Jan 042019
 


Yasuhiro Ishimoto Untitled, Chicago 1950

 

Congratulations! Apple Loses Record $463 Billion in Market Cap in Three Months (Mish)
Apple Just Lost A Facebook (CNBC)
Apple Suffers Its Biggest Single-Day Loss In 6 Years (CNBC)
Why This Time Is Different (MooTrades)
Democrats Introduce Impeachment Articles On 1st Day In The House (RT)
Canada Says 13 Citizens Detained In China Since Huawei CFO’s Arrest (R.)
UBS Chairman Pours Cold Water On Deutsche Bank Merger Talk (R.)
Google Shifted $23 Billion To Tax Haven Bermuda In 2017 (R.)
Over Half Of Tory Members Consider Quitting Party Over May’s Brexit Deal (BI)
US Judge Limits Evidence In Trial Over Roundup Cancer Claims (R.)
New Brazil President Bolsonaro Launches Assault On Amazon Rainforest (G.)

 

 

Losing half a trillion in 3 months should be no surprise now central banks have killed the negative feedback from a functioning market. It’ll be runaway wild swings till it is restored.

Congratulations! Apple Loses Record $463 Billion in Market Cap in Three Months (Mish)

Apple set a record that will take a long time to beat. The first $ trillion company lost nearly half that in 3 months. On, August 2, Apple became the World’s First Trillion-Dollar Company at $207.05 per share. Hooray! On October 3, Apple had a peak market cap of about $1.138 trillion. Today, Apple’s market cap is about $675 billion. That’s a record market cap loss of $463 billion in three short months. Expect more stories similar to this, but this may be hard to top. Amazon has a chance but it needs a big disaster soon.

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• more than double the size of Wells Fargo • more than three times the size of McDonald’s • more than five times the size of Costco • more than 10 times the size of Raytheon.

Apple Just Lost A Facebook (CNBC)

In only three months, Apple has lost $452 billion in market capitalization, including tens of billions on Thursday as the tech giant’s stock sank further. Apple shares have fallen by 39.1 percent since Oct. 3, when the stock hit a 52-week high of $233.47 a share. With its market cap down to about $674 billion, those losses are larger than individual value of 496 members of the S&P 500 — including Facebook and J.P. Morgan. Microsoft, Amazon, Alphabet and Berkshire Hathaway are the only S&P 500 members with larger market caps than Apple’s loss since its recent high.

To put the Apple market value plunge in context, $446 billion is: • more than double the size of Wells Fargo • more than three times the size of McDonald’s • more than five times the size of Costco • more than 10 times the size of Raytheon. Apple gave a sudden warning to investors on Wednesday afternoon, lowering its fiscal first-quarter revenue guidance. Wall Street reacted, with one analyst saying this will represent Apple’s “biggest miss in years” and another saying the company’s announcement “raises more questions than answers.” Apple CEO Tim Cook’s letter to investors blamed a variety of factors for the guidance cut, including declining iPhone revenue and China’s weakening economy.

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Only 6 years? That makes it sound cookie cutter.

Apple Suffers Its Biggest Single-Day Loss In 6 Years (CNBC)

Apple stock cratered almost 10 percent Thursday, a day after slashing revenue guidance in a rare acknowledgement of waning sales. The stock ended trading at $142.19, its lowest price level since July 2017. The plunge makes for Apple’s worst day of trading since January 2013, and it extends a painful year-end trend for Apple into 2019. The stock, which once traded above $230 per share, shed 30 percent in the fourth quarter of 2018. Thursday’s losses push Apple’s market valuation below $700 billion and behind the market cap of Alphabet to become the fourth most valuable publicly traded U.S. company — down from the top spot just two months ago. The company has lost $450 billion in market value since its peak of about $1.1 trillion last year.

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Hard not to think that people working in finance still can’t believe the industry doesn’t function. They keep trying to explain what happens, from inside their faulty models.

Why This Time Is Different (MooTrades)

We have seen the last three bull markets catalyzed largely by loosening liquidity conditions during the bear markets that preceded them by central banks — in more and more of a globally coordinated fashion. This has led me to believe that the expansion of liquidity is the primary driver for consistent risk asset upward price revisions (aka bull markets). More than economic developments, earnings or political discourse. As a result it is crucial to realize that the ‘punch bowl’ of quantitative easing, the veritable liquidity spigot that juiced markets higher over the last 9.5 years, is not only running dry, but going in reverse (taking liquidity from markets). The impact of this reversal cannot overstated. It will be the primary catalyst that drives this bear market in equities lower. Only a reversal of tightening liquidity conditions will drive risk assets higher again.

Macro: • $1 of US GDP growth now costs $4 of debt, and is only growing as we push on the string of debt to borrow forward demand to today. • US now has $200 trillion of unfunded liabilities over the next 10 year period. • Debt monetization isn’t just important, it will become a necessity. Otherwise rates normalize and the party ends in a very bad way (insolvency and/or extreme austerity measures).

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Everybody is getting ready for a fight. Just not one that would benefit their voters.

Democrats Introduce Impeachment Articles On 1st Day In The House (RT)

Democrats are flexing their muscles as the incoming majority in the US House of Representatives, introducing articles of impeachment and even quixotic constitutional amendments even though they have no hope of passing. Rep. Brad Sherman (D-CA) introduced articles of impeachment on the first day of the 2019 Congress, starting with a resolution demanding President Donald Trump be impeached for “threatening, and then terminating” then-FBI Director James Comey in 2017. Reserving the option to introduce more articles later, Sherman told CNN he wanted to be able to “force the conversation on impeachment” when (if?) the Mueller report is released, “challenging” his Democratic colleagues who haven’t yet chosen to support Trump’s impeachment.

Sherman filed the exact same impeachment resolution in 2017 but could only muster one supporter, Rep. Al Green (D-TX), who later filed his own articles of impeachment. Rep. Rashida Tlaib (D-MI) didn’t even wait until she was seated as a congresswoman to go after the president’s job, publishing an op-ed on Thursday entitled “Now is the time to begin impeachment proceedings against President Trump.” “We already have overwhelming evidence that the president has committed impeachable offenses,” she wrote, accusing Trump of “abuse of power and abuse of the public trust” along with a laundry list of crimes. In person, she was even more direct, reportedly telling a MoveOn.org reception, “We’re gonna impeach that mother**ker.”

Speaker of the House Nancy Pelosi has been noticeably reticent on impeachment, telling NBC on Thursday that Democrats should wait for the Mueller report before making any moves. “We shouldn’t be impeaching for a political reason, and we shouldn’t avoid impeachment for a political reason,” she said. Many rank-and-file Democrats ran on pro-impeachment platforms, but with polls indicating only a third of Americans support the idea and a two-thirds majority in the Republican-controlled Senate required to remove the president, they are unlikely to make any sudden moves.

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“..there are almost 900 Canadians in a similar situation in the United States..”

Canada Says 13 Citizens Detained In China Since Huawei CFO’s Arrest (R.)

Canada has said 13 of its citizens have been detained in China since the Huawei executive Meng Wanzhou was arrested in December in Vancouver at the request of the US. “At least” eight of those 13 have since been released, a Canadian government statement said, without disclosing what charges if any had been laid. Prior to Thursday’s statement, detention of only three Canadian citizens had been publicly disclosed. Diplomatic tensions between Canada and China have escalated since Meng’s arrest on 1 December. The Canadian government has said several times it sees no explicit link between the arrest of Meng, the daughter of Huawei’s founder, and the detentions of Canadian citizens. But Beijing-based western diplomats and former Canadian diplomats have said they believe the detentions were a “tit-for-tat” reprisal by China.

Meng was released on a C$10m ($7.4m) bail on 11 December and is living in one of her two Vancouver homes as she fights extradition to the US. The 46-year-old executive must wear an ankle monitor and stay at home from 11pm to 6am. The 13 Canadians detained included Michael Kovrig, Michael Spavor and Sarah McIver, a Canadian government official said on Thursday. McIver, a teacher, has been released and returned to Canada. Kovrig and Spavor remain in custody. Canadian consular officials saw them once each in mid-December. Overall there are about 200 Canadians who have been detained in China for a variety of alleged infractions and continue to face on-going legal proceedings. “This number has remained relatively stable,” the official said. In comparison there are almost 900 Canadians in a similar situation in the United States, the official said.

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Who’s going to save Deutsche? It’s far too big not to be saved. But it would drag down any other bank with it. Let the German government do it.

