May 192022
 


Jack Delano Diner along U.S. Highway No. 1 near Berwyn, Maryland 1940

 

The American Cause in Ukraine: Freedom or Empire? (Drake)
Western Leaders Tied To Ukraine Bioweapons Labs (Woltz)
Major NATO War Games Set to Begin Miles From Russian Base (LI)
Third of Global Population Killed in Next War Cycle – Charles Nenner (USAW)
Biden’s ‘Disinformation’ Clown Show ‘Paused,’ Scary Poppins Resigns (Celente)
Mortality Among White-Collar Workers Jumped 24% Between 2020 and 2021 (ET)
Gates, Fauci Funded Experiments on Bird Flu (Mercola)
Why Were So Many Adverse Events Reported as ‘Unrelated’ to Vaccine? (CHD)
Sussmann Is Receiving Every Consideration Denied To Flynn (Turley)
Juror Donations, Judge’s Family Ties At Sussmann Trial (JTN)
Clinton Campaign Lawyer Elias Testifies In 3rd Day Of Sussmann Trial (JTN)
Clintonworld Steps Away From Black Lives Matter (WE)
Elon Musk Announces He Will Vote Republican (JTN)
Twitter Wants to Close Deal ‘Promptly’ and on ‘Agreed Price’ (ET)
Half of President Biden’s Twitter Followers Are Fake (JTN)
Hunter Biden’s Hollywood Lawyer Teases Counter-offensive vs Trump Allies (CBS)

 

 

 

 

 

 

 

 

Important

 

 

More on abortion

 

 

“The Russian GDP declined by two-thirds from 1989 to 2000.”

The American Cause in Ukraine: Freedom or Empire? (Drake)

On the principle that historical analysis requires an attempt to understand the motives of all sides in a war, the Russian argument deserves a fair hearing. Roy Medvedev, one of Russia’s most distinguished historians and long a supporter of Vladimir Putin, gave an interview on March 2, 2022, to the Corriere della Sera. The ninety-six-year-old Medvedev succinctly expressed the Kremlin view of the Ukraine crisis as a clash involving far more than Putin’s concern about NATO expansion to his country’s borders. The metastasizing of NATO illustrated but did not define for Russia the fundamental issue, which had to do with the failure of America to understand that the unipolar moment of its rules-based order had ended. The time had come for a paradigm shift in international relations.

As an example of the American hegemony’s failures, Medvedev commented on the effects of Washington’s supervisory role in Russia’s transition to capitalism. He was referring to the misery befalling Russia at Cold War’s end and astringently described by the Nobel Prize-winning Columbia University economist Joseph Stiglitz in Globalization and Its Discontents (2002). In general, Stiglitz could find nothing moral or competent in the way globalization had been imposed upon the world by the International Monetary Fund, the World Bank, and the U.S. Treasury Department. Globalization had turned into an enrichment scheme for international elites implementing and benefitting from the neoliberal Washington Consensus.

When Stiglitz came to discuss the Russian economy’s American-led post-Cold War reconfiguration, which evolved along lines pleasing to the Chicago School of true-believing free-market capitalists, he showed in copious detail what Medvedev was alluding to in his interview with Italy’s leading newspaper. This crash course in free market economics had produced a harrowing increase in the nation’s poverty. The Russian GDP declined by two-thirds from 1989 to 2000.The standard of living and life expectancy fell while the number of people in poverty rose. Levels of inequality grew as oligarchs took advantage of insider information to strip the country of its assets, which they invested not in Russia, but in the U.S. Stock Market. Billions of dollars poured out of the country along with a swelling emigration of talented and educated young people who could see no future for themselves there.

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“Why are these top Western military leaders running dangerous (and illegal) bioweapons operation in Ukraine?”

Western Leaders Tied To Ukraine Bioweapons Labs (Woltz)

A military officer’s oath is for life, so one could rightly suspect that the crapstorm Trudeau’s Trevor Cadieu, The Biden Crime family’s, Admiral Eric Thor Olson, and BoJo’s LTC John Bailey just stirred up, was with their consent. Numerous headlines read, “U.S. Admiral Surrenders to Russia in Mariupol, Ukraine.” What they missed is that U.S. Lt. Gen. Roger Cloutier was also captured at Azovstal and is now headed for Moscow to be put on trial as an international terrorist as well. “Reports have been circulating much of today (Sunday, May 15, 2022) claiming that a U.S. Military Commander surrendered to Russian forces from the Azovstal Steel Mill in Mariupol, Ukraine.”

Not to be outdone in international Bioweapons Crimes against humanity, Boris Johnson’s lad, British Lieutenant Colonel, John Bailey—and four NATO military instructors—also surrendered to the Russian troops Sunday past from the depths of the Neo-Nazi tunnels beneath Azov Steel (Azovstal). There is also news of other officers still hiding in the tunnels under Azovstal—along with an estimated 600 Ukraine Neo-Nazis who can expect less cordial treatment by the Russian courts than the western brass. Russian tribunals will hold them responsible for the 14,000 dead Russian-speaking souls in Eastern Ukraine murdered by these men since 2014. Why are these top Western military leaders running dangerous (and illegal) bioweapons operation in Ukraine? I think the question answers itself.

The World Economic Forum’s ‘Great Reset’ glommed onto by the Bidens, the Trudeaus, the Johnsons, the Morrisons Down Under, Ardern in Kiwiland—as well as the Brussels crew in Europe—are losing. Their pandemic was not only ineffective in killing most of ‘us’ (so far) but their dirty bomb plot/bioweapons release from Ukraine planned for March 8th of this year was also a dud.

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“A flurry of additional war games are planned for Germany, Finland, Poland and elsewhere in the coming months.”

Major NATO War Games Set to Begin Miles From Russian Base (LI)

The North Atlantic Treaty Organization will soon conduct large-scale exercises in the Baltics, with thousands of troops from more than a dozen nations set to take part in war games just 40 miles from the nearest Russian military base. Dubbed “Hedgehog,” the drills will kick off later this week in Estonia and run until June 3, meant to simulate a Russian invasion. They will involve 15,000 troops from 14 countries – including the United States, Britain, Denmark, Estonia, Iceland, Latvia, Lithuania, the Netherlands and Norway, as well as non-NATO members Ukraine, Georgia, Sweden and Finland.

According to Major General Veiko-Vello Palm, deputy commander of the Estonian Defence Forces, the exercise will take place just 40 miles from a Russian military base, a facility hosting Moscow’s 76th Guards Air Assault Division in the border city of Pskov. The size of the war games – among the largest in the Baltics since the fall of the USSR – their proximity to the Russian border, and the inclusion of non-NATO states are likely to escalate tensions with Moscow. Though the exercises were planned before Russia’s invasion of Ukraine in February, they will no doubt serve as an additional show of force as NATO members flood the Ukrainian battlefield with billions of dollars in weapons and gear.

The drills come as US lawmakers move ahead on a massive $40 billion aid package for Kiev, around half of which will be devoted to arms shipments. That bill follows more than $14 billion in aid already delivered or authorized by the US government. The Hedgehog exercise will also overlap with two major NATO and allied military drills currently being held in the region, “Defender Europe” and “Swift Response,” which together involve around 18,000 soldiers from 20 countries. A flurry of additional war games are planned for Germany, Finland, Poland and elsewhere in the coming months.

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“There was a Jewish prophet that once said, ‘The last war is going to take 8 minutes.’

Third of Global Population Killed in Next War Cycle – Charles Nenner (USAW)

Renowned geopolitical and financial cycle expert Charles Nenner says his analysis shows the world will start a huge war cycle by 2023. This type of war is similar to WWII but much bigger. Nenner explains, “The cycle work I do on wars starts at the Mandarin Empire 3,000 years before Jesus came into this world. The long cycle only picks up the big wars. Wars in Korea and Iraq do not show up. So, I say the big War Cycle is up, and this is going to be a big war because the small ones don’t even show up. So, I am very worried. . . . There was a Jewish prophet that once said, ‘The last war is going to take 8 minutes.’ Nobody took this serious because how can a war last 8 minutes? Now we have an idea why a war can only take 8 minutes.

Things could calm down in the short term this summer. Then, next year, it can start full force again, and the whole thing is very dangerous.” How many casualties will there be in the next world war? Nenner estimates, “It’s very interesting how you calculate something like that. It’s the same way you calculate a cycle in IBM. When you see IBM going down, you can get an upside price target, which we have. You can do the same thing on the war cycle. About one third of the population is not going to survive in this world.” So, more than 2.5 billion people are going to die in the next world war that is just around the corner? Nenner says, “Yes, the numbers say if you have a world war, it’s going to take out 1/3 of the population.”

On the financial front, Nenner says, “There is a catastrophe going on in bonds. They lost their capital and are not going to get it back. It’s the same thing that is happening in stocks.” Nenner advised to get out of both the bond and stock markets at the beginning of the year, and he was on target. Nenner predicts it’s going to get worse for stocks and bonds. Nenner says the next downside target is “15,000 on the DOW,” and it will eventually hit around “5,000 on the DOW.”

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A clown show indeed. Straight from Zelensky’s PR team.

