Dec 052019
 
 December 5, 2019  Posted by at 9:38 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Arthur Rothstein Interior of migratory fruit worker’s tent, Yakima, Washington Jul 1936

 

The Market Will Need The Fed Again In 2020 (Axios)
The Repo Market Is Broken And Fed Injections Are Not A Lasting Solution (MW)
Is Something Broken? Quants Running “Scared” As Nothing Makes Sense (ZH)
Legal Experts Called By Democrats Say Trump’s Actions Are Impeachable (R.)
Gaetz Grills Impeachment Witnesses Over Democratic Donations (Fox)
Judiciary Committee Member: Unfair, Politically Biased Ordeal (USAT)
The 10 Most Important Revelations From The Russia Probe FISA Report (Solomon)
Illinois’ Unfunded Pension Liability Rises To $137.3 Billion (R.)
China Set To Make History With Record Number Of Bond Defaults In 2019 (ZH)
France Braces For Biggest Strikes Of Macron’s Presidency (G.)
Uber Faces £1,500,000,000 Bill For Unpaid VAT (Metro)
Julian Assange in Videoconference: The Spanish Case Takes a Turn (IPD)

 

 

The Fed will never be able to get out. That was clear the moment they stepped in.

The Market Will Need The Fed Again In 2020 (Axios)

The No.1 risk to the stock market continuing its outperformance next year is not President Trump or consistently weak U.S. economic data or even China, senior analysts at John Hancock Investment Management say, but whether or not the Fed continues to stimulate the economy through what they call “not QE.” What it means: Fed chair Jerome Powell has insisted the central bank’s bond buying program — initiated after rates in the systemically important repo market spiked to five times their normal level in September — is not quantitative easing. But “it walks and talks” like QE, analysts say, and has injected close to $1 trillion of liquidity into the repo market and added more than $260 billion to the Fed’s balance sheet.

The intrigue: The new “not QE” program was “like a fourth rate cut this year,” John Hancock co-chief investment strategist Matthew Miskin said during a media briefing Tuesday in New York. And it has given a boost to the stock market. The big picture: “The equity market has benefited from a super aggressive Fed,” Ethan Harris, head of global economics at Bank of America Merrill Lynch, told Axios during a separate event Tuesday at BAML headquarters. “I mean the Fed basically anesthetized the markets to the trade war escalation this summer.”

Because the Fed was able to mask the economy’s pain from the market, a strong sell-off may be needed to motivate the Trump administration to secure what Harris calls a “skinny” trade deal with China and avert the Dec. 15 tariffs that will hit billions of dollars worth of consumer goods. The converse is also true, Miskin argued. “If things turn more sour because we’re not getting a trade deal or the tariffs go on Dec. 15, the stress underpinning … the market will re-emerge and the Fed’s definitely going to have to be there,” he told Axios.

Read more …

End the Fed.

The Repo Market Is Broken And Fed Injections Are Not A Lasting Solution (MW)

The Federal Reserve’s ongoing efforts to shore up the short-term “repo” lending markets have begun to rattle some market experts. The New York Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short term money markets since mid-September when a shortage of liquidity caused a spike in overnight borrowing rates. But as the Fed’s interventions have entered a third month, concerns about the market’s dependence on its daily doses of liquidity have grown. “The big picture answer is that the repo market is broken,” said James Bianco, founder of Bianco Research in Chicago, in an interview with MarketWatch. “They are essentially medicating the market into submission,” he said. “But this is not a long-term solution.”

This chart shows the more than $320 billion of total repo market support from the Fed since Sept. 17, when for the central bank began pumping in daily liquidity after overnight lending rates jumped to almost 10% from nearly 2%. Initially, the central bank rolled out roughly $75 billion in daily lending facilities to arm Wall Street’s core set of primary dealers with low-cost overnight loans to keep the roughly $1 trillion daily U.S. Treasury repo market running. The facilities allow banks to snap up loans by pledging safe-haven U.S. Treasurys or agency mortgage-backed securities with the New York Fed, but crucially without the typical risk-based pricing that lenders regularly charge when funding each other.

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“..the answer is yes: the market is broken, and you can thank central banks for that.”

Is Something Broken? Quants Running “Scared” As Nothing Makes Sense (ZH)

It was a year where the S&P put the mini bear market of December 2018 in the dust, and after a dramatic reversal which saw most central banks flip from hawkish to dovish throughout the year…

… the MSCI World index is just shy of its January 2018 highs, and the S&P has returned an impressive 24% (despite the jittery start to December), and stands at all time record highs, despite, paradoxically, a year of record equity fund outflow. On paper, this should have been a great year for investors after a dismal 2018. In reality, however, 2019 has been just as painful for not just for hedge funds, which have substantially underperformed the S&P again and in October saw a record 8 consecutive months of outflows, the most since the financial crisis…

… but especially for quants, which after a relatively solid year, suffered the September quant crash that destroyed most of their YTD gains, and have generally been unable to find their bearings in a year in which nothing seemed to work. It’s also Georg Elsaesser, a Frankfurt-based fund manager at Invesco, is trying to calm down his newbie quant clients as choppy stock moves make life difficult for anyone trading factors, which wire up all those systematic portfolios on Wall Street. “Some of them are kind of scared,” Elsaesser told Bloomberg. “They’re asking the questions: Is something going wrong? Is something broken?” Well actually, the answer is yes: the market is broken, and you can thank central banks for that.

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All three are Democrat donors who have a deep dislike of Trump. They couldn’t hide that, didn’t even try, instead went on RussiaRussia rants.

But this was supposed to be about the Constitution, not about their opinions. Turley was the only one who stuck to what was on the table.

Legal Experts Called By Democrats Say Trump’s Actions Are Impeachable (R.)

The hearing on Wednesday was the committee’s first to examine whether Trump’s actions qualify as “high crimes and misdemeanors” punishable by impeachment under the U.S. Constitution. Three law professors chosen by the Democrats made clear during the lengthy session that they believed Trump’s actions constituted impeachable offenses. “If what we’re talking about is not impeachable, then nothing is impeachable,” said University of North Carolina law professor Michael Gerhardt. But George Washington University law professor Jonathan Turley, who was invited by the Republicans, said he did not see clear evidence of illegal conduct. He said the inquiry was moving too quickly and lacked testimony from people with direct knowledge of the relevant events.

“One can oppose President Trump’s policies or actions but still conclude that the current legal case for impeachment is not just woefully inadequate, but in some respects, dangerous, as the basis for the impeachment of an American president,” said Turley, who added that he did not vote for Trump. [..] Republicans focused their questions on Turley, who largely backed up their view that Democrats had not made the case for impeachment – although he did say that leveraging U.S. military aid to investigate a political opponent “if proven, can be an impeachable offense.” Democrats sought to buttress their case by focusing their questions on the other three experts – Gerhardt, Harvard University law professor Noah Feldman and Stanford University law professor Pam Karlan – who said impeachment was justified.

Karlan drew a sharp response from Republicans for a remark about how Trump did not enjoy the unlimited power of a king. “While the president can name his son Barron, he can’t make him a baron,” she said. White House spokeswoman Stephanie Grisham on Twitter called Karlan “classless,” and first lady Melania Trump said Karlan should be “ashamed of your very angry and obviously biased public pandering” for mentioning her 13-year-old son.

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Matt Taibbi: “We laughed at this logic when George W. Bush used it to justify his Mideast wars: “We will fight them over there so we do not have to face them in the United States of America.”

Michael Tracey: “This woman was ostensibly called to testify about the legal and Constitutional questions around impeachment and instead ends up going on a bizarre Cold Warrior rant implying that Russia plans to invade the United States”

Gaetz Grills Impeachment Witnesses Over Democratic Donations (Fox)

Turning to the professors, he asked UNC-Chapel Hill Professor Michael Gerhardt to confirm that he donated to President Barack Obama. “My family did, yes,” Gerhardt responded. Shifting his attention to Harvard Law Professor Noah Feldman, Gaetz noted the educator has written several articles that portray Trump in a negative light. “Mar-a-Lago ad belongs in impeachment file,” Gaetz said, repeating the title of an April 2017 piece Feldman wrote for Bloomberg Opinion. Gaetz further pressed Feldman, asking him: “Do you believe you’re outside of the political mainstream on the question of impeachment?” Responding to Gaetz, Feldman said impeachment is warranted whenever a president abuses their power for personal gain or when they “corrupt the democratic process.”

The professor added he was an “impeachment skeptic” until the July 25 call between Trump and Ukrainian leader Volodymyr Zelensky. After the exchange, Gaetz turned to Stanford Law Professor Pamela Karlan and challenged her on reported four-figure donations to Clinton, Obama and Sen. Elizabeth Warren, D-Mass. “Why so much more for Hillary than the other two?” he added, smiling. The Florida lawmaker went on to criticize Karlan for a remark she made while answering an earlier question by Rep. Sheila Jackson Lee, D-Texas. Karlan had told Jackson Lee that there is a difference between what Trump can do as president and the powers of a medieval king. “The Constitution says there can be no titles of nobility, so while the president can name his son ‘Barron’, he can’t make him a baron.”

Gaetz fumed at the remark, saying it does not lend “credibility” to her argument. “When you invoke the president’s son’s name here, when you try to make a little joke out of referencing Barron Trump… it makes you look mean, it makes you look like you are attacking someone’s family: the minor child of the president of the United States.”

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Rep. Debbie Lesko, R-Ariz., serves on the House Judiciary Committee.

Judiciary Committee Member: Unfair, Politically Biased Ordeal (USAT)

By now we have all heard the news that President Donald Trump’s counsel will not be participating in the House Judiciary Committee’s first impeachment hearing Wednesday. As a member of the committee, I believe President Trump has made the right decision. In their obsession and rush to impeach the president by the end of the year, Democrats have rigged the process from the start. I wouldn’t blame anyone, let alone the president, for being skeptical about this unfair process. Closed door secret meetings, selectively leaked details, refusing to allow Republican witnesses, and releasing the Schiff report and witness list right before the hearing all indicate an unfair, politically biased ordeal.


With little to no information provided by Judiciary Chairman Jerry Nadler, right now it appears anything goes. The president was provided little notice and no indication of who would be the witnesses or if there would be additional hearings. This leaves more questions than answers as we head into the next phase of an already tainted process. House Democrats do not seem to grasp that they cannot legitimize such an illegitimate process halfway through. This process has been unfair for the president and the Republicans from the start, with Democrats ignoring the historical precedents outlined in the Clinton and Nixon impeachments. When it comes to Trump, Democrats have created a whole new set of rules. For them, the end justifies the means, no matter how devoid of due process and fairness those means are.

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I don’t have space for all 10, but Solomon is a must read.

The 10 Most Important Revelations From The Russia Probe FISA Report (Solomon)

Derogatory information about informant Christopher Steele The FBI stated to the court in a footnote that it was unaware of any derogatory information about the former MI6 agent it was using as “confidential human source 1” in the Russia case. This claim could face a withering analysis in the report. Congressional sources have reported to me that during a recent unclassified meeting they were told the British government flagged concerns about Steele and his reliance on “sub-sources” of intelligence as early as 2015. Bruce Ohr testified he told FBI and DOJ officials early on that he suspected Steele’s intelligence was mostly raw and needed vetting, that Steele was working with Hillary Clinton’s campaign in some capacity and appeared desperate to defeat Trump in the 2016 election.

And documents show State Department official Kathleen Kavalec alerted the FBI eight days before the first FISA warrant was obtained that Steele may have been peddling a now-debunked rumor that Trump and Vladimir Putin were secretly communicating through a Russian bank’s computer server. Most experts I talked with say each of these revelations might constitute derogatory information that should be disclosed to the court. On a related note, Horowitz just released a separate report that concluded the FBI is doing a poor job of vetting informants like Steele, suggesting there was a culture of withholding derogatory information from informants’ reliability and credibility validation reports.

News leaks as evidence One of Horowitz’s earlier investigative reports that recommended fired FBI Deputy Director Andrew McCabe for possible prosecution put an uncomfortable spotlight on the bureau’s culture of news leaks. Since then, a handful of other cases unrelated to Russia have raised additional questions about whether the FBI uses news leaks to create or cite evidence in courts. One key to watch in the Horowitz report is the analysis of whether it was appropriate for the FBI to use a Yahoo News article as validating evidence to support Steele’s dossier. We now know from testimony and court filings that Steele, his dossier and Fusion GPS founder Glenn Simpson played a role in that Yahoo News story.

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It’s not just the Fed, but they haven’t exactly helped.

Illinois’ Unfunded Pension Liability Rises To $137.3 Billion (R.)

Illinois’ growing unfunded pension liability, which increased by $3.8 billion to $137.3 billion at the end of fiscal 2019, underscores the need for state action to boost funding or cut costs, analysts said on Wednesday. The increase was fueled by actuarially insufficient state contributions and lower-than-expected investment returns, according to a new state legislative report. Illinois has the lowest credit ratings among U.S. states at a notch or two above the junk level due to its huge unfunded pension liability and chronic structural budget deficit.


Eric Kim, a Fitch Ratings analyst, said growth in the unfunded liability is expected to continue as long as contributions lag actuarial requirements and pension benefits are protected under the Illinois Constitution. “For us, what this all speaks to is the state addressing fundamental structural budget challenges,” he said. Earlier this year, Governor J.B. Pritzker created pension task forces, including one to explore asset sales to boost pension funding. Laurence Msall, president of Chicago-based government finance watchdog the Civic Federation, said the state has not effectively attacked core pension problems, including unsustainable costs. “At best Illinois is running in place, while trying to avoid sliding downhill,” he said.

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A normal market phenomenon?

China Set To Make History With Record Number Of Bond Defaults In 2019 (ZH)

While China is bracing for what may be a historic D-Day event on December 9, when the “unprecedented” default of state-owned, commodity-trading conglomerate Tewoo with $38 billion in assets may take place, it has already been a banner year for Chinese bankruptcies. According to Bloomberg data, China is set to hit another dismal milestone in 2019 when a record amount of onshore bonds are set to default, confirming that something is indeed cracking in China’s financial system and “testing the government’s ability to keep financial markets stable as the economy slows and companies struggle to cope with unprecedented levels of debt.”

After a brief lull in the third quarter, a burst of at least 15 new defaults since the start of November have sent the year’s total to 120.4 billion yuan ($17.1 billion), and set to eclipse the 121.9 billion yuan annual record in 2018. The good news is that this number still represents a tiny fraction of China’s $4.4 trillion onshore corporate bond market; the bad news is that the rapidly rising number is approaching a tipping point that could unleash a default cascade, and in the process fueling concerns of potential contagion as investors struggle to gauge which companies have Beijing’s support. As Bloomberg notes, policy makers have been walking a tightrope as they try to roll back the implicit guarantees that have long distorted Chinese debt markets, without dragging down an economy already weakened by the trade war and tepid global growth.

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The French know how to strike.

France Braces For Biggest Strikes Of Macron’s Presidency (G.)

Emmanuel Macron is braced for the biggest strikes of his presidency as French rail workers, air-traffic controllers, teachers and public sector staff take to the streets on Thursday against proposed changes to the pension system. French rail transport is expected to almost completely grind to a halt with 82% of drivers on strike and at least 90% of regional trains cancelled, amid fears that the transport disruption could continue for days. In Paris, 11 out of 16 metro lines will shut completely, with commuters scrambling to hire bikes and scooters. Many schools will close and even some police unions have even warned of “symbolic” closures of certain police stations. Shops along the route of a march in Paris have been advised to close in case of violence on the edges of the demonstration. About half of the scheduled Eurostar trains between Paris and London have been cancelled.


The standoff is a crucial test for the centrist French president, whose planned overhaul of the pensions system was a key election promise. The government argues that unifying the pensions system – and getting rid of the 42 “special” regimes for sectors ranging from rail and energy workers to lawyers and Paris Opera staff – is crucial to keep the system financially viable as the French population ages. But unions say introducing a “universal” system for all will mean millions of workers in both the public and private sectors must work beyond the legal retirement age of 62 or face a severe drop in the value of their pensions. The row cuts to the heart of Macron’s presidential project and his promise to deliver the biggest transformation of the French social model and welfare system since the postwar era.

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Does Uber have more lawyers than drivers?

Uber Faces £1,500,000,000 Bill For Unpaid VAT (Metro)

Car-sharing giant Uber is a step closer to being liable for an estimated £1.5 billion in unpaid UK tax. Campaigners have won an important legal step that could pave the way for the taxman to come knocking on the beleaguered firm’s door. The move is on top of another legal challenge to stop Uber operating in London. Uber has long-argued that it is a platform that brings drivers and riders together, rather than a transport business. This means that it falls to individual drivers to pay VAT on any rides instead of the company itself. But as the threshold for VAT is only for individuals earning more than £85,000 a year, none of the drivers need to charge it. Campaigners from the Good Law Project calculates this has cost the public £1.5 billion in lost revenue so far.


The law team initially attempted to take Uber to court to force them to disclose their tax affairs but the case looked like being too expensive. Instead, they challenged HM Revenues and Customs and demanded the taxman assess Uber for VAT liabilities. HMRC objected, saying its dealings with Uber were commercially sensitive and it should not have to disclose whether or not it is investigating. Today the Court of Appeal rejected HMRC’s arguments and Mrs Justice Lieven said HMRC now had to disclose whether or not they had made an assessment over Uber’s payment of VAT. The case for the Good Law Project is being led by anti-Brexit campaigner Jolyon Maugham QC who said: ‘The more time passes without an assessment being raised the more VAT is lost – forever.’

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Again, Assange -with his aides- is the only person who has abided by the law. All other parties involved have not. That should have a huge bearing on the case.

Julian Assange in Videoconference: The Spanish Case Takes a Turn (IPD)

The UK Central Authority has had a change of heart. On December 20, Assange is set to be transferred from his current maximum-security abode, Belmarsh, to Westminster Magistrates Court to answer questions that will be posed by De la Mata. To date, the evidence on Morales and the conduct of his organisation is bulking and burgeoning. It is said that the company refurbished the security equipment of the London Ecuadorean embassy in 2017, during which Morales installed surveillance cameras equipped with microphone facilities. While Ecuadorean embassy officials sought to reassure Assange that no recordings of his private conversations with journalists or legal officials were taking place, the opposite proved true.

An unconvinced Assange sought to counter such measures with his own methods. He spoke to guests in the women’s bathroom. He deployed a “squelch box” designed to emit sounds of disruption. These were treated as the measures of a crank rather than those of justifiable concern. The stance taken by Ecuador has not shifted, despite claims by Morales that any recordings of Assange were done at the behest of the Ecuadorean secret service. Instead, Ecuador’s President Lenín Moreno has used the unconvincing argument that Assange, not Ecuador, posed the espionage threat. “It is unfortunate that, from our territory and with the permission of authorities of the previous government, facilities have been provided within the Ecuadorean embassy in London to interfere in the processes of other states.” The embassy, he argued, had been converted into a makeshift “centre for spying.”

German broadcasters NDR and WDR have also viewed documents discussing a boastful Morales keen to praise his employees for playing “in the first league…We are now working for the dark side.” The dark side, it transpires, were those “American friends,” members of the “US Secret Service” that Morales was more than happy to feed samples to. NDR has added its name to those filing charges against UC Global for allegations that its own journalists were spied upon in visiting the Ecuadorean embassy in London.

The allegations have the potential to furnish a case Assange’s lawyers are hoping to make: that attaining a fair trial in the United States should he be extradited to face 18 charges mostly relating to espionage would be nigh impossible. The link between UC Global, the US intelligence services, and the breach of attorney-client privilege, is the sort of heady mix bound to sabotage any quaint notions of due process. The publisher is well and truly damned.

Read more …

 

Simon Kuestenmacher: Map shows that #lightning follows shipping lanes: As it turns out particles in ship exhaust increase the likelihood and intensity of thunderstorms. Really cool fact that I had never considered! Source: https://buff.ly/2B0tcOV

 

 

 

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Nov 262019
 


Paul Gauguin Landscape with black pigs and a crouching Tahitian 1891

 

The Real Bombshell of the Impeachment Hearings (Ron Paul)
Neocon Uses Impeachment To Push Russophobic Agenda (Stockman)
12 Document Troves That Could Change The Ukraine Scandal (Solomon)
The Resistance Digs Their Hole Deeper (Kunstler)
CNN: Trump Is Leader Of ‘Destructive Cult’ , Uses ‘Mind-Control’ (SN)
Spiegel Finds Browder’s Magnitsky Narrative Is Riddled With Lies (RT)
Hong Kong Part Of China and No One Can Mess It Up – Chinese FM (RT)
Record-Breaking Dollar Bond Offering From China Imminent (ZH)
UK Chief Rabbi Attacks Labour Party (BBC)
Uber Loses Licence To Operate In London (BBC)
Tim Berners-Lee Wants To Stop Internet Turning Into ‘Digital Dystopia’ (Ind.)
Epstein, Ghislaine Maxwell And Very Young Girls On ‘Pedo Island’ (ZH)
Greenhouse Gas Concentrations Again Break Records (BBC)
Listen To The Hummingbird. Never Listen To Me (GTD)

 

 

“Vindman was concerned over “influencers promoting a false narrative of Ukraine inconsistent with the consensus views of the interagency.”

The Real Bombshell of the Impeachment Hearings (Ron Paul)

The most shocking thing about the House impeachment hearings to this point is not a “smoking gun” witness providing irrefutable evidence of quid pro quo. It’s not that President Trump may or may not have asked the Ukrainians to look into business deals between then-Vice President Biden’s son and a Ukrainian oligarch. The most shocking thing to come out of the hearings thus far is confirmation that no matter who is elected President of the United States, the permanent government will not allow a change in our aggressive interventionist foreign policy, particularly when it comes to Russia. Even more shocking is that neither Republicans nor Democrats are bothered in the slightest!

Take Lt. Colonel Vindman, who earned high praise in the mainstream media. He did not come forth with first-hand evidence that President Trump had committed any “high crimes” or “misdemeanors.” He brought a complaint against the President because he was worried that Trump was shifting US policy away from providing offensive weapons to the Ukrainian government! He didn’t think the US president had the right to suspend aid to Ukraine because he supported providing aid to Ukraine. According to his testimony, Vindman’s was concerned over “influencers promoting a false narrative of Ukraine inconsistent with the consensus views of the interagency.” “Consensus views of the interagency” is another word for “deep state.”

Vindman continued, “While my interagency colleagues and I were becoming increasingly optimistic on Ukraine’s prospects, this alternative narrative undermined US government efforts to expand cooperation with Ukraine.” Let that sink in for a moment: Vindman did not witness any crimes, he just didn’t think the elected President of the United States had any right to change US policy toward Ukraine or Russia! Likewise, his boss on the National Security Council Staff, Fiona Hill, sounded more like she had just stepped out of the 1950s with her heated Cold War rhetoric. Citing the controversial 2017 “Intelligence Community Assessment” put together by then-CIA director John Brennan’s “hand-picked” analysts, she asserted that, “President Putin and the Russian security services aim to counter US foreign policy objectives in Europe, including in Ukraine.”

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David Stockman throws in a highly needed history lesson for free.

Neocon Uses Impeachment To Push Russophobic Agenda (Stockman)

For want of doubt that the Poroshenko government was in the tank for Hillary Clinton, the liberal rag called Politico spilled the beans a few months later. In a January 11, 2017 story it revealed that the Ukrainian government had pulled out all the stops attempting to help Clinton, whose protégés at the State Department had been the masterminds of the coup which put them in office. Thus, Politico concluded,

“Donald Trump wasn’t the only presidential candidate whose campaign was boosted by officials of a former Soviet bloc country. Ukrainian government officials tried to help Hillary Clinton and undermine Trump by publicly questioning his fitness for office. They also disseminated documents implicating a top Trump aide in corruption and suggested they were investigating the matter, only to back away after the election.

And they helped Clinton’s allies research damaging information on Trump and his advisers, a Politico investigation found. …President Petro Poroshenko’s administration, along with the Ukrainian Embassy in Washington, insists that Ukraine stayed neutral in the race….. But Politico’s investigation found evidence of Ukrainian government involvement in the race that appears to strain diplomatic protocol dictating that governments refrain from engaging in one another’s elections. While it’s not uncommon for outside operatives to serve as intermediaries between governments and reporters, one of the more damaging Russia-related stories for the Trump campaign – and certainly for Manafort – can be traced more directly to the Ukrainian government.

Documents released by an independent Ukrainian government agency – and publicized by a parliamentarian – appeared to show $12.7 million in cash payments that were earmarked for Manafort by the Russia-aligned party of the deposed former president, Yanukovych. The New York Times, in the August story revealing the ledgers’ existence, reported that the payments earmarked for Manafort were “a focus” of an investigation by Ukrainian anti-corruption officials, while CNN reported days later that the FBI was pursuing an overlapping inquiry.”

Yet Fiona Hill sat before a House committee and under oath insisted that all of the above was a Trumpian conspiracy theory, thereby reminding us that the neocon Russophobes are so unhinged that they are prepared to lie at the drop of a hat to keep their false narrative about the Russian Threat and Putin’s “invasion” of Ukraine alive. Needless to say, Fiona Hill is among the worst of the neocon warmongers, and has made a specialty of demonizing Russia and propagating over and over flat out lies about what happened in Kiev during 2014 and after.

Read more …

John Solomon identifies 12 document troves that he thinks Trump should order released. Here are the first three.

12 Document Troves That Could Change The Ukraine Scandal (Solomon)

As House Democrats mull whether to pursue impeachment articles and the GOP-led Senate braces for a possible trial, here are 12 tranches of government documents that could benefit the public if President Trump ordered them released, and the questions these memos might answer.

1) Daily intelligence reports from March through August 2019 on Ukraine’s new president Volodymyr Zelensky and his relationship with oligarchs and other key figures. What was the CIA, FBI and U.S. Treasury Department telling Trump and other agencies about Zelensky’s ties to oligarchs like Igor Kolomoisky, the former head of Privatbank, and any concerns the International Monetary Fund might have? Did any of these concerns reach the president’s daily brief (PDB) or come up in the debate around resolving Ukraine corruption and U.S. foreign aid? CNBC, Reuters and The Wall Street Journal all have done recent reporting suggesting there might have been intelligence and IMF concerns that have not been fully considered during the impeachment proceedings.

2) State Department memos detailing conversations between former U.S. Ambassador Marie Yovanovitch and former Ukrainian Prosecutor General Yuriy Lutsenko. He says Yovanovitch raised the names of Ukrainians she did not want to see prosecuted during their first meeting in 2016. She calls Lutsenko’s account fiction. But State Department officials admit the U.S. embassy in Kiev did pressure Ukrainian prosecutors not to target certain activists. Are there contemporaneous State Department memos detailing these conversations and might they illuminate the dispute between Lutsenko and Yovanovitch that has become key to the impeachment hearings?