UBS Chairman Pours Cold Water On Deutsche Bank Merger Talk (R.)

Swiss bank UBS is not looking to merge with any other bank, Chairman Axel Weber told the Tages-Anzeiger newspaper, dismissing speculation that UBS could join forces with Deutsche Bank. “There is a lot of talk in Europe and the United States about mergers but nothing happens. These are all simulation games,” he said in an interview published on Thursday. Asked specifically about whether UBS, the world’s largest wealth manager, was running simulations about Germany’s biggest lender, Weber said: “Every company has to think things over, but it makes little sense to consider mergers at group level now. These paralyze companies for years.

“UBS is much stronger today than before the financial crisis, but combining with another bank — no matter which — would be premature at this moment. We want to grow primarily organically and we surely have to be able to walk before we want to run.” Weber, a former Bundesbank chief who joined UBS in 2012, said he could imagine remaining in his post until 2022. Asked how long Chief Executive Sergio Ermotti might stay, he said UBS wanted an orderly leadership transition and was under no pressure to act while it ensured the right talent was in place.

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The Dutch finance minister published a list of tax havens a few days ago. Holland wasn’t on it. These people don’t give a sh*t about their credibility.

Google Shifted $23 Billion To Tax Haven Bermuda In 2017 (R.)

Google moved 19.9 billion euros ($22.7 billion) through a Dutch shell company to Bermuda in 2017, as part of an arrangement that allows it to reduce its foreign tax bill, according to documents filed at the Dutch Chamber of Commerce. The amount channeled through Google Netherlands Holdings BV was around 4 billion euros more than in 2016, the documents, filed on Dec. 21, showed. “We pay all of the taxes due and comply with the tax laws in every country we operate in around the world,” Google said in a statement. “Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26 percent over the last ten years.”

For more than a decade the arrangement has allowed Google owner Alphabet to enjoy an effective tax rate in the single digits on its non-U.S. profits, around a quarter the average tax rate in its overseas markets. The subsidiary in the Netherlands is used to shift revenue from royalties earned outside the United States to Google Ireland Holdings, an affiliate based in Bermuda, where companies pay no income tax. The tax strategy, known as the “Double Irish, Dutch Sandwich”, is legal and allows Google to avoid triggering U.S. income taxes or European withholding taxes on the funds, which represent the bulk of its overseas profits.

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“76% of Tory members said that warnings about no deal Brexit — like those on food & medicine — are “exaggerated or invented, and in reality leaving without a deal would not cause serious disruption.”

Over Half Of Tory Members Consider Quitting Party Over May’s Brexit Deal (BI)

Conservative party members overwhelmingly want MPs to vote down Theresa May’s Brexit deal, with more than half saying they have even considered ripping up their membership over it, according to a new poll. A survey of 1,215 Tory party members published on Friday found that 59% of Conservative party members oppose the Withdrawal Agreement May has negotiated with the European Union, while just 38% support it. Among all Conservative party members, more than half (56%) said they had considered quitting the party over May’s deal, according to YouGov polling for leading academics at the ESRC-funded Party Members Project.

The findings will spook figures in Downing Street who had hoped that Conservative MPs would return from their constituencies over Christmas having been urged by party members to get behind May and her deal. The prime minister was forced to postpone a parliamentary vote on her deal after more than 100 of her MPs announced that they planned to oppose it. [..] The Tory party membership is particularly supportive of leaving the EU without a deal, despite the myriad warnings from ministers about the disruption it would cause across multiple aspects of life in the UK, including food and medicine. A whopping 76% of Tory members said that warnings about a no deal Brexit are “exaggerated or invented, and in reality leaving without a deal would not cause serious disruption.” Just 18% said the warnings were realistic.

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The -legal- power of Monsanto should never be underestimated.

US Judge Limits Evidence In Trial Over Roundup Cancer Claims (R.)

A federal judge overseeing lawsuits alleging Bayer’s glyphosate-based weed killer causes cancer has issued a ruling that could severely restrict evidence that the plaintiffs consider crucial to their cases. U.S. District Judge Vince Chhabria in San Francisco in an order on Thursday granted Bayer unit Monsanto’s request to split an upcoming trial into two phases. The order initially bars lawyers for plaintiff Edwin Hardeman from introducing evidence that the company allegedly attempted to influence regulators and manipulate public opinion.

Thursday’s order applies to Hardeman’s case, which is scheduled to go to trial on Feb. 25, and two other so-called bellwether trials which will help determine the range of damages and define settlement options for the rest of the 620 Roundup cases before Chhabria. But Hardeman’s lawyers contended that such evidence, including internal Monsanto documents, showed the company’s misconduct and were critical to California state court jury’s August 2018 decision to award $289 million in a similar case. The verdict sent Bayer shares tumbling though the award was later reduced to $78 million and is under appeal. Under Chhabria’s order, evidence of Monsanto’s alleged misconduct would be allowed only if glyphosate was found to have caused Hardeman’s cancer and the trial proceeded to a second phase to determine Bayer’s liability.

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Time to cut all ties with Brazil.

New Brazil President Bolsonaro Launches Assault On Amazon Rainforest (G.)

Hours after taking office, Brazil’s new president, Jair Bolsonaro, has launched an assault on environmental and Amazon protections with an executive order transferring the regulation and creation of new indigenous reserves to the agriculture ministry – which is controlled by the powerful agribusiness lobby. The move sparked outcry from indigenous leaders, who said it threatened their reserves, which make up about 13% of Brazilian territory, and marked a symbolic concession to farming interests at a time when deforestation is rising again. “There will be an increase in deforestation and violence against indigenous people,” said Dinaman Tuxá, the executive coordinator of the Articulation of Indigenous People of Brazil (Apib).

“Indigenous people are defenders and protectors of the environment.” Sonia Guajajara, an indigenous leader who stood as vice-presidential candidate for the Socialism and Freedom party (PSOL) tweeted her opposition. “The dismantling has already begun,” she posted on Tuesday. Previously, demarcation of indigenous reserves was controlled by the indigenous agency Funai, which has been moved from the justice ministry to a new ministry of women, family and human rights controlled by an evangelical pastor. The decision was included in an executive order which also gave Bolsonaro’s government secretary potentially far-reaching powers over non-governmental organizations working in Brazil.

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Nov 092018
 


Paul Henry Altan Lough, Donegal 1933-34

 

Larry King: CNN Stopped Doing News A Long Time Ago. They Do Trump (ZH)
Democrats Want Healthcare Protected – And Trump Impeached (R.)
The Fed Stands Pat on Thursday, What’s Next? (Street)
US Sues UBS, Alleges Crisis-Era Mortgage Securities Fraud (R.)
Frail Mikhail Gorbachev Warns Against Return To The Cold War (R.)
Corbyn Advisor Economist Mariana Mazzucato Has UK Residency Bid Rejected (G.)
As Renewables Drive Up Energy Prices US, Asia & Europe Opt For Nuclear (F.)
US Court Halts Construction Of Keystone XL Oil Pipeline (AFP) <
World’s First AI News Anchor Unveiled In China (G.)
UN Envoy Meets UK Food Bank Users (G.)
‘Remarkable’ Decline In Global Fertility Rates (BBC)
Stopping Antimicrobial Resistance Would Cost Just $2 Per Person A Year (OECD)

 

 

Not that I need vindication, but it’s good to see that Larry King says the same I’ve been saying: CNN – like NYT, Wapo etc.- is in it for the money only, not for the news. Think of that as the recount stories start spreading.

Larry King: CNN Stopped Doing News A Long Time Ago. They Do Trump (ZH)

HOST RICK SANCHEZ: You know it’s interesting. As I listen to you I’m thinking that both you and I are old enough to remember that there was a lot of antagonism during the 1960s. There was a lot of antagonism during Watergate. There was certainly antagonism during the Clinton years. But there is something, maybe it’s an undercurrent, that is different now. Can you put your finger on it? What is it?

KING: Two things, Rick — the internet and cable news. Could you imagine cable news in Watergate? And they don’t do news anymore. In fact, RT is one of the few channels doing news. RT does news. CNN stopped doing news a long time ago. They do Trump. Fox is Trump TV and MSNBC is anti-Trump all the time. You don’t see a story — there was vicious winds and storms in the Northeast the other day – not covered on any of the three cable networks, not covered. Not covered! So when CNN started covering Trump — they were the first — they covered every speech he made and then they made Trump the story.