Biden’s ‘Disinformation’ Clown Show ‘Paused,’ Scary Poppins Resigns (Celente)

Nina Jankowicz, the so-called disinformation ‘expert’ that was to lead President Joe Biden’s Disinformation Governance Board said in a statement that she was resigning from her post and that the entire project was “paused.” “With the board’s work paused and its future uncertain, and I have decided to leave DHS (the Department of Homeland Security) to return to my work in the public sphere,” she said in a statement obtained by a reporter for the Wall Street Journal. “It is deeply disappointing that mischaracterizations of the board became a distraction from the department’s vital work, and indeed, along with recent events globally and nationally, embodies why it is necessary.”

The Trends Journal was an outspoken critic of the board and Jankowicz’s position due to her her history of extreme views. Her past roles included stints at the Wilson Center and advising the Ukrainian Foreign Ministry (as part of the Fulbright-Clinton Public Policy Fellowship), according to Zerohedge.com. She also directed Russia and Belarus programs at the National Democratic Institute. Jankowicz did her best to discredit the Hunter Biden laptop as “Russian Disinformation” in the days and weeks before the 2020 Presidential election, according to Fox News. At one point she called it a “fairy-tale” of disinformation. She also called it a “Trump Campaign Product.” It has since been proved as authentic. If the media had reported on the laptop honestly, it likely would have severely damaged Joe Biden.

In 2020, she pushed for Twitter to go further in banning political criticism of Biden’s campaign; she said at the time that she “shudders to think about if free speech absolutists were taking over more platforms, what that would look like for the marginalized communities.” DHS told The Trends Journal that the board’s work protects free speech, civil rights, civil liberties, and privacy. “It was intended to ensure coordination across the Department’s component agencies as they protect Americans from disinformation that threatens the homeland – including malicious efforts spread by foreign adversaries, human traffickers, and transnational criminal organizations,” a spokesperson said. “The Board has been grossly and intentionally mischaracterized: it was never about censorship or policing speech in any manner. It was designed to ensure we fulfill our mission to protect the homeland, while protecting core Constitutional rights.”

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And the life insurance people are the only ones worried enough to investigate?!

Mortality Among White-Collar Workers Jumped 24% Between 2020 and 2021 (ET)

The increase in deaths not attributed to COVID-19 in the working-age population during the summer and into the fall of last year affected white-collar workers more than blue- and grey-collar employees, according to life insurance data. In the white-collar sector, mortality jumped 24 percent in the period covered by the data (April 2020–September 2021); less than 64 percent of those were attributed to COVID-19. Among blue-collar workers, mortality rose 19 percent, of which over 80 percent was attributed to COVID-19. As The Epoch Times previously reported, prime-age mortality was particularly elevated in the 12 months ending in October 2021, where there was an excess death spike of more than 40 percent in ages 18–49, compared with the same period in 2018–2019, based on death certificate data from the CDC.

The majority of the excess deaths weren’t attributed to COVID-19. A recent study by the Society of Actuaries, an international professional organization, corroborates the CDC data. It relies on a survey of group term life insurance providers that yielded data on claims made from 2017 to 2021 and reported to insurers by Sept. 30, 2021. The life insurance data show an increase in excess mortality since the second quarter of 2020, along with the COVID-19 pandemic, including a particularly sharp increase in the third quarter of 2021—39 percent above what would have been expected based on 2017–2019 data. That quarter was exceptionally devastating for age groups 25–34, 35–44, 45–54, and 55–64, in which mortality soared 81 percent, 117 percent, 108 percent, and 70 percent, respectively, above the baseline.

Deaths attributed to COVID-19 accounted for about three-quarters of the excess mortality during the 18 months reviewed in the study. But among those under the age of 45, COVID-19 accounted for less than 38 percent of the excess deaths, the study says. Among industries with the largest number of COVID-19 deaths, the worst hit was public administration with nearly 13,000 life insurance claims related to the disease. Yet those only accounted for less than 52 percent of the sector’s excess mortality.

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Get rid of them before they can do more damage.

Gates, Fauci Funded Experiments on Bird Flu (Mercola)

As news of the COVID pandemic winds down around the world, we’re suddenly seeing warnings of another pandemic brewing — bird flu, aka avian influenza (H5N1). In a March 30 CenterPoint interview, former Director for the U.S. Centers for Disease Control and Prevention, Dr. Robert Redfield, stated: “I believe the great pandemic still in the future, and that’s going to be a bird flu pandemic for man. It’s going to have significant mortality in the 10 to 50% range. It’s going to be trouble.” Anyone who knows a little about bird flu is likely to wonder where Redfield and other “experts” are getting their predictions from, as natural bird flu is notoriously harmless to humans. In early April, news of a highly pathogenic bird flu ripping through chicken and turkey flocks in the U.S., triggering the slaughter of millions of these animals, was reported.

Historically, however, the bird flu has never posed a threat to mankind — that is until scientists started tinkering with it, creating a hybrid with human pandemic potential. As reported by Alexis Baden-Mayer, political director for the Organic Consumers Association: “H5N1 kills more than half of the people who get it, but H5N1 has circled the globe for decades and there have only ever been 860 human infections worldwide. … “H5N1 isn’t transmitted person-to-person … There are no food safety risks associated with H5N1. If farm workers and meat packers don’t get bird flu in filthy factory farms or slaughterhouses, it’s no surprise the rest of us don’t get bird flu from eating raw eggs or handling raw chicken.” Despite that, the U.S. and other countries have already started stockpiling H5N1 vaccine, and the H5N1 vaccine Audenz is being marketed “for 2022.”

The approval for this vaccine was granted by the U.S. Food and Drug Administration in January 2020, followed by supplemental approval in 2021. As if on cue, the first-ever H5N1-positive case was identified in the U.S. at the end of April. By the looks of it, the only way human bird flu would appear would be if it was created, and wouldn’t you know it, Dr. Anthony Fauci, Director of the National Institutes of Allergy and Infectious Diseases has funded gain of function research with the intention to make H5N1 transmissible to humans, as has global vaccine profiteer Bill Gates, Baden-Mayer notes. Some of that research has been undertaken in Pentagon-funded biolabs in Ukraine. For more details on this, be sure to read Baden-Mayer’s extensive article.

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Is that a question?

Why Were So Many Adverse Events Reported as ‘Unrelated’ to Vaccine? (CHD)

The latest release of Pfizer-BioNTech COVID-19 vaccine documents raises questions about how frequently adverse events experienced by clinical trial participants were reported as “unrelated” to the vaccine. The 80,000-page document cache released May 2 by the U.S. Food and Drug Administration (FDA) includes an extensive set of Case Report Forms (CRFs) from Pfizer trials conducted at various locations in the U.S. The documents also include the “third interim report” from BioNTech’s trials conducted in Germany (accompanied by a synopsis of this report and a database of adverse events from this particular set of trials).

The FDA released the documents, which pertain to the Emergency Use Authorization (EUA) of the vaccine, as part of a court-ordered disclosure schedule stemming from an expedited Freedom of Information Act (FOIA) request filed in August 2021. Public Health and Medical Professionals for Transparency, a group of doctors and public health professionals, submitted the FOIA request. Pfizer conducted a series of vaccine trials at various locations in the U.S., including the New York University Langone Health Center, Rochester Clinical Research and Rochester General Hospital (Rochester, New York) and the J. Lewis Research, Inc. Foothill Family Clinic (Salt Lake City, Utah).

The Pfizer documents released this month by the FDA included a series of CRFs for patients who suffered some type of adverse event during their participation in the COVID-19 vaccine trials. As the documents reveal, despite the occurrence of a wide range of symptoms, including serious cardiovascular events, almost none were identified as being “related” to the vaccine. [..] The extant body of evidence indicates Pfizer “is hiding critical information from regulators,” Setty said: “The clincher is in the memorandum to the VRBPAC [Vaccines and Related Biological Products Advisory Committee] (Table 2, efficacy populations), where they show us that five times more people in the vaccine group were pulled out of the trial than the placebo within seven days of their second shot for ‘important protocol deviations.’

“In a trial that big the chances that could have happened coincidentally is infinitesimally small (less than 1 in 100,000). “Moreover, months later, the same thing happened in the pediatric trial (Table 12). This time, six times more children were pulled from the trial after their second dose. “There are, of course, procedural differences when administering a placebo versus the mRNA vaccine, but why didn’t it happen after the first dose as well? “Mathematically, that is about as close as you can get to eliminating any ‘shadow of doubt.’ With a formal allegation by a trial coordinator that states the same thing [referring to whistleblower Brook Jackson], we can be assured Pfizer is hiding critical information from regulators.”

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The US cannot afford two separate justice systems.

Sussmann Is Receiving Every Consideration Denied To Flynn (Turley)

Sussman’s trial for allegedly lying to the FBI is being heard in the same District of Columbia federal courthouse where former Trump national security adviser Michael Flynn and others faced the very same charge brought by another special counsel. The cases, however, could not be more different. Whereas Flynn’s prosecution was a no-holds-barred affair, Sussmann’s prosecution has been undermined by a series of unfavorable rulings by the court. Special prosecutor John Durham still may be able to eke out a conviction, but the difference in the treatment of Trump and Clinton associates is striking.