3) State Department memos on U.S. funding given to the George Soros-backed group the Anti-Corruption Action Centre. There is documentary evidence that State provided funding to this group, that Ukrainian prosecutor sought to investigate whether that aid was spent properly and that the U.S. embassy pressured Ukraine to stand down on that investigation. How much total did State give to this group? Why was a federal agency giving money to a Soros-backed group? What did taxpayers get for their money and were they any audits to ensure the money was spent properly? Were any of Ukrainian prosecutors’ concerns legitimate?

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“Perhaps The New York Times has hooked up to a direct line of Burisma’s product as they flood the darkened arena with eerie blue gaslight.”

The Resistance Digs Their Hole Deeper (Kunstler)

“No, you don’t understand. It was the Russians, I tell you, the Russians!” And so, with a holiday recess for Adam Schiff’s impeachment soap opera, and news that DOJ Inspector General Horowitz will unload in early December, the media vassals of the Deep State are giving you their own turkey gristle to chew on: “The Russians did it! Yes, really, they did! Believe us!” Perhaps The New York Times has hooked up to a direct line of Burisma’s product as they flood the darkened arena with eerie blue gaslight. Friday, they featured a story — Russia Inquiry Review Is Said to Criticize F.B.I. but Rebuff Claims of Biased Acts — geared to make readers think that the entire FBI FISA warrant hair-ball came down to one lowly lawyer chump named Kevin Clinesmith messing with an email. Later, Times reporter Adam Goldman, posted this howler on Twitter.

These truthless assertions are meant to let both the CIA and the FBI off-the-hook for opening the “Crossfire Hurricane” investigation on bogus evidence they furnished to the FISA judges. Both Goldman’s news story and his tweet omit the name of the company that packaged and retailed the Russia Collusion narrative: Fusion GPS — the company that Robert Mueller testified to having no knowledge of in his July House appearance. That oafish attempt to get out ahead of the IG’s report was followed by, whaddaya know, a Times op-ed penned by none other than Glenn Simpson, the impresario of Fusion GPS (and his partner Peter Fritsch), The Double-Barreled Dream World of Trump and His Enablers, aimed at re-selling their shopworn Russia collusion story to distract from any attention that voters might be paying to Ukraine’s collusion in the scheme to overthrow the 2016 US election and the Bidens’ grifting operation following the 2014 CIA / State Department sponsored overthrow of Ukraine’s government.


CBS 60-Minutes joined the gaslighting rotation Sunday night with a reality-optional Russia Hacked Our Election story. This was another obvious attempt to deflect attention from the actual story, which is how the company named Crowdstrike, owned by Ukrainian oligarch Dmitri Alperovitch, cooked up the Russian hacking story in the first place. Crowdstrike, you see, had been hired by the Democratic National Committee, and their nominee, Hillary Clinton, to interfere in the 2016 election. Crowdstrike later became the sole entity that was allowed to perform a forensic inquiry on the DNC’s server. Somehow, they persuaded the FBI to not look into the matter. In other words, the DNC’s contractor investigated its own mischief. Does anyone wonder how that worked?

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I know this is too easy and too cheap for me to use, but at the same time, these folk are actually saying such things. And there is a actual US network that broadcasts this stuff. “Trump is mind-controlling the deplorables.” And people go: wow, that’s some serious sh*t…

CNN: Trump Is Leader Of ‘Destructive Cult’ , Uses ‘Mind-Control’ (SN)

Stelter and guest say Trump supporters need ‘deprogramming’ CNN’s resident lunatic Brian Stelter went above and beyond his regular whackery Sunday, wheeling out a ‘cult expert’ on his “Reliable Sources” show, who claimed that President Trump is a “destructive cult” leader, a la Jim Jones, and that he is using “mind control” to direct supporters. Stelter introduced Steven Hassan, author of a book titled The Cult of Trump, claiming that many prominent figures (read ‘CNN talking heads’) have been suggesting recently that Trump’s America first movement is ‘cultish’. Hassan claimed that Trump supporters are “not being encouraged to really explore and look at the details and arrive at their own conclusion.”

“Much of what they’re hearing is emotionally driven, loaded words, thought-stopping, and thought-terminating-type clichés.” he added, citing “fake news,” “build the wall,” “make America great again.” Stelter then brought up mind control, asking “You say the President is using mind control, but how is that provable?” “So, we can start with the pathological lying, which is characteristic of destructive cult leaders.” Hassan claimed, again without providing any evidence.

“Saying things in a very confident way that have nothing to do with facts or truthfulness. The blaming others and never taking responsibility for his own failures and faults. Shunning and kicking out anyone who raises questions or concerns about his own behavior. His use of fearmongering, immigration is a horrible thing.” the guest continued. Stelter then chimed in with the stunning insight that “It is frightening to hear a cult expert say that you see all of these signs right now today in American politics.” The pair then remarkably suggested that Trump supporters need to be ‘deprogrammed’ by breaking them out of their ‘bubbles’.

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The reason there is the Magnitsky act is not that people believed Browder, but that it’s convenient.

Spiegel Finds Browder’s Magnitsky Narrative Is Riddled With Lies (RT)

British investor Bill Browder has made a name for himself in the West through blaming Moscow for the death of his auditor, Sergey Magnitsky. Der Spiegel has picked apart his story and uncovers it has major credibility problems. For years Browder – Russian President Vladimir Putin’s self-proclaimed “enemy number one” and head of the Hermitage Capital Management fund – has been waging what can only be described as his personal anti-Russian campaign. The passionate Kremlin critic relentlessly lobbied for sanctions against Russian officials everywhere from the US to Europe – all under the premise of seeking justice for his deceased employee, who died in Russia, while in pre-trial detention, where he’d been placed while accused of complicity in a major tax evasion scheme.

Browder, who was himself sentenced in absentia by a Russian court to nine years in prison for tax evasion, and was later found guilty of embezzlement as well, presented Magnitsky as a fearless whistleblower who exposed a grand corruption scheme within the Russian law enforcement system, and who was then mercilessly killed out of revenge. [..] the businessman, who has over the years donned the mantle of a human rights campaigner, does not plan to stop at that and is now lobbying for an EU-wide equivalent of the Magnitsky Act, which would allow the banning of Russian officials from the bloc’s countries and the freezing of their accounts.

On the tenth anniversary of the auditor’s death, the German weekly Der Spiegel has decided to take a closer look at Browder’s story about Magnitsky. And the paper found out that the narrative doesn’t quite flow as smoothly as Western politicians and the MSM would like it to.

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18 long years to go before HK becomes Chinese.

Hong Kong Part Of China and No One Can Mess It Up – Chinese FM (RT)

Beijing has said that the outcome of the municipal vote that saw opposition taking nearly 90% of the seats won’t change Hong Kong status, while warning against any attempts to disrupt the situation. Preliminary results of the election reported by local broadcaster RTHK suggest that about 390 seats out of 452 that were up for grabs in 18 district councils have been claimed by the anti-government candidates. Asked to comment while the vote count was ongoing, Chinese Foreign Minister Wang Yi said that regardless of the outcome, Hong Kong will remain an unalienable part of the Chinese state. “It’s not the final result yet. Let’s wait for the final result, OK? However, it is clear that no matter what happens, Hong Kong is a part of China and a special administrative region of China,” he said.


Any attempt to mess up Hong Kong, or even damage its prosperity and stability, will not succeed. Hong Kong administrator Carrie Lam, meanwhile, said that the semi-autonomous city’s government would respect the results of the district poll. “The government will certainly listen humbly to citizens’ opinions and reflect on them seriously,” Lam said, expressing hope that the peace and security would prevail, and the city won’t plunge into chaos again. The landslide victory by the opposition has been attributed to the record-high turnout of 71% (versus only 47% back in 2015) that saw many young voters taking to the polls for the first time. Speaking to SCMP, pro-Beijing lawmaker Michael Tien Puk-su, who lost his seat at the Tsuen Wan District Council, said that while he gained the same number of votes as in the previous elections, it was not enough this time – all because of the first-time voters, he suspected. “If that’s true, it means young people are no longer insensitive to politics,” he said…

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China needs dollars very badly.

Record-Breaking Dollar Bond Offering From China Imminent (ZH)

China is set to expand its bond market through a record sale of sovereign bonds in dollars, according to Bloomberg sources. The bond offering could raise up to $6 billion, would be one of the largest dollar bond offerings on record. The offering could be seen as soon as Tuesday. Sources said the Ministry of Finance is considering tenors of three years, five years, 10 years and 20 years: “It reaffirms China’s determination to develop an orderly offshore dollar bond market for Chinese issuers,” Anne Zhang, head of fixed income for JPMorgan Private Bank in Asia, told Bloomberg. “The new deal will further complete a sovereign curve,” she said. The size of the issuance would be more than double last year’s size, and triple the amount from 2017.


“The size is twice what it was last year, that just speaks to the fact that the past two years have been perceived as successful by the Ministry of Finance,” a banker working on one of the dollar bond deals told The Financial Times. He added that previous offers were “not enough to match demand.” The Chinse dollar bond market is valued at around $740 billion, according to Bloomberg data, and is an important funding source for domestic borrowers. Dollar bond issuances slid in 2018 following the escalation of the trade war. Despite the further escalation of the trade war in 2019, dollar bond issuances have increased as US treasury yields have fallen. Dollar bond demand from Chinese borrowers has been elevated in 2019, so far there has been $195 billion in recorded issuances, already surpassing levels seen in 2017 at $211 billion.

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Corbyn should have spoken out loud and clear a long time ago. He’s the right wing’s toy now.

UK Chief Rabbi Attacks Labour Party (BBC)

The Chief Rabbi has strongly criticised Labour, claiming the party is not doing enough to root out anti-Jewish racism – and asked people to “vote with their conscience” in the general election. In the Times, Ephraim Mirvis said “a new poison – sanctioned from the very top – has taken root” in the party. Labour’s claim it had investigated all cases of anti-Semitism in its ranks was a “mendacious fiction”, he added. Jeremy Corbyn says Labour is tackling anti-Semitism by expelling members. It comes as Labour launches a “race and faith manifesto”, which aims to improve protections for all faiths and tackle prejudice.

Labour has been beset by allegations of anti-Semitism for more than three years, leading to the suspension of a number of high-profile figures such as Ken Livingstone and Chris Williamson, and an unprecedented investigation by the Equality and Human Rights Commission. In his article, the Orthodox Chief Rabbi of Great Britain and Northern Ireland – who is the spiritual leader of the United Synagogue, the largest umbrella group of Jewish communities in the country – says raising his concerns “ranks among the most painful moments I have experienced since taking office”. But he claims “the overwhelming majority of British Jews are gripped by anxiety” at the prospect of a Labour victory in 12 December’s general election.

He writes: “The way in which the leadership of the Labour Party has dealt with anti-Jewish racism is incompatible with the British values of which we are so proud – of dignity and respect for all people. “It has left many decent Labour members and parliamentarians, both Jewish and non-Jewish, ashamed of what has transpired.” He adds that it was “not my place to tell any person how they should vote” but he urged the public to “vote with their conscience”. [..] Jenny Manson, the co-chair of the Jewish Voice for Labour group which is not officially affiliated to the party, told BBC Radio 4’s The World Tonight programme she was “horrified” by the Chief Rabbi’s intervention. She added that there was no threat to Jews in the Labour Party but there was a threat from the far-right.

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No, really, they have secret software that blocks regulators. Just for that I would ban them forever. “But it’s never been used in the UK!” That’s not the point, is it? BTW, where did you use it?

Uber Loses Licence To Operate In London (BBC)

Uber will not be granted a new licence to operate in London after repeated safety failures, Transport for London (TfL) has said. The regulator said the taxi app was not “fit and proper” as a licence holder, despite having made a number of positive changes to its operations. Uber initially lost its licence in 2017 but was granted two extensions, the most recent of which expired on Sunday. The firm will appeal and can continue to operate during that process. About 45,000 drivers work for Uber in London, which is one of its top five markets globally. TfL said it had identified a “pattern of failures” that placed passenger safety and security at risk. These included a change to Uber’s systems which allowed unauthorised drivers to upload their photos to other Uber driver accounts.


It meant there were at least 14,000 fraudulent trips in London in late 2018 and early 2019, TfL said. The regulator also found dismissed or suspended drivers had been able to create Uber accounts and carry passengers. [..] TfL first declined to renew Uber’s licence in September 2017, again over safety concerns. Back then it cited Uber’s approach to carrying out background checks on drivers and reporting serious criminal offences. Uber’s use of secret software, called “Greyball”, which could be used to block regulators from monitoring the app, was another factor, although Uber said it had never been used in the UK.

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Dead on arrival: “It has already been backed by companies including Google and Facebook..”

Tim Berners-Lee Wants To Stop Internet Turning Into ‘Digital Dystopia’ (Ind.)

Tim Berners-Lee, the creator of the world wide web, has launched a plan to stop the world falling into a “digital dystopia”. Sir Tim unveiled a set of standards that good internet companies should abide by, in the hope of preserving the promise of the internet and stopping it being misused. It comes amid a variety of online threats that look to damage everything from elections to personal privacy. The new plan, named the Contract For The Web, was unveiled by Sir Tim’s World Wide Web Foundation in Berlin and calls on governments, companies and the public to ensure the web is a safe, free and open platform for all.

The commitment sets out nine key principles. It has already been backed by companies including Google and Facebook, both of which have been at the centre of controversies over the way the internet is used. “The power of the web to transform people’s lives, enrich society and reduce inequality is one of the defining opportunities of our time,” Sir Tim explained. “But if we don’t act now, and act together, to prevent the web being misused by those who want to exploit, divide and undermine, we are at risk of squandering that potential. “The Contract for the Web gives us a roadmap to build a better web. But it will not happen unless we all commit to the challenge.

“Governments need to strengthen laws and regulations for the digital age. Companies must do more to ensure pursuit of profit is not at the expense of human rights and democracy. “And citizens must hold those in power accountable, demand their digital rights be respected and help foster healthy conversation online. It’s up to all of us to fight for the web we want.” The plan tells governments to ensure everyone can connect to the internet, that access is not deliberately denied and to respect and protect people’s fundamental online privacy and data rights.

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When will Andrew be arrested?

Epstein, Ghislaine Maxwell And Very Young Girls On ‘Pedo Island’ (ZH)

A former masseuse for Jeffrey Epstein who says he raped her on his private island, has provided photos of his secretive Caribbean compound to The Sun. Chaunte Davies says she was raped by Epstein over the course of several years before finally parting ways with him in 2005. She told the Sun that the wealthy pedophile was arrested just five days after she gave the FBI and New Mexico Assistant Attorney General evidence against him. Now 40, Chaunte says the ex-Wall Street banker performed a sex act on himself during their first massage session – and that she was “manipulated” into staying in their circle by Epstein’s alleged madam, Ghislaine Maxwell. “Within weeks she was jetting round the world on his private jet and on to his island of Little Saint James,” according to the report.


Davies also revealed how Epstein bragged about his friendship with Prince Andrew and his ex-wife Sarah Ferguson, and how Epstein used his relationship with the Duke of York to lure young girls into his orbit – at one point, allegedly having an orgy with Andrew and several young girls. “In 2015 court testimony, she wrote: “I was around 18 at the time. Epstein, Andy, approximately eight other young girls and I had sex together.” She said the other girls seemed to be under 18 and “didn’t really speak English”. This seemed to amuse Epstein, she claimed, who said “they are the ‘easiest’ girls to get along with”. The duke has repeatedly denied the claims, which were later struck from the 2015 case. In his Newsnight interview he said he had “no recollection” of meeting Virginia and has denied any wrongdoing. -The Sun “I was very aware of Jeffrey Epstein’s friendship with Prince Andrew and Fergie right away,” she said, adding “It was one of several bragging tactics he used to further induce his power and privilege. He bragged a lot.”

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And we just keep talking…

Greenhouse Gas Concentrations Again Break Records (BBC)

Atmospheric concentrations of carbon dioxide and other greenhouse gases once again reached new highs in 2018. The World Meteorological Organization (WMO) says the increase in CO2 was just above the average rise recorded over the last decade.vLevels of other warming gases, such as methane and nitrous oxide, have also surged by above average amounts. Since 1990 there’s been an increase of 43% in the warming effect on the climate of long lived greenhouse gases. The WMO report looks at concentrations of warming gases in the atmosphere rather than just emissions. The difference between the two is that emissions refer to the amount of gases that go up into the atmosphere from the use of fossil fuels, such as burning coal for electricity and from deforestation.

Concentrations are what’s left in the air after a complex series of interactions between the atmosphere, the oceans, the forests and the land. About a quarter of all carbon emissions are absorbed by the seas, and a similar amount by land and trees. Using data from monitoring stations in the Arctic and all over the world, researchers say that in 2018 concentrations of CO2 reached 407.8 parts per million (ppm), up from 405.5ppm a year previously. This increase was above the average for the last 10 years and is 147% of the “pre-industrial” level in 1750. The WMO also records concentrations of other warming gases, including methane and nitrous oxide.

About 40% of the methane emitted into the air comes from natural sources, such as wetlands, with 60% from human activities, including cattle farming, rice cultivation and landfill dumps. Methane is now at 259% of the pre-industrial level and the increase seen over the past year was higher than both the previous annual rate and the average over the past 10 years. Nitrous oxide is emitted from natural and human sources, including from the oceans and from fertiliser-use in farming. According to the WMO, it is now at 123% of the levels that existed in 1750.

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Adam Cohen put together a last album of his father Leonard’s songs.

“I have tried to write Paradise/Do not move/Let the wind speak/that is Paradise”

“You were born to judge the world / Forgive me but I wasn’t.”

“When he took his hat off at the end of shows, he had this look of humility and bewilderment and gratitude – this was not an act. And he would say, ‘Thank you for keeping my songs alive’. ”

Listen To The Hummingbird. Never Listen To Me (GTD)

Many thanks for the Dance opens with a track referred to as Transpires to the Heart and the 1st of several startling lyrics: “I was operating constant but I hardly ever termed it art/ I bought my shit together, conference Christ and reading through Marx…” It seems like a defiant statement of intent, but the mood, as on the previous album, soon turns darker. The Objective, a small, sombre spoken-term piece, starts “I simply cannot go away my house, or solution the phone” and consists of the poignant self-observation: “I sit in my chair, I glimpse at the road, the neighbour returns my smile of defeat.” The infirmities of old age are broached once again on The Hills, on which he sings, “I’m residing on products, for which I thank God”, delivering the past 3 phrases with heartfelt emphasis.


During, dying is a specified, its looming existence articulated with a attribute diploma of Buddhist acceptance. Below and there, although, there are glimpses of the sensuality that characterised several of his early tracks and poems. On The Night of Santiago he sings: “Her thighs they slipped away from me/ Like educational institutions of startled fish”. The track is basically an adaptation of a poem by Federico García Lorca, 1 of Leonard’s literary touchstones. “It’s just one of my favourite poems and I begged him to go through it,” says Adam.

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Apr 132019
 


Pablo Picasso Standing nude 1928

 

The Assange Arrest Is a Warning From History (John Pilger)
The 7 Years Of Lies About Assange Won’t Stop Now (Cook)
UK MPs Want Assange Extradited To Sweden (G.)
Labour Urges PM To Block Julian Assange Extradition To US (G.)
Assange’s ‘Conspiracy’ to Expose War Crimes Has Already Been Punished (Fair)
Cascading Cat Litter (Jim Kunstler)
Is Julian Assange Another Pentagon Papers case? (Alan Dershowitz)
Facebook Removes Page of Rafael Correa on Same Day as Assange’s Arrest (MU)
Second Brexit Referendum Vote ‘Very Likely’ – Philip Hammond (Ind.)
What Went Wrong With Pensions And Why The Whole World Must Be Worried (Rubino)
Italy’s Fiscal Health Is Once Again In Serious Decline (DQ)
Uber Discloses 3-Yr $10-Billion Loss from Operations (WS)

 

 

“Imagine Tony Blair dragged from his multi-million pound Georgian home in Connaught Square, London, in handcuffs [..] Blair’s “paramount crime” is the deaths of a million Iraqis.”

The Assange Arrest Is a Warning From History (John Pilger)

The glimpse of Julian Assange being dragged from the Ecuadorean embassy in London is an emblem of the times. Might against right. Muscle against the law. Indecency against courage. Six policemen manhandled a sick journalist, his eyes wincing against his first natural light in almost seven years. That this outrage happened in the heart of London, in the land of Magna Carta, ought to shame and anger all who fear for “democratic” societies. Assange is a political refugee protected by international law, the recipient of asylum under a strict covenant to which Britain is a signatory. The United Nations made this clear in the legal ruling of its Working Party on Arbitrary Detention.

But to hell with that. Let the thugs go in. Directed by the quasi fascists in Trump’s Washington, in league with Ecuador’s Lenin Moreno, a Latin American Judas and liar seeking to disguise his rancid regime, the British elite abandoned its last imperial myth: that of fairness and justice. Imagine Tony Blair dragged from his multi-million pound Georgian home in Connaught Square, London, in handcuffs, for onward dispatch to the dock in The Hague. By the standard of Nuremberg, Blair’s “paramount crime” is the deaths of a million Iraqis. Assange’s crime is journalism: holding the rapacious to account, exposing their lies and empowering people all over the world with truth.

The shocking arrest of Assange carries a warning for all who, as Oscar Wilde wrote, “sew the seeds of discontent [without which] there would be no advance towards civilisation”. The warning is explicit towards journalists. What happened to the founder and editor of WikiLeaks can happen to you on a newspaper, you in a TV studio, you on radio, you running a podcast. Assange’s principal media tormentor, the Guardian, a collaborator with the secret state, displayed its nervousness this week with an editorial that scaled new weasel heights. The Guardian has exploited the work of Assange and WikiLeaks in what its previous editor called “the greatest scoop of the last 30 years”. The paper creamed off WikiLeaks’ revelations and claimed the accolades and riches that came with them.

With not a penny going to Julian Assange or to WikiLeaks, a hyped Guardian book led to a lucrative Hollywood movie. The book’s authors, Luke Harding and David Leigh, turned on their source, abused him and disclosed the secret password Assange had given the paper in confidence, which was designed to protect a digital file containing leaked US embassy cables. With Assange now trapped in the Ecuadorean embassy, Harding joined the police outside and gloated on his blog that “Scotland Yard may get the last laugh”. The Guardian has since published a series of falsehoods about Assange, not least a discredited claim that a group of Russians and Trump’s man, Paul Manafort, had visited Assange in the embassy. The meetings never happened; it was fake.

Read more …

We just get more. But it’s what NOT being said that reveals more.

The 7 Years Of Lies About Assange Won’t Stop Now (Cook)

For seven years, from the moment Julian Assange first sought refuge in the Ecuadorean embassy in London, they have been telling us we were wrong, that we were paranoid conspiracy theorists. We were told there was no real threat of Assange’s extradition to the United States, that it was all in our fevered imaginations. For seven years, we have had to listen to a chorus of journalists, politicians and “experts” telling us that Assange was nothing more than a fugitive from justice, and that the British and Swedish legal systems could be relied on to handle his case in full accordance with the law. Barely a “mainstream” voice was raised in his defence in all that time.

From the moment he sought asylum, Assange was cast as an outlaw. His work as the founder of Wikileaks – a digital platform that for the first time in history gave ordinary people a glimpse into the darkest recesses of the most secure vaults in the deepest of Deep States – was erased from the record. Assange was reduced from one of the few towering figures of our time – a man who will have a central place in history books, if we as a species live long enough to write those books – to nothing more than a sex pest, and a scruffy bail-skipper. The political and media class crafted a narrative of half-truths about the sex charges Assange was under investigation for in Sweden.

They overlooked the fact that Assange had been allowed to leave Sweden by the original investigator, who dropped the inquiry, only for it to be revived by another investigator with a well-documented political agenda. They failed to mention that Assange was always willing to be questioned by Swedish prosecutors in London, as had occurred in dozens of other cases involving extradition proceedings to Sweden. It was almost as if Swedish officials did not want to test the evidence they claimed to have in their possession. [..] It was a freedom of information request by an ally of Assange, not a media outlet, that unearthed documents showing that Swedish investigators had, in fact, wanted to drop the case against Assange back in 2013. The UK, however, insisted that they carry on with the charade so that Assange could remain locked up. A British official emailed the Swedes: “Don’t you dare get cold feet!!!”

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There’s some confusion here. Some say because Sweden dropped charges, the US is now first in line. Others deny this.

UK MPs Want Assange Extradited To Sweden (G.)

Political pressure is mounting on Sajid Javid to prioritise action that would allow Julian Assange to be extradited to Sweden, amid concerns that US charges relating to Wikileaks’ activities risked overshadowing longstanding allegations of rape. More than 70 MPs and peers have written to Javid and the shadow home secretary, Diane Abbott, urging them to focus attention on the earlier Swedish investigations that Assange would face should the case be resumed at the alleged victim’s request.


In a letter coordinated by Labour’s Stella Creasy and Jess Phillips and seen by the Guardian, the MPs declare: “We do not presume guilt, of course, but we believe due process should be followed and the [Swedish] complainant should see justice be done.” They call on Javid and Abbott to “champion action” to ensure that extradition is a possibility should Swedish authorities choose to pursue it. Assange first entered the Ecuadorian embassy in 2012 in order to avoid extradition to Sweden over sexual assault allegations, which he has always denied. While the statute of limitations on one of the allegations has expired, the other will not be reached until August 2020.

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May did it before in 2012, but I understand laws have changed since. Labour better make sure that block counts.

Labour Urges PM To Block Julian Assange Extradition To US (G.)

The shadow home secretary, Diane Abbott, has urged Theresa May to block the extradition of Julian Assange to the US in the same way she intervened in the case of the computer hacker Gary McKinnon. In 2012, as home secretary, May halted McKinnon’s extradition on human rights grounds after doctors warned he was at risk of suicide if sent to face trial in the US. Abbott said similar grounds should be used to block Assange’s extradition. On Thursday, the Wikileaks founder was arrested on behalf of the US authorities, who have charged him with involvement in a computer hacking conspiracy.

The 47-year-old faces up to 12 months in a British prison after he was found guilty of breaching his bail conditions. The US charge could attract a maximum jail sentence of five years, according to the US Department of Justice. Speaking on BBC Radio 4’s Today programme on Friday, Abbott said: “If you remember the Gary McKinnon case, the Americans insisted on extraditing him. He had done this massive computer hack, but his real crime was to have embarrassed the American military and security service. “In the end the then home secretary, Theresa May, blocked his extradition on what she said were human rights grounds. We think there may be human rights grounds in relation to Assange.”

