth In 2017 (R.)

China will lower its 2017 economic growth target to around 6.5% from last year’s 6.5-7%, policy sources said, reinforcing a policy shift from supporting growth to pushing reforms to contain debt and housing risks. The proposed target was endorsed by top leaders at the closed-door Central Economic Work Conference in mid-December, according to four sources with knowledge of the meeting outcome. “The target will be around 6.5%, which indicates that slightly slower growth is acceptable,” said one of the sources, a policy adviser. The world’s second-largest economy likely grew around 6.7% last year – roughly in the middle of the government’s target range – but it faces increasing uncertainties in 2017, the head of China’s state planning agency said on Jan. 10.

Policy stimulus measures – evident in record lending from mostly state-owned banks and increased government spending – have fueled worries among top leaders about high debt levels and an overheating housing market that could threaten financial stability if not addressed, the sources said. Under the central bank’s recently announced “prudent and neutral” stance, it is expected to guide market interest rates higher to help put the brakes on flush credit conditions, which should also support the weakening yuan CNY=CFXS, the sources said. “They’ve put more emphasis on controlling risks, and monetary policy could be a bit tighter,” said a second policy source, though he characterized the change as ‘fine-tuning’ ahead of a key party meeting in the autumn at which there will be a change in the top leadership. “They are keen to keep economic growth stable before the 19th party congress,” the source said.

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How to get 6.5% growth.

China’s Found a New Way to Pump Record Credit (BBG)

China is increasingly managing the flow of credit with more finely-tuned instruments than its old method of changing how much of their deposits lenders must keep locked away. Banks’ required reserve requirements haven’t changed for almost a year. Instead, the central bank has used short-term lending channels to add almost six times as much funding than would have been added by lowering banks’ RRRs by half a percentage point. With the new tool playing its part in stabilizing the economy – data Friday is estimated to show a 6.7% expansion for 2016 – the People’s Bank of China is switching its focus to risk management. Another advantage of targeted lending: it adds funds without signaling broad easing that adds to downward pressure on the yuan and fuels further capital flight.

The PBOC pumped in a net 270 billion yuan ($39 billion) through open-market operations on Tuesday, the most in a year, data compiled by Bloomberg show. That followed last week’s 305.5 billion yuan of MLF operations, the main short-term lending tool used to meet banks’ medium-term cash demand. Analysts said the efforts can help stabilize liquidity before the week-long Chinese New Year holiday at the end of this month. The PBOC increased the total outstanding of its Medium-term Lending Facility last month to a record 3.46 trillion yuan. That compares with the 600 billion yuan that economists estimate was added to the banking system after the last required reserve ratio cut in February, when it was lowered by half a%age point. Bank deposits stood at 155 trillion yuan in December, greater than U.S. GDP.

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And now imagine a large devaluation of the yuan vs the dollar.

China’s Oil Collapse Is Unintentionally Helping OPEC (BBG)

OPEC’s campaign to prop up oil prices is getting unlikely support from its biggest customer. China’s production is forecast to fall by as much as 7% this year, extending a record decline in 2016, according to analysts at CLSA, Sanford C. Bernstein and Nomura. That’s about the same size as the output cut agreed by Iraq, the second-biggest producer in OPEC, which late last year reached a deal to trim supply to support prices. “China’s domestic crude output decline will certainly help OPEC’s plan to reduce global supply,” said Nelson Wang, a Hong Kong-based oil and gas analyst at CLSA, who sees a 7% slide this year. ”Even if that isn’t China’s intention, it’s just the reality that China can’t produce more under the current circumstances.” While China consumes more oil than almost any other country, it’s also one of the world’s biggest producers, with fields stretching from offshore its southern coast to the far north east.

The collapse in prices that began in 2014 is taking its toll, and the nation’s output suffered a record decline last year. That plays into the hands of OPEC as it seeks to prop up the global oil market, forcing China to depend more heavily on imports. Brent crude, benchmark for half of the world’s oil, averaged about $45 a barrel last year, more than 50% below levels in 2014, the year OPEC decided to tackle a global glut by keeping the taps open. The crash in prices triggered a rethink by the group, which banded together with 11 non-member countries late last year and agreed to a collective cut of almost 1.8 million barrels a day. Prices have since rallied above $58 a barrel. China’s output slumped in 2016 as state-owned firms shut wells at mature fields that had become too costly to operate after the crash. Crude production fell 6.9% in the first 11 months of 2016 to about 4 million barrels a day, the first decline since 2009 and the biggest in data going back to 1990.