Sussmann is charged under 18 U.S.C. 1001 with lying to the FBI during a meeting with then-FBI general counsel James Baker when he came forward with what he claimed was evidence of possible covert communications between the Trump organization and Alfa, a Russian bank. Sussmann allegedly concealed that he was representing the Clinton campaign, which he billed for his efforts. Shaw told the jury that the FBI “should not be used as a political tool for anyone – not Republicans. Not Democrats. Not anyone.” She then added that the jurors themselves should not use this trial for their own political judgments. Looking at the jury box, one can understand Shaw’s unease. During jury selection, one juror admitted he was a Clinton donor and could only promise to “strive for impartiality as best I can.”

Prosecutors objected to his being seated, but Judge Christopher Cooper overruled them. In another exchange, a former bartender and donor to far-left Rep. Alexandria Ocasio-Cortez (D-N.Y.) was told by a Sussmann defense lawyer that neither Clinton nor Trump were on trial and then asked if she could be impartial. She responded, “Yes, knowing that” — which might suggest she would not be impartial if the campaigns were part of the trial. Other jurors include a woman who said she thought she was a Clinton donor but could not remember; a juror whose husband worked for the Clinton 2008 campaign; and a juror who believes the legal system is racist and police departments should be defunded.

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You can’t have a fair trial in DC.

Juror Donations, Judge’s Family Ties At Sussmann Trial (JTN)

The trial for 2016 Hillary Clinton presidential campaign lawyer Michael Sussmann this week in Washington, D.C., highlights the left-leaning of the nation’s capital — with as many as three jurors reportedly having donated to the Clinton campaign. A fourth juror on the 12-member panel supported New York Democratic Rep. Alexandria Ocasio Cortez, according to the New York Post. In addition, presiding federal judge Christopher Cooper says he and Sussmann were “professional acquaintances” while at the Justice Department in the 1990s. And the judge’s wife represents former FBI lawyer Lisa Page. Page exchanged text messages critical of then-GOP presidential candidate Donald Trump during the 2016 campaign with then-FBI agent Peter Strzok, with whom she was having an extra-marital affair.


The District of Columbia votes overwhelmingly for Democratic candidates, with Democrats outnumbering Republican voters 76.5% to 5.4%, according to the most recent figures from the city’s Board of Elections. In 2016, D.C. voters favored Clinton over Trump, 90.9% to 4.1%. Special Counsel John Durham’s team objected to putting one Clinton donor on the jury after the man said he would “strive for impartiality as best I can,” the Post also reported. However, the prosecutors were overruled by Cooper, of the U.S. District Court for the District of Columbia, who said the Clinton supporter “expressed a high degree of confidence” that he wouldn’t be biased.

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Elias is the leader. No. 1 lawyer for both Hillary AND BLM.

Clinton Campaign Lawyer Elias Testifies In 3rd Day Of Sussmann Trial (JTN)

Marc Elias, a top 2016 Hillary Clinton campaign attorney, began his testimony late Wednesday morning in the federal case against fellow and former campaign attorney and law firm partner Michael Sussmann – as the prosecution laid its groundwork for further questions about the firm’s relationship with opposition research firm Fusion GPS. Special counsel John Durham has charged Sussmann with lying to the FBI, alleging that in 2016, weeks before the presidential election, he pitched the FBI the Trump-Russia collusion plot without disclosing he was working for stakeholder clients, suggesting instead he was there as a good citizen. Sussmann provided evidence at the meeting that purported to prove communications between the Trump Organization and Russia’s Afla Bank, a back channel to the Kremlin.

Elias at the time was general counsel for the Clinton campaign and a partner with Sussmann at the Perkins Coie law firm. Before the court recess Wednesday, the prosecution established through Elias’ testimony that he had hired Fusion GPS for the Clinton campaign in spring 2016, when it looked like then-presidential candidate Donald Trump would become the GOP nominee. Elias said that he had weekly in-person meetings with the firm and daily check-ins over the phone regarding its efforts and progress. Most of what Fusion GPS focused on for the Clinton campaign was Trump-related litigation. The prosecution asked Elias who knew of the relationship between Fusion GPS and the Clinton campaign.

Elias explained that it was largely on a need-to-know basis so as to prevent people in the campaign from reaching out to Fusion GPS without having attorney-client privilege and to prevent leaks on the law firm side from getting out to the public that would hurt the client. Prosecutor Andrew DeFilippis also asked Elias about how Perkins Coie’s clients were billed, setting up a framework for later questioning regarding Sussmann’s purported billing of the Clinton campaign for his meeting with the FBI. The prosecution on Tuesday night had a listed at least five witnesses it intends to bring to the stand Wednesday – including Elias, fellow Clinton campaign lawyer Debbie Fine and Fusion GPS computer researcher Laura Seago.

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Whaddaya know? There’s Elias again. The rats and the sinking ship.

BLM raised $90 million, and spent $60 million?!

Clintonworld Steps Away From Black Lives Matter (WE)

Marc Elias and Minyon Moore, two longtime allies of Bill and Hillary Clinton who recently took up key roles with the national Black Lives Matter group, relinquished top spots with the embattled organization, according to new records filed just days before the group reveals what it did with the $90 million it raised in 2020. The Black Lives Matter Global Network Foundation revealed in February that the Elias Law Group, Elias’s namesake law firm, had taken control of its books and finances. But Elias Law Group is nowhere to be found in BLM’s latest registration filings submitted to Florida and Oklahoma on April 28, according to records obtained by the Washington Examiner.

While the new records show the Elias Law Group is no longer in control of BLM’s books, whatever continued involvement Elias’s firm may have with the embattled charity remains a mystery. The Elias Law Group declined to provide an on-the-record comment to the Washington Examiner. The Elias Law Group’s absence from BLM’s Florida and Oklahoma registrations submitted on the eve of the charity’s financial disclosure is telling, said Tom Anderson, the director of the Government Integrity Project at the National Legal and Policy Center watchdog group. “It is important to note the Elias Law Group is a firm with a laser focus on electing Democrats and pushing the progressive agenda,” Anderson told the Washington Examiner.

“This makes their disappearance from the latest BLM Global Network Foundation filings a pivotal moment, probably foreshadowing the total collapse of what is left of the organization.” BLM had disclosed in February that Elias’s law firm had taken control of its books and Moore had joined its board of directors. The filings were made public about two weeks after the BLM shut off its online fundraising streams amid legal threats from California and Washington over the charity’s lack of financial transparency. [..] Elias is best known for his funding of British ex-spy Christopher Steele’s discredited anti-Trump dossier while he served as Hillary Clinton’s 2016 campaign general counsel, and he is expected to be called by special counsel John Durham to testify at the false statements trial of his former Perkins Coie law firm colleague, Michael Sussmann, which begins [this] week.

Zuby
https://twitter.com/i/status/1526982406586224642

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“The dirty tricks attacks will be next-level.”

Elon Musk Announces He Will Vote Republican (JTN)

The world’s richest man, Elon Musk, on Wednesday announced he will vote Republican due to the “hate” in the Democratic Party. “In the past I voted Democrat, because they were (mostly) the kindness party,” Musk tweeted. “But they have become the party of division & hate, so I can no longer support them and will vote Republican,” he wrote. “Now, watch their dirty tricks campaign against me unfold …” Several hours before making the announcement, Musk posted, “Political attacks on me will escalate dramatically in coming months.” He followed up, “The dirty tricks attacks will be next-level.”

Musk secured a deal to purchase Twitter last month, in a move he says is intended to defend freedom of speech. The Tesla CEO has since said the deal is on hold pending the release of details about fake accounts on the platform. Some Twitter employees are upset with Musk’s possible acquisition of the platform. A video surfaced Tuesday from Project Veritas showing a Twitter executive mocking Musk’s Aspergers and support for free speech.

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No chance anymore.

Twitter Wants to Close Deal ‘Promptly’ and on ‘Agreed Price’ (ET)

Twitter announced Tuesday that it was filing a preliminary proxy statement with the U.S. Securities and Exchange Commission (SEC) in order to complete the Elon Musk buyout “on the agreed price,” and as “promptly as practicable.” Twitter wants the $54.20 per share in cash deal with Musk to go through, while the billionaire is hesitant following allegations that the social media platform is rife with spam or bot accounts. “The preliminary proxy statement contains important information including the background of, and reasons for, Twitter’s transaction with Mr. Musk,” the company said in a statement, adding that it expects the deal to close in 2022. Moreover, Twitter encouraged shareholders to vote in favor of the deal in the preliminary proxy statement.


The board of directors unanimously “determined that the merger agreement is advisable,” and that it is “in the best interests of Twitter and its stockholders.” Meanwhile, Musk has called on the SEC to investigate the actual number of users on the network. “Hello @SECGov, anyone home?” Musk wrote in a Twitter post on May 17 as a response to a suggestion for the regulatory authority to look into Twitter’s claims regarding the number of users. As the uncertainties continue, the stock price has fallen from $46.09 last Wednesday to close at $38.32 Tuesday, a decrease of over 16.8 percent.

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Q: Could or should Musk have known this when he made his offer? But also: did Twitter know?