So, Trump is the story in America. I would bet that ninety-eight percent of all Americans mention his name at least once a day. And when it’s come to that, when you focus on one man, I know Donald 40 years — I know the good side of Donald and I know the bad side of Donald — I think he would like to be a dictator. I think he would love to be able to just run things. So, he causes a lot of this. Then his fight with the media and fake news. I’ve been in the media a long time, like you — longer than you, Rick. And at all my years at CNN, in my years at Mutual Radio, I have never seen a conversation where a producer said to a host “pitch the story this way. Angle it that way. Don’t tell the truth.” Never saw it. Never saw it.

SANCHEZ: You know it’s funny, just quick because you know these producers are telling me you guys have to start wrapping this up … you said something interesting about how CNN played along with Trump. I think they only played along or at least gave him that much airtime in many ways because they didn’t think he was going to win, correct?

KING: I guess it’s to their regret. But, they covered him as a character. They carried every speech he made. They carried him more than Fox News, at the beginning. And so they built the whole thing up and the Republicans had a lot of candidates and they all had weaknesses. When I saw Senator Cruz hug Donald Trump the other day I said, “this is what America has become.” He said that Cruz’s father helped kill Kennedy!

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Healthcare good. Impeachment painfully dumb. These people should go looking for trustworthy news stories, not blindly parrot MSM.

Democrats Want Healthcare Protected – And Trump Impeached (R.)

Democrats have a clear message for party leaders who will take control of the U.S. House of Representatives next year, according to a Reuters/Ipsos national opinion poll: Protect their healthcare and impeach President Donald Trump. The poll released on Thursday found that 43 percent of people who identified as Democrats want impeachment to be a top priority for Congress. That goal was second in priority only to healthcare, which played a major role in Democratic campaigns’ closing arguments before Tuesday’s elections.

They may be disappointed: Party leaders on Wednesday vowed to use their newly won majority to impose a new level of scrutiny on the Trump White House, but said impeachment would require evidence of action to subvert the Constitution that was so overwhelming that it would trouble even Trump’s supporters. Democratic Party leaders had practical reasons for caution. While they were poised to gain at least 30 House seats, more than the 23 they needed for a majority, Republicans strengthened their control of the U.S. Senate, which has the power to determine guilt or innocence in an impeachment proceeding. [..] The American public at large was far less supportive of impeachment proceedings, with just 24 percent of overall respondents listing it among their top three goals for the new Congress.

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A raise next month is what’s next.

The Fed Stands Pat on Thursday, What’s Next? (Street)

In an unsurprising move, Fed chair Jerome Powell kept rates flat on Thursday. “The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions and inflation near the committee’s symmetric 2 percent objective over the medium term,” the Fed said following its regularly scheduled two-day meeting to discuss interest rates. “Risks to the economic outlook appear roughly balanced.” TheStreet Founder and Action Alerts portfolio manager Jim has been adamant that the pause was necessary given a “collapse in oil” and a “collapse in housing.” He noted that Powell’s pause, and potentially an extended pause, could change that.

[..] Powell has paused, but the market seems to be slow off the starting line so far as major indices finished Thursday down slightly. So what’s next? “People have to remember that this November meeting is the last lame duck meeting,” Quill Intelligence CEO and former Federal Reserve Bank of Dallas advisor Danielle DiMartino Booth told TheStreet. “imagine all of the drama with Trump castigating Powell.” She added that a raise is very likely in December and speculated that rates could possibly be raised again in January, which would surprise the markets. “I don’t think he has any qualms about having the market make monetary policy for him,” Dimartino Booth said. “He’s not afraid of the stock market.”

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Why did that take 10 years? And what are the odds an actual person will be held accountable?

US Sues UBS, Alleges Crisis-Era Mortgage Securities Fraud (R.)

The U.S. government on Thursday filed a civil fraud lawsuit accusing UBS, Switzerland’s largest bank, of defrauding investors in its sale of residential mortgage-backed securities leading up to the 2008-09 global financial crisis. UBS was accused of misleading investors about the quality of more than $41 billion of subprime and other risky mortgage loans backing 40 securities offerings in 2006 and 2007, the Department of Justice said in a complaint filed with the federal court in Brooklyn. The lawsuit came after UBS rejected a government proposal that it pay nearly $2 billion to settle, according to a person familiar with the talks who was not authorized to speak publicly about them.

While UBS was not a big originator of U.S. residential home loans, U.S. Attorney Richard Donoghue in Brooklyn said investors suffered “catastrophic losses” from the bank’s failure to fully disclose the risks of mortgage securities it helped sell. [..] U.S. officials faulted UBS for having a business culture that placed a higher priority on profits than full disclosure to investors, who were deprived of crucial information about the quality of the loans underlying the securities they bought. Thursday’s lawsuit quoted a UBS trader who in a 2006 instant message said “our crack due diligence effort is a joke,” and a UBS mortgage employee who the same year complained to his bosses about the bank’s ethics, including that “Lying is ok.”

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His last warning?

Frail Mikhail Gorbachev Warns Against Return To The Cold War (R.)

Mikhail Gorbachev, the last Soviet leader, warned on Thursday against rising tensions between Russia and the United States and said there should be no return to the Cold War. The frail 87-year-old was physically helped by aides to a cinema hall to watch the premiere in Russia of a new documentary about his life, his Soviet reforms in the 1980s and his arms control drive that helped end the Cold War. His legacy has come under a pall as ties between Moscow and Washington have fallen to post-Cold War lows, following Russia’s annexation of Crimea in 2014 and rows over sanctions, election meddling and the poisoning of a spy in England.

He spoke briefly to a cinema hall in Moscow after “Meeting Gorbachev”, a new documentary directed by filmmakers Werner Herzog and Andre Singer, and was asked if the world would hold back from a new Cold War. “We must hold back,” he said. “And not just from the Cold War. We have to continue the course we mapped. We have to ban war once and for all. Most important is to get rid of nuclear weapons.” Reviled by many Russians as the man whose reforms ultimately led to the Soviet breakup, Gorbachev is lauded in the West as the man who helped end the Cold War. Gorbachev, whose visibly ailing health was in stark contrast to the vigorous reformist figure he cut in the 1980s, said the world was moving dangerously closer to a new arms race.

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This happened last year. Even university professors with 4 British kids are not safe.

Corbyn Advisor Economist Mariana Mazzucato Has UK Residency Bid Rejected (G.)

The London-based international economist Mariana Mazzucato has said her application for permanent residency in the UK was turned down, prompting renewed anger about the government’s immigration policy. Mazzucato, the founding director of University College London’s Institute for Innovation and Public Purpose and the author of several influential books on the economy, was born in Italy but has lived in the UK for 20 years. She applied for permanent residency in 2017, a few months after the UK voted to leave the EU. On Thursday she tweeted that her application had been refused and her Italian passport kept by the Home Office for six months. Immigration officials blamed a credit card problem with her application fee, she said, adding that there was no problem with her card.

A spokesman for University College London said Prof Mazzucato did not want to elaborate on her Twitter update. Later, after her tweet prompted widespread outrage, it clarified that she was referring to an incident in 2017. Mazzucato joined Jeremy Corbyn’s Economic Advisory Committee in 2015 and 2016 alongside other big name economists, including Joseph Stiglitz and Thomas Piketty. She is a member of the Scottish government’s Council of Economic Advisers. Her attempt to secure permanent residency ran into problems over a mixup about single digit on her 85-page application. “My ‘big’ error was making 4 look like 9 in my credit card number,” she tweeted in May 2017. At the time she said her application had to be resubmitted.

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No, we are not a smart species.

As Renewables Drive Up Energy Prices US, Asia & Europe Opt For Nuclear (F.)

Voters in the U.S., Asia, and Europe are increasingly opting for nuclear power in response to rising electricity prices from the deployment of renewables like solar panels and wind turbines. By a more than two-to-one margin (70% to 30%), voters in Arizona on Tuesday rejected a ballot initiative (proposition 127) that would have resulted in the closure of that state’s nuclear power plant and in the massive deployment of solar and wind. In Taiwan, momentum is building for a repeal of that nation’s nuclear energy phase-out. Grassroots pro-nuclear advocacy inspired a former president to help activists gather over 300,000 signatures so voters could vote directly on the issue on November 24.

And after a coalition of grassroots groups rallied in Munich, Germany last month to protest the closure of nuclear plants, a wave of mostly positive media coverage spread across Europe, inspiring a majority of Netherlands voters, and the nation’s ruling political party, to declare support for building new nuclear reactors. Now, in the wake of rising public support for nuclear energy, a longstanding foe of nuclear power, the U.S.-based Union of Concerned Scientists, has reversed its blanket opposition to the technology and declared that existing U.S. nuclear plants must stay open to protect the climate.