Abbott described the allegations facing Assange from two women in Sweden as “serious”, but said charges were never brought. She said: “If the Swedish government wants to come forward with those charges I believe that Assange should face the criminal justice system.” But she added: “It is not the rape charges, serious as they are, it is about WikiLeaks and all of that embarrassing information about the activities of the American military and security services that was made public. “He is at the very least a whistleblower and much of the information that he brought into the public domain, it could be argued, was very much in the public interest.”

[..] “It is this whistleblowing into illegal wars, mass murder, murder of civilians and corruption on a grand scale, that has put Julian Assange in the crosshairs of the US administration. “It is for this reason that they have once more issued an extradition warrant against Mr Assange.” In response, the home secretary, Sajid Javid, said: “Why is it whenever someone has a track record of undermining the UK and our allies and the values we stand for, you can almost guarantee that the leadership of the party opposite will support those who intend to do us harm? You can always guarantee that from the party opposite.”

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“The point of journalism is to expose horrific crimes like this so that the powerful people who order them pay legal consequences, not the ones who expose them.”

Assange’s ‘Conspiracy’ to Expose War Crimes Has Already Been Punished (Fair)

In 2010, the Guardian, like the New York Times and a few other corporate newspapers, briefly partnered with WikiLeaks to publish the contents of thousands of confidential US diplomatic cables, known as Cablegate. That year, WikiLeaks released other confidential US government information as well: the Afghanistan War Logs, the Iraq War Logs, the infamous “Collateral Murder” video. The material exposed atrocities perpetrated by the US military, as well as other disgraceful acts—like US diplomats strategizing on how to undermine elected governments out of favor with Washington, spying on official US allies and bullying poor countries into paying wildly exorbitant prices for life-saving drugs.

One US soldier involved in the “collateral murder” airstrike that Manning and Assange exposed, Ethan McCord, was threatened and reprimanded by a superior officer for requesting psychiatric help after the atrocity. (“Get the sand out of your vagina,” he was reportedly told.) McCord had tended to wounded children during the massacre. He was soon expelled from the military, apparently now “unsuited” for it. The point of journalism is to expose horrific crimes like this so that the powerful people who order them pay legal consequences, not the ones who expose them. Presumably that is why “press freedom” is considered important, and why it’s guaranteed by the First Amendment.

The law should have protected Manning from punishment, the same way it protects somebody who uses violence in justifiable self-defense or in defense of others. In Manning’s case, that was especially true, because she exposed grave crimes while stationed in Iraq, as the US perpetrated an even higher-level crime—a war of aggression based on a fraudulent pretext. If the law should have protected Manning, who was at the very heart of the “conspiracy” to expose gruesome crimes, then it obviously should protect Assange, and any of the outlets that worked with him.

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“I’d like to see The New York Times’s front page headline on that story: Russian Colluder Wins Nobel Prize, Put on Trial in Federal Court.”

Cascading Cat Litter (Jim Kunstler)

And so now Julian Assange of Wikileaks has been dragged out of his sanctuary in the London embassy of Ecuador for failing to clean his cat’s litter box. Have you ever cleaned a litter box? The way we always did it was to spread some newspaper — say, The New York Times — on the floor, transfer the used cat litter onto it, wrap it into a compact package, and put it in the trash. It was interesting to scan the Comments section of The Times’s stories about the Assange arrest: Times readers uniformly presented themselves as a lynch mob out for Mr. Assange’s blood. So much for the spirit of liberalism and The Old Gray Lady who had published The Pentagon Papers purloined by Daniel Ellsberg lo so many years ago.

Reading between the lines in that once-venerable newspaper — by which I mean gleaning their slant on the news — one surmises that The Times has actually come out against freedom of the press, a curious attitude, but consistent with the neo-Jacobin zeitgeist in “blue” America these days. Anyway, how could anyone expect Mr. Assange to clean his cat’s litter box when he was unable to go outside his sanctuary to buy a fresh bag of litter, and was denied newspapers this past year, as well as any other contact with the outside world? US government prosecutors had better tread lightly in bringing Mr. Assange to the sort of justice demanded by readers of The New York Times — which is to say: lock him up in some SuperMax solitary hellhole and throw away the key. The show trial of Julian Assange on US soil, when it comes to pass, may end up being the straw that stirs America’s Mickey Finn as a legitimate republic.

The bloodthirsty hysteria among New York Times readers is a symptom of the mass confusion sown by agencies of the US government itself when its own agents ventured to meddle in the national election of 2016 and then blame it on “the Russians.” As you will learn in the months ahead, it was The Times itself, and other corporate news organizations, who colluded with officers of the FBI, the Department of Justice, the CIA, and the Obama White House to concoct a phony narrative about Mr. Trump being in cahoots with Vladimir Putin, thus depriving Hillary Clinton of her “turn” in the White House; and then to join those agencies, and the grotesquely dishonest two-year investigation of Special Counsel Robert Mueller, in a cover-your-ass operation to hide their nefarious and criminal acts.

In the meantime, Mr. Assange may receive a Nobel Prize as a symbol of a lone conscience standing up against the despotic deceits of the world’s deep states. Wouldn’t that gum up the works nicely? I’d like to see The New York Times’s front page headline on that story: Russian Colluder Wins Nobel Prize, Put on Trial in Federal Court. By then, the United States of America will be so completely gaslighted that it will pulsate in the darkness like a death star about to explode.

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Michael Malice on Twitter: “Let’s be clear: Julian Assange is not a journalist.
He uncovered and released information that the political establishment and government wanted to stay hidden.
Does that sound like the work of a journalist?”

Is Julian Assange Another Pentagon Papers case? (Alan Dershowitz)

Before WikiLeaks founder Julian Assange gained asylum in the Ecuadorian embassy in London in 2012, he and his British legal team asked me to fly to London to provide legal advice about United States law relating to espionage and press freedom. I cannot disclose what advice I gave them, but I can say that I believed then, and still believe now, that there is no constitutional difference between WikiLeaks and the New York Times. If the New York Times, in 1971, could lawfully publish the Pentagon Papers knowing they included classified documents stolen by Rand Corporation military analyst Daniel Ellsberg from our federal government, then indeed WikiLeaks was entitled, under the First Amendment, to publish classified material that Assange knew was stolen by former United States Army intelligence analyst Chelsea Manning from our federal government.

So if prosecutors were to charge Assange with espionage or any other crime for merely publishing the Manning material, this would be another Pentagon Papers case with the same likely outcome. Many people have misunderstood the actual Supreme Court ruling in 1971. It did not say that the newspapers planning to publish the Pentagon Papers could not be prosecuted if they published classified material. It only said that they could not be restrained, or stopped in advance, from publishing them. Well, they did publish, and they were not prosecuted.

[..] the problem with the current effort is that, while it might be legally strong, it seems on the face of the indictment to be factually weak. It alleges that “Assange encouraged Manning to provide information and records” from federal government agencies, that “Manning provided Assange with part of a password,” and that “Assange requested more information.” It goes on to say that Assange was “trying to crack the password” but had “no luck so far.” Not the strongest set of facts here!

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Nice going, Zuck.

Facebook Removes Page of Rafael Correa on Same Day as Assange’s Arrest (MU)

Facebook has unpublished the page of Ecuador’s former president, Rafael Correa, the social media giant confirmed on Thursday, claiming that the popular leftist leader violated the company’s security policies.[..] In March, WikiLeaks published a tranche of documents dubbed the INA Papers linking President Lenin Moreno to the INA Investment Corporation, an offshore shell company used by Moreno to procure furniture, property, and various luxury items. The account number for the offshore account allegedly used by the president to launder money was shared across Ecuadorean social networks by netizens of all political stripes, including by Correa – who had about 1.5 million followers and whose Facebook page enjoyed more interactions and attention than that of President Moreno himself.


[..] The removal of Correa’s page for violating Facebook’s “community standards” is an unprecedented move, and the former statesman is the most high-profile public political figure to ever be removed from the social platform–placing the economist and icon of Latin American “socialism of the 21st century” in the same unlikely category as right-wing conspiracy theorist and broadcaster Alex Jones.

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What would that solve?

Second Brexit Referendum Vote ‘Very Likely’ – Philip Hammond (Ind.)

A second referendum on Brexit is “very likely” to be put before parliament, Philip Hammond has said. Speaking in Washington on Friday, the chancellor said a fresh public vote was a “proposition that could and, on all the evidence, is very likely to be put to parliament at some stage”. However, he also said about six months would be needed to hold a referendum, and that there would not be enough time before Britain is due to leave the EU on the new deadline of 31 October. Mr Hammond also stressed that the government was still opposed to a second referendum, although he said other Labour demands – such as a customs union with the EU – were up for debate.


“The government’s position has not changed,” he said. “The government is opposed to a confirmatory referendum and therefore we would not be supporting it.” The idea of a new referendum was among several Brexit alternatives to Theresa May’s deal that were put to lawmakers in the last month – but which all fell short of a majority in parliament. The prime minister has so far failed to get her own party behind the Brexit divorce deal she agreed with other European Union leaders last year. She was forced to ask the bloc for a delay and to start talks with Labour about how to break the impasse in parliament.

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It says a lot about the human attention span that this doesn’t receive a lot more scrutiny.

This is where Fed policies will be found to have hurt people most.

What Went Wrong With Pensions And Why The Whole World Must Be Worried (Rubino)

As baby boomer teachers, police and firefighters retire, the required pension payouts are soaring. Combine this with inadequate contributions, and the liabilities of major U.S. public pensions are up 64% since 2007 while assets are up only 30%. This math is simple enough for even a politician or fund trustee to grasp, but because there’s no immediate penalty for underfunding a pension system, it has become normal practice in a long list of places. Another, related problem is also mathematical, but it’s harder to manage in a boom-and-bust world: When pension plans suffer a big loss, as they tend to do in bear markets, the next few years’ returns have to go towards making up that loss before plan assets can start growing again. The following chart, from a recent Wall Street Journal article, shows pension fund assets falling behind in the past two bear markets and having increasing trouble catching up with steadily-growing liabilities.

In some cases this puts funds permanently behind the curve and can only be fixed with massive infusions of taxpayer cash or draconian benefit cuts, neither of which are feasible in a system that punishes hard choices. The next chart shows how much more the worst offenders would have to contribute to their plans to get by with honest future return assumptions. For Illinois, Kentucky and New Jersey this will never happen.

What does all this mean? A few things: In the next bear market the pension funds that are already wildly underfunded will fall into a financial black hole from which they’ll never be able to escape. Those states and cities – many of which are issuing bonds to cover their day-to-day expenses – will be exposed as junk credits (as Chicago was recently) and will have to either pay way up to borrow or enact some combination of tax increases (politically almost impossible) or pension benefit cuts (legally impossible in many places) which will cause chaos without fixing the underlying problem. The weakest cities and the states in which they reside will be forced to default on some of their obligations, stiffing suppliers, creditors, and/or employees.


This will throw the municipal bond market into chaos as investors, worried that the next Chicago is lurking in their portfolios, dump the whole muni sector. Faced with a cascade failure of a crucial part of the fixed income universe, the federal government will react the way it did when the mortgage market imploded in 2008, with a massive taxpayer funded bailout. At which point there’s a good chance of the crisis spreading from pensions to currencies, as the world finally realizes that the bailouts are just beginning, with US states and cities soon to be followed by student loans, emerging markets, and European failed states.

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Drip. Drip.

Italy’s Fiscal Health Is Once Again In Serious Decline (DQ)

On Wednesday, Italy’s coalition government slashed its growth forecast for the Italian economy in 2019 to 0.2% – the weakest forecast in the Eurozone – from a previous forecast of 1%. Italy is already in a technical recession after chalking up two straight quarters of negative GDP growth in the second half of 2018. The government’s budget for this year was based on the assumption that the economy would expand by 1% this year. Now, it seems the economy may not grow at all; it could even shrink. One direct result of this is that Italy’s current account deficit for 2019 will be substantially higher than the 2.04% of GDP Italy’s government pledged to stick to late last year. And that can mean only thing: another standoff between Rome and Brussels over the direction of fiscal policy is in the offing.

Italy already boasts the largest public debt pile in Europe in nominal terms, clocking in at €2.14 trillion, as well as the second largest in relative terms after Greece’s twice bailed out economy. Rome just forecast that public debt would hit a new record high of 132.6% of GDP this year. That record is unlikely to last very long given Italy’s stagnating economy and the government’s determination to cut taxes, reduce the retirement age and introduce a citizens’ basic income.

The biggest problem with Italy’s economy is that many of its problems are chronic and deep seated. Many of them date back to the adoption of the euro, in 2000, or in the case of Rome’s massive addiction to public debt, to the 1980s. As the OECD points out, real GDP in Italy is still well below its pre-crisis peak. Italy is also the only OECD country where incomes (as measured by GDP per capita) are no higher than in 2000. By contrast, in France, Spain, the UK and Germany they have risen during the same period by 13%, 17%, 21% and 23 respectively.

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Now imagine this WITHOUT interest rates at record lows. What was once a market has now turned into a slot machine.

Uber Discloses 3-Yr $10-Billion Loss from Operations (WS)

Uber Technologies’ IPO filing was made public today. The 330-page or so S-1 filing disclosed all kinds of goodies, including detailed but still unaudited pro-forma financial statements as of December 31, 2018, huge losses from operations, big tax benefits, large gains from the sale of some operations, stagnating rideshare revenues, and an enormous list of chilling “Risk Factors” that go beyond the usual CYA. The filing, however, didn’t disclose the share price, the IPO valuation, and how much money the IPO will raise for Uber. On Tuesday, “people familiar with the matter” had told Reuters that Uber plans to raise $10 billion in the IPO. Most of the IPO shares would be sold by the company to raise funds, and a smaller amount would be sold by investors cashing out, the sources said.


The filing did not confirm this and instead left blanks or used placeholder amounts. But if true, $10 billion in shares sold would make this IPO one of the biggest tech IPOs. And the rumored $90 billion to $100 billion valuation would make it the biggest since Alibaba’s $169 billion IPO. Uber will need every dime it raises in the IPO going forward because it’s got a little cash-burn situation in its operations that persists going forward, as it admitted in its “Risk Factors,” and it will need to raise more money, and if it cannot raise more money, it might not make it. Uber is upfront about this. The company has already raised – and mostly burned through – over $20 billion so far in its 10 years of existence. This includes $15 billion in equity funding and over $6 billion in debt.

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Dec 082018
 


Getty Vigil in front of White House on the evening after Pearl Harbor attack Dec. 7 1941

 

France Braced For ‘Ultra-Violent’ Protests (BBC)
S&P 500 Closes In An Official ‘Death Cross’ (CNBC)
A Death Cross For The S&P 500 Highlights A Stock Market In Tatters (MW)
Dow Down Over 500 Points, Wipes Out 2018 Gains In Wild Week On Wall Street (CNBC)
George H. W. Bush, Wimp (Matt Taibbi)
Five Eyes Against Huawei (Voltaire)
Russia Ready To Switch Off Visa & Mastercard Ahead Of Tougher Sanctions (RT)
UK Ministers Warn No-Deal Brexit Chaos May Last Six Months (Ind.)
EU Support For Austerity Opens Door To Far Right – Corbyn (G.)
Capture the Flag (Kunstler)
Uber Files Confidential IPO Paperwork (R.)
The Column I Didn’t Want To Write About Julian Assange (SMH)
Media Is Giving The US Cover To Extradite Assange (Hrafnsson)
97% Decline In Monarch Butterflies (G.)

 

 

The French government goes about this so wrong you’d think they want the violence. Macron hasn’t been seen in many days, he left public displays up to his PM and left his country alone. Now they say there will be only 10,000 protesters, a ridiculously low number, and solemnly proclaim “10,000 is not the people, it’s not France.”

In fact, a large majority of people support the protests. Not the violence, but that’s not the core of this. Moreover, the students, who were not taking part last week, have now joined the yellow vests. And the government’s suggesting they -and the other protesters- are not really French.

Tear gas is being employed already on Saturday morning. Paris is under siege. And not from the protesters.

France Braced For ‘Ultra-Violent’ Protests (BBC)

France is braced for renewed anti-government protests, with nearly 90,000 security personnel on the streets. Some 8,000 officers and 12 armoured vehicles will be deployed in Paris alone, where shops have been boarded up and sites like the Eiffel Tower closed. The “yellow vest” movement began three weeks ago in opposition to a rise in fuel tax but ministers say it has been hijacked by “ultra-violent” protesters. Last week saw hundreds arrested and scores injured in violence in Paris. They were some of the worst street clashes seen in the capital for decades. The authorities are certainly not underestimating the threat. There were 65,000 security officers across the country last weekend and that has been increased to 89,000, even though Interior Minister Christophe Castaner said he expected fewer protesters than last weekend, perhaps about 10,000 nationwide. He said: “10,000 is not the people, it’s not France.”

The security forces will want to prevent a repeat in the capital, where the Arc de Triomphe was vandalised, police were attacked and cars overturned and burned last weekend. Mr Castaner has vowed “zero tolerance” towards violence. He said: “According to the information we have, some radicalised and rebellious people will try to get mobilised. Some ultra-violent people want to take part.” The barricade-smashing armoured vehicles have not been seen in the Paris area since riots erupted in poor suburbs in 2005. Mr Castaner added: “These past three weeks have seen the birth of a monster that has escaped its creators.”

[..] The government has said it is scrapping the unpopular fuel tax increases in its budget and has frozen electricity and gas prices for 2019. The problem is that protests have erupted over other issues. Granting concessions in some areas may not placate all the protesters, some of whom are calling for higher wages, lower taxes, better pensions, easier university requirements and even the resignation of the president. He has been called by some “the president of the rich”.

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“It’s almost confirming what could be a change in trend to the downside.”

S&P 500 Closes In An Official ‘Death Cross’ (CNBC)

The chart of the S&P 500 Index is flashing a warning of more selling ahead. A pattern, called the ‘death cross,’ appeared on the chart on Friday as stocks plunged. The S&P 500’s average price of the last 50 days, dropped below the 200-day moving average, a sign of negative momentum and possible change in trend, according to technical analysts. “It just means you’re lower for longer, meaning there’s no real bounce, which is a sign of real selling.” said Scott Redler, partner with T3Live.com. “Sometimes you break moving averages and you get some kind of quick fast recovery…but when you stay down longer, all of a sudden it’s showing real selling. That’s why people don’t like the death cross. It’s almost confirming what could be a change in trend to the downside.”

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It highlights a stock market that doesn’t exist.

A Death Cross For The S&P 500 Highlights A Stock Market In Tatters (MW)

The S&P 500 index on Friday has joined the ranks of market benchmarks forming that dreaded Wall Street chart pattern: the death cross. A death cross has materialized in the S&P 500 with the 50-day moving average at 2,759.28.02, below the 200-day moving average of 2,762.02, according to FactSet data. A death cross is what chart watchers refer to as the point where the 50-day — a short-term trend tracker — crosses below the 200-day, which is used to define the longer-term trend. Many believe the cross marks the point where a shorter-term decline graduates to a longer-term downtrend.

S&P 500’s Thursday action— falling in tandem with the Dow Jones Industrial Average (and briefly with the Nasdaq Composite)— helped deliver a breach for the large-cap index’s short-term trend line beneath the 200-day. The formation marks the first time the 50-day MA was below the 200-day for the S&P 500 since April 22, 2016, according to Dow Jones Market Data. However, the last time that a death cross formed was in January of 2016. The move for the benchmark comes amid a series of bearish patterns that have cropped up in equities and fixed-income markets, highlighting growing concerns about the durability of a bull run in stocks that has lasted about a decade as the economy’s vital signs have also been strong, in a long-running, if measured, rebound from the 2007-09 financial crisis.

[..] the ominous formation also is a sign of how viciously equity markets have unraveled in the past several weeks. More than half of the S&P 500’s 11 sectors have seen death crosses, and a chunk of the index’s constituents are in bear markets, having declined at least 20% from a recent peak. Both the S&P 500 and the Nasdaq are in correction, usually defined as a 10% drop from a peak, while the Russell 2000 is 15% beneath its recent peak.

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Without functioning markets, wild swings are guaranteed.

Dow Down Over 500 Points, Wipes Out 2018 Gains In Wild Week On Wall Street (CNBC)

Stocks dropped sharply on Friday, concluding what has been a wild week for Wall Street. A weaker-than-expected jobs report and China-U.S. trade tensions sent the Dow Jones Industrial Average lower by 558.72 points to 24,388.95 and erased its gains for the year. At one point, the Dow was up more than 8 percent for 2018. The S&P 500 pulled back 2.3 percent to 2,633.08 and also turned negative for the year. The Nasdaq Composite dropped 3.05 percent to close at 6,969.25. Shares of large-cap tech companies led the way lower. Facebook, Amazon, Netflix and Google-parent Alphabet all traded lower. Apple’s stock also fell 3.6 percent — erasing its gains for the year — after Morgan Stanley cut its price target on the tech giant’s shares, citing weakening iPhone sales.

For the week, the major indexes all dropped more than 4 percent. Thursday’s session included a violent drop of nearly 800 points, followed by a strong rebound from those levels. This week was also the worst for the indexes since March. Indexes fell to their lows of the day after the Wall Street Journal reported federal prosecutors are expected to bring charges against Chinese hackers allegedly trying to break into technology service providers in the U.S., another negative headline amid tense trade talks between the two countries. [..] “You’ve gone from a period of zero sensitivity to headlines to a period of hypersensitivity,” said James Athey, senior investment manager at Aberdeen Standard Investments. “We’re now in a world where no one knows which way is up and which way is down.”

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Delightful from Taibbi on among other things the years-long feud between HW and Doonesbury’s Garry Trudeau. Do read¡

I’ve left the HW story alone, overkill. But I was thinking all the time: if there’s one thing HW was not, it was a leader. I’m not the only one.

George H. W. Bush, Wimp (Matt Taibbi)

For most of his political life, George Herbert Walker Bush was basically the unimaginative proxy for other powerful interests. He was always the front man for the fellas at the club, be it Skull and Bones or the CIA (he retains the dubious distinction of being the only spy head to become president). He excelled in this brute-behind-the-scenes role. But once fashioning himself as something other than Ronald Reagan’s wingman, politics demanded he offer the national public glimpses of his personality. Sadly, he was president before he found out he didn’t really have one. This would have been fine, if he’d been a more confident person.

But Bush was not satisfied to be remembered as a dull imperial steward, and his flailing efforts to carve out a macho personal myth on par with Reagan or Kennedy marred both his presidency and large swaths of the planet. Unable to let insults stand, he dreamed up stunt after stunt in an attempt to counter Heathers-style media taunts that grew out of inside jokes circulated in Washington during the Reagan years. His presidency turned into an endless cycle: Bush would do something goofy/out of touch, the press would bash his brains in for it and he’d overreact, often by having someone bombed or jailed.

[..] In December 1989, Bush invaded Panama, ostensibly to capture former American client/human rights monster Manuel Noriega. The New York Times cheered Bush for going through the “rite of passage” of the presidency, which involved “a need to demonstrate the willingness to shed blood.” The paper was one of many to describe the invasion as a triumph over both Newsweek and Doonesbury: “For President Bush… a man still portrayed in the Doonesbury comic strip as the invisible President – showing his steel had a particular significance.”

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Encryption. Wonder how many people will get a Huawei phone now, and be safe from spying.

Five Eyes Against Huawei (Voltaire)

Washington has asked Ottawa to arrest Meng Wanzhou and to extradite her. This young woman is the financial director and daughter of the founder of Huawei, the Chinese Telecom Giant. She was arrested on 6 December in Canada. The motive for the war undertaken by Washington against Huawei is deep-rooted and spurious are the justifications. The heart of the problem is that the Chinese firm uses a system of encryption that prevents the NSA from intercepting its communications. A number of governments and secret services in the non-Western world have begun to equip themselves exclusively with Huawei materials, and are doing so to protect the confidentiality of their communications.

The covers/excuses for this war are theft of intellectual property or in the alternative, trade with Iran and North Korea, and violating rules of competition by benefitting from national subsidies. The Five Eyes is a system of electronic espionage by Australia, Canada, the United States, New Zealand and the United Kingdom. They have begun to exclude Huawei from their auctions.

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Sure, it’s uncomfortable, but Russia is well prepared.

Russia Ready To Switch Off Visa & Mastercard Ahead Of Tougher Sanctions (RT)

Moscow faces prospects of harsher sanctions this coming January as the US Congress is set to discuss a new package of anti-Russian penalties. The Russian central bank has warned the country’s lenders over potential risks.
The regulator has recommended that Russian financial institutions take the necessary preventive steps in case their partner-banks are forced to stop providing connection to services by the world’s two most used payment systems – Visa and Mastercard, reports Russian business daily Vedomosti. The list of Russia’s banking majors that are currently working as an intermediary include Credit Union “Payment Center,” one of Russia’s largest private lenders Uralsib, Rosbank that operates as a Russian subsidiary of the international financial group Societe Generale, Russia’s second biggest bank VTB and privately owned Promsvyazbank.

VTB and Promsvyazbank have already been included in the Countering America’s Adversaries Through Sanctions Act (CAATSA), approved by US Congress last summer. The legislation allows Washington to introduce penalties against enterprises and individuals that are seen as hostile towards the US or loyal to regimes that are hostile to the US. The Central Bank of Russia advises that Russian banks should look for an alternative sponsor that will be able substitute a current provider of Visa and MasterCard services, seal a maintenance service contract and test an opportunity of integrating.

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May’s cabinet now warns of chaos unless her Brexit plan is executed. Ignoring that if such chaos erupts, it’s their own fault; the government must prepare. So essentially they’re saying: we haven’t prepared the country, so you must support us.

UK Ministers Warn No-Deal Brexit Chaos May Last Six Months (Ind.)

Emergency plans to fly in medical supplies have been laid to ensure hospitals remain stocked amid six months of expected chaos at Britain’s channel ports after a no-deal Brexit. Critical supplies could also be diverted away from channel routes and some drugs may even be rationed to ensure stocks do not run out. The plans were published as a government assessment suggested a no-deal departure from the EU could mean severe disruption until the end of September 2019 to shipping between Dover and Calais and traffic using the Channel Tunnel.

Ministers continued to put up a defiant front on Friday, saying they were determined to push ahead with the House of Commons vote on Theresa May’s Brexit deal, though Downing Street insiders indicated it could still be pulled if efforts to turn rebels fall flat at the weekend. While MPs secured measures this week that make a no-deal scenario less likely, it is still possible if Ms May’s deal is rejected and parliament fails to opt for any alternative course before 29 March. Ministers had already told drug manufacturers to build six-week stockpiles in anticipation of Brexit customs disruption, but after the new assessment indicated Brexit disorder could last six months, further measures were deemed necessary.