Half of President Biden’s Twitter Followers Are Fake (JTN)

Nearly half of President Biden’s 22.2 million Twitter followers are fake accounts, according to an audit tool by software company SparkToro. Newsweek reports that the tool found that 49.3% of accounts following the U.S. president are fake followers based on a number of factors, including how recently the accounts were established, location issues and lack of profile images. The tool defines fake accounts as “accounts that are unreachable and will not see the account’s tweets (either because they’re spam, bots, propaganda, etc. or because they’re no longer active on Twitter).” Elon Musk, who is in the middle of attempting to purchase Twitter, says the deal cannot move forward until there is a better understanding of the number of fake accounts on the site.


If a crackdown on fake and bot accounts is ultimately implemented, the official @POTUS account could lose an enormous numbers of followers. On Tuesday, Musk said that the number of fake accounts on Twitter was close to 20%, four times what Twitter claims,” he wrote, and “could be *much* higher.” “My offer was based on Twitter’s [Security and Exchange Commission] filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does,” he wrote. The Tesla CEO and current Twitter CEO, Parag Agrawal, traded some tweets Monday about the issue.

“We suspend over half a million spam accounts every day, usually before any of you even see them on Twitter,” Agrawal posted. “We also lock millions of accounts each week that we suspect may be spam, if they can’t pass human verification challenges (captchas, phone verification, etc).” The Twitter CEO said that the company estimates each quarter that less than 5% of monetizable daily active users are spam accounts. Musk first responded to Agrawal’s lengthy thread with an excrement emoji, and then wrote, “So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter.”

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Q: How does Hunter pay “a team of more than 30 lawyers and investigators..?” That sounds costly.

Hunter Biden’s Hollywood Lawyer Teases Counter-offensive vs Trump Allies (CBS)

The Hollywood lawyer working with Hunter Biden has recruited a team of more than 30 lawyers and investigators to probe the backstory of how a laptop containing years of personal and intimate emails and business records found its way to news reporters and authorities. The effort led by Kevin Morris, a maverick entertainment lawyer best known for crafting a 9-figure deal for the creators of the animated series “South Park,” appears to be part of an attempt to blunt the impact of an ongoing federal investigation into Hunter Biden’s tax records and business dealings. Morris and his team have been circulating provocative slides that tease a coming counter-narrative to political attacks against the president’s son.

An ongoing Republican-led investigation into Hunter Biden’s overseas business dealings is widely expected to escalate if the party takes control of the House or Senate and gains subpoena power. Republicans say the investigation aims to determine if Hunter Biden’s work created any conflicts for his father as a U.S. senator, vice president or presidential candidate. Both Hunter Biden and his father have maintained that they never communicated about the younger Biden’s business dealings, which included service on the board of a Ukrainian energy firm and dealmaking in China — work that has drawn scrutiny for the past several years.

Morris’s team includes investigators on the ground in Delaware, attorneys in multiple states, and forensic analysts who are attempting to determine if malicious content was added to Hunter Biden’s laptop — which has become the source of investigative reports and political attacks targeting the president’s son. But at least initially, the effort appears less focused on the content of the laptop than on how it surfaced in the first place. Based on Morris’ slides, several of which were viewed by CBS News, the attorney’s team of investigators is attempting to re-trace the path of Biden’s laptop and determine how it passed through the hands of the Bidens’ political opponents. Much remains unknown about how the younger Biden’s personal computer and its contents became public.

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Nov 122014
 
 November 12, 2014  Posted by at 12:28 pm Finance Tagged with: , , , , , , , , , , , ,  3 Responses »


Ben Shahn L.F. Kitts general store in Maynardville, Tennessee Oct 1935

What the Economy Has Done to the Family (Bloomberg)
Full-Time Employee Jobs Account For Only 1 In 40 Created Since 2008 (Guardian)
US Cities Struggle to Recover From Recession (Bloomberg)
QE Isn’t Dying, It’s Morphing (Nomi Prins)
A Few Central Bankers and Money Managers Get It, Yellen and Kuroda Don’t (Lee Adler)
It’s The 0.01% Who Are Really Getting Ahead In America (Economist)
In New Oil Order, OPEC’s Choice Is Pricing Power or Sales (Bloomberg)
Shale Boom Masks Multiple Threats to World Oil Supply (Bloomberg)
Low Oil Prices To Bite Into 2015 US Shale Growth: IEA (Reuters)
Fossil Fuels With $550 Billion in Subsidy Hurt Renewables (Bloomberg)
Record Exports of Cheap Chinese Steel May Spark Trade War (Bloomberg)
Japan Snap-Election Potential Looms, Abenomics at Risk as Growth Stalls (Bloomberg)
Junk Bond Risks Escalate With Leverage Back to ’08 Levels (Bloomberg)
Banks to Pay $3.3 Billion in FX-Manipulation Probe (Bloomberg)
Leverage Up To 50-1 Lures Mom-and-Pop FX Traders Who Mostly Lose (Bloomberg)
Environmentalists Sue To Protect Whales, Dolphins From Navy War Games (Fox)
Sinking Jakarta Starts Building Giant Wall as Sea Rises (Bloomberg)

It’s hard to see how the loss of familes can not be detrimental to human society.

What the Economy Has Done to the Family (Bloomberg)

It could be a future diorama at New York’s Museum of Natural History: A human male and female who not only got married, but stayed married. Divorce among 50-somethings has doubled since 1990. One in five adults have never married, up from one in ten 30 years ago. In all, a majority of American adults are now single, government data show, including the mothers of two out of every five newborns. These trends are often blamed on feminists or gay rights activists or hippies, who’ve somehow found a way to make Americans reject tradition. But the last several years showed a different powerful force changing families: the economy. The effects of the Great Recession on families are hard to ignore. Births and marriages have plunged, as millions of millennials skip or delay starting traditional families. The economic uncertainty of the downturn dismantled job security which, in turned, ripped up many wedding plans.

Families that have made unconventional arrangements are the most financially fragile. An Allianz survey of 4,500 Americans included an extra sample of families outside the historical norm, including single parents, same-sex couples and blended families. These “modern families” were less financially secure than traditional families, the study found. They were 50% more likely to have unexpectedly lost their main form of income – and twice as likely to have declared bankruptcy. Rocky times rearrange plans and priorities. When women in their early 20’s face an economy with high unemployment, for example, they tend to have fewer children. The spike in unemployment starting in 2008 should result in 9.2 million young women giving birth to 430,000 fewer babies over their lifetimes, according to a 2014 National Academy of Science study.

Why would more unemployment mean fewer babies? When asked what they’d like in a potential spouse, single men’s top answer is “similar ideas about having and raising children,” a Pew Research survey found in September. But when women were asked, 78% said they wanted a spouse with “a steady job.”A man with a steady job is harder to find. Since the 1970s, men have been holding jobs for shorter and shorter periods of time. Women’s average job tenure hasn’t fallen, but that’s only because so many more joined the workforce in the ‘80s and ‘90s. Both sexes are working more temporary or contract gigs, have stagnant wages and enjoy fewer company benefits. The number of big companies offering pensions has dropped 57% in 10 years.

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Wow. 1 in 40. Many western countries hide significant protions of unemployment behind ‘self-employment’. Peel off that fake layer, and you uncover a bitter reality.

Full-Time Employee Jobs Account For Only 1 In 40 Created Since 2008 (Guardian)

Only one in every 40 new jobs created since the recession has been for a full-time employee, according to the Trades Union Congress. The share of full-time employee jobs – excluding self-employment – fell during the recession and has failed to recover since, falling from 64% in 2008 to 62% in 2014, the TUC said. That is equivalent to a shortfall of 669,000 full-time employees. Unemployment never reached the levels feared at the onset of the crisis, but the figures highlight that job creation between 2008 and 2014 has been dominated by rising self-employment and part-time work, not full-time employee jobs. Employment increased by 1.08m between January to March 2008 and June to August 2014, but only 26,000 were full-time employee roles. Frances O’Grady, TUC general secretary, said: “While more people are in work there are still far too few full-time employee jobs for everyone who wants one. It means many working families are on substantially lower incomes as they can only find reduced hours jobs or low-paid self-employment.”

While one in 40 of the net jobs added to the economy between 2008 and 2014 has been a full-time employee job, 24 in every 40 have been self-employed and 26 in every 40 have been part-time. The TUC said that although part-time work was an important option for many people, the number of part-time employees who say they want to work full-time is still almost double the number before the recession at 1.3m. The TUC also said that at least part of the increase in self-employment was driven by people unable to find employee jobs or those forced into false self-employment by companies seeking to evade taxes and avoid paying out entitlements such as holiday pay, sick pay and pensions. O’Grady said: “The chancellor has said he wants full employment, but that should mean full-time jobs for everyone who wants them. At the moment the economy is still not creating enough full-time employee jobs to meet demand.”

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They’ll never come back. Detroit was merely a guinea pig.