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Very interesting discussion, but I would want to see a much stronger link to the pros and cons of centralization itself.

Size Matters – No Country Should Be Bigger Than This (Mises Inst.)

For Mises, individuals associate with each other voluntarily in order to take advantage of the division of labor. Writing in Human Action, Mises notes: “Every step by which an individual substitutes concerted action for isolated action results in an immediate and recognizable improvement in his conditions. The advantages derived from peaceful cooperation and division of labor are universal. They immediately benefit every generation, and not only Iater descendants. For what the individual must sacrifice for the sake of society he is amply compensated by greater advantages. His sacrifice is only apparent and temporary; he foregoes a smaller gain in order to reap a greater one later.” Mises continues: [H]uman action itself tends toward cooperation and association; man becomes a social being not in sacrificing his own concerns for the sake of a mythical Moloch, society, but in aiming at an improvement in his own welfare.”

In Mises’s view, these efforts to enhance trade and cooperation among human beings lead to the creation of cities and other population centers. Moreover, for Mises, the state — properly limited to the function of protecting private property — can potentially assist in creating conditions that facilitate the cooperative behavior he envisioned. Thus, it is the cost of acting as an administrator of law that leads Mises to conclude that certain “compelling technical considerations” are are likely to keep states above a certain minimum size. A problem arises, however, when we recognize that this vision of the state exists in tension with the fact that — as illustrated by Raico — the physical and geographical growth of states tends to facilitate the expansion of state power well beyond the role imagined by Mises.

When contained at a municipal or metropolitan level, state power is one thing. Relocation to a neighboring metropolitan area remains relatively easy. Once states begin to take control of sizable frontiers and multiple municipal areas, however, the situation becomes far different, and states begin to limit and regulate trade and free movement, rather than facilitate it. Thus, even if we accept Mises’s idea that there is some level at which economies of scale for state administration may be beneficial, those assumed benefits are increasingly threatened the larger a state becomes. The answer lies in limiting state size to a human scale in which human beings can still associate, travel, and trade across jurisdictional boundaries without incurring a great cost. The standard for “great cost” is subjective, of course, and over time has changed substantially.

The cost of traveling 50 miles in the 16th century, for example, is significantly different form the cost of traveling the same distance today. There are ongoing attempts by geographers, however, to determine the “natural” size of a region that encompasses a population’s economic, political, and social institutions. In a recent study, for example, Garret Dash Nelson and Alasdair Rae attempted to identify regions that “have been substantively tied together by the forces of urban development, telecommunications, the frictionless circulation of capital, and the consolidation of both public and private institutions.” Basing their standard of scale on tolerance for commute times, the geographers selected 50-mile commutes as an indicator of how closely tied together is a specific region. The end result was this:

The authors then create a suggested map of political units based on the scale of megaregions:

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Tsipras needs to grow a pair.

Greek Migration Ministry Running Out Of Options On Islands (Kath.)

The Migration Ministry appears to be at a dead end over how to manage the growing number of migrants trapped on the country’s eastern Aegean islands after an adverse court ruling on Chios and a clash with the mayor of Lesvos. On Chios, a magistrate on Monday upheld a complaint against the development of a holding facility for migrants exhibiting delinquent behavior, leaving the ministry with few options over how to separate troublemakers from the general population at the processing center in Souda, where violence has erupted on several occasions in the past few months.

On Lesvos, tensions rose during a meeting between Migration Minister Yiannis Mouzalas and Mayor Spyros Galinos on Sunday over the installation of portable toilets at the island’s harbor for migrants temporarily housed on a ship after their tents at Moria camp were snowed in last week, with the local official accusing Mouzalas of putting him on a collision course with the community. Mouzalas has sought – and largely failed – to muster support for building more camps on the islands to help ease the pressure on existing facilities that are struggling to accommodate tens of thousands of refugees and migrants, but is running into increasing opposition.

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We are beyond shame and humanity. Beyond God.

Second Man Dies On Freezing Migrant Route Near Turkey In Greece (AP)

Police in a region of Greece that borders Turkey say another person has died of hypothermia on a route used by migrant smugglers despite freezing temperatures. Authorities said the body of a man was discovered buried in snow outside a Greek village on Monday. They think he probably died over the weekend. The man was the second to succumb to the cold in less than two weeks. Another died of hypothermia in the same area on January 3. In a separate incident, a migrant man was being treated at a nearby hospital for symptoms of frostbite. Greek authorities have reported a recent surge in the number of people attempting to reach Europe while avoiding detention on the Greek islands by crossing a river that divides Turkey and Greece.