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The never ending battle continues. Just let interest rates bankrupt shale, and we’re good.

US Court Halts Construction Of Keystone XL Oil Pipeline (AFP)

A federal judge on Thursday halted construction of the Keystone XL oil pipeline, arguing that President Donald Trump’s administration had failed to adequately explain why it had lifted a ban on the project. The ruling by Judge Brian Morris of the US District Court for the District of Montana dealt a stinging setback to Trump and the oil industry and served up a big win for conservationists and indigenous groups. Trump granted a permit for the $8 billion conduit meant to stretch from Canada to Texas just days after taking office last year. He said it would create jobs and spur development of infrastructure. In doing so the administration overturned a ruling by then president Barack Obama in 2015 that denied a permit for the pipeline, largely on environmental grounds, in particular the US contribution to climate change.

The analysis of a cross-border project like this is done by the State Department. The same environmental analysis that the department carried out before denying the permit in 2015 was ignored when the department turned around last year and approved it, the judge argued. “An agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past, any more than it can ignore inconvenient facts when it writes on a blank slate,” Morris wrote. He added: “The department instead simply discarded prior factual findings related to climate change to support its course reversal.” The judge also argued that the State Department failed to properly account for factors such as low oil prices, the cumulative impacts of greenhouse gases from the pipeline and the risk of oil spills.

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Who’ll know the difference?

World’s First AI News Anchor Unveiled In China (G.)

China’s state news agency Xinhua this week introduced the newest members of its newsroom: AI anchors who will report “tirelessly” all day every day, from anywhere in the country. Chinese viewers were greeted with a digital version of a regular Xinhua news anchor named Qiu Hao. The anchor, wearing a red tie and pin-striped suit, nods his head in emphasis, blinking and raising his eyebrows slightly. “Not only can I accompany you 24 hours a day, 365 days a year. I can be endlessly copied and present at different scenes to bring you the news,” he says.

Xinhua also presented an English-speaking AI, based on another presenter, who adds: “The development of the media industry calls for continuous innovation and deep integration with the international advanced technologies … I look forward to bringing you brand new news experiences.” Developed by Xinhua and the Chinese search engine, Sogou, the anchors were developed through machine learning to simulate the voice, facial movements, and gestures of real-life broadcasters, to present a “a lifelike image instead of a cold robot,” according to Xinhua.

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Britian’s reality.

UN Envoy Meets UK Food Bank Users (G.)

At Britain’s busiest food bank in Newcastle’s west end people loaded carrier bags with desperately needed groceries as unemployed Michael Hunter, 20, took his chance to spell out to one of the world’s leading experts in extreme poverty and human rights just how tight money can get in the UK today. Previous destinations for Philip Alston, the United Nations rapporteur on the issue, have included Ghana, Saudi Arabia, China and Mauritania. But now his lens is trained on Britain, the fifth richest country in the world, and he listened as Hunter explained an absurdity of the government’s much-criticised universal credit welfare programme.

Users have to go online to keep their financial lifeline open, but computers need electricity – and with universal credit leaving a £465 monthly budget to stretch across the three people in Michael’s family (about £5 each a day), they can barely afford it with the meter ticking. “I have to be quick doing my universal credit because I am that scared of losing the electric,” he said. Alston mentally logged the situation, ahead of a report ruling on whether Britain is meeting its international obligations not to increase inequality. But it was not just the computer that was too expensive to power. “I am hungry sometimes,” Michael said. “I’m scared to eat sometimes in case we run out of food.”

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Maybe mankind CAN solve some of its problems?!

‘Remarkable’ Decline In Global Fertility Rates (BBC)

There has been a remarkable global decline in the number of children women are having, say researchers. Their report found fertility rate falls meant nearly half of countries were now facing a “baby bust” – meaning there are insufficient children to maintain their population size. The researchers said the findings were a “huge surprise”. And there would be profound consequences for societies with “more grandparents than grandchildren”. The study, published in the Lancet, followed trends in every country from 1950 to 2017. In 1950, women were having an average of 4.7 children in their lifetime. The fertility rate all but halved to 2.4 children per woman by last year. But that masks huge variation between nations. The fertility rate in Niger, west Africa, is 7.1, but in the Mediterranean island of Cyprus women are having one child, on average.

Whenever a country’s average fertility rate drops below approximately 2.1 then populations will eventually start to shrink (this “baby bust” figure is significantly higher in countries which have high rate of deaths in childhood). At the start of the study, in 1950, there were zero nations in this position. Prof Christopher Murray, the director of the Institute for Health Metrics and Evaluation at the University of Washington, told the BBC: “We’ve reached this watershed where half of countries have fertility rates below the replacement level, so if nothing happens the populations will decline in those countries. “It’s a remarkable transition. “It’s a surprise even to people like myself, the idea that it’s half the countries in the world will be a huge surprise to people.”

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Apparently for the OECD, these are equal issues: ..handwashing and more prudent prescription of antibiotics. Though they know full well that simply putting a ban on antibiotics in agriculture would solve the issue in no time.

Stopping Antimicrobial Resistance Would Cost Just $2 Per Person A Year (OECD)

Superbug infections could cost the lives of around 2.4 million people in Europe, North America and Australia over the next 30 years unless more is done to stem antibiotic resistance. Yet, three out of four deaths could be averted by spending just USD 2 per person a year on measures as simple as handwashing and more prudent prescription of antibiotics, according to a new OECD report. Stemming the Superbug Tide: Just A Few Dollars More says that dealing with antimicrobial resistance (AMR) complications could cost up to USD 3.5 billion a year on average across the 33 countries included in the analysis, unless countries step up their fight against superbugs.

Southern Europe risks being particularly affected. Italy, Greece and Portugal are forecast to top the list of OECD countries with the highest mortality rates from AMR while the United States, Italy and France would have the highest absolute death rates, with almost 30,000 AMR deaths a year forecast in the US alone by 2050. A short-term investment to stem the superbug tide would save lives and money in the long run, says the OECD. A five-pronged assault on antimicrobial resistance — by promoting better hygiene, ending the over-prescription of antibiotics, rapid testing for patients to determine whether they have viral or bacterial infections, delays in prescribing antibiotics and mass media campaigns — could counter one of the biggest threats to modern medicine.

Investment in a comprehensive public health package encompassing some of these measures in OECD countries could pay for themselves within just one year and end up by saving USD 4.8 billion per year, says the OECD. While resistance proportions for eight high-priority antibiotic-bacterium combinations increased from 14% in 2005 to 17% in 2015 across OECD countries, there were pronounced differences between countries. The average resistance proportions in Turkey, Korea and Greece (about 35%) were seven times higher than in Iceland, Netherlands and Norway, the countries with the lowest proportions (about 5%).

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May 132015
 
 May 13, 2015  Posted by at 10:15 am Finance Tagged with: , , , , , , , , ,  5 Responses »


Lewis Wickes Hine Workers in Maryland packing company 1909

Obama’s Plans For TPP, TTIP Trade Deals In Tatters After Senate Vote (Guardian)
US Senate Votes Against Fast-Tracking TPP (RT)
Top Democratic Senator Blasts Obama’s TPP Secrecy (Intercept)
US Set to Rip Up UBS Libor Accord, Seek Conviction (Bloomberg)
No Respite In Selloff Of Low-Risk Bonds (Reuters)
Everyone Looks in the Wrong Place for the Answer to Low Real Rates (Bloomberg)
China Outlook Even Worse Than Imagined: Analyst (CNBC)
EU Said to Consider Plan for Greece in Event of Euro Exit (Bloomberg)
Greece’s Creditors Said to Seek €3 Billion in Budget Cuts (Bloomberg)
Greece Wants Action From Lenders (Reuters)
Greece Tapped Reserves At IMF To Make Debt Repayment (Reuters)
This Is How Greece Kept Its Budget On Track In Q1 (Macropolis)
The Real Sign That Greece’s Financial Turmoil Is Getting Worse (Telegraph)
America’s Achilles’ Heel (Dmitry Orlov)
Central Banks Need To Talk A Lot Less And Act A Lot More (Satyajit Das)
What Does Milan Gain By Hosting Bloated Expo 2015 Extravaganza? (Guardian)
Europe Prepares Plan To Fight Human-Traffickers (Spiegel)
How Struggling Families Are Being Forced Out of London (Vice)
Earth Endangered by New Strain of Fact-Resistant Humans (Borowitz)

“We need to fundamentally renegotiate American trade agreements so that our largest export doesn’t become decent-paying American jobs,” said Sanders.”