US Cities Struggle to Recover From Recession (Bloomberg)

Most big U.S. cities have struggled to restore revenue to pre-recession peaks amid lagging property-tax receipts and cuts in state and federal funds, according to a report from the Pew Charitable Trusts. Pew analyzed financial statements for the central cities of the 30 most-populous metropolitan areas and found that as of 2012 a majority still hadn’t recovered from the recession that ended in June 2009. Revenue of 18 municipalities declined in 2012 after adjusting for inflation, with eight logging the lowest collections since the economic slump started in 2007, a report released yesterday showed. Even with fiscal gains since 2012 from a growing national economy and rallying stocks, the governments are straining to balance costs for services such as police and fire protection with the expense of obligations to retirees. In Houston, the biggest increase in the proposed 2015 budget is a 21% boost in pension contributions, eclipsing spending on libraries, parks, trash and courts combined, Pew said.

“Cities are not out of the woods yet,” Mary Murphy, a Pew officer and one of the report’s authors, said in a conference call with reporters. “In spite of an ongoing national recovery, serious financial concerns remain for local leaders in many of the nation’s cities.” For Atlanta, Dallas, Detroit, Las Vegas, Phoenix, Pittsburgh and San Antonio, revenue declines in 2012 from 2011 were the largest since the recession began, Pew said. “The recovery hasn’t been evenly felt across the country, and these pockets of distress remain,” Murphy said in an interview from Washington. Researchers blamed a drop in property-tax collections, generally a city’s largest source of financing, and reduced funding by states and the federal government, for most of the revenue declines. Both categories fell by an average of 4% in 2012, the report said. While the national housing market has begun to rebound, municipal real-estate levy collections trail increases to assessments by at least a year, Pew said. Twenty-four cities reported declines in receipts from 2011.

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The taper was never meant to hurt back profits. That should be very obvious by now.

QE Isn’t Dying, It’s Morphing (Nomi Prins)

The Fed is already the largest hedge fund in the world, with a book of $4.5 trillion of assets. These will plummet in value if rates rise. Cue the banks that are gearing up their own (still small in comparison, but give them time) role in this big bamboozle. By doing so, they too are amassing additional risk with respect to interest rates rising, on top of all their other risk that counts on leveraging cheap money. Only the naïve could possibly believe that the Fed and its key banks haven’t been in regular communication about this US Treasury security shell game. Yet, aside from a few politicians, such as Ron Paul, Sherrod Brown, Bernie Sanders and Elizabeth Warren, the notion that Fed policy has helped bankers, rather than other people, remains largely divorced from bi-partisan political discussion. Adding more fuel to the central-private bank collusion fire, is the fact that the Fed is a paying client of the JPM Chase. The banking behemoth is bagging fees for holding and executing transactions on the $1.7 trillion New York Fed’s QE mortgage portfolio.

Wouldn’t it be convenient if JPM Chase was also trading this massive mortgage book for its own profits? Or rather – why wouldn’t they be? Who’s going to stop them – the Fed? Besides, they hold more trading assets than any other US bank, so why not trade the Fed’s securities ostensibly purchased to help the public – recover? According to call report data compiled by the extremely thorough website www.BankRegData.com, nearly 97% of all bank trading assets (including US Treasuries) are held by just 10 banks, led by JPM Chase with 43.80% and followed by Citigroup at 24.51% of all bank trading assets. Last quarter, US Treasuries were the fastest growing form of security bought by banks, increasing by 26.3% or $72 billion over the prior quarter. As the Fed tapered, banks stepped in to do their part in the coordinated Fed-private bank QE game. In the past year, banks have added $185.8 billion of US Treasuries to their books, more than doubling their share of government debt.

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Sounds reasonable, except for the praise of Fisher and Plosser.

A Few Central Bankers and Money Managers Get It, Yellen and Kuroda Don’t (Lee Adler)

It may be more than a few, but increasingly some central bankers like the courageous Richard Fisher of the Dallas Fed and Chuck Plosser of the Philly Fed are speaking up, joined by a few well known money managers. They’re echoing the complaints that I and others have made for years about the insane (and immoral) policies of ZIRP and QE that the world’s major central banks have been promulgating since 2008. At a meeting of central bankers held by the Banque du France in Paris last week, a few of those people spoke out.

Among the gripes: Central-bank stimulus has relieved pressure on governments to revamp their economies, punished savers, inflated asset bubbles and left financial markets overly reliant on liquidity [emphasis mine] and prone to volatility when it reverses.
– via Central Bankers Join Investors Warning on Easy Money – Bloomberg.

That says it all in a nutshell. Finally a few people in the mainstream are expounding on those themes that I have hammered on in futility for years. In time, the longer that QE and ZIRP continue to fail in increasingly obvious ways, the more the groundswell against them will grow. Meanwhile, hidebound jackasses like Yellen and Kuroda remain in denial. Hey Janet! Hey Haruhiko! Riddle me this. If QE and ZIRP are so essential to stimulating growth, why with the BoJ’s balance sheet tripling in size and rates held at zero for years, is Japan’s GDP now no more than it was in 2006? Could it be that QE and ZIRP actually don’t stimulate growth? Could it be that the financial engineering, speculative excess, and labor suppression that results from QE and ZIRP are actually detrimental to real growth? Maybe, just maybe, higher interest rates would promote thrift, and rational, real investment that benefits everybody, not just the bankers, speculators, and corporate executives engaged in the constant easy money wealth transfer schemes that you promote and enable?

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So when are we going to do something about it? I’ve seen zero attempts at that.

It’s The 0.01% Who Are Really Getting Ahead In America (Economist)

Among the most controversial of Thomas Piketty’s arguments in his bestselling analysis of inequality, “Capital in the Twenty-First Century”, is that wealth is increasingly concentrated in the hands of the very rich. Rising wealth inequality could presage the return of an 18th century inheritance society, in which marrying an heir is a surer route to riches than starting a company. Critics question the premise: Chris Giles, the economics editor of the Financial Times, argued earlier this year that Mr Piketty’s data were both thin and faulty. Yet a new paper suggests that, in America at least, inequality in wealth is approaching record levels. Earlier studies of American wealth have tended to show only small increases in inequality in recent decades. A 2004 study of estate-tax data by Wojciech Kopczuk of Columbia University and Emmanuel Saez of the University of California, Berkeley, found an almost imperceptible rise in the share of wealth held by the top 1% of families, from about 19% in 1976 to 21% in 2000.

A more recent investigation of the Federal Reserve’s data on consumer finances, by Edward Wolff of New York University showed a continued but gentle increase in inequality into the 2000s. Mr Piketty’s book, which drew on this previous work, showed similarly modest rises in wealth inequality in America. A new paper by Mr Saez and Gabriel Zucman of the London School of Economics reckons past estimates badly underestimated the share of wealth belonging to the very rich. It uses a richer variety of sources than prior studies, including detailed data on personal income taxes (which the authors mine for figures on capital income) and property tax, which they check against Fed data on aggregate wealth. The authors note that not every potential source of error can be accounted for; tax avoidance strategies, for instance, could cause either an overestimation of the wealth share of the rich (if they classify labour income as capital income in order to take advantage of lower rates) or an underestimation (if they intentionally seek out lower yielding investments for their tax advantages).

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Look, teh Saudis would never have enacted their latest policies without extensive delibeartions with the relevant Americans (which may well not include the President). Their 90-year old King is acutely aware of his family’s decades-long and still nigh-complete dependence on the US for its safety and its hold on power. Any discussion about today’s oil prices must always consider that.

In New Oil Order, OPEC’s Choice Is Pricing Power or Sales (Bloomberg)

The decision OPEC faces at this month’s meeting isn’t just over whether to cut oil production. It’s a choice of whether the group is willing to fight to maintain the sway it has had over crude markets for decades. The Organization of Petroleum Exporting Countries, buffeted by plunging prices, could reassert control by cutting output, said Societe Generale SA, ceding more market share to U.S. shale oil producers. The alternative – waiting to see if lower prices choke off the North American shale boom – would usher in a “new oil order” where pricing power is handed to drillers in Texas and North Dakota, according to Goldman Sachs. “We’ve not seen a turning point like this in decades,” Mike Wittner, Societe Generale’s head of oil market research in New York, said by phone yesterday. “Is OPEC going to abdicate its role in the market? If the Saudis do exactly what they’re signaling, and just let the market take care of the overproduction, then it could certainly become irrelevant.”

Oil plunged into a bear market last month, the result of a surge in shale drilling that has lifted U.S. production to a three-decade high as well as slowing growth in global demand. The drop has caused financial pain for some OPEC members, prompting Ecuador, Venezuela and Libya to call for action to halt the slide. Nigeria’s currency slumped to an all-time low last week and Venezuela’s benchmark bond fell yesterday to 56.63 cents on the dollar, the lowest level since March 2009. The group’s data show shale output has trimmed a %age point from its market share and will take it to the lowest in more than 25 years during this decade. Reducing output is a tougher decision to make when there are more competitors ready to supply clients cut off by OPEC.

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Duh!