In a letter to pharmaceutical firms, health secretary Matt Hancock said: “The revised cross-government planning assumptions show that there will be significantly reduced access across the short straits, for up to six months. “This is very much a worst-case scenario; however, as a responsible government, we have a duty to plan for all scenarios. “Whilst the six-week medicines stockpiling activities remain a critical part of our UK-wide contingency plan, it is clear that in light of the changed border assumptions described above this will now need to be supplemented with additional action.”

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True enough, but declaring yourself ‘internationalist’ and ‘socialist’ may not be the smartest meassage at this point.

EU Support For Austerity Opens Door To Far Right – Corbyn (G.)

Jeremy Corbyn has told an audience of European socialists that EU support for austerity has caused hardship for ordinary people, and that unless something changes there is a risk that “the fake populists of the far right will fill the vacuum”. Speaking at the Congress of European Socialists in Lisbon, the Labour leader also said his party respected the result of the Brexit referendum and it was the duty of the left in the UK to “shape what comes next”. Corbyn argued that Labour would be internationalist whether the UK was inside or outside the EU, and promised that the party would “work together to help build a real social Europe” by protecting workers’ and consumers’ rights. He said: “EU support for austerity and failed neoliberal policies have caused serious hardship for working people across Europe.”

It had “damaged the credibility of European social democratic parties and played a significant role in the vote for Brexit”. However, he promised that under his leadership Labour would take a different approach, and he added a stark warning: “If the European political establishment carries on with business as usual, the fake populists of the far right will fill the vacuum. European socialists have to fight for a different kind of Europe.” In a speech on the first day of the two-day event attended by Labour’s sister parties around Europe, Corbyn said of Brexit: “In a country where a million families are using food banks, over 4 million children are living in poverty, and real wages are lower today than they were in 2010, the British people voted to leave the EU. We respect that decision; it’s our job to shape what comes next.”

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What’s the difference between analysis and propaganda? It’s very unclear in America these days.

Capture the Flag (Kunstler)

It’s obvious that the Obama White House, along with CIA director John Brennan, and Director of National intel James Clapper, used the FBI and the DOJ (with support from the nation’s two leading newspapers), and help from Britain’s MI6 intel shop, to run illegal operations against Mr. Trump during the 2016 election, and then persisted in acts to delegitimize him after Jan 20, 2017. All this, of course, is apart from whether you like Mr. Trump or approve of his policies. It’s well documented elsewhere that Robert Mueller’s mission to detect election “collusion” between Russia and Mr. Trump was a bust, and that all he has to show for it is a roll of contrived convictions for lying to federal prosecutors and the FBI.

The case of General Flynn lies at the center because he served as Mr. Obama’s Director of the Defense Intelligence Agency (DIA) and he knew too much about US shenanigans around the notorious Iran nuclear deal and other shady doings. They were alarmed when he went over to Mr. Trump’s campaign, and determined to disable him. Once Mr. Trump appointed Gen. Flynn Director of National Security, Mr. Obama engineered an “incident” in late December of 2016 (confiscating Russian properties in Maryland over alleged election meddling and laying down new sanctions), that prompted Russian ambassador Sergey Kislyak to phone Gen. Flynn, the incoming DNS. US Intel was prepared for that set-up and recorded the call, which required the illegal “unmasking” of Flynn, a nicety of spycraft.

Thus, the FBI had a transcript of the phone call and were easily able to entrap Flynn in mis-remembering the particulars of the call. Where is that transcript? The predicate for this operation was completely dishonest: that incoming senior government officials are forbidden to speak to foreign ambassadors. In fact it is their duty to consult with foreign officials, especially in Mr. Flynn’s job, and a long-established tradition of every presidential transition. The coup cadres of the Deep State used The New York Times and The Washington Post to persuade the public that Gen. Flynn had done something treasonous, when it was nothing more than routine transition business.

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The IPO to end all IPO’s?!

Uber Files Confidential IPO Paperwork (R.)

Uber Technologies Inc has filed paperwork for an initial public offering, according to three people with knowledge of the matter, taking a step closer to a key milestone for one of the most closely watched and controversial companies in Silicon Valley. The ride-hailing company filed the confidential paperwork on Thursday, in lock-step with its smaller U.S. rival, Lyft Inc, which also announced on Thursday it had filed for an IPO, setting the stage for one of the biggest technology listings ever. The simultaneous filings extend the protracted battle between Uber and Lyft, which as fierce competitors have often rolled out identical services and matched each other’s prices.

Uber’s most recent valuation was $76 billion, and could be worth $120 billion in an IPO. Its listing next year would be the largest in what is expected to be a string of public debuts by highly valued Silicon Valley companies, including apartment-renting company Airbnb and workplace messaging firm Slack. Uber’s debut will be a test of investor tolerance for legal and workplace controversies, which embroiled Uber for most of last year..

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For some reason, people think it’s very normal to hate Assange. They don’t explain why, though, it’s presented as a given.

The Column I Didn’t Want To Write About Julian Assange (SMH)

We don’t like Julian Assange. That much is clear. Back in 2010, after the original Iraq leak, he seemed a reasonable imitation of a public-spirited whistleblower. By the time I met him in 2012 he was already obsessed by how the leftist media had abandoned him, blaming a conspiracy among Oxbridge PPE (Politics, Philosophy, Economics) graduates. That struck me as narcissistic paranoia although it is, I suppose, remotely possible that such a cabal existed. Now, the question of why the left “hates” Assange occupies his few remaining supporters almost exclusively. Personally I think hate is too strong. Most people just consider Assange a spoilt-brat egomaniac with murky motives, a limelight habit and some profoundly questionable political affiliations.

As further allegations emerge (from Robert Mueller’s ongoing investigations) as to his working with Russia to destabilise Clinton, perhaps in return for being rescued from London (allegations which Assange denies), many hold Assange responsible for Trump. So yes, the dislike is legit. But if egomania and dumb politics were a crime half the population would be in porridge. You don’t abandon someone to a system of revenge indictments, secret trials and solitary confinement because they’re arrogant, or even arrogant and wrong. So it’s not the emotion we need to analyse but the leap from “I’m no longer sympathetic” to “throw away the key”.

[..] Back in 2011 a grand jury was convened in Virginia to determine whether Assange was indictable. Grand jury proceedings are inherently secret. Involving neither judge nor jury they are prosecutor-led, with no defendant right to a defence, attendance or even knowledge. Their findings too are secret. Thus, despite years of enduring rumours of a “sealed indictment” against Assange we know only that last month, US prosecutors inadvertently revealed that secret charges had been laid against Assange. Put it together. An old arrest warrant for skipping bail on a charge that was always feeble and has since been dropped, a refusal to deny extradition intentions, secret charges emerging from a secret court over an act that may not even be illegal and for which the principal culprit has already been pardoned. Does anyone really think such a system could produce a fair trial?

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The Guardian piece is way overexposed, but okay, here’s WikiLeaks new editor-in-chief, Kristinn Hrafnsson.

Media Is Giving The US Cover To Extradite Assange (Hrafnsson)

The Guardian’s attack on Assange came only days after it was confirmed that he has been indicted some time ago, under seal, and that the U.S. will seek his extradition from the U.K. The story was published just hours before a hearing brought by media groups trying to stop the U.S. government from keeping its attempts to extradite Assange secret. The story went viral, repeated uncritically by many media outlets around the world, including Newsweek. This falsely cast Assange into the center of a conspiracy between Putin and Trump. The Guardian even had the gall to post a call to its readers to donate to protect “independent journalism when factual, trustworthy reporting is under threat.”

[..] This is part of a series of stories from The Guardian, such as its recent claim of a “Russia escape plot” to enable Assange to flee the embassy, which is not true. What do these stories have in common? They all give the U.K. and Ecuador political cover to arrest Assange and for the U.S. to extradite him. Any journalists worth their salt should be investigating who is involved in these plots.

[..] Numerous commentators have criticized The Guardian for its coverage of Assange. Glenn Greenwald, former columnist for The Guardian, writes that the paper has “…such a pervasive and unprofessionally personal hatred for Julian Assange that it has frequently dispensed with all journalistic standards in order to malign him.” Another former Guardian journalist, Jonathan Cook, writes: “The propaganda function of the piece is patent. It is intended to provide evidence for long-standing allegations that Assange conspired with Trump, and Trump’s supposed backers in the Kremlin, to damage Hillary Clinton during the 2016 presidential race.”

Hours before The Guardian published its article, WikiLeaks received knowledge of the story and “outed” it, with a denial, to its 5.4 million Twitter followers. The story then made the front page, and The Guardian asserted they had not received a denial prior to publication—as they had failed to contact the correct person. A simple retraction and apology will not be enough. This persecution of Assange is one of the most serious attacks on journalism in recent times.

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Really, guys? Blame it all on climate change? I wouldn’t.

97% Decline In Monarch Butterflies (G.)

In the 1980s, roughly 4.5 million monarchs wintered in California, but at last count, there may be as few as 30,000. The hillside groves of eucalyptus trees that tower over the Santa Cruz shoreline would, not so long ago, be teeming with monarch butterflies at this time of year. Boughs would be bent under the weight of black and orange clusters, as hundreds of thousands of the magical invertebrates nestled into the leaves, waiting out the frost on the California coast before returning north. Now, on a sunny December afternoon the boardwalk that weaves through the monarch preserve, at Natural Bridges State Beach, is filled with school children craning necks and straining eyes to catch a glimpse. The monarchs are there – but they are harder to spot.

Just two years ago, 8,000 overwintered here, but these days, just more than a thousand are fluttering amidst the Santa Cruz trees. It’s part of a troubling trend: over the last two decades monarch numbers in the West have declined by roughly 97%. “It is a sad reality of climate change,” said Anthony Dutierrez, a volunteer guide at the park and biology student at the University of California, Santa Cruz, as he takes a break from guiding school children through a tour. “For every little thing that changes there’s not just one consequence – it’s a whole chain reaction.” According to the Xerces Society, a conservation organization, in the 1980s between 10 million and 4.5 million monarchs spent the winter in California. The last count, conducted annually by volunteers each November, showed that in 2018 there may be as few as 30,000 across the state – a number that’s 87% lower than just the year before.

“We had a lot of reason to suspect that it was going to be a bad year, but we were shocked at just how bad,” said Xerces Society Conservation biologist Emma Pelton. She said that year-to-year fluctuations can be expected, but this kind of continuous drop-off is cause for concern. “It is in the context that the population has already declined 97%. So, it’s OK if you have millions of butterflies and they drop down a little bit – that’s not a huge deal. But if you have 200,000 butterflies to begin with and you have a bad year? Now we only have 30,000 left.”


Photograph: Michael Yang / Rex Features

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Jun 032018
 


Andrew Wyeth Christina’s world 1948

 

Why Italy Had To Say Goodbye To The Dolce Vita (David McWilliams)
An Italian Exit May Be Rome’s Best Option – JPMorgan (ZH)
Angela Merkel Rules Out Debt Relief For Italy (CNBC)
New Italy PM Starts Off In Shadow Of His Powerful Deputies (AFP)
Juncker: EU Won’t ‘Meddle’ In Italy’s Affairs (O.)
Political Bruiser Sánchez Stuns Spain To Become PM (Spain Report)
Europe: Confront Trump or Avoid a Costly Trade War (NYT)
US Wants Structural Changes To China’s Economy: Mnuchin
Uber’s ‘Business Is Finished’ In Turkey, Erdogan Says (R.)
Britain’s Low-Paid Face Decade Of Wage Squeeze (O.)
UK Universal Credit Change To Bar 2.6m Children From Free School Meals (Ind.)
Whale Dies From Eating More Than 80 Plastic Bags (AFP)

 

 

Excellent from David McWilliams on what the euro has done to Italy.

Why Italy Had To Say Goodbye To The Dolce Vita (David McWilliams)

Sometimes it is not appreciated quite how industrial Italy is. It has long been Europe’s second-biggest manufacturing power, beaten only by Germany. Italy is far more industrial than France or the UK. In some areas of design and high-quality manufacturing, Italy is still without peer. However, since it gave up the lira and adopted the euro – in effect Germany’s currency – things have gone pear-shaped. This economic calamity is driving Italian politics, leading many to question the euro and Italy’s membership of it. From 1945 to 1995 there was an understanding that Italy would devalue the lira. This is what Italy did. Traditionally, it devalued the lira every few years. This kept Italian industry competitive.

For example, when Italy joined the European Monetary System, in 1979, the exchange rate was 443 lire per Deutschmark. By 1990, the year of German reunification, the rate was 750 lire to the Deutschmark. By 1995 it was 1,000 lire to the Deutschmark. In the 1992 currency crisis the lira fell to a low of 1,250 against the Deutschmark before recovering a bit. The gradual fall in the value of the lira was a price that the Italians were prepared to pay for industrial success. Contrary to the dogma spouted by Europe’s central bankers, Italian devaluations worked particularly well. From 1979 to 1998, Italian industrial production outpaced that of Germany by more than 10%. Italian equities outperformed German equivalents by 16% – after having taken into account the devaluations.

So not only was Italian industry growing faster than German industry, aided by lira devaluations, but also the return on capital in Italy was higher than in Germany. This is because if the stock market of a country is outperforming another country’s, it implies that the capital that is deployed in the faster-growing country is being deployed more efficiently. Therefore, not only was Italy growing more quickly than Germany, but it was more efficient too. Then came the euro. Since Italy joined the single currency, almost to the day, its industry has gone backwards. Having outperformed German stocks during the period of the lira, Italian stocks have underperformed German stocks by a whopping, bankruptcy-inducing 65%.

During the half-century when Fellini was writing the story of postwar Italian success, the Italian stock market almost always returned more than the German stock market. Once Italy joined the euro that stopped almost overnight. Deep in the economy, the strictures imposed by the euro have destroyed much of Italian industry. For example, having outgrown Germany’s industrial output in the 1980s and 1990s by 10%, Italian factory output since Italy joined the euro has lagged Germany’s by 40%.

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Hard to summarize this long Zero Hedge piece. Depending on where you look, Italy may not be all that weak.

“If you owe the ECB €10 billion, you have no leverage. If you owe the ECB €426 billion, you have all the leverage.”

An Italian Exit May Be Rome’s Best Option – JPMorgan (ZH)

[..] with €426BN, Italy has the highest Target2 deficit with the Eurosystem (Spain is a close second with €377BN) any discussion about an Italian euro exit raises concerns about costs. [..] due to QE induced cross border flows since 2015, Target2 balances have exploded since the launch of the ECB’s QE (and third Greek bailout in 2015), and surpassed the previous extremes from the depths of the euro debt crisis in the summer of 2012.

[..] a euro exit by a debtor country would represent more of a cost to creditor countries such as Germany rather than to the exiting country itself. And, as shown in the chart above, Germany sure has a lot of implicit accumulated costs, roughly €1 trillion to be precise, as a result of preserving a currency union that allowed German exporters to benefit from a euro dragged lower by the periphery, relative to where the Deutsche Mark would be trading today. But here the analysis gets slightly more complex, as Target2 does not provide the full picture of potential costs (or benefits, assuming a scorched earth approach). As JPMorgan writes, the Target2 liabilities of a debtor country give only a partial picture of the cost to creditor nations from that debtor country exiting.

This is because Target2 balances represent only one component of the Net International Investment Position of a country, i.e. the difference between a country’s total external financial assets vs. liabilities. The broader metric that one must use, is of the Net International Investment Position for euro area countries and is shown in the chart below. It shows that contrary to the Target2 imbalance, Italy leaving the euro would inflict a lot less damage to creditor nations than Spain leaving the euro. This is because Spain’s net international investment liabilities stood at close to €1tr as of the end of last year, almost three times as large as its Target2 liabilities. In contrast Italy’s net international investment liabilities were much smaller and stood at only €115bn at the end of last year, around a quarter of its €426bn Target2 liabilities. This, as JPM explains, is because Italy has accumulated over the years more external assets than Spain and should thus be overall more able to repay its external liabilities.

[..] Ironically, the surprisingly low net international investment liabilities of Italy are the result of the persistent current account surpluses the country has been running since the euro debt crisis of 2012, and smaller current account deficits compared to Spain before the crisis. The flipside is that the current account surplus – in theory – also makes it easier for a country like Italy to exit the euro relative to a current account deficit country. This is because the higher the current account deficit of a debtor country, the higher the cost of an exit for this country as the current account deficit would have to be closed abruptly following an exit. Most importantly, this means that as a result of Italy’s decent current account surplus, from a narrow current account adjustment point of view, its own cost of a euro exit should be relatively small.

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Merkel has weakened a lot. Italy knows it.

Angela Merkel Rules Out Debt Relief For Italy (CNBC)

German Chancellor Angela Merkel appeared on Saturday to rule out debt relief for Italy, saying in a newspaper interview that the principle of solidarity among members of the euro zone should not turn the single currency bloc into a debt-sharing union. “I will approach the new Italian government openly and work with it instead of speculating about it intentions,” Merkel told the Frankfurter Allgemeine Sonntagszeitung in an interview to be published on Sunday.

On Friday, Italy swore a populist coalition into power, ending months of political uncertainty that hit global markets in the last week. Newly designated Prime Minister Giuseppe Conte will lead Western Europe’s first anti-establishment government with the aim of cutting taxes, boosting spending on welfare and overhauling EU rules on budgets and immigration. Italy accounts for 23.4 percent of the euro zone’s public debt and 15.4 percent of the bloc’s GDP, according to Eurostat.

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Conte has a full agenda.

New Italy PM Starts Off In Shadow Of His Powerful Deputies (AFP)

Italy’s new prime minister Giuseppe Conte mostly kept quiet on his full first day in office Saturday, while his two powerful deputies took centre stage in setting the tone of the populist government’s policy. Conte, a political novice, was finally sworn in on Friday as the head of a government of ministers from the anti-establishment Five Star Movement and the far-right League, ending months of uncertainty since elections in March. But Conte was a compromise candidate between Five Star leader Luigi Di Maio and the League’s Matteo Salvini – both of whom are now his deputy prime ministers – and he will have to walk a delicate line to push through the anti-austerity and pro-security promises their populist parties campaigned on.

The 53-year-old academic also inherited a daunting list of issues from his predecessor Paolo Gentiloni, including the financial travails of companies such as Ilva and Alitalia, a Group of Seven summit in Canada and a key EU summit at the end of the month, as well as the thorny question of immigration. Immigration is the bugbear of Conte’s interior minister, Salvini, the 45-year-old leader of the anti-immigrant, anti-Islam League. Salvini announced Friday that he would visit Sicily to see the situation for himself at one of the main landing points for refugees fleeing war, persecution and famine across North Africa and the Middle East. “The good times for illegals is over – get ready to pack your bags,” Salvini said at a rally in Italy’s north on Saturday, adding however that he wants to economically assist migrants’ countries of origin.

His comments come after more than 150 migrants, including nine children, disembarked from a rescue ship late Friday in Sicily. Conte attended a military parade alongside President Sergio Mattarella on Saturday, marking Republic Day for the foundation of the Italian Republic in 1946. However the new prime minister has issued few public statements since being appointed. On Saturday he did post on Facebook that he had spoken with German Chancellor Angela Merkel and French President Emmanuel Macron and would meet the two leaders at the G7 summit, where he will be a “spokesman for the interests of Italian citizens”. Conte has also opted to keep the country’s intelligence services under his personal control.

Deputy premier Di Maio, who is serving as economic development minister, also took to Facebook, calling for “entrepreneurs to be left alone”. “Employers and employees in Italy must not be enemies,” he said, promising “I will not disappoint you”. On Saturday evening Five Star held a rally in the centre of Rome with thousands of supporters and all its ministers to celebrate “the government of change”. Di Maio told the crowd that “from today, the state is us”. Five Star’s founder, former comic Beppe Grillo, rang a bell in front of the crowd, saying the sound “marks the fracture between a world that is going away and a new one that is arriving”.

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Right. Sure.

Juncker: EU Won’t ‘Meddle’ In Italy’s Affairs (O.)

Italy, the third-largest economy in the eurozone, has a public debt second only to Greece’s and there was a negative reaction from the financial markets to the League-M5S coalition, which plans to significantly raise public spending. Juncker offered a more placatory tone, suggesting that Brussels and Berlin had learned the lessons of the Greek crisis. He also denied that the eurozone was set on a course for another economic downturn: “The Italians cannot really complain about austerity measures from Brussels. However, I do not now want to lecture Rome. We must treat Italy with respect. Too many lectures were given to Greece in the past, in particular from German-speaking countries. This dealt a blow to the dignity of the Greek people. The same thing must not be allowed to happen to Italy.”

Juncker said that the financial markets’ reaction was “irrational”: “People should not draw political conclusions from every fluctuation in the stock market. Investors have been wrong on so many occasions.” Neither of the coalition parties in the new Italian government campaigned on leaving the euro or the EU, but both have backed such calls in the past and are scathing about the rules that underpin the eurozone. Mujtaba Rahman, a former European commission and UK Treasury official who now works for consultancy the Eurasia Group, warned that as the cornerstone of the coalition government’s platform was fiscal expansion, it was liable to clash with the commission this autumn.

“Though no official estimates have been produced, independent estimates suggest the proposed measures would cost, combined, upwards of €100bn per annum, around 6% of GDP.“If the government were to propose a very expansionary budget, the commission – which provides its opinions and recommendations on member states’ draft budgetary plans – would have to reject it in September. This would be a first, and would set the stage for a real confrontation with Rome,” he said. “A significant deviation from EU-mandated fiscal targets may prompt the commission to open a new Excessive Deficit Procedure, a process designed to give the EU more power to enforce austerity on Rome. Yet the symbolism of this move would only strengthen the Italian government’s domestic standing.”

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Poker player?!

Political Bruiser Sánchez Stuns Spain To Become PM (Spain Report)

Forget about what the new socialist government’s policies are going to be, because no one really knows yet. Forget about who the new ministers are going to be, because no one really knows yet. And forget about how long this government is going to last. No one has a clue right now. What is worthy of note is how Pedro Sánchez has just crushed all of his political opponents in a week. Last Friday, the PSOE had slowly slumped to less than 20% in the polls and he was being written off by columnists and commentators. This Saturday, he will be driven to Zarzuela Palace to be sworn in as the new socialist Prime Minister of Spain [..]

Mr. Rajoy is likely not the only political leader who needs a stiff drink this weekend. Pedro Sánchez has just left Pablo Iglesias—who nine days ago thought his biggest problem was an absurd internal ballot about his new luxury home—sitting in the dust in the fight for the Spanish left. Two years ago, with the sudden appearance and meteoric rise of Podemos, Mr. Iglesias’s stated strategic goal was not to win the election but to dominate the Spanish left. He just lost that race. Pedro Sánchez has just left Ciudadanos leader Albert Rivera rabbiting on incessantly about wanting a new general election instead of the socialists “unfairly” grabbing power, because Mr. Rivera is—or was—doing rather better in the polls than the rest.

But rabbit on is all he can do for now because, just like nine days ago, in the real world Ciudadanos still only has 32 seats in Congress. And Pedro Sánchez has just left the powerful leader of the Socialist Party in Andalusia, Susana Diaz, well, in Andalusia. This might be the sweetest victory of all for the new Prime Minister, because it was she who wielded her considerable internal and establishment influence in October 2016 to oust Mr. Sánchez as leader of the PSOE, allowing Mariano Rajoy to be reappointed Prime Minister after a year of national stalemate unbroken by two general elections.

Again: Pedro Sánchez, written off by some as being too handsome to have any interesting ideas, has, somewhere along the way, learnt to execute political hit jobs that have left all of his major political opponents staggering, and sent what was a confident conservative party that had only just passed a new budget—two days previously—scurrying into opposition, wounded. In a week. Whatever happens next in Spanish politics, do not underestimate Pedro Sánchez.

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More division.

Europe: Confront Trump or Avoid a Costly Trade War (NYT)

Despite its name, the European Union is not generally a model of unity. If Mr. Trump was banking on internal division stymieing the European response, he picked an opportune moment. Britain is consumed with domestic sniping over its pending departure from the European Union, making it a bit player in these proceedings. Italy has been immersed in the operatic political drama at which it excels, only Friday swearing in a new government after inconclusive elections in March. The incoming government presents a coalition of two populist parties that have expressed disdain for the European Union and the shared euro currency, stoking fears that the bloc will be presented with a new challenge to its cohesion.

Spain just swapped governments. Germany is headed by a chastened chancellor Angela Merkel following her own lengthy struggles to form a government after elections last fall. The French president has been frustrated in his attempts to forge greater political unity within the bloc. “Europe is in disarray,” said Nicola Borri, a finance professor at Luiss, a university in Rome. “It’s even difficult to understand who is in power in Europe.” In deliberating how to respond to Mr. Trump’s tariffs, the key schism appears to run between Germany and the rest of the bloc. “I don’t think there is a unified consensus for how to deal with the Americans,” said Meredith Crowley, an expert on international trade at the University of Cambridge in England. “The Germans benefit from open markets globally, so they don’t want to throw up more barriers to free trade.”

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That’s quite the statement. What if Beijing said the same about the US?

US Wants Structural Changes To China’s Economy: Mnuchin

The United States wants trade talks in Beijing this weekend to result in structural changes to China’s economy, in addition to increased Chinese purchases of American goods, U.S. Treasury Secretary Steven Mnuchin said on Saturday. U.S. Commerce Secretary Wilbur Ross arrived in Beijing on Saturday with an interagency team of U.S. officials for talks on long-term purchases of U.S. farm and energy commodities, just days after Washington renewed its threats to impose tariffs on Chinese goods.

The purchases are partly aimed at shrinking the $375 billion U.S. goods trade deficit with China. Mnuchin, speaking at a G7 finance leaders meeting in Canada where he was the target of U.S. allies’ anger over steel and aluminum tariffs, said the China talks would cover other issues, including the Trump administration’s desire to eliminate Chinese joint venture requirements and other policies that effectively force technology transfers.

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It’s election time.

Uber’s ‘Business Is Finished’ In Turkey, Erdogan Says (R.)

Turkey’s President Tayyip Erdogan has said ride hailing app Uber is finished in Turkey, following pressure from Istanbul taxi drivers who said it was providing an illegal service and called for it to be banned. About 17,400 taxis operate in Istanbul, home to about a fifth of Turkey’s population of 81 million people, and since Uber entered the country in 2014 tensions have risen sharply. Erdogan’s statement came after new regulations were announced in recent weeks tightening transport licensing requirements, making it more difficult for drivers to register with Uber and threatening a two-year ban for violations.

“This thing called Uber emerged. That business is finished. That does not exist anymore,” he said in a speech in Istanbul late on Friday. “We have our taxi system. Where does this (Uber) come from? It is used in Europe, I do not care about that. We will decide by ourselves,” added Erdogan, who is running for re-election in three weeks. [..] Uber said that about 2,000 yellow cab drivers use its app to find customers, while another 5,000 work for UberXL, using large vans to transport groups to parties, or take people with bulky luggage to Istanbul’s airports.