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Jan 162017
 
 January 16, 2017  Posted by at 10:13 am Finance Tagged with: , , , , , , , , , , , ,  9 Responses »
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John Collier Japanese restaurant, Monday after Pearl Harbor, San Francisco 1941


World Could Enjoy Utopian Future With Sustainable Development (Ind.)
The Global Chain That Produces Your Fish (AFP)
Trump Calls NATO Obsolete And Dismisses EU (BBG)
Trump Slams NATO And EU, Prepared To “Cut Ties” With Merkel (ZH)
NATO, Russia, Merkel, Brexit: Trump Unleashes Broadsides On Europe (AFP)
Trump Vows ‘Insurance For Everybody’ In Replacing Obamacare (R.)
CIA Director Warns Trump To Watch What He Says (R.)
Trump Team May Move West Wing Briefings to Expand Capacity (BBG)
Pound Sterling Hits New 31-Year-Low Ahead Of May’s Brexit Speech (Ind.)
The Scandal of the 35-Page Anti-Trump ‘Intelligence Dossier’ (GR)
Eight Billionaire Men ‘As Rich As World’s Poorest 3.5 Billion People’ (BBC)
“China Should Stop Intervening In FX Market And Let Yuan Float” (R.)
China’s Booming Middle Class Drives Asia’s Toxic E-Waste Mountains (G.)
Greece Strives To Absorb EU’s Migration Funds (Kath.)

 

 

If you find this appealing, seek help. These people mean it, which makes them the biggest danger to your future, bar none. We’re not going to fix the world for profit. The sustainable delusion will kill us.

World Could Enjoy Utopian Future With Sustainable Development (Ind.)

It is an unremittingly bleak vision of the future: over the next decade the world’s economy stagnates, fossil fuels ramp up global warming and the gap between rich and poor widens, fuelling nationalist tensions based on resentment of the ‘global elite’. But, while a major new report by the Business & Sustainable Development Commission (BSDC) warns this appears to be humanity’s current path, it also spells out how to create not quite “heaven on Earth” but a world that is wealthier, more peaceful and fair for all. And their call for the world to start living up to the United Nations’ 17 Sustainable Development Goals was backed by more than 80 major companies in a joint letter to Theresa May, which urged the UK Government to take this “essential” step to secure “our long-term prosperity and the well-being of generations to come”.

However, Ms May did not respond personally to the letter, with the Department for International Development instead issuing a response on behalf of the Government in an implicit snub to the letter’s call for all departments, “not only” DfID, to get involved. The UN’s ‘Global Goals’, as they are known, seem at first sight to be almost impossibly ambitious. There should be “no poverty” and “zero hunger” in the world, universal health coverage, a decent education for all, gender equality, access to affordable and clean energy, action on climate change, the list goes on. But the BSDC’s report, compiled after a year of research into their effects, says achieving them is actually key to delivering massive growth. The document, called Better Business, Better World, estimates the Global Goals could be worth up to $36,000bn a year in savings and extra revenue by 2030.

They based this on an analysis of four major economic sectors – food and agriculture; energy and materials; cities; and health and wellbeing – which would benefit to the tune of $12,000bn a year. They then estimated the total economic prize would be two to three times higher. Lifting people out of poverty could bring up to a billion people into the consumer economy. And achieving gender equality alone could add at least $12,000bn to the world’s total GDP by 2025, according to one estimate. “The overall prize is enormous,” the report says. “The results will not be heaven on Earth; there will be many practical challenges. “But the world would undoubtedly be on a better, more resilient path. We could be building an economy of abundance.

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Mommy, tell me the story again about how smart we once were.

The Global Chain That Produces Your Fish (AFP)

That smoked salmon you bought for the New Year’s festivities has a story to tell. The salmon may have been raised in Scotland – but it probably began life as roe in Norway. Harvested at a coastal farm, the fish may have been sent to Poland to be smoked. It may even have travelled halfway around the world to China to be sliced. It eventually arrived, wrapped in that tempting package, in your supermarket. Globalisation has changed the world in many ways, but fish farming is one of the starkest examples of its benefits and hidden costs. The nexus of the world fish-farming trade is China – the biggest exporter of fish products, the biggest producer of farmed fish and a major importer as well.