Obama’s Plans For TPP, TTIP Trade Deals In Tatters After Senate Vote (Guardian)

Barack Obama’s ambitions to pass sweeping new free trade agreements with Asia and Europe fell at the first hurdle on Tuesday as Senate Democrats put concerns about US manufacturing jobs ahead of arguments that the deals would boost global economic growth. A vote to push through the bill failed as 45 senators voted against it, to 52 in favor. Obama needed 60 out of the 100 votes for it to pass. Failure to secure so-called “fast track” negotiating authority from Congress leaves the president’s top legislative priority in tatters. It may also prove the high-water mark in decades of steady trade liberalisation that has fuelled globalisation but is blamed for exacerbating economic inequality within many developed economies with the outsourcing of manufacturing jobs.

Internet activists had said the deal would curb freedom of speech, while other critics charged it would enshrine currency manipulation. Drama over the landmark trade negotiations has been escalating for weeks, propelling Obama into a public feud with Democrats – going so far as to accuse opposing members within his party of lying about the fast-track bill. The vote marked a rare moment in which Republicans lined up to support the president’s agenda, even as GOP leadership pointed to Obama’s failure to rally his own party in favor of the legislation.

“Really it’s a question of does the president of the United States have enough clout with members of his own political party to produce enough votes to get this bill debated and ultimately passed,” Texas senator John Cornyn, the No 2 Republican in the Senate, told reporters on Capitol Hill. White House officials dismissed the Senate vote against fast tracking as a “procedural snafu” but without this crucial agreement from lawmakers to give the administration negotiating freedom, it is seen as highly unlikely that international diplomats can complete either of the two giant trade deals currently in negotiation: the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).

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Major defeat. The increased weight of Elizabeth Warren and Bernie Sanders has a lot to do with this.

US Senate Votes Against Fast-Tracking TPP (RT)

Lawmakers in the United States Senate have thrown a wrench in a plan that would have given President Barack Obama “fast track” authority to advance a 12-nation trade deal between the US and Pacific Ring partners. In a 52-45 vote on Tuesday afternoon, the Senate opposed moving forward for now on the Trans-Pacific Partnership. A procedural vote required at least 60 “ayes” in order to let the Senate host discussions on whether or not to give the president so-called “fast track” authority on the matter. Failure to reach that threshold puts the future of the trade agreement in jeopardy. Had the vote gone the other way, lawmakers would have hosted a debate to decide whether to give President Obama the power to approve the potential deal on his own, before asking Congress to either ratify or reject any agreement.

Ahead of Tuesday’s vote, Senator Orrin Hatch (R-Utah), the chairman of the Senate Finance Committee, told Reuters the possibility of expediting the process as the White House had requested “may be dead” due to lack of support soon after the procedural vote failed. “In the future, if we see a sharp decline in US agriculture and manufacturing,” Hatch said after the votes were counted, “…people may very well look back at today’ events and wonder why we couldn’t get our act together.” “I’m already thinking that: why couldn’t we get our act together?” he asked. “I have no doubt some will come to regret what went on here today, one way or another.”

Sen. John Cornyn (R-Texas), the majority whip of the chamber, added on the Senate floor that he was disappointed that Democratic lawmakers refrained from voting for the fast-track authorization, but said he was willing to “work with anybody, including the pres of the United States, to try to get our economy growing again.” President Obama has been touting the TPP as a catalyst for the domestic jobs market and an enabler of workers’ rights abroad, and last week he pitched the deal at the main office of footwear giant Nike. “If I didn’t think that this was the right thing to do for working families then I wouldn’t be fighting for it,” Obama told the crowd at Friday’s event. [..] TPP partners currently include the United States, Japan, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand and Brunei.

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‘Wait a minute. I’m going to take notes and then you’re going to take my notes away from me and then you’re going to have them in a file, and you can read my notes? Not on your life.’”

Top Democratic Senator Blasts Obama’s TPP Secrecy (Intercept)

Sen. Barbara Boxer, D-Calif., today blasted the secrecy shrouding the ongoing Trans-Pacific Partnership negotiations. “They said, well, it’s very transparent. Go down and look at it,” said Boxer on the floor of the Senate. “Let me tell you what you have to do to read this agreement. Follow this: you can only take a few of your staffers who happen to have a security clearance — because, God knows why, this is secure, this is classified. It has nothing to do with defense. It has nothing to do with going after ISIS.” Boxer, who has served in the House and Senate for 33 years, then described the restrictions under which members of Congress can look at the current TPP text.

“The guard says, ‘you can’t take notes.’ I said, ‘I can’t take notes?’” Boxer recalled. “‘Well, you can take notes, but have to give them back to me, and I’ll put them in a file.’ So I said: ‘Wait a minute. I’m going to take notes and then you’re going to take my notes away from me and then you’re going to have them in a file, and you can read my notes? Not on your life.’” Boxer noted at the start of her speech that she hoped opponents of the trade promotion authority bill — the so-called fast-track legislation required to advance the TPP — would be able to block the bill via a filibuster. Senate Majority Leader Mitch McConnell, R-Ky., is expected to file a motion to invoke cloture on the measure later this afternoon.

“Instead of standing in a corner, trying to figure out a way to bring a trade bill to the floor that doesn’t do anything for the middle class — that is held so secretively that you need to go down there and hand over your electronics and give up your right to take notes and bring them back to your office — they ought to come over here and figure out how to help the middle class,” Boxer said.

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We must see jail time now.

US Set to Rip Up UBS Libor Accord, Seek Conviction (Bloomberg)

The U.S. Justice Department is set to rip up its agreement not to prosecute UBS Group AG for rigging benchmark interest rates, according to a person familiar with the matter, taking a new step to hold banks accountable for repeat offenses. The move by the U.S. would be a first for the industry, making good on a March threat by a senior Justice Department official to revoke such agreements and putting banks on notice that these accords can be unwound if misconduct continues. UBS is among the five banks that are poised to reach settlements with U.S. regulators over allegations that they manipulated currency markets, people familiar with the situation have said.

Four of them – Citigroup, JPMorgan, Barclays and Royal Bank of Scotland – will likely enter pleas related to antitrust violations, people familiar with the talks have said. “This is basically a trade off,” said Andreas Venditti at Vontobel in Zurich. “They get leniency on foreign exchange and a lower fine and instead the Justice Department comes back with Libor.” UBS’s cooperation in the currency probe may help shield it from antitrust charges in that matter. However, the bank is still exposed to fraud charges in that case, and any admission of wrongdoing could also put it in violation of an earlier deal the Zurich-based bank struck with the Justice Department.

In a December 2012 non-prosecution agreement with the U.S. to resolve a worldwide investigation into the manipulation of the London interbank offered rate, or Libor, UBS promised not to commit crimes for two years. That agreement, which was set to expire last year, was extended through December as the Justice Department investigated currency rigging. As part of the currency settlements, which are set to be announced in coming days, UBS is expected to plead guilty to a charge stemming from the Libor agreement.

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QE becomes the snake that eats its tail.

No Respite In Selloff Of Low-Risk Bonds (Reuters)

Low-risk bonds sold off again on Tuesday driving down stocks and helping push the euro higher against the dollar. Ten-year U.S. Treasury yields, the benchmark for global borrowing costs, hit their highest since early December, while German 10-year yields added 8 basis points to 0.67%. Volatility in the bond markets weighed on stocks, adding to existing investor anxiety over the perilous state of Greece’s finances. Shares in Europe and followed Wall Street lower. “It’s a matter of concern for the market. When any particular asset class goes through periods of extreme volatility in a short space of time, people feel the pressure to take their risk exposure lower,” Ian Richards, global head of equities strategy at Exane BNP Paribas, said.

Less than a month ago German 10-year yields hit a record low of 0.05%, driven down by a €1 trillion ECB bond-purchase scheme intended to kick-start inflation. Traders, who struggle to fully explain the recent yield surge, blame it on a rise in inflation expectations, higher oil prices, and restricted liquidity, caused by ECB purchases, as investors sought to exit a crowded trade. “It’s clear that the market hasn’t stabilized. Before the sell-off started the common perception was one of low volatility. Now investors are more cautious, asking for a premium for the volatility we’ve seen recently,” said Jan von Gerich, chief fixed income analyst at Nordea.