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The Tories can’t wait to return to Dickens.

Britain’s Low-Paid Face Decade Of Wage Squeeze (O.)

The wages of 10 million low-paid workers have stalled for two decades and face pressure for a decade to come, according to a bleak assessment of Britain’s future jobs market. Global economic competition, automation, the shift to the gig economy and a widening regional divide will see further pressure placed on the incomes of those earning between £10,000 and £15,000, it warns. The analysis by the Centre for Social Justice (CSJ) thinktank, which is on the political right and chaired by the former Tory leader Iain Duncan Smith, also blamed a chronic national failure to boost skills and education. It will be seen as another warning to Theresa May from Conservative figures to kickstart her domestic agenda.

There have been concerns within the party that the focus on Brexit has led to inaction in other crucial areas that could hold Britain back after its exit from the European Union. The analysis, co-written by Boris Johnson’s former economic adviser and Brexit supporter Gerard Lyons, concludes that wages of those on the lowest salaries stalled long before the 2008 financial crash. It warns that the current evidence shows that most never escape a life on low pay. The centre’s support for action on low pay shows that it is now an issue of concern across the political spectrum, with automation expected to place further pressure on jobs in some low-paid sectors unless new skills and opportunities are developed.

The CSJ report states that 20% of Britain’s 33 million workers earn £15,000 a year or less, and that 50% earn no more than £23,200. Only 10% of employees, or about 3 million people, earn above £53,000 a year. Britain does not compare well with other developed nations when it comes to low pay, it states. Taking data from manufacturing, and giving the US a score of 100, Switzerland topped the table with a pay rate of 155, followed by Norway on 126, Germany on 111 and France on 97. However, the UK was much further behind, on 73.

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These people would be better off moving to Poland.

UK Universal Credit Change To Bar 2.6m Children From Free School Meals (Ind.)

Up to 2.6 million children whose parents are on benefits could be missing out on free school meals by 2022, the shadow education minister will warn. Angela Rayner will tell a GMB union conference on Sunday that the Government’s claims on school meals are “falling apart” after changes to eligibility under Universal Credit (UC). When the system was first introduced in 2013, all children of recipients – who were all unemployed – were eligible for free school meals (FSM), as they would have been under the old system. But in April the criteria was tightened based on income. In England, the net earnings threshold will be £7,400 whereas in Northern Ireland it will be £14,000.

A government technical note published in May said that if the change had not been made, “around half of all (state school) children would become eligible for FSM and the meals would no longer be targeted at those who need them the most”. It said that in 2017 around 1.1 million disadvantaged children were eligible and received a free school meal, some 14 per cent of all state-school pupils. But if the change had not been made the number of additional children who would have been eligible was between 2,300,000 and 2,600,000 by 2022.

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And that’s just one animal that we could see.

Whale Dies From Eating More Than 80 Plastic Bags (AFP)

A whale has died in southern Thailand after swallowing more than 80 plastic bags, with rescuers failing to nurse the mammal back to health. The small male pilot whale was found barely alive in a canal near the border with Malaysia, the country’s department of marine and coastal resources said. A veterinary team tried “to help stabilise its illness but finally the whale died” on Friday afternoon. An autopsy revealed 80 plastic bags weighing up to 8kg (18lb) in the creature’s stomach, the department added. People used buoys to keep the whale afloat after it was first spotted on Monday and an umbrella to shield it from the sun. The whale vomited up five bags during the rescue attempt.

Thon Thamrongnawasawat, a marine biologist and lecturer at Kasetsart University, said the bags had made it impossible for the whale to eat any nutritional food. “If you have 80 plastic bags in your stomach, you die,” he said. Thailand is one of the world’s largest users of plastic bags. Thon said at least 300 marine animals including pilot whales, sea turtles and dolphins, perished each year in Thai waters after ingesting plastic. “It’s a huge problem,” he said. “We use a lot of plastic.” The pilot whale’s plight generated sympathy and anger among Thai netizens. “I feel sorry for the animal that didn’t do anything wrong, but has to bear the brunt of human actions,” wrote one Twitter user.

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Apr 062018
 


Edgar Degas Leaving the paddock 1866
Stolen from Gardner Museum March 18 1990, the single largest art theft in the world. Never recovered

 

US Willing To Talk Trade With China, No Session Set Yet (R.)
Trump Considers New $100 Billion Tariffs On Chinese Goods (G.)
Trade Is a Matter of Survival for China (Rickards)
Facebook Explored Data Sharing Agreement With Hospitals (CNBC)
Uber To Suspend Service In Greece After New Legislation (R.)
HSBC Whistleblower Released By Judge After Swiss Extradition Request (Ind.)
German Court Says Carles Puigdemont Can Be Released On Bail (G.)
Young People In Britain Have Never Been Unhappier (G.)
Elderly People Grow As Many New Brain Cells As Young (Ind.)
Surgeon General Urges More Americans To Carry Opioid Antidote (CNN)
Social Media Looks Like the New Opiate of the Masses (BBG)
Lifting Sugarcane Farming Ban ‘Last Straw’ For Amazon Rainforest (Ind.)
Bolivia’s Jaguars Under Threat Of Chinese Fang Craze (AFP)

 

 

Get around a table alright.

US Willing To Talk Trade With China, No Session Set Yet (R.)

The United States is willing to negotiate with China on trade, but only if talks are serious, as previous attempts produced little progress, a senior U.S. official told Reuters late on Thursday as trade tensions between the two nations escalated. No formal negotiating sessions have been set, the official said. “There is ongoing communications with the Chinese on trade,” said the official, who requested anonymity to discuss the Trump administration’s trade strategy. The official said Republican President Donald Trump, who has already sought $50 billion in new tariffs on China, will insist on “verifiable, enforceable and measurable deliverables” from China in any trade negotiations.

The comments came as Trump said late on Thursday he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China “in light of China’s unfair retaliation” against earlier U.S. trade actions. In a statement, Trump said the U.S. Trade Representative had determined that China “has repeatedly engaged in practices to unfairly obtain America’s intellectual property.” The senior official said: “We’ve had a type of negotiation in different forums where China has made lots of different commitments that they haven’t followed through on. “We don’t want to go down that path. But the president has been clear, the administration has been clear, we’re not trying to start a trade war. We’re simply trying to get fair and reciprocal treatments so we’re open to those conversations.”

The official said China had committed seven times to stopping forced technology transfers, a practice in which China allegedly seeks to obtain U.S. intellectual property (IP) through joint venture requirements, something that China denies. “This president is not going to tolerate hollow commitments or refusal to change bad practices. And if the way that we effectuate that is through negotiations, that’s great,” the official said.

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All still just proposals. Waiting for Chinese replies that are not threats.

Trump Considers New $100 Billion Tariffs On Chinese Goods (G.)

Donald Trump has instructed the US trade representative to consider slapping $100bn in additional tariffs on Chinese goods in an escalating standoff over trade. Trump said in a statement on Thursday that the further tariffs were being considered “in light of China’s unfair retaliation” against earlier US trade actions. He added that the US trade representative had determined that China “has repeatedly engaged in practices to unfairly obtain America’s intellectual property”. The White House said Trump had instructed the Office of the United States Trade Representative, the agency responsible for developing and recommending trade policy, to consider whether the additional tariffs would be appropriate under section 301 and, if so, to identify which products they should apply to.

He’s also instructed his secretary of agriculture “to implement a plan to protect our farmers and agricultural interests”. “Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers”, Trump said. Trump argues China’s trade practices have led to the closure of American factories and the loss of millions of American jobs. On Friday China’s commerce ministry said Beijing would fight the US ‘at any cost’. China’s state-run tabloid Global Times called Trump’s latest threat “ridiculous” in an editorial on Thursday, noting that it “reflects the deep arrogance of some American elites in their attitude towards China.”

Trump’s move comes one day after China issued a $50bn list of US goods including soybeans and small aircraft for possible tariff hikes. That itself was 11 hours after the White House announced a list of 1,333 Chinese imports, also worth about $50bn, for punitive tariffs of 25%.

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Jim Rickards with a good history of US Presidential powers, but also of what China is afraid of: the homefront.

Trade Is a Matter of Survival for China (Rickards)

President Trump may now use IEEPA to block a variety of Chinese deals in the U.S. in retaliation for Chinese theft of U.S. intellectual property. With the U.S. using its nuclear option in financial warfare, investors should hope that the Chinese don’t respond in kind. President Trump may not appreciate the extent to which China will go to protect its interests. Trade negotiations are not the art of the deal, as far as China is concerned. Their goal is national survival. China’s economy is not just about providing jobs, goods and services that people want and need. It is about regime survival for a Chinese Communist Party that faces an existential crisis if it fails to deliver. The overriding imperative of the Chinese leadership is to avoid societal unrest.

[..] given China’s current economic problem, Beijing’s challenge is becoming more difficult every day. Consider what’s happening in China right now… Growth in GDP is conventionally defined as the sum of consumer spending, investment, government spending (excluding transfer payments) and net exports. Most large economies other than oil-producing nations get most of their growth from consumption, followed by investment, with relatively small contributions from government spending and net exports. A typical composition would show a 65% contribution from consumption plus a 15% contribution from investment. China is nearly the opposite, with about 35% from consumption and 45% from investment.

That might be fine in a fast-growing emerging-market economy like China if the investment component were carefully designed to produce growth in the future as well as short-term jobs and inputs. But that’s not the case. Up to half of China’s investment is a complete waste. It does produce jobs and utilize inputs like cement, steel, copper and glass. But the finished product, whether a city, train station or sports arena, is often a white elephant that will remain unused.

What’s worse is that these white elephants are being financed with debt that can never be repaid. And no allowance has been made for the maintenance that will be needed to keep these white elephants in usable form if demand does rise in the future, which is doubtful. Chinese growth has been reported in recent years as 6.5–10% but is actually closer to 5% or lower once an adjustment is made for the waste. The Chinese landscape is littered with “ghost cities” that have resulted from China’s wasted investment and flawed development model. This wasted infrastructure spending is the beginning of the debt disaster that is coming soon. China is on the horns of a dilemma with no good way out.

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It gets harder to act innocent. Why do this in secret if it is to benefit people?

Facebook Explored Data Sharing Agreement With Hospitals (CNBC)

Facebook has asked several major U.S. hospitals to share anonymized data about their patients, such as illnesses and prescription info, for a proposed research project. Facebook was intending to match it up with user data it had collected, and help the hospitals figure out which patients might need special care or treatment. The proposal never went past the planning phases and has been put on pause after the Cambridge Analytica data leak scandal raised public concerns over how Facebook and others collect and use detailed information about Facebook users. “This work has not progressed past the planning phase, and we have not received, shared, or analyzed anyone’s data,” a Facebook spokesperson told CNBC.

But as recently as last month, the company was talking to several health organizations, including Stanford Medical School and American College of Cardiology, about signing the data-sharing agreement. While the data shared would obscure personally identifiable information, such as the patient’s name, Facebook proposed using a common computer science technique called “hashing” to match individuals who existed in both sets. Facebook says the data would have been used only for research conducted by the medical community.

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Just make it local. And use the revenues to support your own cities.

Uber To Suspend Service In Greece After New Legislation (R.)

Ride-hailing service Uber said on Thursday it would suspend its licensed service in Greece after the approval of local legislation which imposes stricter regulation on the sector. Uber, which operates a licensed service in the Greek capital, has faced opposition from local taxi drivers who accuse it of taking their business. “New local regulations were voted on recently with provisions that impact ride-sharing services,” Uber said in a blog post. “We have to assess if and how we can operate within this new framework and so will be suspending uberX in Athens from next Tuesday until we can find an appropriate solution.” Uber operates two services in Athens: UberX, which uses professional licensed drivers, and UberTAXI, which uses taxi drivers.

The new regulations require each trip to start and end in the fleet partner’s designated headquarters or parking area, something Uber does not do. A digital registry of all ride-sharing platforms and their passengers will also be created. The company launched in Europe in 2011, angering some local authorities and taxi drivers who said it did not abide by the same rules on insurance, licensing and safety. Following widespread protests, court battles and bans, Uber has taken a more emollient stance under its new CEO Dara Khosrowshahi, suspending operations in various cities in order to comply with local regulations. UberX launched in Athens in 2015 and more than 450,000 people have used its smartphone app to book a ride.

News of the new regulation last year angered some Athenians and tens of thousands signed a petition launched by Beat – a local ride-sharing service – in favor of ride-hailing services. UberX drivers have to be employed by fleet partners such as car rental companies or tourist agencies and their cars could not be more than seven years old. The data registry and return-to-garage requirement will only apply to ride-hailing services like Uber and Beat, while taxi drivers will be able to use cars that are up to 22 years old.

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Too much backlash?!

HSBC Whistleblower Released By Judge After Swiss Extradition Request (Ind.)

An HSBC whistleblower who leaked data that led to a tax evasion scandal has been released by a Spanish judge after being arrested on an extradition request from Switzerland. Hervé Falciani, a former IT worker at HSBC’s secretive Swiss bank, faces a five-year prison sentence in Switzerland after being convicted in absentia for industrial sabotage in 2015. Police arrested Mr Falciani in Madrid on Wednesday on his way to speak at a conference on whistleblowing. Swiss authorities had requested that he be remanded in custody but he was released without bail on Thursday and ordered to surrender his passport while Spanish authorities consider whether to extradite him.

In 2008, Mr Falciani fled Switzerland, having stolen data on 130,000 HSBC clients, many of whom he suspected of tax evasion. The information uncovered large-scale wrongdoing at the bank that led to investigations in several countries, including the UK. HSBC chief executive Stuart Gulliver later apologised to MPs for “unacceptable” practices at the bank’s Swiss subsidiary which he said had caused “damage to trust and confidence” in the company. Sven Giegold, an MEP and spokesperson for the German Greens on transparency and integrity said on Thursday that Mr Falciani should be awarded a medal for his actions. “Falciani deserves a European Order instead of imprisonment in Switzerland,” Mr Geigold said.

“He was one of the first whistleblowers to pioneer the fight against global tax fraud, followed by many disclosures in Switzerland, Luxembourg, Liechtenstein and other tax havens,” “We should be grateful to him. Europe’s governments should call on the Spanish government not to extradite Falciani. His extradition would be shamefully ungrateful after having profited from his data financially and politically.”

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Misuse of public funds. Not what Spain wanted. Just let him go. Germany can’t extradite someone on that.

German Court Says Carles Puigdemont Can Be Released On Bail (G.)

A court in northern Germany has ruled that the former Catalan president Carles Puigdemont can be released on bail while extradition proceedings continue. The district court in Schleswig set bail for the 55-year-old at €75,000 (£66,000). Puigdemont was arrested on a Spanish-issued warrant upon entering Germany on 25 March as he attempted to drive from Finland to Belgium, where he currently resides. Spain accuses the Catalan separatist of rebellion and corruption after he organised an unsanctioned independence referendum. The Schleswig court said that it considered a charge of misuse of public funds sufficient grounds for an extradition, but that a charge of “rebellion” was not, because the comparable German charge of treason specifies violence.

Proceedings to decide whether to extradite him on corruption charges could continue, it said. “There is a risk of flight,” the court said in its explanation of its decision to grant bail. “But since extradition on rebellion charges is impermissible, the risk of flight is substantially lessened.” Puigdemont has written an open letter from prison, urging Catalonia’s parliament to make another attempt to elect jailed separatist activist Jordi Sànchez as the region’s president. Puigdemont had proposed Sànchez as his number two in the Together for Catalonia party last month, but Spain’s supreme court refused to free him to attend a parliamentary session. Sànchez said in a letter from a Madrid jail published on Thursday that he was ready to try again to be elected.

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In that society, no wonder.

Young People In Britain Have Never Been Unhappier (G.)

Young people’s happiness across every single area of their lives has never been lower, research by the Prince’s Trust has found. The charity, set up by the Prince of Wales, said the results of its annual UK Youth Index, which gauges young people’s happiness and confidence across a range of areas, from working life to mental and physical health, should “ring alarm bells”. The national survey shows young people’s wellbeing has fallen over the last 12 months and is at its lowest level since the study was first commissioned in 2009. The research, based on a survey of 2,194 respondents aged 16 to 25, revealed that three out of five young people regularly feel stressed amid concerns over jobs and money, while one in four felt “hopeless”, and half had experienced a mental health problem.

Almost half said they did not feel they could cope well with setbacks in life, but despite this more than one quarter said they would not ask for help if they were feeling overwhelmed. The index shows that young people are particularly disillusioned with the job market and are concerned about money and future prospects. One in ten said they had lost a job through redundancy or having a contract terminated or not renewed, or being fired, while 54% said they were worried about their finances. The report highlights significant differences between the views held by young men and women, particularly when it comes to how they feel about their future prospects. Young women are more likely to think a lack of self-confidence holds them back and 57% of young women worry about “not being good enough in general”, compared to 41% of men.

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Or do they? Is the secret in the synopses?

Elderly People Grow As Many New Brain Cells As Young (Ind.)

Elderly people grow as many new brain cells as teenagers, according to a new study which counters previous theories that neurons stop developing after adolescence. Healthy men and women continue to produce new neurons throughout life, suggesting older people remain more cognitively and emotionally intact than previously believed, researchers found. For decades it was thought that adult brains were hard-wired and unable to form new cells. But a Columbia University study found older people continued to produce neurons in the hippocampus – a part of the brain important for memory, emotion and cognition – at a similar rate to young people. Researchers examined the brains of 28 previously healthy people who died suddenly between the age of 14 and 79.

“We found that older people have similar ability to make thousands of hippocampal new neurons from progenitor cells as younger people do,” said the study’s lead author Maura Boldrini, associate professor of neurobiology. “We also found equivalent volumes of the hippocampus across ages.” The ability to generate new hippocampal cells, a process known as neurogenesis, declines with age in rodents and primates. Declining production of neurons and shrinkage of parts of the brain which help form of new episodic memories were believed to occur in ageing humans as well, explaining why younger people find it easier to learn skills and languages. But the Columbia University study found similar numbers of newly formed cells in old and young brains.

However, the researchers also noted fewer blood vessels and connections between cells in the older brains, which Ms Boldrini said “may be linked to compromised cognitive-emotional resilience” in the elderly. The findings, published in the journal Cell Stem Cell, are likely to be hotly debated. They come just a month after a University of California study suggested adults do not develop new neurons.

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That’s how bad it’s gotten.

Surgeon General Urges More Americans To Carry Opioid Antidote (CNN)

The US surgeon general issued an advisory Thursday recommending that more Americans carry the opioid overdose-reversing drug, naloxone. The drug, sold under the brand name Narcan (among others), can very quickly restore normal breathing in someone suspected of overdosing on opioids, including heroin and prescription pain medications. Dr. Jerome Adams emphasized that “knowing how to use naloxone and keeping it within reach can save a life.” To make his point, Adams relied on a rarely used tool: the surgeon general’s advisory. The last such advisory was issued more than a decade ago and focused on drinking during pregnancy.

Adams noted that the number of overdose deaths from prescription and illicit opioids doubled in recent years: from 21,089 deaths across the nation in 2010 to 42,249 in 2016. America’s top doctor attributed this “steep increase” to several contributing factors, including “the rapid proliferation of illicitly made fentanyl and other highly potent synthetic opioids” and “an increasing number of individuals receiving higher doses of prescription opioids for long-term management of chronic pain.”

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The right discussion, but launched very weakly. On purpose?

Social Media Looks Like the New Opiate of the Masses (BBG)

[..] many of us who lived through the shift from Internet 1.0 to the new age of social media can’t help but feel a nagging worry. In addition to concerns about privacy, electoral influence and online abuse, social media seems like it has many of the qualities of an addictive drug. Research isn’t conclusive on whether social-media addiction is real. But it certainly has some negative side effects that loosely resemble the downsides of recreational drugs. In 2011, psychologists Daria Kuss and Mark Griffiths wrote a paper that found: “Negative correlates of [social media] usage include the decrease in real life social community participation and academic achievement, as well as relationship problems, each of which may be indicative of potential addiction.”

Meanwhile, a number of more recent studies find similarities between social-media use and addictive behavior. And experiments found that smartphone deprivation induced anxiety among young people, a phenomenon that certainly has parallels to drug withdrawal. That certainly doesn’t mean that everyone who uses social media is a junkie. Evidence shows that moderate usage is not harmful. That fits with my own experience – I find that I derive great enjoyment from Facebook, which I use in moderation, but am often made anxious and irritable by Twitter, which I use much more. It’s the heaviest users who may be in the most danger — a recent survey found that a quarter of Americans are online “almost constantly.” And social-media use is going up relentlessly worldwide:

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“..there is no need for more land to grow sugarcane..”

Lifting Sugarcane Farming Ban ‘Last Straw’ For Amazon Rainforest (Ind.)

Environmentalists in Brazil have urged the government not to proceed with a change in the law described as the “last straw” for the Amazon rainforest. The Brazilian senate is set to vote on a bill that could see the eight-year-old ban on farming sugarcane for biofuel production in the Amazon lifted. In an open letter, 60 NGOs including Greenpeace and WWF have warned of the implications this decision would have, both for the rainforest itself and the reputation of the biofuels industry. They have been joined in their condemnation of the bill by several former Brazilian environment ministers.

The letter states: “If passed, the bill will be a tragedy for forests and for the biofuel industry in Brazil – the image of which will be damaged to the brink of no return, at a time critical to its success”. There is also concern that Brazil’s Paris climate agreement targets will be compromised if its ethanol production is not sustainable. Supporters of the new bill say it will benefit the economy and help contribute to the national supply of biofuels. However, environmentalists, scientists and even representatives from the biofuels industry say there is no need for more land to grow sugarcane, and the expansion of the industry will further drive deforestation of the rainforest.

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Reminds us of that park in India where more poachers than rhinos are killed. Beijing needs to stop this, all of it.

Bolivia’s Jaguars Under Threat Of Chinese Fang Craze (AFP)

Bolivia’s once-thriving jaguar population is loping into the cross-hairs of a growing threat from poachers responding to growing Chinese demand for the animal’s teeth and skull. Researchers believe there are around 7,000 of the speckled big cats in Bolivia, out of a global population of some 64,000, stretching from North America to Argentina. But such is the appetite in China’s huge underground market that “if controls are not put in place, it can lead to a serious problem” for their survival, warned Fabiola Suarez of the Environment Ministry. Considered vulnerable by conservationists, the jaguar’s future in the South American country is in the hands of anti-trafficking police only now coming to grips with the potential scale of the problem.

Local authorities began getting reports in 2014 of trade in the animal in the northeastern area of Beni, according to Rodrigo Herrera, an advisor to Bolivia’s directorate of Biodiversity at the Environment Ministry. He says the increased presence of Chinese nationals in the South American country has stimulated demand. President Evo Morales’ leftist government has awarded seven billion dollars’ worth of public works contracts to Chinese groups, sparking an influx of workers from the Asian giant. Herrera said each of the cat’s teeth, which measure between eight and 10 centimeters, can fetch up to $100 for poachers, but that figure can reach $5,000 on the Chinese market. The feline’s skull is also prized by traffickers, at rates of up to $1,000. Traffickers also sell the skin, and even the testicles, which along with the ground-down teeth, are prized by some Chinese as an aphrodisiac.

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Apr 052018
 
 April 5, 2018  Posted by at 12:11 pm Finance Tagged with: , , , , , , , , , , , , ,  2 Responses »


Herbert Ponting Scott’s Terra Nova Expedition, Antarctica 1911

 

Something must be terribly wrong with the world. A few days ago Elizabeth Warren agreed with Trump on China, now Bernie Sanders agrees with him about Amazon. What’s happening?

 

Bernie Sanders Agrees With Trump: Amazon Has Too Much Power

Independent Vermont senator and 2016 presidential hopeful Bernie Sanders echoed President Donald Trump in expressing concern about retail giant Amazon. Sanders said that he felt Amazon had gotten too big on CNN’s “State of the Union” Sunday, and added that Amazon’s place in society should be examined.

“And I think this is, look, this is an issue that has got to be looked at. What we are seeing all over this country is the decline in retail. We’re seeing this incredibly large company getting involved in almost every area of commerce. And I think it is important to take a look at the power and influence that Amazon has,” said Sanders.

A backlash against Facebook, a backlash against Amazon. Are these things connected? Actually, yes, they are connected. But not in a way that either Trump or Sanders has clued in to. Someone who has, a for now lone voice, is David Stockman. Here’s what he wrote last week.

 

The Donald’s Blind Squirrel Nails An Acorn

It is said that even a blind squirrel occasionally finds an acorn, and so it goes with the Donald. Banging on his Twitter keyboard in the morning darkness, he drilled Jeff Bezos a new one – or at least that’s what most people would call having their net worth lightened by about $2 billion:

“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” You can’t get more accurate than that. Amazon is a monstrous predator enabled by the state, but Amazon’s outrageous postal subsidy – a $1.46 gift card from the USPS stabled on each box – isn’t the half of it.

The real crime here is that Amazon has been exempted from making a profit, and the culprit is the Federal Reserve’s malignant regime of Bubble Finance. The latter has destroyed financial discipline entirely and turned the stock market into the greatest den of speculation in human history. That’s why Bezos can kill established businesses with impunity.

The casino allows him to run a pernicious business model based on “price to destroy”, rather than price for profit and a return on capital. Needless to say, under a regime of sound money and honest capital markets Amazon would be a far more benign economic creature. That’s because no real investors would value AMZN’s money-loosing e-Commerce business at $540 billion – nor even a small fraction of that after 25-years of profitless growth.

The bubble economy, the everything bubble, that we have been forced into, with QE, ultra-low rates, central banks buying trillions in what at least used to be assets, and massive buybacks that allow companies to raise their ‘value’ into the stratosphere, has enabled a company like Amazon to kill off its competition, which consists of many thousands of retailers, that do have to run a profit.

It’s a money scheme that allows many of the most ‘valuable’ tech companies to elbow their way into our lives, in ways that may seem beneficial to us at first, but in reality will only leave us behind with much less choice, far less competition, and many, many fewer jobs. Once it’s done someone will mention ‘scorched earth’. But for now they are everybody’s darlings; they are, don’t you know, the tech giants, the brainchildren of the best that the best among us have to offer.

They don’t all work the exact same way, which may make it harder to recognize what they have in common. For some it’s easier to see than for others. It’s also difficult to list them all. Here’s a few: Apple, Amazon, Facebook, Google (Alphabet), Tesla, Uber, Airbnb, Monsanto. Let’s go through the list.