With battalions of lost-cost workers, linked to markets by a network of ocean-going refrigerated ships, China is the go-to place for labour-intensive fish processing. In just a few clicks on Alibaba, the Chinese online trading hub, you can buy three tonnes of Norwegian filleted mackerel shipped from the port city of Qingdao for delivery within 45 days. “There is a significant amount of bulk frozen fish sent to China just for filleting,” said a source from an association of importers in an EU country. “The temperature of the fish is brought up to enable the filleting but the fish are not completely defrosted.” The practice has helped transform the Chinese coastal provinces of Liaoning and Shandong into global centres for fish processing.

But globalised fish farming leaves a mighty carbon footprint and has other impacts, many of which are unseen for the consumer. Don Staniford, an activist and director of the Global Alliance Against Industrial Aquaculture, called the fish industry’s production and transportation chain “madness”. “The iconic image of Scottish salmon – a wild salmon leaping out of the river – has gone. The Scottish salmon farming industry is dominated, 60-70%, by Norwegian companies,” he said. The biggest such company, Marine Harvest, is the world’s largest producer of Atlantic salmon, some 420,000 tonnes in 2015. Scottish salmon farms import eggs from Norway, the fish food from Chile and then send the fish to Poland – “because it’s cheaper” – for smoking, said Staniford.

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Lots of coverage of Trump’s weekend interviews in Europe. Too many details to cover them all in this format. Overall impression: he makes a lot of sense. Likes Brexit, doesn’t like NATO, sees EU as a project to benefit Germany, wants far less nukes, far less US regime change-focused interventionism.

Trump Calls NATO Obsolete And Dismisses EU (BBG)

Donald Trump called NATO obsolete, predicted that other European Union members would follow the U.K. in leaving the bloc, and threatened BMW with import duties over a planned plant in Mexico, according to two European newspapers which conducted a joint interview with the president-elect. Trump, in an hourlong discussion with Germany’s Bild and the Times of London published on Sunday, signaled a major shift in trans-Atlantic relations, including an interest in lifting U.S. sanctions on Russia as part of a nuclear weapons reduction deal. Quoted in German by Bild from a conversation held in English, Trump predicted that Britain’s exit from the EU will be a success and portrayed the EU as an instrument of German domination designed with the purpose of beating the U.S. in international trade.

For that reason, Trump said, he’s fairly indifferent to whether the EU stays together, according to Bild. The Times quoted Trump as saying he was interested in making “good deals with Russia,” floating the idea of lifting sanctions that were imposed as the U.S. has sought to punish the Kremlin for its annexation of Crimea in 2014 and military support of the Syrian government. “They have sanctions on Russia – let’s see if we can make some good deals with Russia,’’ Trump said, according to the Times. “For one thing, I think nuclear weapons should be way down and reduced very substantially, that’s part of it.’’ Trump’s reported comments leave little doubt that he’ll stick to campaign positions and may in some cases upend decades of U.S. foreign policy, putting him fundamentally at odds with Angela Merkel on issues from free trade and refugees to security and the EU’s role in the world.

Repeating a criticism of NATO he made during his campaign, Trump said that while trans-Atlantic military alliance is important, it “has problems.” “It’s obsolete, first because it was designed many, many years ago,” Trump said in the Bild version of the interview. “Secondly, countries aren’t paying what they should” and NATO “didn’t deal with terrorism.” The Times quoted Trump saying that only five NATO members are paying their fair share. While those comments expanded on doubts Trump expressed about the North Atlantic Treaty Organization during his campaign, he reserved some of his most dismissive remarks for the EU and Merkel, whose open-border refugee policy he called a “catastrophic mistake.”

In contrast, Trump praised Britons for voting in 2016 to leave the EU. People and countries want their own identity and don’t want outsiders coming in to “destroy it,” he said. The U.K. is smart to leave the bloc because the EU “is basically a vehicle for Germany,” the Times quoted Trump as saying. “If you ask me, more countries will leave,” he said. Trump told the Times that he plans to quickly pursue a trade deal with the U.K. after taking office and will meet with British Prime Minister Theresa May soon. “We’re gonna work very hard to get it done quickly and done properly. Good for both sides,” he said. “We’ll have a meeting right after I get into the White House and it’ll be, I think we’re gonna get something done very quickly.”

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ZH has a good summary of the interviews.

Trump Slams NATO And EU, Prepared To “Cut Ties” With Merkel (ZH)

In two separate, and quite striking, interviews with Germany’s Bild (paywall) and London’s Sunday Times (paywall), Donald Trump did what he failed to do in his first US press conference, and covered an extensive amount of policy and strategy, much of which however will likely please neither the pundits, nor the markets. Among the numerous topics covered in the Bild interview, he called NATO obsolete, predicted that other European Union members would join the U.K. in leaving the bloc and threatened BMW with import duties over a planned plant in Mexico, according to a Sunday interview granted to Germany’s Bild newspaper that will raise concerns in Berlin over trans-Atlantic relations. Furthermore, in his first “exclusive” interview in the UK granted to the Sunday Times, Trump said he will offer Britain a quick and “fair” trade deal with America within weeks of taking office to help make Brexit a “great thing”.