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“For years, companies have been choosing [to outsourec labor], which reduces the requirement for capital in the West, thereby reducing the price of that capital.”

Everyone Looks in the Wrong Place for the Answer to Low Real Rates (Bloomberg)

Ben Bernanke and Larry Summers recently had a public discussion on global interest rates, which currently are exceptionally low, and whether or not secular stagnation—the idea that slow growth in the developed economies may be here to stay—is the culprit. They proved unable to agree on either the cause of, or a solution to, current low real rates. Bernanke, the former central banker, sees the problem as a global savings glut and the solution in monetary policy and structural reforms. Larry Summers, the former U.S. Treasury Secretary, suggests that if secular stagnation is the problem, the solution lies in expansionary fiscal policies. What if they’re both wrong?

In a column published in voxeu.org over the weekend, Toby Nangle, head of multi-asset allocation at Columbia Threadneedle Investments, suggests that current low real rates have little to do with central banks or fiscal policy. The problem is a much larger and longer trend than either Bernanke or Summers suggest and is due, according to Nangle, to the effects of globalization and the collapse of labor power in the West. At its simplest, Nangle’s thesis is that the supply of cheap, skilled labor from East Asia and former communist countries over the past few decades has meant that global labor costs have remained lower than they otherwise would have been. Globalization has meant that industry has had access to this alternative source of labor, which has massively reduced labor power to negotiate higher wages in the West.

[..] a large selection of people who are well-off in global terms—the Western working class—have not benefited at all from the past three decades of global growth. Access to a new reserve army of cheap global labor through globalization has encouraged companies to invest in this workforce rather than in capital at home. A garment company, for example, could chose to build a highly automated, capital-intensive factory in the U.S. or build a low-tech, high-labor factory in the Far East. For years, companies have been choosing the latter option, which reduces the requirement for capital in the West, thereby reducing the price of that capital. For labor-market pricing power to remain weak, the supply of excess labor has to remain strong. Labor market globalization is largely a China story, and there are signs that supply is now drying up.

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“Whenever a country increases its debt to GDP sharply over five years, in the next five years there’s a 70% chance of a financial crisis and 100% chance of a major economic slowdown..”

China Outlook Even Worse Than Imagined: Analyst (CNBC)

The worst of the Chinese economic slowdown is likely still ahead because of the nation’s debt, according to a senior Morgan Stanley investment strategist. “China, to try and sustain its growth rate in the post-financial-crisis era, has engaged in the largest credit binge of any emerging market in history,” said Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley Investment Management, Sharma, speaking Tuesday at the Global Private Equity Conference in Washington, D.C., predicted that the credit boom would cause problems. Whenever a country increases its debt to GDP sharply over five years, in the next five years there’s a 70% chance of a financial crisis and 100% chance of a major economic slowdown, according to Morgan Stanley research.

The Chinese government this week cut interest rates for the third time in six months because of projected 7% GDP growth this year, the lowest level in more than two decades. Sharma said the slow growth he forecast would be around 4% or 5% over the next five years, about half the rate of what it used to be. “If China follows this template, it really is payback time,” he said. Another speaker at the conference, former U.S. Gen. Wesley Clark, took a less grim view. “I’m not as worried about the buildup of debt in China as other countries,” the founder of Wesley Clark & Associates said. He cited two reasons. The renminbi is not fully convertible to other currencies, and the Chinese economy still has elements of central control.

“Every year people at these business conferences say the demise of the Chinese economy is coming very rapidly,” Clark added. “But it hasn’t happened. And President Xi is not going to let it happen if he can avoid it.” Another China bull, Robert Petty, managing partner and co-founder of Clearwater Capital Partners, said China can forestall its debt problems. “We believe the balance sheet of China absolutely has the capacity to do two things: term it out and kick the can down the road,” Petty said.

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“Within the EU there are a lot of financial funds which will continue to be available for Greece..”

EU Said to Consider Plan for Greece in Event of Euro Exit (Bloomberg)

Euro-area governments are considering putting together an aid package for Greece to cushion the country’s economy if it was forced out of the euro, according to two people familiar with the discussions. The Greek government doesn’t expect to need that help. Prime Minister Alexis Tsipras says he’s not considering leaving the currency bloc and is focused on getting the aid he needs to avoid a default. Even so, European officials are considering mechanisms to ring fence Greece both politically and economically in the event of a euro breakup, in order to shield the rest of the currency bloc from the fallout, one of the people said. “There is always a plan B,” Filippo Taddei, an economic adviser to Italian Prime Minister Matteo Renzi, said in an interview in Rome on Tuesday, without referring to the aid package specifically.

“But you have to ask yourself who has the ability to step in, in that event. And I think if you start making up a list you realize very quickly that that list is very short.” While euro-area finance ministers welcomed the progress Greece has made toward qualifying for more financial aid at a meeting in Brussels on Monday, policy makers are still concerned Tsipras may not be prepared to swallow the concessions necessary for a disbursement. Before any payment will be made, Greece has to submit a comprehensive program of economic reforms, win approval from its creditor institutions, secure the endorsement of euro-region finance ministers and then get past parliaments in Berlin and elsewhere. Greek Finance Minister Yanis Varoufakis said on Monday his country will run out of cash within a couple of weeks unless it gets help.

“Trying to pretend that economies as different as Germany and Greece can survive effectively under the same monetary umbrella has already been proven wrong and this is just going to be a long, long painful death for the Greek economy,” Richard Jeffrey at Cazenove Capital, said Monday. With Ukraine to the north of Greece ravaged by Russian-backed separatists and Libya to the south collapsing as rival militias fight for control, the German government has made it clear that leaving the euro wouldn’t jeopardize Greece’s place in the European Union. “Within the EU there are a lot of financial funds which will continue to be available for Greece,” Thomas Steffen, Germany’s chief negotiator with Greece within the euro area, said at an event in Berlin last week. “There is no reason to even contemplate that Greece would leave the European Union.”

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Squeeze your grandma!

Greece’s Creditors Said to Seek €3 Billion in Budget Cuts (Bloomberg)

Greece’s anti-austerity government needs to raise at least €3 billion through additional fiscal measures by the end of this year to meet the minimum budget targets acceptable by creditors, an official with knowledge of the discussions said. The reductions would bring the primary budget surplus in 2015 to just over 1% of gross domestic product, a target Greek Interior Minister Nikos Voutsis said today is acceptable. Without any change in fiscal policy, Greece would end 2015 with a budget deficit of about 0.5% of GDP, the official said. The so-called primary budget balance doesn’t include interest payments Greece, whose debt-to-GDP ratio is the highest in Europe, is locked in talks with euro region governments and the INF over the terms attached to its €240 billion bailout.

Uncertainty over whether it will do enough to receive more money has triggered a liquidity squeeze, prompting the European Commission to revise down deficit and debt forecasts last week. The commission now predicts the country’s debt will be 174% of GDP next year, 15 percentage points above the level projected in February. And that assumes Prime Minister Alexis Tsipras reaches a deal to get previously agreed aid flowing by June. The commission predicts that as defined in the bailout program there will be almost no surplus. Budget cuts aren’t the only thorny issue in the negotiations over the disbursement of the next emergency loans tranche for the cash-strapped economy.

Disagreements remain over the retirement age, pension cuts, privatizations and the government’s intention to reinstate collective bargaining restrictions in the labor market, the official said. As negotiations drag on, euro-area governments are considering putting together an aid package for Greece to cushion the economy in the event that it is forced out of the common currency, two people familiar with the discussions said yesterday. While the Greek government expects to remain in the euro, some officials are considering mechanisms to ring-fence Greece both politically and economically in the event of a breakup, one of the people said.

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“The Greek side has so far fully met everything the Feb. 20 Eurogroup decision foresaw. It has taken as many steps as possible towards the European partners’ side,” the official quoted Tsipras as telling his cabinet.

Greece Wants Action From Lenders (Reuters)

Greek Prime Minister Alexis Tsipras on Tuesday called on lenders to break an impasse in cash-for-reform talks after Athens had to resort to a temporary expedient to make a crucial payment to the IMF. Greek officials told Reuters they had emptied an IMF holding account to repay €750 million to the global lender on Monday, avoiding default but underscoring the dire state of the country’s finances. At his second cabinet meeting in three days, Tsipras told ministers Athens was sticking to its “red lines” and that it was time to see lenders meet Greece halfway, according to a government official. The official said Greece is still expecting a deal by the end of the month.