 

Apple ? Yes, Apple too. But they make real things! Yes, but just as Apple CEO Tim Cook seeks to distance his company from the likes of Facebook on morals and ethics, he can’t deny that Apple sells a zillion phones to a large extent because everybody uses them to look at Facebook and Alphabet apps until their faces are blue. If data ethics are the only problem Cook sees, he’s in trouble.

Silicon Valley infighting shows that the industry does have an idea what is going wrong, in ways that should have already led to many more pronounced worries and investigations.

 

Silicon Valley Rivals Take Shots At Facebook

Mr. Cook, who has long sought to differentiate Apple on privacy matters, contrasted its focus on selling devices with Facebook and Google’s ad-based businesses that are built on user data. Asked what he would do if he were Facebook CEO Mark Zuckerberg, Mr. Cook replied: “I wouldn’t be in this situation.”

[..] Days earlier, François Chollet, an artificial intelligence engineer at Google, sought to draw a line between his company and Facebook. He tweeted that Google products like search and Gmail help users “to do more, to know more.” Facebook’s newsfeed, he wrote, “manipulates your worldview and seeks to maximally waste your time.”

[..] In January, Salesforce.com CEO Marc Benioff, whose company sells business software services, said that the addictive nature of social media means it should be regulated like a health issue.“I think that you do it exactly the same way that you regulated the cigarette industry,” Mr. Benioff told CNBC when asked how Facebook should be regulated. Some of the most cutting rebukes have come from people who know Facebook well.

In November, Sean Parker, the founding president of Facebook, said that Facebook executives, including himself, were “exploiting a vulnerability in human psychology” by designing a platform built on social validation. Mr. Parker didn’t respond to a request for comment.

Facebook generally hasn’t responded to the criticism, but it did after sharp comments from its former vice president of growth, Chamath Palihapitiya. “The short-term, dopamine-driven feedback loops that we have created are destroying how society works,” Mr. Palihapitiya said at a talk at Stanford University in November.

I would expect to hear a lot more of that sort of thing. Big Tech is changing the world in more ways than one. And spying on people Facebook-style is merely one of a long list of them. So yes, Apple certainly also belongs in that list. Facebook doesn’t build the devices people use to see what their friends had for breakfast, Apple does that. Moreover, Apple profits hugely from stock buybacks, so it fits in Stockman’s bubble finance definition of Amazon, too.

The failure of politics to investigate, and act against, those dopamine-driven feedback loops which exploit a vulnerability in human psychology in order to maximally waste your time and sell you product after product that you never (knew you) wanted is downright bizarre. Politicians only started talking about Facebook when a topic connected to Trump and Russia was linked to it.

 

Amazon: Trump can’t act fast enough on the tax situation and the US Postal deal. Not that that will solve the issue. Amazon, like all the companies on my list, can only be cut down to size if and when the everything bubble is. They are, after all, its children.

The most pernicious aspect of the Amazon ‘business model’, which all these firms share, and all are able to live by thanks to the central banks and the “greatest den of speculation in human history” they have created, is the prospect of world domination in their respective fields. They all hold in front of speculators the promise that they can crush all competition, or nearly all. Scorched earth, flat earth.

 

Facebook: their place in the list is obvious. What is it, 2.5 billion users? And what they don’t have is divvied up between them and Google when they buy up apps like Instagram. Officially competitors, but they have the exact same goals. And, like me, you may think: what’s the problem, just ban them from collecting all that data. Facebook has no reason to know, at least not one that serves us, where you were last Friday, and with whom. And just in case you missed that bit, they do.

But there their connection to the intelligence world comes in. Their platforms are better than anything the NSA has ever been able to develop. So we can say we don’t want Zuckerberg and Alphabet spying on us, but our own spies do want to do just that. That makes any kind of backlash much harder to succeed. And it doesn’t matter if you delete your Facebook account, they’ll find you anyway. Friend of a friend. We all have friends who are on Facebook, rinse and repeat.

The only hope there is, with Facebook as with the other companies, is for investors and speculators to dump their holdings in massive numbers. And that will only happen when the central bank Ponzi collapses. And it will, but by then we have a whole new set of problems.

 

Google: largely the same set of issues that Facebook has. Its tentacles are everywhere. Former CEO Eric Schmidt’s connections to the Pentagon should be really all you need to know. The EU may have issued all sorts of complaints and fines on competition grounds, but that makes no difference.

The one country with an effective response to Google and Facebook is China, that has largely banned both and built its own versions of their products. Which allows Beijing to ban people from boarding planes, buying homes etc., if their ‘social credit’ is deemed too low. If you want to be scared about where Big Tech’s powers can lead, look no further.

 

Tesla: Elon Musk has built a fantasy (and maybe I should put Paypal in this list too) on what everyone thinks must be done to ‘save the planet’ (yeah, build cars…) by grossly overstating the number of cars he can build, and financing his growth on not only speculation, but also on spectacular amounts of government subsidies (politicians want to save the planet, too).

And now he needs additional financing again. He will probably get it, again, but the Amazon backlash might have people take another look. One fine day… Fits David Stockman’s complaint to a t(ee), doesn’t have to make a profit. Musk has perfected that model.

 

Uber and Airbnb: why anyone anywhere would want to send money generated in their community, by renting out cars and apartments in that same community, to a bunch of people in Silicon Valley, is beyond me. Someone should set this up as an international effort that makes it easy for a community, a city etc., to provide this kind of service and make the profits benefit their own cities.

But like Amazon, they are free to run any competition into the ground because no profits are required until they have conquered the world. And then they can go nuts. It may look like a business model, but it isn’t. It’s a soon to be orphaned bubble child..

 

Monsanto: less obvious perhaps as an entry in the Big Tech list, but very much warranting a spot. And of course it stands for the entire chemical-seeds field. From Agent Orange to your children’s dinner plate. Monsanto has more lawyers and lobbyists on its payroll than it has scientists, but then its lofty goals outdo even those of Google or Amazon.

Facebook may focus on your addiction to human contact, but Bayer, DuPont, Syngenta et al have decided to make your food so addicted to their chemicals that they will in the future profit from every bite served on your table. How they will grow that food long term without any insects, bees or birds left is unclear, but they don’t seem to care much. As for profits? Monsanto seeks to rule the world, and for now care as little about profits as they do about insects.

 

Zuckerberg may claim that he only wants to improve Facebook’s service, but when that is done through for instance the 2012 so-called Transmission of Anger experiment in which the company tried to alter their users’ emotional states -and succeeded-, by manipulating their friends’ postings, that claim becomes pure ridicule. Selling off user data to scores of developers doesn’t help either. But do you see Congress tackling him in any serious way next week? Neither do I.

Because there’s one huge catch to the scenario that David Stockman -and I- painted, of the whole tech bubble collapsing when the financial bubble does. It is the links tech companies have built to intelligence. A group of Google employees wrote a letter to their CEO Sundar Pichai to protest the company’s involvement in “weaponized AI”, in the shape of Project Maven, a military surveillance engine to-be.

These people undoubtedly mean well, but they’re far too late. They will have to leave the “don’t be evil” company to actually not be evil. Because it’s not a big step from weaponized AI to killer robots. Microsoft is also part of the project, and Amazon is. If you work there and don’t want to be evil, you know what to do.

Yeah, it’s about our safety, and security, and political and military and economic power. But it’s also about spying on people, in even worse ways than Facebook does. So even as the central bank bubble, and the tech bubble, go poof, some of these companies may be saved by their military ties.

That sound you hear is George Orwell turning in his grave.

 

 

Jan 122018
 


Do these people ever consider this perhaps helps Trump? The Man’s on Fire!

 

Bitcoin Steadies But Set For Worst Weekly Slide Since 2015 (BBG)
Cryptos Surge As South Korea Backs Away From Trading Ban (ZH)
South Korea Is Talking Down The Idea Of A Cryptocurrency Trading Ban (CNBC)
China’s Trade Surplus With The US Hit A Record High In 2017 (CNBC)
China Sets New Records for Gobbling Up the World’s Commodities (BBG)
Household Debt Boom Sows The Seeds For A Bust (CBR)
Markets Still Blow Off the Fed, Dudley Gets Nervous, Fires Warning Shot (WS)
We’re Going To See A Radically Changing World In 2018 – (Nomi Prins)
Why We Have to Talk About a Bubble (BBG)
Uber’s Secret Tool for Keeping the Cops in the Dark (BBG)
Monsanto Seeks To Cash In On The Organic Food Market (CP)
Electric Car Dreams Run Into Metal Crunch (BBG)
Greece Is Now Worse Off Than When It Defaulted For The First Time (ZH)

 

 

It’s a slide! It’s a surge! Depends who you ask, and what time of day. Ask again every half hour, or you may miss the big moves. Translation: bitcoin is far from ready for the big leagues. It’s about stability.

Bitcoin Steadies But Set For Worst Weekly Slide Since 2015 (BBG)

Bitcoin steadied Friday after four days of losses for the largest cryptocurrency amid increasing scrutiny from regulators around the world with concerns ranging from investor losses to strains on power systems. Bitcoin was little changed on the day, at $13,467 as of 1:27 p.m. Hong Kong time, reversing an earlier decline. It was down as much as 23% for the week at one point, on track for the deepest decrease since January 2015, according to Bloomberg composite pricing, and is now down about 20%. The token peaked in mid-December soon after the introduction of futures trading on regulated exchanges in Chicago. Among the blows to cryptocurrencies this week was the South Korean justice minister’s reiteration of a proposal to ban local cryptocurrency exchanges, though the comments were later downplayed by a spokesman for the president.

Meanwhile, bitcoin mining is set to become more expensive as China’s government cracks down on the industry, in part out of concerns about power use. In the U.S., scrutiny is set to increase amid concerns about the potential use of cryptocurrencies for fraudulent purposes such as money laundering. Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo are set to testify to the Senate Banking Committee on risks tied to bitcoin and its counterparts, according to a person with direct knowledge of the matter. The committee intends to hold a hearing in early February, the person said.

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The reaction scared the sh*t out of Seoul. But they still have to act, because bitcoin’s wide acceptance in the country means it’s a real danger to the whole economy.

Cryptos Surge As South Korea Backs Away From Trading Ban (ZH)

After what has seemed like a non-stop barrage of bad news for crypto bulls from South Korea, we noted some cracks in the foundation of the anti-cryptocurrency push as the ministry of finance refused to support the ministry of justice’s exchange shutdown bill. Tonight we get further clarification that the end of South Korean crypto trading is not nigh as Yonhap reports the various government ministries need more time and more consultations over the mininstry of justice’s plan to ban crypto-exchanges. “The issue of shutting down (cryptocurrency) exchanges, told by the justice minister yesterday, is a proposal by the justice ministry and it needs consultations among ministries,” Kim said.

Ministers reportedly seek a “soft-landing” considering the shock the measures may have on the market is an issue that can result in huge social, economic damage. Additionally Yonhap notes that even if pursued, shutdown of exchanges would take some time as it needs discussion at parliament (it would take months or even years for a bill to become a law). All of which can be roughly translated as – we have no idea of the impact of banning this stuff and just how much damage to the nation’s wealth could occur if we do… The result is a broad-based rally across the major cryptocurrencies… Tens of thousands of people filed an online petition, asking the presidential office to stop the clampdown against cryptocurrency trading. South Korea is home to one of the world’s biggest private bitcoin exchanges, with more than 2 million people estimated to own some of the best-known digital currency.

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Stand up comedian minister: “..a balanced perspective is necessary because blockchain technology has high relevance with many industries such as security and logistics.”

South Korea Is Talking Down The Idea Of A Cryptocurrency Trading Ban (CNBC)

South Korea’s finance minister on Friday said that relevant officials need to hold more consultations over the justice ministry’s plan to ban cryptocurrency exchanges in the country. “All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation,” Minister Kim Dong-yeon told reporters, according to news agency Yonhap. “The issue of banning exchanges that the justice minister talked about yesterday is a proposal by the Justice Ministry and it needs more coordination among ministries,” Kim added. He also said that discussion was under way on how the government could reasonably regulate cryptocurrency trading that’s overheating with irrational and speculative behavior, Yonhap reported.

Kim said “a balanced perspective is necessary because blockchain technology has high relevance with many industries such as security and logistics.” Kim’s comments followed news that the country’s justice ministry appeared to have softened its stance after remarks from its chief on Thursday saw billions wiped off the global cryptocurrency market. The justice ministry explained, according to Yonhap, that the ban was not a done deal in a text message to reporters on Thursday. “The ministry has been preparing a special law to shut down all cryptocurrency exchanges, but we will push for it after careful consideration with related government agencies,” the justice ministry said.

[..] “Justice Minister Park Sang-ki’s remarks regarding the shutdown of cryptocurrency exchanges is one of the measures that have been prepared by the Justice Ministry, but it is not a finalized decision and will be finalized through discussion and a coordination process with each government ministry,” the chief press secretary to President Moon Jae-in said in a statement reported by Yonhap. Even if a bill aiming to ban all cryptocurrency trading is drafted, it will require a majority vote in the country’s National Assembly before it can be enacted into law. That process could take months — or even years.

Read more …

This must worry Xi. China sets itself up for a strong reaction. And then? Withdraw back into its own cocoon? Not an option for an export-dependent economy. The shift to domestic consumption has so far failed miserably.

China’s Trade Surplus With The US Hit A Record High In 2017 (CNBC)

China’s 2017 trade surplus with the U.S. was $275.81 billion, the country’s customs data showed Friday, according to Reuters. By that data, last year’s surplus is a record high, the wire service reported. For comparison, the previous record was a surplus of $260.8 billion in 2015. The world’s second-largest economy had a surplus of $25.55 billion in December, data showed, compared to $27.87 billion in November. Trade with China is politically sensitive as the world’s second-largest economy runs surpluses against many of its trading partners. President Donald Trump has repeatedly signaled tougher action on what he calls unfair practices that have lead to a massive trade deficit with China. Overall, China’s trade balance for 2017 was a surplus of $422.5 billion

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Stocking up on oil and gas instead of Treasuries, just in case Trump launches a trade war.

China Sets New Records for Gobbling Up the World’s Commodities (BBG)

China continues to gobble up the world’s commodities, setting new records for consumption of everything from crude oil to soybeans. In a year of flux marked by industrial capacity cuts, environmental curbs and financial deleveraging, demand for raw materials has continued to grow in the world’s biggest consumer, helping drive a second annual gain in global commodity returns. As President Xi Jinping consolidates power behind an economy that may have posted its first full-year acceleration since 2010, there are few signs of the Chinese commodity juggernaut slowing as it rolls into 2018. “China’s economic expansion has been beating expectations since the second half of last year, boosting demand for all kinds of commodities,” Guo Chaohui at China International Capital, said by phone. “We are expecting continued strength in economic growth in 2018 which will keep up the nation’s import appetite.”

Inbound shipments from across the globe – Russia to Saudi Arabia and Venezuela – jumped about 10% to average 8.43 million barrels a day in 2017, data from China’s General Administration of Customs showed on Friday. The unprecedented purchases may be bettered in 2018, if import quotas granted by the government to China’s independent refiners are a signal. The first batch of allocations was 75% higher than for 2017. The world’s second-biggest economy is also realizing that the key to winning its war on smog may lie overseas. Record amounts of less-polluting grades of iron ore – typically not available within China – are being pulled in to feed the nation’s mammoth steel industry, with imports rising 5% to 1.07 billion metric tons in 2017.

Purchases of less-polluting ore is only one tactic in China’s war against pollution. Another is curbing coal use and encouraging the use of cleaner natural gas instead. Imports of the fuel via both sea and pipeline surged almost 27% to 68.57 million tons in 2017.

Read more …

Coherent.

Household Debt Boom Sows The Seeds For A Bust (CBR)

What causes the ebbs and flows of the business cycle? In the first of two videos, Chicago Booth’s Amir Sufi argues that one key factor is the financial sector and its willingness to lend. As credit becomes more and more available, the economy booms—but when household debt becomes unsustainable, it sows the seeds for a bust.

Read more …

Financial stress at a record low. There’s no stronger stress indicator.

Markets Still Blow Off the Fed, Dudley Gets Nervous, Fires Warning Shot (WS)

“So, what am I worried about?” New York Fed President William Dudley, who is considered a dove, asked rhetorically during a speech on Thursday at the Securities Industry and Financial Markets Association in New York City. “Two macroeconomic concerns warrant mention,” he continued. And they are: One: “The risk of economic overheating.” He went through some of the mixed data points, including “low” inflation, “an economy that is growing at an above-trend pace,” a labor market that is “already quite tight,” and the “extra boost in 2018 and 2019 from the recently enacted tax legislation.” Two: The markets are blowing off the Fed. He didn’t use those words. He used Fed-speak: “Even though the FOMC has raised its target range for the federal funds rate by 125 basis points over the past two years, financial conditions today are easier than when we started to remove monetary policy accommodation.”

When the Fed raises rates, its explicit intention is to tighten “financial conditions,” meaning that borrowing gets a little harder and more costly at all levels, that investors and banks become more risk-averse and circumspect, and that borrowers become more prudent or at least less reckless – in other words, that the credit bonanza cools off and gets back to some sort of normal. To get there, the Fed wants to see declining bond prices and therefor rising yields, cooling equities, rising risk premiums, widening yield spreads, and the like. These together make up the “financial conditions.” There are various methods to measure whether “financial conditions” are getting “easier” or tighter. Among them is the weekly St. Louis Fed Financial Stress Index, whose latest results were published on Thursday.

The Financial Stress Index had dropped to a historic low of -1.6 on November 3, meaning that financial stress in the markets had never been this low in the data series going back to 1994. Things were really loosey-goosey. On Thursday, the index came in at -1.57, barely above the record low, despite another rate hike and the Fed’s “balance-sheet normalization. And this rock-bottom financial stress in the markets is occurring even as short-term interest rates have rocketed higher in response to the Fed’s rate hikes, with the two-year Treasury yield on Thursday closing at 1.96% for the third day in a row, the highest since September 2008.

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Nomi doesn’t really clarify what is radical about events.

We’re Going To See A Radically Changing World In 2018 – (Nomi Prins)

In last year’s roadmap, I forecast that 2017 would end with gold prices up and the dollar index down, both of which happened. I underestimated the number of Fed hikes by one hike, but globally, average short term rates have remained around zero. That will be a core pattern throughout 2018. Central banks may tweak a few rates here and there, announce some tapering due to “economic growth”, or deflect attention to fiscal policy, but the entire financial and capital markets system rests on the strategies, co-dependencies and cheap money policies of central banks. The bond markets will feel the heat of any tightening shift or fears of one, while the stock market will continue to rush ahead on the reality of cheap money supply until debt problems tug at the equity markets and take them down.

Central bankers are well aware of this. They have no exit plan for their decade of collusion. But a weak hope that it’ll all work out. They have no dedicated agenda to remove themselves from their money supplier role, nor any desire to do so. Truth be told, they couldn’t map out an exit route from cheap money even if they wanted to. The total books of global central banks (that hold the spoils of QE) have ballooned by $2 Trillion in assets (read: debt) over 2017. That brings the amount of global central banks holdings to more than $21.7 trillion in assets. And growing. Teasers about tapering have been released into the atmosphere, but numbers don’t lie.

That’s a hefty cushion for international speculation. Every bond a central bank buys or holds, gets a price-lift. Trillions of dollars of such buys have artificially lifted all bond prices, and stocks because of the secondary-lift effect and rapacious search for self-perpetuating returns. Financial bubbles pervade the world. Central bank leaders may wax hawkish –manifested in strong words but tepid actions. Yet, overall, policies will remain consistent with those of the past decade to combat this looming crisis. US nationalistic trade policies will push other nations to embrace agreements with each other that exclude the US and shun the US dollar.

Read more …

Jean-Michel Paul, founder and Chief Executive of Acheron Capital in London, says: “..one that has received too little attention up to now is the prospect that we are heading toward a growing asset bubble that will result in a pronounced crash.. “. Well, not in my circles, which talk ONLY about that.

Why We Have to Talk About a Bubble (BBG)

Back in November, former Fed chief Janet Yellen described the current low level of inflation as a “mystery.” Despite a small pickup in prices, Europe has the same mystery to solve: Economic confidence in the euro area is at its highest point for a decade, according to the European Commission’s measure, released this week. But there’s no sign of the inflation that you’d normally expect with that kind of economic upsurge. The ECB minutes from December, released Thursday, show some in the ECB are similarly baffled by what they call a “disconnect” between the real economy and prices. With QE having multiplied the amount of fiat money issued by central banks in just a few years, it’s fair to wonder: How come it didn’t trigger much higher levels of inflation than what we now see?

The technical answer is that the money created has ended up full circle – on the books of the central banks. The more fundamental answer is that QE resulted in a wealth increase for the richest, who consume relatively little of their revenue, while the middle class and the neediest largely failed to reap any benefit. Having not gained from QE, their consumption has not risen, leaving prices pretty much flat. There are many problems with this, from growing inequality to pressures on social cohesion. But one that has received too little attention up to now is the prospect that we are heading toward a growing asset bubble that will result in a pronounced crash, as Jeremy Grantham, co-founder of the investment firm GMO, argued in a note last week. He predicts a “melt-up” – where investors pile into assets as prices rise – followed by a significant decline “of some 50%.”

[..] central bankers are still using inflation as a measure to gauge how much more QE they should proceed with. The ECB has repeatedly justified QE expansion because its goal of 2 percent consumer inflation remains unmet. [..] British journalist Ambrose Evans-Pritchard, commenting on the Grantham thesis recently in the Daily Telegraph, put the challenge now in the starkest possible terms, as a threat not simply to the recovery but to democracy: “The central banks themselves entered into a Faustian Pact from the mid-Nineties onwards, falsely thinking it safe to drive real interest rates ever lower with each cycle, until they became ensnared in what the Bank for International Settlements calls a policy “debt trap”. This has gone on so long, and pushed debt ratios so high, that the system is now inherently fragile. The incentive to let bubbles run their course has become ever greater.”

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Can’t decide if this is hard to believe, or entirely normal by now.

Uber’s Secret Tool for Keeping the Cops in the Dark (BBG)

In May 2015 about 10 investigators for the Quebec tax authority burst into Uber Technologies Inc.’s office in Montreal. The authorities believed Uber had violated tax laws and had a warrant to collect evidence. Managers on-site knew what to do, say people with knowledge of the event. Like managers at Uber’s hundreds of offices abroad, they’d been trained to page a number that alerted specially trained staff at company headquarters in San Francisco. When the call came in, staffers quickly remotely logged off every computer in the Montreal office, making it practically impossible for the authorities to retrieve the company records they’d obtained a warrant to collect. The investigators left without any evidence.

Most tech companies don’t expect police to regularly raid their offices, but Uber isn’t most companies. The ride-hailing startup’s reputation for flouting local labor laws and taxi rules has made it a favorite target for law enforcement agencies around the world. That’s where this remote system, called Ripley, comes in. From spring 2015 until late 2016, Uber routinely used Ripley to thwart police raids in foreign countries, say three people with knowledge of the system. Allusions to its nature can be found in a smattering of court filings, but its details, scope, and origin haven’t been previously reported. The Uber HQ team overseeing Ripley could remotely change passwords and otherwise lock up data on company-owned smartphones, laptops, and desktops as well as shut down the devices.

This routine was initially called the unexpected visitor protocol. Employees aware of its existence eventually took to calling it Ripley, after Sigourney Weaver’s flamethrower-wielding hero in the Alien movies. The nickname was inspired by a Ripley line in Aliens, after the acid-blooded extraterrestrials easily best a squad of ground troops. “Nuke the entire site from orbit. It’s the only way to be sure.” [..] Uber deployed Ripley routinely as recently as late 2016, including during government raids in Amsterdam, Brussels, Hong Kong, and Paris, say the people with knowledge of the matter. The tool was developed in coordination with Uber’s security and legal departments, the people say. The heads of both departments, Joe Sullivan and Salle Yoo, left the company last year.

Read more …

Monsanto wants a monopoly on all the world’s food. If you don’t stop them now, it’ll soon be too late.

Monsanto Seeks To Cash In On The Organic Food Market (CP)

At the recent Codex meeting in Berlin, there was an attempt to define genetically engineered (GE) food ingredients as ‘biofortified’ and therefore mislead consumers. This contravened the original Codex mandate for defining biofortification. That definition is based on improving the nutritional quality of food crops through conventional plant breeding (not genetic engineering) with the aim of making the nutrients bioavailable after digestion. The attempt was thwarted thanks to various interventions, not least by the National Health Federation (NHF), a prominent health-freedom international non-governmental organization and the only health-freedom INGO represented at Codex. But the battle is far from over.

The Codex Alimentarius Commission’s Codex Committee on Nutrition and Foods for Special Dietary Uses (CCNFSDU) convened in Berlin during early December and drafts provisions on nutritional aspects for all foods. It also develops international guidelines and standards for foods for special dietary uses that will be used to facilitate standardized world trade. Based upon previous meetings, the initial intention of the Committee was to craft a definition for biofortification that could then be used uniformly around the World. Biofortification originally referred to increasing certain vitamin and mineral content of basic food crops by way of cross-breeding, not genetic engineering, for example by increasing the vitamin or iron content of sweet potatoes so that malnourished populations would receive better nutrition.

However, according to president of the NHF, Scott Tips, Monsanto wants to redefine the definition to include GE ‘biofortified’ foods and it has seemingly influenced Codex delegates in that direction. Tips says, “I am sure that Monsanto would be thrilled to be able to market its synthetic products under a name that began with the word ‘bio’.” [..] Including GE foods within any definition of biofortification risks consumer confusion as to whether they are purchasing organic products or something else entirely. “Monsanto seeks to cash in on the organic market with the loaded word ‘bio’,” argues Scott Tips. At the Codex meeting in Berlin, Tips addressed the 300 delegates in the room. “Although NHF was an early supporter of biofortification, we have since come to see that the concept is in the process of being hijacked and converted from something good into something bad,” explained Tips.

Read more …

Luckily the CIA is still dividing the people in the Congo. And making money selling all sides weapons.

Electric Car Dreams Run Into Metal Crunch (BBG)

When BMW revealed it was designing electric versions of its X3 SUV and Mini, the going rate for 21 kilograms of cobalt—the amount of the metal needed to power typical car batteries—was under $600. Only 16 months later, the price tag is approaching $1,700 and climbing by the day. For carmakers vying to fill their fleets with electric vehicles, the spike has been a rude awakening as to how much their success is riding on the scarce silvery-blue mineral found predominantly in one of the world’s most corrupt and underdeveloped countries. “It’s gotten more hectic over the past year,” said Markus Duesmann, BMW’s head of procurement, who’s responsible for securing raw materials used in lithium-ion batteries, such as cobalt, manganese and nickel. “We need to keep a close eye, especially on lithium and cobalt, because of the danger of supply scarcity.”