Shale Boom Masks Multiple Threats to World Oil Supply (Bloomberg)

The U.S. shale boom masks threats to global oil supply including Middle East turmoil, conflict in Ukraine and the difficulty of unconventional oil production beyond North America, the International Energy Agency said. “The global energy system is in danger of falling short of the hopes and expectations placed upon it,” the IEA said in its annual World Energy Outlook today. “The short-term picture of a well-supplied oil market should not disguise the challenges that lie ahead as reliance grows on a relatively small number of producers.” Global oil consumption will rise to 104 million barrels a day in 2040 from 90 million barrels a day in 2013, driven by demand for transport fuel and petrochemicals in developing countries, the report said. To meet that growth and replace exhausted fields will require about $900 billion a year in investment by the 2030s as oil companies develop fields from Canada’s oil sands to the deep waters off Brazil, the IEA said.

Oil prices slumped to a four-year low this month on concern that supply from U.S. unconventional fields is rising faster than global demand. The recent price slowdown is threatening investment in the industry as companies try to insulate profits from the price fall. While the near-term picture is secure, the development of capital-intensive areas outside North America is at risk, the IEA said. In the Canadian oil sands, among the most expensive oil deposits in the world to exploit, a slowdown is already evident and the IEA estimates about a quarter of projects are at risk as prices fall. Likewise, the complexity and capital intensity of developing Brazil’s deepwater fields could also contribute to a shortfall in investment. Replicating the U.S. shale oil boom outside of North America will also be a challenge, the report said. A lack of existing oil and gas infrastructure, environmental opposition to fracking, and uncertain geology are among the reasons unconventional drilling hasn’t spread.

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And a lot. Please note that Fatih Birol is an absolute douche. And the IEA only pushes industry agendas, it has no use for objective research.

Low Oil Prices To Bite Into 2015 US Shale Growth: IEA (Reuters)

Falling oil prices may cut investment in U.S. shale oil by 10% next year, the International Energy Agency (IEA) said, slowing growth in a sector that has turned the United States to a major global producer. The recent drop in oil prices “should not blind us to the problems that may be around the corner,” Fatih Birol, the IEA’s chief economist, told Reuters ahead of the launch of the agency’s 2014 World Energy Outlook. Benchmark oil prices have dropped by about 30% over the past four months to around $82 a barrel due mostly to increased supplies from the Middle East and North America, squeezing budgets of oil producing nations and oil companies.

“If prices remain at these lows, this may result in a decline in U.S. upstream capital expenditures by 10% in 2015, which will have implication for future production growth,” Birol said. U.S. oil production has risen by 1 million barrels per day (bpd) per year over the past year as strong oil prices led to a boom in shale oil production through fracking, a technique that uses high pressure to capture gas and oil trapped in deep rock. Production is set to grow by an additional 963,000 bpd in 2015, according to the U.S. Energy Information Administration.

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That’s more than the $88 billion discussed yesterday, but then, that was only for exploration. Other reports talk about $5 trillion per year, see: Energy Costs – Necessity, Not Folly .

Fossil Fuels With $550 Billion in Subsidy Hurt Renewables (Bloomberg)

Fossil fuels are reaping $550 billion a year in subsidies and holding back investment in cleaner forms of energy, the International Energy Agency said. Oil, coal and gas received more than four times the $120 billion paid out in subsidy for renewables including wind, solar and biofuels, the Paris-based institution said today in its annual World Energy Outlook. The findings highlight the policy shift needed to limit global warming, which the IEA said is on track to increase the world’s temperature by 3.6 degrees Celsius by the end of this century. That level would increase the risks of damaging storms, droughts and rising sea levels. “In Saudi Arabia, the additional upfront cost of a car twice as fuel efficient as the current average would at present take 16 years to recover through lower spending on fuel,” the IEA said. “This payback period would shrink to three years if gasoline were not subsidized.”

Renewable use in electricity generation is on the rise and will account for almost half the global increase in generation by 2040, according to the report. It said about 7,200 gigawatts of generating capacity needs to be built in that period to keep pace with rising demand and replace aging power stations. The share of renewables in power generation will rise to 37% in countries that are members of the Organization for Economic Cooperation and Development, according to the IEA. It said that globally, wind power will take more than a third of the growth in clean power; hydropower accounts for about 30%, and solar 18%. Wind may produce 20% of European electricity by 2040, and solar power could take 37% of summer peak demand in Japan, it said. The IEA singled out the Middle East as a region where fossil fuel subsidies are hampering renewables. It said 2 million barrels per day of oil are burned to generate power that could otherwise come from renewables, which would be competitive with unsubsidized oil.

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It’s a dog eat dog world.

Record Exports of Cheap Chinese Steel May Spark Trade War (Bloomberg)

Record steel exports from China are undercutting foreign rivals on price, triggering complaints from Seoul to South Africa that may signal the start of a trade conflict. China produces about half the world’s steel and exports are on pace to exceed 80 million tons this year, the most ever, according to the China Iron & Steel Association. That’s exacerbating trade tensions in the region as Japanese Prime Minister Shinzo Abe and President Barack Obama meet with Chinese President Xi Jinping this week in Beijing. With China’s economy slowing to levels not seen for more than two decades, producers are boosting shipments to other markets. “It’s certain the trend to export will continue next year,” said Luo Yongdong, head of imports and exports at the Panzhihua Iron & Steel Group, a unit of Anshan Iron & Steel Group, one of China’s largest steelmakers. “As a result, trade disputes will intensify.” Hebei Iron & Steel Group’s Tangshan unit said this week it will make its first shipments of auto sheet to Latin America, while its Xuancheng unit shipped hard steel wire to Japan on Nov. 7 for the first time.

In Japan, Tokyo Steel Manufacturing Managing Director Kiyoshi Imamura said the sheer scale of China’s exports puts it on pace to reach 100 million tons a year. That’s about equal to the entire output of Japan, the world’s second-largest producer. Japan’s Kobe Steel and South Korea’s Posco said they have complained to counterparts in China about the flood of metal that’s eating into their sales. Chinese steel is also piling up in ports in India and Africa, where local producers have asked governments to do something to stop it. The exports are reaching as far as the U.S., where imports of the metal rose more than 50% in September. Exports to Taiwan and India rose more than four-fold. In the Southeast Asia markets, China’s lower costs allow it to sell some types of steel at about $40 to $50 a ton less than South Korea and $100 lower than Japan, said Wei Zengmin, an analyst from Mysteel.com, the nation’s largest industry research company.

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Abe will only do it if he knows he’ll win. Besides, who else wants to take over his bankrupt estate?

Japan Snap-Election Potential Looms, Abenomics at Risk as Growth Stalls (Bloomberg)

A potential snap election in Japan next month clouds the outlook for the Abe administration’s economic program as the nation struggles to shake off the impact of this year’s sales-tax increase. Prime Minister Shinzo Abe is likely to call a general election on Dec. 14, according to two people with knowledge of the ruling Liberal Democratic Party’s strategy. His government favors delaying the next bump in the sales levy until April 2017, according to LDP lawmakers who asked not to be named. With steps such as opening Japan to casinos, scaling back labor regulations and reforming social security still to be taken, a parliamentary election in December risks putting off structural changes deeper into 2015. Any reduced majority for the ruling coalition could also open Abe’s reflation program to increased criticism. “It would be asking the voters to give an endorsement of Abenomics,” said Izumi Devalier, an economist at HSBC in Hong Kong. An election would also help Abe silence “fiscal hawks” in the party who want the tax hike, she said.

The Nikkei 225 Stock Average gained 0.4% today after jumping 2.1% yesterday amid speculation of a delay in the tax and a December election. The world’s third biggest economy contracted 7.1% in the second quarter, the most in more than five years, after the government increased the tax by 3 %age points to 8%. Abe adviser Etsuro Honda said today that the tax hike is out of the question if the economy grows less than 3.8% in the third quarter. Gross domestic product data will be released on Nov. 17, with the median of projections by economists for a rise of 2.8%. No decision has been made to postpone the tax rise, Finance Minister Taro Aso said today in parliament, adding that it would be very hard to fund Japan’s social welfare without increasing the tax to 10%, as planned.

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Chasing yield shielded by the Fed. Or so they think.

Junk Bond Risks Escalate With Leverage Back to ’08 Levels (Bloomberg)

The riskiest corporate debtors in the U.S. aren’t growing fast enough to pay down their borrowings, increasing the risk for bond investors at a time when valuations are already at about record highs. That’s the conclusion of Deutsche Bank, which estimates that the biggest jump in earnings in almost three years may be coming too late for speculative-grade borrowers as the amount of debt on balance sheets climbs back to levels seen in early 2008 before the financial crisis. To make matters worse, their ability to make interest payments is about where it was in 2007, even as the Federal Reserve has held its benchmark rate close to zero.

“We expect the next restructuring cycle will be dominated by companies with good operations but not able to grow into their balance sheets or refinance maturing debt,” Kenneth Buckfire, president of restructuring firm Miller Buckfire said. Investors have piled into junk bonds for their relatively high yields amid the suppressed rates. That has allowed the least creditworthy borrowers to raise $1.64 trillion in the bond market since the end of 2008, according to data compiled by Bloomberg. That led to average annual returns of 18.6% from 2009 through 2013, compared with 17.7% for stocks as measured by gains in the Bank of America Merrill Lynch U.S. High Yield Index and the Standard & Poor’s 500 Index.