“The Greek side has so far fully met everything the Feb. 20 Eurogroup decision foresaw. It has taken as many steps as possible towards the European partners’ side,” the official quoted Tsipras as telling his cabinet. “It’s now our partners’ turn to make the necessary steps in order for them to prove in practice their respect towards the democratic popular mandate.” Earlier, Germany’s hardline finance minister Wolfgang Schaeuble said the negotiations’ tone had improved but not their substance, warning again that time was running out for Greece. “On the issues, progress in the talks is not comparable to the improvement in the atmosphere,” Schaeuble told reporters after a EU finance ministers’ meeting in Brussels.

Euro zone partners issued a lukewarm statement on Monday welcoming incremental progress in the talks but noting that more work was needed to narrow remaining gaps. Sources say these are mainly over pension and labor reforms and budget targets. The creditors are insisting Greece must adopt and begin implementing a full reform program before they will start releasing the last €7.2 billion from a bailout program that expires at the end of June.

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Interesting move.

Greece Tapped Reserves At IMF To Make Debt Repayment (Reuters)

Greece tapped emergency reserves in its holding account at the IMF to make a crucial €750 million debt payment to the Fund on Monday, two government officials said on Tuesday. With Athens close to running out of cash and a deal with its international creditors still elusive, there had been doubts whether the leftist-led government would pay the IMF or opt to save cash to pay salaries and pensions later this month. Member countries of the IMF have two accounts at the fund – one where their annual quotas are deposited and a holding account which may be used for emergencies. One official told Reuters that Athens used about €650 million from the holding account to make the payment.

“We made use of money in our holding account in the fund,” the official said, declining to be named. “The government also used about €100 million of its cash reserves.” Made a day early, the payment calmed immediate fears of a Greek default, but Finance Minister Yanis Varoufakis said on Monday the liquidity situation was “terribly urgent” and a deal to release further funds was needed in the next couple of weeks. A second Greek official said on Tuesday that the reserves the government tapped must be replenished in the IMF account in “several weeks.” Following legislative changes, Greece has meanwhile gathered €600 million of local government and other public entity money to help it deal with the cash crunch, the government’s spokesman said on Tuesday.

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It’s not as if Athens isn’t trying.

This Is How Greece Kept Its Budget On Track In Q1 (Macropolis)

Recent Greek budget data showed the huge revenue gap of €968 million recorded in January narrowed to €389 million by the end of the first quarter (Q1) of 2015. At the same time, primary expenditure, which was just €53 million better than target in January, displayed a strong outperformance of €1.18 billion by the end of March. The underlying primary balance (excluding the impact of Public Investment Budget), which is defined as revenues (before tax refunds) minus primary expenditure, showed the shortfall of 915 million euros recorded in January gradually reversed to an outperformance of €791 million by the end of March.

Another important point to take away is that revenues exceeded primary expenditure in all three months of Q1, with the underlying monthly primary surplus ranging between €240 and €845 million. This means that the collected revenues in each month are more than adequate for the payment of primary expenses (salaries, pensions, grants to social security sector and a large part of non-payroll costs). A closer look at the evolution of the key budget items reveals some instructive findings for the underlying trends that were recorded within Q1.

On the revenue front, the target for January was exceptionally high as it was initially due to include VAT revenues and the fifth installment of the single property tax (ENFIA). However, the negative impact from the pre-election period as well the postponement of the VAT payment by one month had a marked impact on the revenue underperformance of that month. VAT payments in February did not result to any significant revenue collection, with VAT revenues coming in 30% lower than those collected in January. However, February closed with a modest revenue outperformance of €91 million, mainly boosted by higher income tax month on month.

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German luxury car sales. Oh irony.

The Real Sign That Greece’s Financial Turmoil Is Getting Worse (Telegraph)

Here is a slightly surprising sign that Greece is in the classic throes of a bank run: car sales jumped by 47pc in April. It was the 20th consecutive month that car registrations of new and used vehicles has risen. People living in a country gripped by financial turmoil often worry about the security of their money. If it’s in a bank, it can be caught up in capital controls or lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car. This makes motor vehicle sales a decent proxy for financial turmoil (under some circumstances). Ordinary Greeks, many of whom are not wealthy enough to hold bank accounts outside of the country, are taking their money of the financial system and spending it on “hard” assets.

In December, when snap elections were called in Greece, monthly car registrations soared by nearly 70pc. Since then, bank desposits have shrunk by nearly 15pc of their total value. Another €7bn left the country in April alone. A similar phenomenon was observed during Russia’s financial meltdown late last year. The rouble’s crash resulted in many Russians scrambling to make “high-ticket” purchases, including four wheels. During Cyprus’s banking crisis in 2013, car registrations increased by nearly a third in 10 months. Many Cypriots rightly feared their unsecured deposits would be at risk from the “bail-ins” of the country’s biggest banks.

Cypriot consumers also chose to make their purchases in cash, rather than be tied to financing or hire-purchase deals. Despite depreciating in value quite quickly, cars are still a handy asset to own because they can be put to productive use – especially if the alternative is just stashing your money under a matress. In a strange irony of Greece’s woes, German industry is perversely one of the main beneficiaries of the country’s banking collapse. Greek consumers, like many of their fellow Europeans, buy German cars more than any other brand.

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Dmitry stays sharp.

America’s Achilles’ Heel (Dmitry Orlov)

Instead of collapsing quietly, the US has decided to pick a fight with Russia. It appears to have already lost the fight, but a question remains: How many more countries will the US manage to destroy before the reality of its inevitable defeat and disintegration finally catches up with it? As Putin said last summer when speaking at the Seliger youth forum, “I get the feeling that no matter what the Americans touch, they end up with Libya or Iraq.” Indeed, the Americans have been on a tear, destroying one country after another. Iraq has been dismembered, Libya is a no-go zone, Syria is a humanitarian disaster, Egypt is a military dictatorship executing a program of mass imprisonment.

The latest fiasco is Yemen, where the pro-American government was recently overthrown, and the American nationals who found themselves trapped there had to wait for the Russians and the Chinese to extract them and send them home. But it was the previous American foreign policy fiasco, in the Ukraine, which prompted the Russians, along with the Chinese, to signal that the US has taken a step too far, and that all further steps will result in automatic escalation. The Russian plan, along with China, India, and much of the rest of the world, is to prepare for war with the US, but to do everything possible to avoid it. Time is on their side, because with each passing day they become stronger while America grows weaker.

But while this process runs its course, America might “touch” a few more countries, turning them into a Libya or an Iraq. Is Greece next on the list? What about throwing under the bus the Baltic states (Estonia, Latvia, Lithuania), which are now NATO members (i.e., sacrificial lambs)? Estonia is a short drive from Russia’s second-largest city, St. Petersburg, it has a large Russian population, it has a majority-Russian capital city, and it has a rabidly anti-Russian government. Of those four facts, just one is incongruous. Is it being set up to self-destruct? Some Central Asian republics, in Russia’s ticklish underbelly, might be ripe for being “touched” too.

There is no question that the Americans will continue to try to create mischief around the world, “touching” vulnerable, exploitable countries, for as long as they can. But there is another question that deserves to be asked: Do the Americans “touch” themselves? Because if they do, then the next candidate for extreme makeover into a bombed-out wasteland might be the United States itself.

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But all they have left is words.

Central Banks Need To Talk A Lot Less And Act A Lot More (Satyajit Das)

Research confirms the increase in the length and complexity of the US Federal Reserve’s statements, parallelling the rise in the size of its balance sheet. Facing intractable problems and difficult choices, politicians have abnegated economic leadership to central bankers. With limited policy options available, central bankers have resorted to “forward guidance”: a tautology, as any guidance must be about future events. They now communicate commitments on future interest rates, liquidity provision or quantitative easing (QE) and currency values over a medium to long-term horizon. Forward guidance suffers from a number of weaknesses. Focus on any single or narrow set of indicators, such as unemployment or inflation, is not meaningful.

Forward guidance relies on the accuracy of central bank forecasts. Guidance is highly conditional. Central bankers have no “skin in the game” – their tenure or remuneration is not linked to outcomes. An unanticipated trigger event can lead to a sudden response or policy change. In January 2015, the Swiss National Bank’s decision to abandon its currency peg highlights the problem. It created volatility and uncertainty, precisely the opposite of the policy intention. Forward guidance increasingly confirms John Maynard Keynes’s fear that “confusion of thought and feeling leads to confusion of speech”. The Fed committed to keeping rates low until the unemployment rate fell below 6%. In early 2014, the Fed changed the unemployment target to a non-binding indicator.