[..] Complicating the process is the fact that the cobalt trail inevitably leads to the Democratic Republic of the Congo, where corruption is entrenched in everyday business practices. The U.S. last month slapped sanctions on Glencore’s long-time partner in Congo, Israeli billionaire Dan Gertler, saying he used his close ties to Congolese President Joseph Kabila to secure mining deals. There’s also another ethical obstacle to negotiate. The African nation produces more than 60 percent of the world’s cobalt, a fifth of which is drawn out by artisanal miners who work with their hands — some of whom are children. The country is also planning to double its tax on the metal.

“There just isn’t enough cobalt to go around,” said George Heppel, a consultant at CRU. “The auto companies that’ll be the most successful in maintaining long-term stability in terms of raw materials will be the ones that purchase the cobalt and then supply that to their battery manufacturer.” To adjust to the new reality, some carmakers are recruiting geologists to learn more about the minerals that may someday be as important to transport as oil is now. Tesla Inc. just hired an engineer who supervised a nickel-cobalt refinery in New Caledonia for Vale to help with procurement. But after decades of dictating terms with suppliers of traditional engine parts, the industry is proving ill-prepared to confront what billionaire mining investor Robert Friedland dubbed “the revenge of the miner.”

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Never use Greece and Recovery in one sentence together. Because you’d be spouting nonsense.

Greece Is Now Worse Off Than When It Defaulted For The First Time (ZH)

According to the market, the situation in Greece has staged a tremendous recovery. So much so, in fact, that Greek 2Y bonds are now trading inside US 2Y Treasurys. Yes, according to the market, Greece is now a safer credit than the US. And yet, a quick peek inside the actual Greek economy, reveals that nothing has been fixed. In fact, one can argue that things are now worse than they were when Greece defaulted (for the first time), According to statistics from IAPR, unpaid taxes in Greece currently make up more than 55% of the country’s GDP due to – well – the inability of people to pay the rising taxes. Overdue debt to the state has reached nearly €100 billion with only €15 billion possible to be returned to the government’s coffers, as most are due to bankrupt businesses and deceased individuals.

The Greek tax authorities seized pensions, salaries, and assets of more than 180,000 taxpayers in 2017, meanwhile bad debt to the state treasury continue to grow. The Independent Authority for Public Revenue confiscated nearly €4 billion in the first 10 months of this year with forced measures to be reportedly taken against 1.7 million defaulters in 2018. Bad debt owed to the state in Greece has been growing at €1 billion a month since 2014, and nearly 4.17 million taxpayers currently owe money to the country, which means that every second Greek is directly indebted. Demonstrating the full extent of the economic mess, a recent report from Kathimerini revealed that Greek lenders are proposing huge haircuts, as high as 90%, for borrowers with debts from consumer loans, credit cards or small business loans without collateral.

In the context of the sale of a 2.5-billion-euro bad-loan portfolio named Venus, Alpha Bank is using the incentive of major haircuts in letters it has sent to some 156,000 debtors. The fact that this concerns some 240,000 bad loans means that some debtors may have two or three overdue loans. Another major local lender, Eurobank, is employing the same strategy for a set of loans adding up to 350 million euros. Most of them range between 5,000 and 7,000 euros each and have been overdue for over a decade. Yes, most Greek are unable to repay a few thousands euros and would rather default. This means that the banks are expecting to collect a small amount of those debts, coming to 250 million euros for Alpha and 35 million for Eurobank – whopping 90% haircuts – accepting that the rest of the debt is uncollectible.

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Dec 292017
 
 December 29, 2017  Posted by at 10:16 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »


Vincent van Gogh Snowy landscape with Arles in the background 1888

 

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Natural Time Cycles: A Dow Forecast For 2018-2020 (Freeze)
Trump Says Russia Inquiry Makes US ‘Look Very Bad’ (NYT)
Russiagate Is Devolving Into an Effort to Stigmatize Dissent (Carden)
US Fiscal Path Will Rattle the Rafters of the Casino – Stockman (SG)
China May Be A Bigger Worry For 2018 (CNBC)
China’s Leaders Fret Over Debts Lurking In Shadow Banking System (R.)
China Temporarily Waives Taxes To Get Foreign Firms To Stay (AFP)
How Far the Scams & Stupidities around “Blockchain Stocks” are Going (WS)
IRS Guidance on Property Taxes Has the US Confused (BBG)
Turns out, Uber Shareholders Are Eager to Sell at 30% Discount (WS)
UK Holds Back Historic Files on EU as It Prepares for Brexit (BBG)
Greek Migration Ministry Responds To Criticism Over Island Camps (K.)

 

 

Gann is all the vogue these days. Why has it taken so long? Lots of graphs here.

Natural Time Cycles: A Dow Forecast For 2018-2020 (Freeze)

The analysis and forecasts presented in this article are based on the analytical framework of W.D. Gann. Gann is an investing legend, labeled as genius by many financial historians. He reportedly accumulated $50 million in profits during his trading career. His superior track record and those of others using his methods argues that, regardless of our opinion of his methodology, we should heed the advice of his work. A more detailed explanation of his analytical framework is included in the last section of this article.

Forecast: 2018-2020

The Dow Jones Industrial Average forecast, in the graph above, is based upon the natural 20-year cycle that Gann identified. The lines in the graph show the projected monthly cumulative percentage returns from the peak level. The yellow line is the average scenario and the aqua line is the pessimistic scenario. The graph provides monthly estimates for 2018. The last data point represents June 2020, which covers the entire 30-month period from December 2017. My average scenario forecasts a -15.29% price return for 2018. The cumulative price return is forecast to bottom in June 2020 at -20.39%, at which time an extended rally should ensue. My pessimistic scenario forecasts a -32.90% price return for 2018. The cumulative price return is forecast to be little-changed in June 2020 at -31.23%, at which time an extended rally in should ensue.

Read more …

The New York Times feels obliged to cede the stage to the one person they’ve sought to discredit for the past 2 years. Must be humiliating.

Trump Says Russia Inquiry Makes US ‘Look Very Bad’ (NYT)

President Trump said Thursday that he believes Robert S. Mueller III, the special counsel in the Russia investigation, will treat him fairly, contradicting some members of his party who have waged a weekslong campaign to try to discredit Mr. Mueller and the continuing inquiry. During an impromptu 30-minute interview with The New York Times at his golf club in West Palm Beach, the president did not demand an end to the Russia investigations swirling around his administration, but insisted 16 times that there has been “no collusion” discovered by the inquiry. “It makes the country look very bad, and it puts the country in a very bad position,” Mr. Trump said of the investigation. “So the sooner it’s worked out, the better it is for the country.”

Asked whether he would order the Justice Department to reopen the investigation into Hillary Clinton’s emails, Mr. Trump appeared to remain focused on the Russia investigation. “I have absolute right to do what I want to do with the Justice Department,” he said, echoing claims by his supporters that as president he has the power to open or end an investigation. “But for purposes of hopefully thinking I’m going to be treated fairly, I’ve stayed uninvolved with this particular matter.” Hours after he accused the Chinese of secretly shipping oil to North Korea, Mr. Trump explicitly said for the first time that he has “been soft” on China on trade in the hopes that its leaders will pressure North Korea to abandon its nuclear weapons program. He hinted that his patience may soon end, however, signaling his frustration with the reported oil shipments.

[..] Mr. Mueller’s investigation appears to be moving ahead despite predictions by Mr. Trump’s lawyers this year that it would be over by Thanksgiving. Mr. Trump said that he was not bothered by the fact that he does not know when it will be completed because he has nothing to hide. Mr. Trump repeated his assertion that Democrats invented the Russia allegations “as a hoax, as a ruse, as an excuse for losing an election.” He said that “everybody knows” his associates did not collude with the Russians, even as he insisted that the “real stories” are about Democrats who worked with Russians during the 2016 campaign. “There’s been no collusion. But I think he’s going to be fair,” Mr. Trump said of Mr. Mueller.

[..] Mr. Trump said he believes members of the news media will eventually cover him more favorably because they are profiting from the interest in his presidency and thus will want him re-elected. “Another reason that I’m going to win another four years is because newspapers, television, all forms of media will tank if I’m not there because without me, their ratings are going down the tubes,” Mr. Trump said, then invoked one of his preferred insults. “Without me, The New York Times will indeed be not the failing New York Times, but the failed New York Times.” He added: “So they basically have to let me win. And eventually, probably six months before the election, they’ll be loving me because they’re saying, ‘Please, please, don’t lose Donald Trump.’ O.K.”

Read more …

Russiagate has turned into a huge embarrassment.

Russiagate Is Devolving Into an Effort to Stigmatize Dissent (Carden)

Of all the various twists and turns of the year-and-a-half-long national drama known as #Russiagate, the effort to marginalize and stigmatize dissent from the consensus Russia-Trump narrative, particularly by former intelligence and national-security officials and operatives, is among the more alarming. An invasion-of-privacy lawsuit, filed in July 2017 by a former DNC official and two Democratic donors, alleges that they suffered “significant distress and anxiety and will require lifelong vigilance and expense” because their personal information was exposed as a result of the e-mail hack of the DNC, which, the suit claims, was part of a conspiracy between Roger Stone and the Trump campaign.

According to a report in The New York Times published at the time of the suit’s filing, “Mr. Trump and his political advisers, including Mr. Stone, have repeatedly denied colluding with Russia, and the 44-page complaint, filed on Wednesday in the Federal District Court for the District of Columbia, does not contain any hard evidence that his campaign did.” (Emphasis added.) In a new development, in early December, 14 former high-ranking US intelligence and national-security officials, including former deputy secretary of state William Burns; former CIA director John Brennan; former director of national intelligence James Clapper; and former ambassador to Russia Michael McFaul (a longtime proponent of democracy promotion, which presumably includes free speech), filed an amicus brief as part of the lawsuit.

The amicus brief purports to explain to the court how Russia deploys “active measures” that seek “to undermine confidence in democratic leaders and institutions; sow discord between the United States and its allies; discredit candidates for office perceived as hostile to the Kremlin; influence public opinion against U.S. military, economic and political programs; and create distrust or confusion over sources of information.” The former officials portray the amicus brief as an offering of neutral (“Amici submit this brief on behalf of neither party”) expertise (“to offer the Court their broad perspective, informed by careers spent working inside the U.S. government”).

The brief claims that Putin’s Russia has not only “actively spread disinformation online in order to exploit racial, cultural and political divisions across the country” but also “conducted cyber espionage operations…to undermine faith in the U.S. democratic process and, in the general election, influence the results against Secretary Hillary Clinton.”

Read more …

“The Fed will sell more bonds in the next 3-4 years than had been accumulated by all of the central banks of the world in all of recorded history as of 1995!”

US Fiscal Path Will Rattle the Rafters of the Casino – Stockman (SG)

[..] the US government is spending money like a drunken sailor. But nobody really seems to care. Since Nov. 8, the US national debt has risen $1 trillion. Meanwhile, the Russell 2000 (a small-cap stock market index) has risen by 30%. Former Reagan budget director David Stockman said this makes no sense in a rational world, and he thinks the FY 2019 is going to sink the casino. In a rational world operating with honest financial markets those two results would not be found in even remotely the same zip code; and especially not in month #102 of a tired economic expansion and at the inception of an epochal pivot by the Fed to QT (quantitative tightening) on a scale never before imagined.” Stockman is referring to economic tightening recently launched by the Federal Reserve. It’s not only the increasing interest rates.

By next April the Fed will be shrinking its balance sheet at an annual rate of $360 billion and by $600 billion per year as of next October. By the end of 2020, the Fed will have dumped $2 trillion of bonds from its books. Stockman puts this into perspective. So the net of it is this: The Fed will sell more bonds in the next 3-4 years than had been accumulated by all of the central banks of the world in all of recorded history as of 1995!” Now pause for just a moment and think about this. The GOP just passed a tax plan that will add another $1.5 trillion to the deficit. And word is Trump’s next big push will be to pass an infrastructure bill – even more spending and debt. Meanwhile, during a time of rising debt, the Fed will be flooding the market with bonds. And what do governments have to do to finance debt? That’s right. They sell bonds.

There is literally a fiscal red ink eruption heading straight at the Fed’s balance sheet shrinkage campaign that will rattle the rafters in the casino … Uncle Sam’s borrowing requirements are likely to hit $1.25 trillion or more than 6% of GDP in FY 2019 owing to the fact that the tax bill is so heavily front-loaded and the GOP’s wild spending spree for defense, disasters and much else.”

Read more …

It’s starting to feel like Xi is seriously stuck. Let zombies default, and accept the lost jobs and mom and pop investments, or keep propping them up.

China May Be A Bigger Worry For 2018 (CNBC)

For a market dependent on synchronized global growth, investors may be betting too much that China will not rock the boat next year. Part of the S&P 500’s rally to record highs this year comes on the back of better economic growth around the world. A major contributor to that growth was stability in China as leaders prepared for a key 19th Communist Party Congress this fall. Now that the congress is over and Beijing looks set to take action on its growing debt problems, worries about a sharper-than-expected slowdown in the world’s second-largest economy could hurt U.S. stocks. “With the 19th Party Congress now behind us, the risk is that the peak growth in China is also behind us,” David Woo, head of global rates, FX and EM FI strategy & econ research at Bank of America, said in an outlook report.

“Curiously, the market has been ignoring the string of negative Chinese data surprises in recent weeks. It is possible that the market views them as temporary.” “We are concerned that China could be vulnerable to US tax reform getting done,” Woo said, noting that a resulting increase in U.S. rates and the U.S. dollar would likely cause capital flight from China to accelerate and weaken the Chinese yuan. If that happens, China’s central bank would be likely “to tighten liquidity, which in turn would raise further concerns about the growth outlook,” he said. Fears of negative spillover from a rapid slowdown in China’s economy hit global markets in August 2015 after a surprise yuan devaluation. Further weakness in the currency in the first few weeks of 2016 contributed to the worst start to a year on record for both the Dow and S&P 500.

Since then, Chinese authorities have proven they are still able to control their economy. But stability has come at the cost of ever-increasing debt levels. The IMF warned in October that China’s banking sector assets have risen steadily to 310% of GDP from 240% of GDP at the end of 2012. S&P Global Ratings downgraded China’s long-term sovereign credit rating in September, following a similar downgrade by Moody’s in May. “If clusters of credit defaults start to form, concerns about contagion into the wider economy could take hold if fears of default in wealth management products arise,” UBS Wealth Management’s chief investment office said in its 2018 outlook. “Should this happen, the Chinese government, in our view, would likely have sufficient resources to prevent widespread contagion.”

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Xi made the conscious choice to rise on the shadow’s coat tails. Now he has to keep riding or else.

China’s Leaders Fret Over Debts Lurking In Shadow Banking System (R.)

Before the 2008 financial crisis, there was very little shadow banking in China. In the aftermath of that shock, Chinese authorities launched a massive effort to stimulate the economy, mostly through a huge increase in lending. This led to a boom in property and infrastructure spending that continues today. Demand for credit increased sharply, especially from local and municipal government-owned companies. To meet this demand, banks began selling wealth management products offering higher interest rates than normal deposits. Many investors believed these products were implicitly guaranteed by the issuer, even if it was not expressly stated in the contract. Banks also borrowed cash from other banks and companies. For banks, these funds can then be lent to borrowers prepared to pay higher rates.

But the banks want to sidestep rules designed to restrict lending to overheated sectors including property, mining and other resources. So, people in the shadow banking industry say, these loans are often disguised by directing them through a complex chain of intermediaries, including trusts, securities companies, other banks and asset managers. To earn interest on these loans, a bank will buy a financial product from one of the intermediaries, which directs earnings back to the bank. That allows the bank to describe what is really a loan as an investment on its books. This type of lending can be more profitable because banks can set aside much less capital than they are required to hold for regular loans as a safeguard against defaults. By the end of 2015, shadow lending was growing faster than traditional bank lending, and was equivalent to 57% of total bank loans, according to a 2016 report from investment bank CLSA.

This dramatically accelerated the speed at which overall debt expanded in China’s financial system. Moody’s said in a November report that China’s shadow banking assets grew more than 20% in 2016 to 64 trillion yuan ($9.8 trillion), equivalent to 86.5% of GDP. [..] At the center of shadow banking are the 12 nationally licensed joint stock banks and many of the more than 100 city commercial lenders which hold about a third of China’s commercial banking assets. From 2010, these mid-tier banks and regional lenders set about competing with the country’s so-called Big Five lenders, the state-controlled behemoths that dominate the economy. The key to the upstarts’ growth is selling wealth management products and borrowing from other banks, allowing them to create loans wrapped in financial instruments to give the appearance of investments.

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Translation: foreign reserves are fleeing. Blame the Trump tax plan.

China Temporarily Waives Taxes To Get Foreign Firms To Stay (AFP)

China will temporarily waive income taxes for foreign companies on profits they reinvest in the country as Beijing battles to retain foreign firms and investment. The finance ministry announced Thursday the new tax policy, which will apply retroactively from January so businesses will be able to take advantage of the exemption for this year’s taxes. The new incentives for foreign business to keep their earnings in China follow the passing last week of a corporate tax overhaul in the United States. The US reform will lower the tax rate for most corporations to 21%. Businesses in China pay 25%. The temporary exemption “will create a better investment environment for foreign investors and encourage foreign investors to sustain their investments in China,” a spokesman for the ministry of commerce said.

The policy announcement also comes as China has struggled with capital flight and tightened capital controls this year to stem the outflow of money. But foreign companies have long complained of the onerous bureaucracy they must navigate, barriers to market access, and policies that favour local firms. The new tax incentives aim to make China more attractive but come with a slew of restrictions. To be eligible, the profits must be invested in industries and activities where the Chinese government encourages foreign investment: manufacturing, services, research and development. Locations in the west of the country are also prioritised for development. Companies have three years to apply for the exemptions after paying tax.

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“This can happen only during the very late stage of a bubble.”

How Far the Scams & Stupidities around “Blockchain Stocks” are Going (WS)

It just doesn’t let up. UBI Blockchain Internet, a Hong Kong outfit whose shares trade in the US [UBIA], filed with the SEC to sell an additional 72.3 million shares owned by its executives. In other words, it isn’t selling the shares to raise money for corporate purposes, but to allow its executives, including CEO Tony Liu, to bail out. This is happening after the company – which sports zero revenues and a disconnected phone number in its SEC filings – managed to get its shares to spike briefly by over 1,100%, pushing its market capitalization to $8 billion. UBI Blockchain didn’t do an IPO. Instead, in October 2016, it acquired a publicly traded shell company registered in Las Vegas, called “JA Energy.” It then changed the name and ticker symbol to what they’re now.

Over the six trading days starting on December 11, 2017, its shares soared over 1,100%, from $7.20 to $87 on December 18, as the word “blockchain” in its name and sufficient hype and speculator-idiocy took hold. By December 21, shares had plunged 67% to $29. They closed on Wednesday at $38.50. At this price, it still has a ludicrous market cap of $3.64 billion. In its prospectus for the share sale, filed with the SEC on December 26, UBI explains the overcooked spaghetti of its dreamed-up activities: UBI Blockchain Internet Ltd. business encompasses the research and application of blockchain technology with a focus on the Internet of things covering areas of food, drugs and healthcare. Management plans to focus its business in the integrated wellness industry, by providing procedures for safety and effectiveness in food and drugs, but also preventing counterfeit or fake food and drugs.

With the advancement of the blockchain technology, the Company plans to trace a food or drug product from its original source within the context of the Internet of Things to the final consumer. It explains that “management is uncertain that the Company can generate sufficient revenues in the next 12-months to sustain our operations. We shall need to seek additional funding to continue our operations and implement our plan of operations.” It added that “due to the uncertainty of our ability to meet our financial obligations and to pay our liabilities as they become due,” the auditors in the financial statement for the year ended August 31, 2017, questioned “our ability to continue as a going concern.” For the year, UBI had an operating loss of $1.83 million on zero revenues. It had $15,406 in cash, and: “In order to keep the company operational and fully reporting, management anticipates a burn rate of approximately $220,000 per month, pre and post-offering.”

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Overtime for accountants.

IRS Guidance on Property Taxes Has the US Confused (BBG)

New guidance from the Internal Revenue Service that limits taxpayers’ ability to deduct prepaid property levies on their 2017 tax returns is causing confusion nationwide as people rush to pay in advance without knowing whether they’re wasting their time and money. The IRS said Wednesday that taxpayers can deduct prepaid state and local property taxes for 2018 on 2017 returns only if the taxes were assessed before 2018. The brief guidance – which doesn’t define the term “assessed” – had local tax officials scratching their heads. Some see the issue as an early signal of far wider confusion that’s coming soon – the predictable result of passing a bill that rewrites the tax code just two weeks before many of the changes take hold.

“This is the tip of the iceberg as state and local governments try to figure this out – and by the way, they’re trying to figure it out with one week before the changes take effect,” said Richard Auxier, a researcher with the Urban-Brookings Tax Policy Center, a Washington public policy group. “And that week happens to be the week between Christmas and New Year’s.” The IRS guidance comes after many state and local officials – including New York Governor Andrew Cuomo and New Jersey Governor Chris Christie – have taken pains to clear the way for their residents to accelerate property-tax payments. The nationwide flurry came ahead of the new tax law that will cap property tax deductions – along with those for state and local income taxes or sales taxes – at an overall total of $10,000.

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Uber just lost a third of its valuation.

Turns out, Uber Shareholders Are Eager to Sell at 30% Discount (WS)

Softbank, an acquisitive junk-rated Japanese holding company that also owns about 80% of Sprint, has been preparing for months to buy a large stake in Uber. At the end of November, it launched a tender offer to buy enough shares from investors and employees to give it a 14% stake. It dangled out a price of $33 a share, which valued Uber at $48 billion – a 30% discount from Uber’s “valuation” of $69 billion, which had been established behind closed doors during the last fund-raising round. The offer at a $48-billion valuation is even lower than Uber’s valuation back in June 2015 of $51 billion. When the tender offer was started, there was uncertainty if enough sellers would be willing to dump their shares at this discount. The other option for them would be to hold out until the IPO, in the hopes for a better deal. The tender offer expired today at noon Pacific Time.

Turns out, there are plenty of eager sellers – despite any dreams of a blistering IPO: The tendered shares amount to about 20% of the company’s equity, “people familiar with the matter” told the Wall Street Journal. But SoftBank will likely acquire only a 15% stake, “the people said.” Other members of the consortium SoftBank is leading – including Dragoneer Investment Group and Tencent Holdings – are likely to buy some but not all of the remaining tendered shares. This deal will not raise money for Uber itself but will allow employees and early investors to cash out some of their holdings – at a steep discount. But to maintain the illusion of the previous “valuation” of $69 billion – which is critical for a properly hyped future IPO – SoftBank will also make a $1-billion direct investment into Uber at the $69-billion “valuation,” as part of the deal.

Since startup “valuations” are based on the price paid during fund-raising, this $1-billion deal forms Uber’s new “valuation,” the same as the prior one. So the “valuation” illusion remains intact. [..] SoftBank already owns major stakes in other rideshare startups, including Didi Chuxing, the largest rideshare company in China; Grab, a major rideshare company in Southeast Asia; Ola, the largest rideshare company in India, slightly ahead of Uber; and 99, the largest rideshare company in Brazil. So SoftBank is serious about getting into this business on a global scale. But all rideshare companies are competing with each other, with taxis, rental cars, mass transit, and other modes of transportation on service and low fares, and they’re competing with each other to rope in drivers by offering them incentives.

The plan is to dominate the markets. And all of them are losing money hand over fist. The chart below shows what quarterly “adjusted” losses look like for Uber. Actual losses under GAAP would be much larger since the costs of employee stock compensation, interest, taxes, depreciation, and amortization have been stripped out of the figures that Uber shows the media:

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It’s hard to keep track of all the Monty Python moves at Downing Street 10.

UK Holds Back Historic Files on EU as It Prepares for Brexit (BBG)

As Prime Minister Theresa May prepares for the next round of Brexit negotiations, her government has held back publication of secret files relating to the creation of the European Union. The documents from 1992 were due to be released Friday at the National Archives under British rules that allow government papers to enter the public domain. Out of 495 files from the prime minister’s office that year, a total of 114 were held back. Of those, 12 related to European policy. The main opposition party was quick to pounce. Jon Trickett, a high-ranking Labour politician described it as “profoundly shocking, particularly given the current state of the national debate.”

May’s government has had a series of problems with information around Brexit. Last week, after months of ministers trying to keep them secret, the government published an assessments of how different segments of the economy will cope with leaving the EU. Lawmakers commented that the documents contained little that couldn’t be found on Wikipedia. The Cabinet Office, which supports May in running the government, said in an email that “there is no question that any files are deliberately ‘withheld’ from the media.” A further 26 files covering the EU were sent to the archives too late for journalists to read them before publication.

It explained that “we have to ensure all files are properly reviewed and prepared before they are transferred, so that they do not harm national security or our relations with other countries or disclose the sensitive personal data of living individuals.” The files that were released reveal the extent to which Britain’s 1992 expulsion from the Exchange Rate Mechanism turned Conservatives against Europe. That year, Sept. 16 was christened “Black Wednesday” after the government’s failed attempt to keep the pound within the system by pushing interest rates up to 15%.

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Everybody accuses everybody else, because assigning the blame is more important than helping the refugees.

Greek Migration Ministry Responds To Criticism Over Island Camps (K.)

The Migration Ministry has blamed local authorities for the grim conditions inside island migrant camps in the wake of criticism from a senior European Union official. In an interview with news website New Europe on Sunday, the EU’s special envoy on migration, Maarten Verwey, said the European Commission had made funding available to ensure appropriate accommodation for all. “However, the Commission cannot order the creation or expansion of reception capacity against the opposition of the competent authorities,” he added. Speaking to Kathimerini on Thursday, sources inside the ministry did not deny the existence of EU funds, adding however that Verwey had omitted any mention of the difficulties “although he has personal experience.”

Authorities on Lesvos and Chios have opposed government plans to expand screening centers for refugees. Meanwhile, only a small amount of the available funds have been absorbed. Of the 540 million euros earmarked until 2020, Greece has received just 97 million euros, according to the Economy Ministry. The same sources referred to recent remarks by Migration Minister Yiannis Mouzalas, who accused EU governments of “hypocrisy” for failing to shoulder their fair share of the refugee burden.