Trump revealed that he was inviting Theresa May to visit him “right after” he gets into the White House and wants a trade agreement between the two countries secured “very quickly”. Trump told the Times that other countries would follow Britain’s lead in leaving the European Union, claiming it had been deeply damaged by the migration crisis. I think it’s very tough, he said. People, countries want their own identity and the UK wanted its own identity. [..] Trump discussed his stance on Russia and suggested he might use economic sanctions imposed for Vladimir Putin’s encroachment on Ukraine as leverage in nuclear-arms reduction talks, while NATO, he said, “has problems.” “[NATO] is obsolete, first because it was designed many, many years ago,” Bild quoted Trump as saying about the trans-Atlantic military alliance. “Secondly, countries aren’t paying what they should” and NATO “didn’t deal with terrorism.”

While those comments expanded on doubts Trump raised about the North Atlantic Treaty Organization during his campaign, he reserved some of his most dismissive remarks for the EU and Merkel, whose open-border refugee policy he called a “catastrophic mistake.” He further elaborated on this stance in the Times interview, where he said he was willing to lift Russian sanctions in return for a reduction in nuclear weapons. When asked about the prospect of a nuclear arms reduction deal with Russia, Trump told the newspaper in an interview: “For one thing, I think nuclear weapons should be way down and reduced very substantially, that’s part of it.” Additionally, Trump said Brexit will turn out to be a “great thing.” Trump said he would work very hard to get a trade deal with the United Kingdom “done quickly and done properly”.

Trump praised Britons for voting last year to leave the EU. People and countries want their own identity and don’t want outsiders to come in and “destroy it.” The U.K. is smart to leave the bloc because the EU “is basically a means to an end for Germany,” Bild cited Trump as saying. “If you ask me, more countries will leave,” he was quoted as saying.

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Goal-seeked ‘reporting’: “Five days before his inauguration as the 45th President of the United States, the billionaire populist let loose a torrent of controversial comments..” AFP didn’t stand out so far as having joined the anti-Trump ranks, but there you go.

NATO, Russia, Merkel, Brexit: Trump Unleashes Broadsides On Europe (AFP)

NATO is “obsolete”, Germany’s Angela Merkel made a “catastrophic mistake” on refugees, Brexit will be “great” and the US could cut a deal with Russia: Donald Trump unleashed a volley of broadsides in interviews with European media. Five days before his inauguration as the 45th President of the United States, the billionaire populist let loose a torrent of controversial comments about European allies in interviews with British newspaper The Times and Germany’s Bild. He extended a hand to Russia, which has been hit by a string of sanctions under his predecessor Barack Obama over Moscow’s involvement in Ukraine, the Syrian war and for alleged cyber attacks to influence the US election. “Let’s see if we can make some good deals with Russia,” Trump said in remarks carried by The Times.

The US president-elect suggested a deal in which nuclear arsenals would be reduced and sanctions against Moscow would be eased, but gave no details. “Russia’s hurting very badly right now because of sanctions, but I think something can happen that a lot of people are gonna benefit,” said the president-elect, who has previously expressed admiration for Russian leader Vladimir Putin. Washington’s European allies imposed sanctions against Russia over Ukraine in 2014. Those measures were renewed on December 19.

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Trump grants an interview to the WaPo? He has a big heart!

Trump Vows ‘Insurance For Everybody’ In Replacing Obamacare (R.)

U.S. President-elect Donald Trump aims to replace Obamacare with a plan that would envisage “insurance for everybody,” he said in an interview with the Washington Post published on Sunday night. Trump did not give the newspaper specifics about his proposals to replace Democratic President Barack Obama’s signature health insurance law, but said the plan was nearly finished and he was ready to unveil it alongside the leaders of the Republican-controlled Congress. The Republican president-elect takes office on Friday. “It’s very much formulated down to the final strokes. We haven’t put it in quite yet but we’re going to be doing it soon,” Trump told the Post, adding he was waiting for his nominee for health and human services secretary, Tom Price, to be confirmed.