In May 2014, the full-employment goal was changed to cover the “disadvantaged”, including long-term unemployed and workers forced to work part-time. The Bank of Japan and European Central Bank targeted 2% inflation, despite the fact that actual inflation was near zero and proving unresponsive to traditional policies. In March 2014, at her first press conference, the new chair, Janet Yellen, stated that the Fed would not increase interest rates for a “considerable time”. In December 2014, the Fed announced it would be “patient”. Now the word patient has been jettisoned, although Ms Yellen has warned that not being patient is not the same as being impatient.

European central bankers lead the world in policy linguistics. Mario Draghi’s July 2012 statement that the ECB would “do whatever it takes” is credited with stabilising money markets and reducing borrowing costs of eurozone countries without requiring any actual intervention. In October 2013 he was ready to consider all available instruments, a message repeated in November and again in December. In January 2014 he stated that he would take further decisive action if required. In February and March, despite the lack of actual initiatives, he again vowed to take further decisive action if required. In April and May, the ECB undertook to act swiftly if required. Forced finally to announce new measures in June 2014, Mr Draghi finished with a rhetorical flourish: “Are we finished? The answer is no.” By November, he was recycling 2012: “We must do what we must”.

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Beppe Grillo’s M5S has been targeting the EXPO madness for a long time.

What Does Milan Gain By Hosting Bloated Expo 2015 Extravaganza? (Guardian)

A four-storey high rug of twinkling LEDs proclaims the glories of Turkmenistan’s textile traditions above a rain-soaked scene, casting a pinkish glow across the golden arches of the neighbouring McDonald’s. Across the way, a half-finished Nepalese pagoda towers over a faceted glass dome of Belgian produce, while Russia thrusts a gargantuan mirrored canopy into the air, aggressively cocked like a missile next to Estonia’s wooden shed. A bugle call is the signal for a Korean marching band to strike up, trumpeting the arrival of the country’s futuristic white space-blob, just as an Argentinian drumming troop thunders into action next door.

Sprawling across 110 hectares on the outskirts of Milan, this crazed collage of undulating tents, tilting green walls and parametrically-contorted lumps can mean only one thing: Expo 2015, latest in a long and controversial tradition of “world’s fairs”, has landed. “We’ve tried to build a stage where all the actors can make their voices heard,” says its design director Matteo Gatto, fresh from touring the Italian prime minister and the pope (who has his own, relatively restrained, pavilion) around the frenzied fairground. And Gatto appears to have achieved his aim: the 140 participating countries and brand sponsors are screaming their presence at full volume.

In the centre of Milan, however, others have been making their voices heard in a different way. As the fair opened on May Day, thousands took to the streets to protest, while violent splinter groups smashed shopfronts and torched cars. “The Expo is a machine for burning public money,” said one protester, carrying a “No Expo” banner. “It promised to bring jobs and boost the economy, but it’s being run by voluntary labour and has wasted billions on pointless infrastructure.” “It claims to be a celebration of slow food, local agriculture and healthy eating,” added another activist, carrying an anti-globalisation placard. “Its official motto is Feeding the Planet, Energy for Life, but it is sponsored by corporate giants like Coca-Cola and McDonald’s. The whole thing is beyond a joke.”

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One more area in which the EU is entirely clueless. Expect total disaster.

Europe Prepares Plan To Fight Human-Traffickers (Spiegel)

EU leaders convened in Brussels in late April for an emergency summit on the refugee crisis, which came to a head over the course of a few weeks that saw thousands of migrants drown trying to cross the Mediterranean. Negligence on the part of EU member state governments was partly to blame for the tragedy, with the Italian coast guard left alone to cope with the problem. The various leaders assembled in Brussels were eager to take decisive action – and to identify an enemy. “We agreed that we need to tackle the traffickers’ pernicious business model at its roots,” said German Chancellor Angela Merkel. Military action could not be ruled out, including the destruction of boats used by smugglers. Federica Mogherini, the EU’s high representative for foreign affairs and security policy, was tasked with drawing up a proposal for an EU-led military operation.

Two weeks later, Mogherini briefed the UN Security Council on plans for a resolution authorizing the use of force. They amount to a declaration of war on human-trafficking, as evidenced by the fact that the draft paper was classified as top secret by the European External Action Service, the EU’s diplomatic service. It outlines full-scale military action in the Mediterranean and North Africa. The EU is clearly pinning its hopes on deterrence. Rather than considering accepting a greater number of asylum-seekers, aiming for their more even distribution throughout the bloc or drawing up a new refugee policy worthy of the name, the powers-that-be in Brussels are focusing on efforts to keep migrants away from EU shores. Yet there is no precedent for such an uncertain mission in the history of the EU’s Common Security and Defense Policy.

The 30-page “Crisis Management Concept” outlines how the EU should respond in the future. In order “to disrupt the business model of the smugglers,” “systematic efforts” are need “to identify, seize and destroy vessels and assets before they are used by smugglers.” The plan calls for EU soldiers to destroy smugglers’ boats before they can be used. It states that keeping these operations safe from armed militias through “robust force protection” will also be required, as will “special forces units,” satellite surveillance, landing craft and “boarding teams.” A map shows the ambitious scale of the planned area of operations. It suggests that the EU campaign will be focused on Libya’s territorial waters as well as parts of Egypt’s and Tunisia’s ports and dockyards in coastal areas. It also foresees task forces deployed inside Libya in a bid to smash trafficking networks.

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A March article, but still very relevant. This is how you kill a city.

How Struggling Families Are Being Forced Out of London (Vice)

When the housing benefit cap was announced in 2010, Boris Johnson said he would “not accept any kind of Kosovo-style social cleansing of London”, adding, “The last thing we want to have in our city is a situation such as Paris where the less well-off are pushed out to the suburbs.” Fast forward five years and everyone to the left of Boris has at some point bemoaned the ongoing social cleansing of the city. But who is actually being purged from London, and how do they feel about it? Sadly, the most under-reported aspect of the rapidly changing capital is the fate of the people who are being forced to leave it.

There was a flurry of headlines in 2012 and 2013 about London councils finding speculative locations for their homeless tenants in places like Stoke, Hastings, Birmingham and beyond. But it was always speculative: no-one has actually demonstrated how many people are being pushed out – until now. For the first time, VICE can confirm with hard facts what had always been the possibility of an exodus of London’s poor. It’s not an easy trend to measure, or give flesh to – quite simply, there is no London-wide monitoring system. But a data set gleaned from a series of FOI requests submitted by the Green Party over the last five years, seen exclusively by VICE, fleshes out some details on one of the most significant issues to be debated in the forthcoming election. [..]

In this substantial sample – which includes inner boroughs such as Camden, Lambeth and Kensington & Chelsea, as well as outer boroughs like Bromley and Merton – the number of families with children forced out of London rose from ten in the municipal year 2010/11, to 307 in 2013/14, and already stands at 364 for the current year, with several months’ worth of data still to come in. While the sample is incomplete, the pattern is clear: according to our data, over 35 times more families are having to move out of London this year compared to five years ago.

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“.. it’s possible that they will become more receptive to facts once they are in an environment without food, water, or oxygen..”

Earth Endangered by New Strain of Fact-Resistant Humans (Borowitz)

Scientists have discovered a powerful new strain of fact-resistant humans who are threatening the ability of Earth to sustain life, a sobering new study reports. The research, conducted by the University of Minnesota, identifies a virulent strain of humans who are virtually immune to any form of verifiable knowledge, leaving scientists at a loss as to how to combat them. “These humans appear to have all the faculties necessary to receive and process information,” Davis Logsdon, one of the scientists who contributed to the study, said. “And yet, somehow, they have developed defenses that, for all intents and purposes, have rendered those faculties totally inactive.” More worryingly, Logsdon said, “As facts have multiplied, their defenses against those facts have only grown more powerful.”

While scientists have no clear understanding of the mechanisms that prevent the fact-resistant humans from absorbing data, they theorize that the strain may have developed the ability to intercept and discard information en route from the auditory nerve to the brain. “The normal functions of human consciousness have been completely nullified,” Logsdon said. While reaffirming the gloomy assessments of the study, Logsdon held out hope that the threat of fact-resistant humans could be mitigated in the future. “Our research is very preliminary, but it’s possible that they will become more receptive to facts once they are in an environment without food, water, or oxygen,” he said.

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