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Dec 212017
 
 December 21, 2017  Posted by at 8:32 am Finance Tagged with: , , , , , , , , , , , ,  3 Responses »


Claude Monet Houses of Parliament (Sun Breaking through the Fog) 1904

 

Trump Plans Tax Bill Signing on January 3 Due to Technical Issue (BBG)
Why Wall Street Is Furious At The Trump Tax Plan (ZH)
Peak Valuations and Market Corrections (Rosso)
Silicon Valley Homes Going For Nearly $2 Million Over Asking Price (ZH)
Bitcoin Is Biggest Bubble Of Them All, And It’s The Fed’s Fault – Ron Paul (CNBC)
Uber Loses EU Court Fight as Judges Take Aim at Gig Economy (BBG)
Gloomy Brexit Forecasts For UK Are Coming True, Says IMF (G.)
Bank of England To Allow EU Banks To Operate Unchanged After Brexit (G.)
UK PM May Heads to Poland to Seek Brexit Ally After Firing Her Deputy (BBG)
Poland Protests EU ‘Nuclear Option’ Over Judicial Independence (G.)
Catalonia Poised For Hung Parliament In Bitterly Contested Election (G.)
How The US Swindled Russia in The Early 1990s (Zuesse)
Alaska’s Arctic National Wildlife Refuge Now Has A $1 Billion Price Tag (G.)
Russians, Chinese Seek Out Greek Properties for Bargains, Visas (BBG)
Lesvos Mayor Files Suit Over Conditions At Moria Migrant Camp (K.)

 

 

Don’t have the impression it’s a great piece of work. But the entire MSM has only one goal: bash anything Trump. A neutral assessment might be appropriate, but where does one get one?

Trump Plans Tax Bill Signing on January 3 Due to Technical Issue (BBG)

President Donald Trump plans to sign the tax bill on Jan. 3 to ensure automatic spending cuts to Medicare and other programs don’t take effect, according to a House Republican aide familiar with the plans. The White House informed House GOP members of the timetable, following the likely decision by House Republicans to leave the so-called PAYGO provision out of a year-end spending deal to avoid a government shut down before Friday, the person said who asked not to be named because the plan hasn’t been publicly announced. Trump and GOP leaders have repeatedly said the president would sign the legislation before Christmas. White House National Economic Council Director Gary Cohn signaled Wednesday morning that the signing date could be pushed back because of the potential for triggering the cuts.

Under the PAYGO law, automatic cuts to Medicare and other spending categories would be triggered by the tax bill in January because the bill is scored as increasing the deficit by $1.5 trillion over 10 years. Waiting until January means that those cuts would be delayed until 2019, according to budget expert Ed Lorenzen of the Committee for a Responsible Federal Budget. White House officials insisted that no firm timetable had been set. Trump could sign the tax legislation earlier if Congress passed a waiver to the PAYGO rules, but that is unlikely to happen before lawmakers leave Washington for a holiday recess. “I think we’re just working out some of the logistics on that,” Treasury Secretary Steven Mnuchin said Wednesday on Fox News. “He’ll sign it as quickly as he can.”

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But wait, wasn’t Trump making Wall Street that much richer?

Why Wall Street Is Furious At The Trump Tax Plan (ZH)

Back in October 2016, the “millionaire, billionaire, private jet owners” of America’s elitist, liberal mega-cities (A.K.A. New York and San Francisco) celebrated the tax hikes that a Hillary Clinton presidency would have undoubtedly jammed down their throats proclaiming them to be a ‘patriotic duty’. Unfortunately, now that Trump has given them exactly what they apparently wanted…an amazing opportunity to ‘spread their wealth around”…they’re suddenly feeling a lot less patriotic. Of course, as we’ve noted numerous times, while most people across the country and across the income spectrum will benefit from the Republican tax reform package, the folks who stand to lose are those living in high-tax states with expensive real estate as their SALT, mortgage interest and property tax deductions will suddenly be capped. And, as Bloomberg points out today, that has a lot of Wall Street Traders in New York drowning their sorrows in expensive vodka and considering a move to Florida.

“One trader, sipping a Bloody Mary on a morning flight to somewhere more tropical, said he’s going to stop registering as a Republican. En route, he sent more than a dozen text messages ripping the tax bill. A pair of hedge fund managers said the tax bill is too tilted toward corporations, rather than individuals who should get more relief. “My clients are hard-working young professionals on Wall Street. I don’t have a lot of good news for them,” said Douglas Boneparth, a financial adviser in lower Manhattan who counsels people throughout the industry. Most are coming to terms with it. “I don’t think anyone is going to be surprised by the economic reality.” “This provides a clear incentive for financial advisers to go independent,” said Louis Diamond of Diamond Consultants. “We’re hearing from a lot of clients on this; it’s just another reason why it makes a ton of sense, economically, to become self-employed.”

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All bubbles have limited lifespans.

Peak Valuations and Market Corrections (Rosso)

[..] global diversification has enhanced portfolio returns this year. Spreading wealth among different markets and sectors has allowed investors to capture strong equity performance. You see, on the trend higher, investors may seek to employ a series of risk horses to fully participate in the race. Fixed income or bonds, and cash equivalents do a good job of helping investors manage risk through bear markets as they are negatively correlated to stocks. On the way down, stocks across markets connect and head south in sync; some fall faster than others. Unfortunately, when stock diversification is needed the most, it fails. With current valuations and stock prices extended well beyond their long-term trends, investors must be aware of reversions that have the probability of wiping out a decade or longer in gains.

Stock diversification will not protect you if or when this occurs (let me know if you’ve heard this from your broker’s research hub as of late; I bet you haven’t). Strategists for big-box financial retailers are consistently wishy-washy when it comes to the current unsustainable altitude of stock prices. It’s not in their best interest to take a stand. It would be a death knell for their careers. Recently, one of the paunchiest of the brethren shared on CNBC: Stocks are “slightly overvalued;” followed by – “that doesn’t mean you should do anything here.” Perfect. Well done. That’s how seven-figure compensation packages are earned, folks. When it comes to retail investors, time is as or more precious a commodity as money; we at RIA consistently write and research the math of investment losses to make sure you remain emotionally grounded and don’t allow greed to blind your judgment. We are not afraid to outline the risks inherent in extended markets.

Personally, I’m not willing to give up a decade or two to break even. Are you? Don’t worry about your friendly neighborhood talking heads. They’ll continue to collect big paychecks and hefty year-end bonuses as long as they play senior managements’ game. A broker’s research department superstar spokesperson is paid handsomely to point out when markets reach new highs but rarely expound on how long it takes to achieve or in most cases, reclaim them. A big-box financial retail investment strategist’s primary role is to forge and fortify a firm’s presence or brand and help front-line brokers keep investors fully invested through rough market cycles, nothing more.

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It’s different this time, though….

Silicon Valley Homes Going For Nearly $2 Million Over Asking Price (ZH)

If you’re still holding out hope that the following chart is anything but another massive housing bubble in the making then you should probably ignore the disturbing evidence to the contrary that we’re about to present below… Back in 2005/2006, one of the key signs that housing markets across the country were overheating was the number of houses that, thanks to soaring demand from speculators, were suddenly selling at prices well in excess of their asking price. That said, as a local CBS affiliate in San Francisco points out, the premiums of 2005/2006 pale in comparison to homes in Silicon Valley today that are selling for as much as $1-$2 million over their original asking prices.

But if you thought they area housing market couldn’t get any more outrageous, consider a home on Colorado Avenue in Palo Alto. It listed for $2.9 million, but sold for $3.9 million, $1 million over asking price. Another home on Anacapa Drive in the Los Altos hills listed for $2.8 million, but sold for $4.5 million. That is $1.67 million over asking. Finally, there is this home on University Avenue in Los Altos that listed at $7.9 million, but sold for $1.8 million over asking. In 2017, 10 homes in the mid-Peninsula area sold for $1 million over asking. Six of those listings belonged to Deleon Realty.

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Where does the money come from that’s used to buy bitcoin?

Bitcoin Is Biggest Bubble Of Them All, And It’s The Fed’s Fault – Ron Paul (CNBC)

He’s taken on President Donald Trump and the Federal Reserve. Now, libertarian former congressman Ron Paul is taking on bitcoin. According to Paul, cryptocurrencies have become an asset that rivals the bubble he sees in stocks. “I think it’s going to continue to do exactly what it’s doing. It’s going higher and it’s going lower,” he said Tuesday on CNBC’s “Futures Now.” “We can look at what’s happening now, which to me is a climactic end of QEs.” Paul, who has done commercials touting currency competition for a company that benefits from bitcoin’s rise, views the crypto craze as a side effect of central banks doing several rounds of quantitative easing to cope with the last financial crisis. “I look at the problems we face. I think they’re gigantic and people are desperate and looking everywhere. Why would they buy bonds that pay negative interest rates? Why would they buy stocks, and say well this time it’s different? ” asked Paul.

“Cryptocurrency is a reflection of the disaster of the monetary dollar system.” Paul, who’s also a medical doctor and former Republican presidential candidate, argues that cryptocurrencies are in an “exponential bubble” where trying to calculate its real value is extremely difficult. Bitcoin, the largest of the cryptocurrencies, has been trading above $17,000. He hasn’t been able to pinpoint when a plunge could happen in cryptocurrencies or the stock market. But Paul says the danger is real. “They’re both big bubbles in the sense that it occurred because there was excessive credit. But if you look at the curves, I think that the cryptocurrency curve looks more threatening,” Paul said.

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Looks like ‘we are tech’ was always a losing argument.

Uber Loses EU Court Fight as Judges Take Aim at Gig Economy (BBG)

Uber Technologies Inc. will be regulated in European Union countries as a transport company after the bloc’s top court rejected its claim to be a digital service provider, a decision that could increase legal risks for other gig-economy companies including Airbnb. While the EU Court of Justice’s ruling covered UberPop – which used drivers without taxi licenses and has already been shuttered in many countries due to the legal issues – it’s a real blow as the first definitive finding that Uber must be regulated by transport authorities. The decision clarifies for the first time that connecting people via an app to non-professional drivers forms an integral part of a transport service. It rejects Uber’s view that such services are purely digital and could fuel further scrutiny of other gig-economy firms.

Paris regulators are already clamping down on Airbnb, treating the home-rental service more like a hotel, and British food-delivery start-up Deliveroo is in the spotlight for its treatment of workers. In the EU judges’ view, “the most important part of Uber’s business is the supply of transport – connecting passengers to drivers by their smartphones is secondary,” said Rachel Farr at law firm Taylor Wessing. “Without transport services, the business wouldn’t exist.” Uber has argued that it’s a technology platform connecting passengers with independent drivers, not a transportation company subject to the same rules as taxi services. The case has been closely watched by the technology industry because of its precedent for regulating the gig economy, where freelancers make money by plying everything from spare rooms to fast-food deliveries via apps on smartphones and PCs.

“After today’s judgment innovators will increasingly be subject to divergent national and sectoral rules,” said Jakob Kucharczyk, of the Computer & Communications Industry Association, which speaks for companies like Uber, Amazon.com, Google and Facebook. “This is a blow to the EU’s ambition of building an integrated digital single market.” While the ruling is valid EU-wide, it remains limited to Uber’s services and won’t directly affect other disputes Uber is facing over how its drivers are treated. One such case is pending at the U.K. court of appeal.

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You don’t really need to be a genius to see this.

Gloomy Brexit Forecasts For UK Are Coming True, Says IMF (G.)

The IMF has strongly defended its gloomy forecasts for the UK after Brexit, saying pre-referendum warnings of slower growth were coming true. Christine Lagarde, the fund’s managing director, said the vote to leave the EU in June 2016 was already having an impact and Britain’s weaker growth this year was in contrast to accelerating activity in the rest of the world. Speaking at the Treasury as the IMF announced the results of its annual health check of the UK economy, Lagarde hit back at those who lambasted the fund when predictions of an immediate post-referendum recession failed to come to pass. “We feared that if Britain decided to leave, it would most likely entail a depreciation of sterling, higher inflation leading to a squeeze on disposable income and a reduction in investment,” she said.

“People said ‘Oh those experts’, but we are seeing the narrative we identified as a potential risk being rolled out as we speak. This is not the experts speaking, it’s what the economy is demonstrating.” The IMF trimmed its forecast for UK growth this year from 1.7% in October to 1.6%, and said it expected the economy to grow by 1.5% in 2018. It was one of several economic forecasters to say the UK would suffer a downturn should voters back leaving the EU. Last year, the fund had said growth for 2017 would be 1.1%, before raising the forecast to 2%. Since the turn of the year, Lagarde said activity had slowed notably and the UK’s recent performance was a disappointment in the light of the best showing by the global economy since the financial crash.

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A deliberate mess?

Bank of England To Allow EU Banks To Operate Unchanged After Brexit (G.)

The Bank of England plans to allow European banks to maintain their UK operations under current rules following Brexit, in a direct challenge to European Union regulators to adopt the same policy towards UK-based banks. The Bank said it wanted to press ahead with assessing the risks posed by the 177 banks and insurance companies based in the European Economic Area that have branches in London, following the agreement between Theresa May and EU officials to move to the second stage of Brexit talks. In a move that pre-empts trade talks between the UK and EU, the Bank said it would assess each foreign bank’s branch operation to decide whether it needed to be converted into a subsidiary, which effectively separates it from its overseas parent with its own capital.

Banks domiciled in the EEA will be keen to maintain UK branches, which are cheaper to run and come under more direct head office control. They also maintain their chief regulator in their home country. Most branches are expected to retain their current status despite needing to satisfy stringent rules. The BoE said it would carry out a broad assessment of the risks posed by branches, though it would rely heavily on cooperation with regulators across the EU. Branches that are considered to pose a systemic risk to London’s financial centre could be forced to convert to being subsidiaries. The Treasury is expected to give the Bank additional powers to supervise foreign bank branches in the UK, a job largely done by regulators based inside the EU.

Some pro-Brexit campaigners are expected to view the move as throwing away a major bargaining chip in trade talks. The UK might have threatened to block EU access to facilities in the City as the price of concessions in other areas, such as manufacturing and fishing rights. However, Mark Carney, the Bank’s governor, told MPs on the Treasury select committee on Wednesday that the decision to allow EU banks to continue operating under existing UK rules had been taken on the assumption that a “high degree of supervisory cooperation with the EU” would continue after Brexit.

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Desperate?!

UK PM May Heads to Poland to Seek Brexit Ally After Firing Her Deputy (BBG)

Fresh from sacking her trusted deputy, U.K. Prime Minister Theresa May heads to Poland on Thursday to attempt to get close – but not too close – to its new government. May was forced to tell First Secretary of State Damian Green to resign Wednesday afternoon after an inquiry into his behavior found he’d made misleading statements over pornography found on his parliamentary computer by police nearly a decade ago. Green is the third Cabinet minister to quit in two months. A couple of recent Brexit-related successes mean the prime minister is better equipped to handle Green’s departure than she might have been a month ago: The European Union has agreed to move negotiations on to the next phase, and late Wednesday, May’s flagship Brexit Bill completed the detailed scrutiny stage of its journey through the House of Commons.

Still, his departure leaves her without her closest ally in Cabinet. The flight to Warsaw will give May a chance to consider how she manages without him. She’ll be accompanied by her most senior ministers for a summit where she’ll promise cooperation on defense and security as part of a charm offensive to win friends in Europe before negotiations on post-Brexit trade start in March. But Poland’s rift with the EU over judicial reforms – and its government’s fears of a shortfall in EU funding after Britain leaves the bloc – threaten to overshadow the meeting with new Polish Prime Minister Mateusz Morawiecki. “The prime minister will raise her concerns with the prime minister when they meet,” May’s spokesman James Slack told reporters in London.

“We place importance on respect for the rule of law and we expect all our partners to abide by international norms and standards.” Britain’s rush to forge links with Morawiecki’s populist administration reflects a desire both to win friends for the talks ahead and to reassure former eastern European countries that it will continue to support them against Russian expansionism after Brexit. British troops are already stationed in Poland, and May will announce increased cooperation on cyber security.

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You are not sovereign. All your base are belong to us.

Poland Protests EU ‘Nuclear Option’ Over Judicial Independence (G.)

The Polish government has accused the European commission of a politically motivated attack after the EU’s executive body triggered a process that could see the country stripped of voting rights in Brussels, over legal changes that the bloc claims threaten the independence of the judiciary. In a highly symbolic moment, Poland’s fellow 27 EU member states were advised by the commission on Wednesday that the legislative programme of Poland’s government was putting at risk fundamental values expected of a democratic state by allowing political interference in its courts. The row represents the greatest crisis in the EU since Britain’s decision to leave the EU last year, with the Polish government showing little inclination to back down.

Frans Timmermans, the vice-president of the commission, told reporters in Brussels that in two years 13 laws had been adopted that put at serious risk the independence of Poland’s judiciary and the separation of powers. “Judicial reforms in Poland mean that the country’s judiciary is now under the political control of the ruling majority. In the absence of judicial independence, serious questions are raised about the effective application of EU law,” Timmermans, a former Dutch diplomat, said. “We are doing this for Poland, for Polish citizens.” Poland’s new prime minister, Mateusz Morawiecki, responded on Twitter: “Poland is as devoted to the rule of law as the rest of the EU.” The Polish foreign ministry said in a statement: “Poland deplores the European commission’s launch of the procedure […] which is essentially political, not legal.”

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‘Election’ today. Can’t even really call this an election. The goal seems to be to divide the independence vote among multiple parties.

Catalonia Poised For Hung Parliament In Bitterly Contested Election (G.)

Catalans head to the polls on Thursday to vote in an extraordinary and bitterly contested election that will pit secessionists against unionists and determine the next phase of the long-running campaign for independence from Spain. The election was called by the Spanish prime minister, Mariano Rajoy, at the end of October when the central government took control of Catalonia and sacked the regional government after it staged an illegal independence referendum and made a unilateral declaration of independence. Polls suggest Catalonia is set for a hung parliament, with the pro-independence Catalan Republican Left party (ERC) vying for first place with the unionist, centre-right Citizens party.

With no clear winner in sight, Thursday’s result is likely to lead to coalition negotiations to form a government that will either maintain the drive for independence in some form or defend the constitutional status quo. Tensions remain high in the region following the referendum and the Spanish police’s heavy-handed efforts to stop it. Secessionists believe that Madrid’s imposition of direct rule and the jailing of senior independence leaders could increase support for their cause. Unionists, however, argue that Catalans are sick of the social unrest and economic uncertainty generated by the unilateral actions of the government of deposed regional president Carles Puigdemont.

The exceptional circumstances surrounding the election are compounded by the fact that Puigdemont has been campaigning from Belgium. He fled to Brussels hours before Spain’s attorney general asked for charges of rebellion, sedition and misuse of public funds to be brought against his cabinet almost two months ago. Puigdemont’s former number two, Oriol Junqueras, has been fighting the election from prison, where he and two prominent independence leaders are being held as part of a judicial investigation into October’s events. “This is not a normal election,” Puigdemont told supporters via video link on Tuesday evening as the campaign drew to a close.

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A long list of documents. NATO expansion.

How The US Swindled Russia in The Early 1990s (Zuesse)

Due to a historic data-dump on December 10th, the biggest swindle that occurred in the 20th Century (or perhaps ever) is now proven as a historical fact; and this swindle was done by the US Government, against the Government and people of Russia, and it continues today and keeps getting worse under every US President. It was secretly started by US President George Herbert Walker Bush on the night of 24 February 1990; and, unless it becomes publicly recognized and repudiated so that it can stop, a nuclear war between the US and all of NATO on one side, versus Russia on the other, is inevitable unless Russia capitulates before then, which would be vastly less likely than such a world-ending nuclear war now is.

This swindle has finally been displayed beyond question, by this, the first-ever complete release of the evidence. It demonstrates beyond any reasonable doubt (as you’ll verify yourself from the evidence here), that US President G.H.W. Bush (and his team) lied through their teeth to Soviet President Mikhail Gorbachev (and his team) to end the Cold War on Russia’s side, when the US team were secretly determined never to end it on the US-and-NATO side until Russia itself is conquered. And this swindle continues today, and keeps getting worse and worse for Russians.

Until now, apologists for the US-Government side have been able to get away with various lies about these lies, such as that there weren’t any, and that Gorbachev didn’t really think that the NATO issue was terribly important for Russia’s future national security anyway, and that the only limitation upon NATO’s future expansion that was discussed during the negotiations to end the Cold War concerned NATO not expanding itself eastward (i.e., closer to Russia) within Germany, not going beyond the then-existing dividing-line between West and East Germany — that no restriction against other east-bloc (Soviet-allied) nations ever being admitted into NATO was discussed, at all. The now-standard US excuse that the deal concerned only Germany and not all of Europe is now conclusively disproven by the biggest single data-dump ever released about those negotiations.

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When everything is measured in monetary value, nothing will be left in the end.

Alaska’s Arctic National Wildlife Refuge Now Has A $1 Billion Price Tag (G.)

Years ago, camping in Alaska’s Arctic national wildlife refuge, I watched a herd of caribou – 100,000 bulls, cows and their three-week-old calves – braid over the tundra, moving to a rhythm as old as the wind. “Not many places like this left today,” said my friend Jeff, sitting next to me above an ice-fringed river. And so Alaska senator Lisa Murkowski believes this refuge – 80 miles east of Prudhoe Bay – could generate $1bn over 10 years once it’s opened to oil leasing. She and her Republican colleagues slipped this drilling provision into the Senate Republican tax bill. Murkowski repeatedly says this development would cover just 2,000 acres, “about one ten-thousandth of ANWR”.

The acronym ANWR conveniently deletes the words “wildlife” and “refuge”, with no regard for the polar bears, Arctic fox, musk oxen and migratory ground-nesting birds that come there every summer, some species from as far away as Patagonia. Alaska’s lieutenant governor, Byron Mallott, has said that drilling in ANWR is necessary to deal with climate change. His caddywhompus logic: we need to drill for more oil to raise money to address a problem that’s caused by humanity’s addiction to oil. Why not just say the truth? We want the money. Murkowski adds: “We have waited nearly 40 years for the right technology to come along for a footprint small enough for the environment to be respected.” They have not. Alaskans have been trying to drill here for decades, using one crazy rationale after another.

At one hearing the state’s lone congressman, Don Young, put a blue pen mark on his nose to show how small the industry footprint would be. Clever man. The development would in fact be a spider web of roads, pipelines, well pads and landing strips smack in the middle of the biological heart of the refuge. It would look less like a refuge and more like Prudhoe Bay, where thousands of spills have been reported. Senator Maria Cantwell of Washington says the whole idea is “ludicrous”, noting that the Republican tax plan would add roughly $1.5tn to the national deficit in five years [with the richest 1% of Americans reaping half of the tax cuts]. “I am disturbed,” she says. She should be. Christopher Lewis, a retired BP manager of exploration, has said: “I do not believe that there are any adequate, commercially viable reservoirs in the Arctic refuge.” The reality is “there are other less sensitive and less costly places to explore”.

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Brutal.

Russians, Chinese Seek Out Greek Properties for Bargains, Visas (BBG)

George Kachmazov, a Russian realtor, is buying up property in Athens. The Moscow-based chief executive officer of real-estate platform Tranio.com has bought a building in the Greek capital and is in the process of acquiring five others with a view to selling apartments to international investors. For Kachmazov, the sales pitch is clear: buying property in Greece can give an investor a so-called golden visa to the country – and with it an entree into much of Europe. What’s more, the country’s real estate market may be poised for a rebound, helping buyers make some money on their purchase. “Greece’s real estate market is one of the remaining few in Europe that hasn’t recovered since the 2008 economic crisis,” Kachmazov said in an interview in Athens.

Prices in Spain, Portugal, Ireland, Poland and Hungary are heading toward pre-crisis levels because of high liquidity in Europe, he said. Kachmazov is among agents making a beeline for Greece to help property hunters from Russia, China, Turkey and elsewhere bet on a market that may be on the cusp of a revival as the country exits its bailout program in August 2018. Property prices in Greece have fallen more than the 25% contraction in the economy since Europe’s sovereign debt crisis began in 2008. Prices of apartments in Athens more than five years old shrank by 45% between 2008 and June 2017, according to Bank of Greece data.

“The belief is that the worst is over and that this is a good time to take advantage of the low prices and to benefit from future capital gains as the market recovers,” said Carrie Law, CEO of Juwai.com, a Chinese international property website. Juwai this year signed an agreement with Warren Buffett’s real estate brokerage firm to advertise homes in the U.S. The average price per square meter in Greece is 2,846 euros ($3,369), according to Germany-based statistics company Statista. That’s almost 1,000 euros cheaper than Portugal, which has a similar golden visa program for property buyers, one and a half times cheaper than in Spain and Germany, and almost three times cheaper than in Italy and Austria. Greece is more expensive than Bulgaria, Croatia, Romania and Estonia.

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There are reportedly highly superior facilities lying idle on the mainland. But the EU doesn’t want the refugees there.

Lesbos Mayor Files Suit Over Conditions At Moria Migrant Camp (K.)

The mayor of the eastern Aegean island of Lesvos has filed suit against all responsible parties over the conditions at the Moria refugee and migrant processing center. Spyros Galinos filed his suit in Lesvos’s Court of Misdemeanors, claiming that the law is being broken at the government-run facility, which is supervised by the military. His action comes two days after foreign media published videos shot covertly inside the camp and showing the squalor and cramped conditions to which thousands of refugees and migrants are being subjected. The mayor stressed that the facility, a former military base, should not be accommodating more than 1,800 people at a time if decent living standards are to be ensured.

“Unfortunately, though, for the past two years and this year especially there is an extremely large number of third-country citizens and vulnerable groups (men, women – among which pregnant women – and children) indiscriminately trapped and cramped together, coming to more than 6,000 individuals,” Galinos said in his lawsuit. He also stressed poor safety and sanitation standards, saying that an inadequate water and sewerage network is putting the lives of the camp’s residents and workers at risk. People living at the camp “every day experience serious psychological problems and have been led to suicide attempts and self-harm, while others are compelled to serious acts of lawlessness in order to survive,” Galinos said.

His suit came just hours after about a dozen people were injured in a brawl that went on for hours between rival groups at the camp and resulted in extensive destruction. The mayor further stressed the impact of conditions at Moria on the lives of the island’s residents, saying that authorities are failing in their duty to control and monitor such a large number of refugees and migrants. Galinos added that overcrowding at the camp has forced hundreds of migrants to move into the main town of Mytilene in search of some kind of shelter, “taking over public spaces, the city’s parks, sidewalks and courtyards of public and municipal buildings.” In the suit, Galinos asks that “all responsible parties” are taken to task over the situation, as “their actions and omissions are malicious and deliberate, and put at risk the desperate and poor people trapped in [Moria’s] illegal facilities.”

“The disruption of social cohesion and the risk of criminal offenses in defense of life and property by a part of the island’s native population is evident and very likely,” Galinos warned. Since the onset of the refugee crisis at the start of 2015, the residents of Lesvos and its mayor have been distinguished for the support they have given to tens of thousands of migrants that have landed on the island’s shores.

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