The plan, he said, would include “lower numbers, much lower deductibles,” without elaborating. “We’re going to have insurance for everybody,” Trump said. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” Trump was also quoted as saying in the interview that he would target pharmaceutical companies over drug pricing and insist they negotiate directly with the Medicare and Medicaid government health plans for the elderly and poor. U.S. House Republicans won passage on Friday of a measure starting the process of dismantling the Affordable Care Act, popularly known as Obamacare, despite concerns about not having a ready replacement and the potential financial cost of repealing the law.

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All these people, CIA, media, who actively attempted to undermine Trump’s campaign and candidacy, are now shocked (I tell you, shocked!) that he doesn’t ignore what they did.

CIA Director Warns Trump To Watch What He Says (R.)

CIA Director John Brennan on Sunday offered a stern parting message for Donald Trump days before the Republican U.S. president-elect takes office, cautioning him against loosening sanctions on Russia and warning him to watch what he says. Brennan rebuked Trump for comparing U.S. intelligence agencies to Nazi Germany in comments by the outgoing CIA chief that reflected the extraordinary friction between the incoming president and the 17 intelligence agencies he will begin to command once he takes office on Friday. In an interview with “Fox News Sunday,” Brennan questioned the message sent to the world if the president-elect broadcasts that he does not have confidence in the United States’ own intelligence agencies.

“What I do find outrageous is equating the intelligence community with Nazi Germany. I do take great umbrage at that, and there is no basis for Mr. Trump to point fingers at the intelligence community for leaking information that was already available publicly,” Brennan said. Brennan’s criticism followed a tumultuous week of finger-pointing between Trump and intelligence agency leaders over an unsubstantiated report that Russia had collected compromising information about Trump. The unverified dossier was summarized in a U.S. intelligence report presented to Trump and outgoing President Barack Obama this month that concluded Russia tried to sway the outcome of the Nov. 8 election in Trump’s favor by hacking and other means. The report did not make an assessment on whether Russia’s attempts affected the election’s outcome.

Trump has accused the intelligence community of leaking the dossier information, which its leaders denied. They said it was their responsibility to inform the president-elect that the allegations were being circulated. Later on Sunday, Trump took to Twitter to berate Brennan and wrote, “Was this the leaker of Fake News?” In a separate posting, Trump scolded “those intelligence chiefs” for presenting the dossier as part of their briefing. “When people make mistakes, they should APOLOGIZE,” he wrote.

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Excellent. The elite press do not deserve their status.

Trump Team May Move West Wing Briefings to Expand Capacity (BBG)

The incoming Trump administration is considering moving White House press briefings out of the West Wing to accommodate more than the “Washington media elite,” President-elect Donald Trump’s press secretary said. “This is about greater accessibility, more people in the process,” Sean Spicer said Sunday on Fox News Channel’s “Media Buzz.” Involving more people, including bloggers and others who aren’t from the mainstream media, “should be seen as a welcome change,” he said. Their comments followed a report Saturday by Esquire, citing unidentified officials from the transition team, that the new administration may move the press corps out of the main White House building altogether because of antagonism between Trump and the media.

Any change would be made for logistical reasons, in response to heavy demand from media organizations, Vice President-elect Mike Pence said Sunday. “The briefing room is open now to all reporters who request access,” White House Correspondents’ Association President Jeff Mason said in a statement Sunday. “We object strenuously to any move that would shield the president and his advisers from the scrutiny of an on-site White House press corps.” Mason said he was meeting with Spicer “to try to get more clarity on exactly what” the proposal is. “There’s such a tremendous amount of interest in this incoming administration that they’re giving some consideration to finding a larger venue on the 18 acres in the White House complex, to accommodate that extraordinary interest,” Pence said on CBS News’ “Face the Nation.”

“The interest of the team is to make sure that we accommodate the broadest number of people who are interested and media from around the country and around the world,” Pence said. On ABC’s “This Week,” incoming White House chief of staff Reince Priebus said demand for press-conference credentials far exceeds the “49 people” who can fit into the current briefing room. “The one thing that we discussed was whether or not we want to move the initial press conferences into the Executive Office Building,” Priebus said, adding, “you can fit four times the amount of people.”

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Oh well, with Trump praising Brexit and promising a swift deal, this may reverse.

Pound Sterling Hits New 31-Year-Low Ahead Of May’s Brexit Speech (Ind.)