Debt exceeds earnings before interest, taxes, depreciation and amortization by about four times at speculative-grade companies, near 2008 levels, Deutsche Bank strategists Oleg Melentyev and Daniel Sorid wrote in a Nov. 7 report. Leverage rose even as cash flow grew 12% at those companies that had reported third-quarter results, according to the New York-based analysts. The Fed has held its benchmark rate between zero and 0.25% since the end of 2008 to spur economic growth. Yields on junk-rated debt, which is rated below BBB- by S&P and less than Baa3 by Moody’s Investors Service, have fallen to 6.36%, from a peak of more than 22% at the end of 2008, according to Bank of America index data. Yields touched a record low 5.7% on June 23.

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Not even 10 times that would be enough.

Banks to Pay $3.3 Billion in FX-Manipulation Probe (Bloomberg)

Regulators in the U.S., Britain and Switzerland ordered five banks to pay about $3.3 billion to settle a probe into the manipulation of benchmark foreign-exchange rates. Switzerland’s UBS was ordered to pay the most at $800 million, according to statements from the U.S. Commodity Futures Trading Commission, Britain’s Financial Conduct Authority and Swiss Financial Market Supervisory Authority. Citigroup was ordered to pay $668 million, followed by JPMorgan at $662 million, the filings show. HSBC paid $618 million and Royal Bank of Scotland $534 million. “Countless individuals and companies around the world rely on these rates to settle financial contracts, and this reliance is premised on faith in the fundamental integrity of these benchmarks,” Aitan Goelman, the CFTC’s director of enforcement said in the statement. “The market only works if people have confidence that the process of setting these benchmarks is fair, not corrupted by manipulation by some of the biggest banks in the world.”

The settlements are the first since authorities around the world began investigating allegations last year that dealers at the biggest banks colluded with counterparts at other firms to rig benchmarks used by fund managers to determine what they pay for foreign currency. Probes have expanded to include whether traders used confidential information to take bets on unauthorized personal accounts, and whether sales desks charged clients excessive commissions in the $5.3 trillion-a-day foreign-exchange market. The FCA said it would “progress” its probe of Britain’s Barclays, which wasn’t fined today, to cover its wider foreign exchange trading business. “We will continue to engage with these authorities, including the FCA and CFTC, with the objective of bringing this to resolution in due course,” Barclays said in a statement.

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FX trading eats people.

Leverage Up To 50-1 Lures Mom-and-Pop FX Traders Who Mostly Lose (Bloomberg)

It’s a Saturday afternoon in March, and more than 500 people have tuned in for a two-hour webinar that tells them they can become rich trading foreign currencies. “Success in trading is not a fantasy; it’s a formula,” Jared Martinez, founder of Market Traders Institute, the oldest and largest such school in the U.S., tells his audience. “We have that formula.” The Lake Mary, Florida, company that Martinez founded in 1994 says it has educated 30,000 amateur foreign-exchange investors. “How many people would like to learn a skill where, within two days, they could make a thousand dollars?” Martinez asks that afternoon. “I’m here to tell you I can teach you how to trade consistently.” He introduces Jose Tormos, his son-in-law, who echoes Martinez’s advice, Bloomberg Markets will report in its December issue. “It is the easiest, most predictable and safest way to invest,” Tormos says. “Many of you are missing out on opportunities to build a retirement nest egg.” One person familiar with the webinar pitch is Dan Gratton, a 71-year-old retiree who lives on Social Security in Kingman, Arizona.

He says he’s been a student of the institute for two years and had hoped that taking its home-study classes and watching webinars would help him succeed with forex trading. That hasn’t happened. “Probably the most consistent thing is losing,” Gratton says. He’s right. Most retail currency investors lose money most of the time, according to the industry’s own data. Reports to clients by the two biggest publicly traded over-the-counter forex companies – FXCM and Gain Capital – show that, on average, 68% of investors had a net loss from trading in each of the past four quarters. These kinds of losses make for investor churn. The average OTC forex investor drops out of the market after just four months, according to the National Futures Association, an industry self-regulatory group. Retail forex investors, many of whom are well educated in fields other than finance, enter into a market that is lightly regulated, opaque and rife with conflicts of interest. They are enticed by pitches from coaches like Martinez, saying people can finance their retirements trading forex.

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How did we get there from here?

Environmentalists Sue To Protect Whales, Dolphins From Navy War Games (Fox)

Worried about collateral damage to whales, dolphins and other marine life, environmentalists are fighting the U.S. Navy in court in a bid to protect the creatures of the sea from war games in the Pacific Ocean. “The worst harm comes from the explosives going off,” said David Henkin, an attorney for EarthJustice. U.S. Navy testing and war games are underway in American waters off the coasts of California and Hawaii. The drills amount to critical practice for the military and last through 2018, but environmental groups like EarthJustice say hundreds of marine mammals will die or get injured by the time the Navy is through. They said they don’t want to stop the Navy from training – but change how they do it. The testing areas are home to nearly 40 marine mammal and five sea turtle species. According to the Natural Resources Defense Council, the Navy will conduct 500,000 hours of sonar testing between 2013 and 2018. During that time, 260,000 bombs, missiles and other explosives will be tested.

According to an analysis of the National Marine Fisheries Service, a division of the Department of Commerce charged with protecting mammals, the estimated damage to the marine life includes the deaths of 155 whales, dolphins and seals; 2,000 permanent injuries to marine mammals; and 9.6 million incidents of temporary hearing loss and behavior changes in areas like migration, nursing and feeding. But the Navy says fears are overblown and that war-gaming, which dates back to 1886, is a consistently reliable way to train for combat. “Despite decades of the Navy conducting very similar activities in these same areas, there is no evidence of these types of impacts,” Kenneth Hess, Navy spokesman, told FoxNews.com. “Bear in mind that the permits the Navy requires to conduct at-sea training and testing can only be issued if our activities will have no more than a negligible impact on marine mammal populations.”

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Behold your children’s world.

Sinking Jakarta Starts Building Giant Wall as Sea Rises (Bloomberg)

If you worry that rising sea levels may one day flood your city, spare a thought for Michelle Darmawan. Her house in Jakarta is inundated several times a year — and it’s 3 kilometers (1.9 miles) from the coast. Whenever there’s a particularly high tide or heavy rain, the Ciliwung River and its network of canals overflow, swamping thousands of homes in Indonesia’s capital. In January, a muddy deluge washed over Darmawan’s raised porch, contaminating her fresh-water tank and cutting off electricity for three days. “We were sitting on the second floor, looking down at the floods, calling out to neighbors to make sure they’re OK,” said Darmawan, 27, a marketing executive whose family had to store drinking water in buckets.

Jakarta, a former Dutch trading port, is one of the world’s megacities most at risk from rising sea levels. That’s because parts of the metropolis of almost 30 million people are sinking by as much as 6 inches a year, more than 10 times faster than the sea is rising. The Indonesian capital ranks eighth among the 30 biggest cities in the 2015 Climate Change Vulnerability Index compiled by Bath, England-based risk-assessment company Maplecroft. The index is led by Dhaka, Lahore in Pakistan, and Delhi. The government’s solution: a $40 billion land-reclamation project unveiled last month. It includes a 32-kilometer (20-mile) sea wall, a chain of artificial islands, a lagoon about the size of Manhattan – and a giant offshore barrier island in the shape of the national symbol, the mythical bird Garuda.

The first pile for the initial stage of the program – a barrier to strengthen existing sea defenses along 32 kilometers – was sunk at the Oct. 9 opening ceremony. “The whole city is sinking like Atlantis,” said Christophe Girot, principal investigator of the Jakarta Study at the Future Cities Laboratory research group in Singapore. “You see the absolute most miserable and poorest population living right by the river, and they know they’re going to get flooded and may be killed three or four more times a year.” The central and municipal governments will split the 3.2 trillion rupiah ($263 million) cost for the first 8 kilometers of the wall. Developers would put up the remaining 24 kilometers by 2030 in exchange for the right to build on reclaimed land. [..] .. the metropolis is home to almost 30 million people, making it the second-most-populous urban area in the world, after Tokyo-Yokohama,

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 October 13, 2014  Posted by at 10:44 am Finance Tagged with: , , , , , , , , , , ,  5 Responses »


John Vachon Gas station in Minneapolis Dec 1937

Emerging Markets Enter Era Of Slow Growth (FT)
Global Signs of Slowdown Ripple Across Markets, Vex Policy Makers (WSJ)
World Leaders Play War Games As The Next Financial Crisis Looms (Guardian)
Fed’s Fischer Says Rate Hike Won’t Damage Global Economy (MarketWatch)
Saudis Make Aggressive Oil Push in Europe (WSJ)
OPEC Members’ Rift Deepens Amid Falling Oil Prices (WSJ)
Draghi Says Growing ECB Balance Sheet Is Last Stimulus Tool Left (Bloomberg)
Draghi-Weidmann Fight Intensifies as ECB Debates Action (Bloomberg)
Italy on Sale to Chinese Investors as Recession Bites (Bloomberg)
French Ministers Tussle Over Urgency of Benefit-System Revamp (Bloomberg)
China Steel Now As Cheap As Cabbage (MarketWatch)
China Central Bank: No Major Stimulus Needed in ‘Foreseeable Future’ (WSJ)
Air-Pockets, Free-Falls, and Crashes (John Hussman)
Surging British Anti-EU UKIP Party Demands Early ‘Brexit’ Vote (Reuters)
Monkeys, the Queen and Inequality (Russell Brand)
Poverty Ensnares 1-in-7 Australians Even After Decades of Growth (Bloomberg)
Drugs Flushed Into The Environment Linked To Wildlife Decline (Guardian)
10 Reasons To Quit The US For Europe (MarketWatch)
Ebola-Stricken Sierra Leone Double-Whammied by Iron Ore Plunge (Bloomberg)
If “The Protocols Work,” How Did Dallas Nurse Get Ebola?