Fears of the consequences of a hard Brexit have sent the pound to a fresh 31-year-low against the dollar, excluding last October’s flash crash. The pound hit new lows after reports said that Prime Minister Theresa May will on Tuesday signal plans to quit the EU’s single market to regain control of Britain’s borders, in a speech which is expected to give the most detailed insight yet into her approach to the forthcoming negotiations with Brussels. Sterling fell against all of its major peers, dropping below $1.1985 against the dollar in early Asian trade on Monday, before recovering slightly to just above $1.20. This is a more than three-decade low for the currency, excluding the flash crash on 7 October that sent the pound plunging more than six per cent to $1.18.

Fears among currency traders and investors that the UK is heading for a hard Brexit – in which access to the EU’s single market would be sacrificed in favour of tighter control over immigration – have tended to weaken the pound while suggestions that the UK could retain access to the EU single market have helped it recover. Sterling is down against the dollar by about 19 per cent since the Brexit vote, with declines since mainly sparked by concerns that Mrs May would pursue a so-called hard Brexit. City analysts are anticipating Mrs May’s speech on Tuesday with a sense of gloom.

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I know, I know, we should ignore this drivel. But there’s a few good take downs, this being one. I still wonder how the peeing hookers tale -apparently- ended up in Steele’s report. Because it came from the US, not Russia. Then again, of course, Steele hasn’t been to Russia in decades. If this report says anything, it’s that they can’t find dirt on Trump.

The Scandal of the 35-Page Anti-Trump ‘Intelligence Dossier’ (GR)

Some critics have been ungrateful enough to suggest that claims published without the least scintilla of supporting evidence by intelligence agencies which have a rich history of lying to the American people as well as everyone else, and which are in addition led by James Clapper, the Director of National Intelligence, may not be above suspicion. But the latest revelation, a 35-page sequence of linked texts published on January 10 by BuzzFeedNews, gives what simpletons are expected to interpret as unimpeachable evidence of soundness and credibility. The document is authored “by a person who has claimed to be a former British intelligence official,” and its sources, identified by letters of the alphabet, include a “senior Russian Foreign Ministry figure,” “a former top level Russian intelligence officer still active inside the Kremlin,” as well as another “senior Kremlin official.”

(How could one fail to doff one’s cap in acknowledgment of the spy-craft of those Brits, who are able so deftly to penetrate the inner counsels of the wicked Mr. Putin and induce his close associates to sing like canaries?) The texts which make up this document propose that Mr. Trump and his entourage had routine treasonous contacts with Russian state authorities over a long period leading up to the election, and that Mr. Putin was interfering in that election in every way possible—including by exploiting “TRUMP’s personal obsessions and sexual perversion in order to obtain suitable ‘kompromat’ (compromising material) on him.” The document’s most lurid claim—certified by Sources B, D, E and F—is made on its second page. It’s not clear what form of perverse pleasure Mr. Trump was supposed to have obtained by having “a number of prostitutes” urinate on his bed in the Moscow Ritz Carlton’s presidential suite.

The explanation given for the motivation behind this command performance – that the same bed had previously been slept in, on one of their official visits to Russia, by Barack and Michelle Obama (“whom he hated”) – seems bizarre. After all, on the night in question, whose soggy bed was it now? [..] The most immediate concern raised by this literally filthy story may be humanitarian. It seems well attested that Mr. Trump is not merely fastidious, but germaphobic: where is he supposed to have slept out the rest of the night? On the perhaps undefiled sofa, or on the carpet? And what are we to make of the claim by trolling posters at 4Chan that this “golden showers” story was a hoax they had foisted onto a Republican operative known to despise Trump, who then shopped it around to news media, other politicians, and intelligence agencies? If this story is a fiction, then are the document’s Sources B, D, E and F, who confirmed it, also fictional? And if some of the document’s sources are made up, what kind of fool would want to believe that any of the rest are authentic?

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We call these people success stories. We need to redefine ‘success’.

Eight Billionaire Men ‘As Rich As World’s Poorest 3.5 Billion People’ (BBC)

The world’s eight richest individuals have as much wealth as the 3.6bn people who make up the poorest half of the world, according to Oxfam. The charity said its figures, which critics have queried, came from improved data, and the gap between rich and poor was “far greater than feared”. Oxfam’s report coincides with the start of the World Economic Forum in Davos. Mark Littlewood, of the Institute of Economic Affairs, said Oxfam should focus instead on ways to boost growth. “As an ‘anti-poverty’ charity, Oxfam seems to be strangely preoccupied with the rich,” said the director-general of the free market think tank. For those concerned with “eradicating absolute poverty completely”, the focus should be on measures that encourage economic growth, he added.

Ben Southwood, head of research at the Adam Smith Institute, said it was not the wealth of the world’s rich that mattered, but the welfare of the world’s poor, which was improving every year. “Each year we are misled by Oxfam’s wealth statistics. The data is fine – it comes from Credit Suisse – but the interpretation is not.” The annual event in Davos, a Swiss ski resort, attracts many of the world’s top political and business leaders. Katy Wright, Oxfam’s head of global external affairs, said the report helped the charity to “challenge the political and economic elites”. “We’re under no illusions that Davos is anything other than a talking shop for the world’s elite, but we try and use that focus,” she added.

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But that would sink it. A band of 25%?!

“China Should Stop Intervening In FX Market And Let Yuan Float” (R.)

China should stop intervening in the foreign exchange market, devalue the yuan and let it float freely to restore stability, a senior researcher at a government-backed think tank said. Xiao Lisheng, a finance expert with the Chinese Academy of Social Sciences, made the remarks in an article on Monday in the official China Securities Journal amid a growing debate among the country’s economists on whether authorities should let the closely-managed currency trade more freely. The yuan lost 6.6% against the dollar last year, the biggest annual loss since 1994. “The more the government delays the release of depreciation pressure, the greater the impact and destructive power of the release of depreciation pressure will be,” Xiao wrote.

The authorities should “let the yuan exchange rate have a one-off adjustment to realize a free float” of the currency, he said. The yuan is allowed to trade in a band of 2% on either side of a daily reference rate managed by the central bank. Authorities have said repeatedly there was no basis for continued depreciation of the unit, but many currency strategists predict a further weakening this year if the U.S. dollar remains strong, spurring further capital outflows from China. Xiao said the current mid-point formation mechanism, adopted in 2015, is still immature and in transition, although it has eased depreciation pressure and curbed sharp declines in the country’s foreign exchange reserves. “But any foreign exchange rate mechanism without a free float cannot fundamentally reach a market clearing (price),” he wrote.

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Much more of that to come, even if -or especially if- their economy tanks.

China’s Booming Middle Class Drives Asia’s Toxic E-Waste Mountains (G.)

Asia’s mountains of hazardous electronic trash, or e-waste, are growing rapidly, new research reveals, with China leading the way. A record 16m tonnes of electronic trash, containing both toxic and valuable materials, were generated in a single year – up 63% in five years, new analysis looking at 12 countries in east and south-east Asia shows. In China the mountain of discarded TVs, phones, computers, monitors, e-toys and small appliances grew by 6.7m tonnes in 2015 alone. That’s an 107% increase in just five years. To get a sense of scale, if every woman, man and child in China had an old LCD monitor and dumped it the pile would not equal the 2015 tonnage. The region’s fast-increasing middle class is the main driver of e-waste increases, not population growth, the report by the United Nations University found.

However, Asia’s 3.7kg per person of waste is still tiny compared to Europe’s 15.6 kg per person, it said. “Growing incomes, the creation of more and more gadgets and ever-shorter lifespans of things like mobile phones are the reasons for this tremendous increase in Asia,” said co-author Ruediger Kuehr of UN University. Electronics and electrical devices have a big eco footprint, meaning their manufacture consumes a lot of energy and water, along with valuable and sometimes scarce resources, making recycling and recovery very important. The increasing volumes of e-waste combined with a lack of environmentally sound management is a cause for concern, says Kuehr. “We risk future production of these devices and very high costs without recycling the materials,” he said.

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The numbers start to be confusing. It’s good to realize that Kathimerini is not a fan of Tsipras. What we know is the EU prefers to donate millions to NGOs rather than Greece.

But the point stands: where is the money going, what is it being spend on, and why is there no public accounting of this? Why are refugees freezing to death?

Greece Strives To Absorb EU’s Migration Funds (Kath.)

Greece is struggling to make use of EU money for migrants and refugees after having absorbed just a fraction of the 509 million euros in funding for up to 2020. So far, Athens has used about 2% of 294.6 million euros from the EU’s Asylum, Migration and Integration Fund, and around 25% of 214.8 million euros from the Internal Security Fund. Greek authorities blame the slow absorption rate on emergency conditions caused by the migrant influx, whereas Brussels has pointed to technical faults on the other end.

Athens, however, appears more flexible absorbing separate EU emergency funding: From about 350 million euros for 2015-16, some 175 million has gone to state agencies and an equal sum to the UN refugee agency, the International Organization for Migration (IOM) and the European Asylum Service. “Were it not for the emergency funds, we would be able to do nothing. Or we would have to spend money from the state budget. Regular funding requires a lot of bureaucracy,” a Labor Ministry official told Kathimerini on condition of anonymity.

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