It’s a new day. The masks come off, along with all the emperors’ clothes.

Emerging Markets Enter Era Of Slow Growth (FT)

Growth in emerging markets is slowing to its lowest ebb since the aftermath of the financial crisis due to a combination of China’s fading dynamism, a sputtering performance in eastern Europe and Latin America’s slowdown. Evidence that emerging economies are entering a new era of slower growth will fuel concerns for the global outlook as western countries continue to struggle, the oil price lurches towards a four-year low and eurozone stalwart Germany suffers from declining growth. Data from 19 large emerging economies collated by research firm Capital Economics show that industrial output in August and consumer spending in the second quarter fell to their lowest levels since 2009. Export growth in August also plunged. These trends are contributing to a sense that slower growth is becoming a permanent fixture among the world’s most dynamic group of economies. “This is the new normal,” said Neil Shearing, chief emerging markets economist at Capital Economics. “For the rest of the decade this is it. This is as good as it gets.”

Speaking at the annual meetings of the International Monetary Fund last week, Olivier Blanchard, the fund’s chief economist, said there had been “a fairly major change in the landscape” for emerging markets in the medium term. Christine Lagarde, the IMF’s managing director, said there was “clearly a major slowdown in countries like Brazil and Russia”, pointing out that the end of quantitative easing would send shockwaves to emerging economies. “We’re going to continue to caution a lot of the emerging market economies … to just prepare themselves for a bit more volatility than we have observed over the last few months,” she said. George Magnus, senior adviser to UBS, said: “It is now clear that the exceptional acceleration in emerging market growth between 2006 and 2012 is over,” he said, noting that the IMF has revised downward its forecasts for EM growth on six occasions since late 2011.

Although official gross domestic product statistics for the third quarter have not yet been published, projections are bleak. China’s GDP annual growth rate in the quarter – due to be announced next week – is set to plunge to 6.8%, down from 7.5% in the second quarter, according to Jasper McMahon of Now-Casting Economics in London. Brazil is on track to report GDP growth of 0.3% this year, down from an official 2.5% in 2013, according to Now-Casting’s model. Capital Economics’ model, which makes projections for overall EM GDP growth based on published official and private data, shows an aggregate growth rate of 4.3% in July, down from 4.5% in June and preliminary numbers for August suggest a further slowdown. “It looks like August is going to be the weakest month in terms of emerging markets’ GDP growth since October 2009,” Mr Shearing said.

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Debt stimulus is on its last legs.

Global Signs of Slowdown Ripple Across Markets, Vex Policy Makers (WSJ)

Gathering signs of a slowdown across many parts of the world are roiling financial markets and confounding policy makers, who after years of battling anemic economic growth have limited tools left to jump-start a recovery. Slumping exports in Germany are adding fuel to worries about a third recession in the eurozone in six years. China is slowing in the wake of its credit boom, weighing on countries throughout the region. Japan’s economy has recently contracted despite a policy offensive to lift it from years of stagnation. Other onetime powerhouses, from Brazil to South Africa, also are struggling. The pullback is sending tremors through global markets, hammering equities after years of steady gains and knocking down commodity prices. The Dow Jones Industrial Average on Friday turned negative for the year. A recent drop in oil prices—a decline of about 20% in four months—reflects the downward pressure on global growth.

The U.S. remains a relative bright spot in an otherwise gloomy picture, particularly its job market, which is gaining traction after years of fitful growth. But doubts are building over the U.S. economy’s ability to accelerate as some of its biggest trading partners struggle. Top Federal Reserve officials are already voicing concern about sagging growth overseas and its drag on the world’s largest economy. Fed officials in recent days noted they are watching how weakness abroad has boosted the dollar, which could keep inflation below the Fed’s target and hurt U.S. growth by restraining its exports. That could mean a longer wait to start raising interest rates. “If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to [begin increasing rates] more slowly than otherwise,” Fed Vice Chairman Stanley Fischer said during weekend meetings of the International Monetary Fund, which drew urgent pleas for action from top policy makers.

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“All seemed serene, but only because of an unsustainable build-up in debt. There was a structural shift in power and income share from labour to capital. Rising asset prices compensated for real income growth. Then came the crisis, which was long and costly. ”

World Leaders Play War Games As The Next Financial Crisis Looms (Guardian)

Press the uniform. Check the battle plans. Call up the reservists. Arm the bombers and refuel the tanks. Field Marshal George Osborne is going on manoeuvres. On Monday in Washington, the chancellor of the exchequer will see if Britain is ready for war. A financial war that is. Along with his allies from the United States, he will play out a war game designed to show whether lessons have been learned from the last show, the slump of 2008. Like all commanding officers, Osborne thinks he is ready. He will have general Mark Carney at his side. He has studied the terrain. He has a plan that he insists will work. Let’s hope so. Because the evidence from last week’s meeting of the International Monetary Fund in Washington was that it won’t be long before the real shooting starts. The Fund’s annual meeting was like a gathering of international diplomats at the League of Nations in the 1930s. Those attending were desperate to avoid another war but were unsure how to do so.

They can see dark forces gathering but lack the weapons or the will to tackle them effectively. There is an uneasy, brooding peace as the world waits to see whether lessons really have been learnt or whether the central bankers, the finance ministers and the international bureaucrats are fighting the last war. Here’s the situation. The years leading up to the start of the financial crisis in August 2007 were like the Edwardian summer in advance of the first world war. All seemed serene, but only because of an unsustainable build-up in debt. There was a structural shift in power and income share from labour to capital. Rising asset prices compensated for real income growth. Then came the crisis, which was long and costly. Once it was over, there was a strong urge to return to the world as it was. Countries wanted to return to balanced budgets and normal levels of interest rates, just as they had once hankered after going back on the Gold Standard.

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Again, part of a carefully planned series of Fed bosses giving their ‘opinions’. This one: a rate hike won’t hurt anyone at all. An absurd statement, but important to make. Now, when the victims start dropping post-hike, Fisher can claim that’s not what his models predicted.

Fed’s Fischer Says Rate Hike Won’t Damage Global Economy (MarketWatch)

The Federal Reserve’s eventual rate increase, the first since 2006, will not damage the global economy, Federal Reserve Vice Chairman Stanley Fischer said on Saturday. While there could be “trigger further bouts of volatility” in international markets when the Fed first hikes, “the normalization of our policy should prove manageable for the emerging market economies,” Fischer said in a speech at the International Monetary Fund’s annual meeting. Fischer also played down concern about the recent fall of the euro, which has fallen more than 8% against the dollar since the beginning of the year. “We were all surprised for how long the euro stayed as high as it did, so to turn around and say that terrible things are likely to happen — I think, what is happening now is reflective of the underlying strengths of the economy,” Fischer said.

There was a sharp selloff of emerging market currencies and assets last year after the Fed first publicly discussed the possibility of ending its bond-buying program, otherwise known as quantitative easing. Some experts, notably Reserve Bank of India Governor Raghuram Rajan, have worried publicly that the Fed could derail the global economy if it doesn’t look outward before it raises domestic interest rates. Since last year, Fischer said, the Fed has “done everything we can, within limits of forecast uncertainty, to prepare market participants for what lies ahead.” The Fed has been as clear as it can be about the future course of its policy course, and markets understand, Fischer said. “We think, looking at market interest rates, that their understanding of what we intend to do is roughly correct,” Fischer said.

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The Saudis are increasing their exports at a time when prices are plummeting. The end of OPEC?

Saudis Make Aggressive Oil Push in Europe (WSJ)

Days after slashing prices in Asia, Saudi Arabia is now making an aggressive push in the European oil market, traders say. The kingdom is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude. “The Saudi push is not just in Asia. It’s a global phenomenon,” one oil trader said. “They are using very aggressive tactics” in Europe too, the trader added. This month, state-owned Saudi Aramco stunned the rest of the Organization of the Petroleum Exporting Countries by slashing its November prices to defend its market share in Asia’s growing market. The move, setting a price war in the oil-production group, was combined with a boost in the kingdom’s output in September.

But Riyadh is also moving to protect its sales to Europe, a declining market where it is facing rivalry from returning Libyan production. After cutting its November prices there, Saudi Aramco is also asking refiners to commit to full, fixed deliveries in talks to renew contracts for next year, the traders say. They say the Saudi oil company had previously offered a formula allowing flexibility of more or less 10% of contracted volumes, the most commonly used in the industry. “They are threatening buyers” to discontinue sales if they don’t agree with the fixed deliveries, another trader said.

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OPEC continues to exist in name only. Like the EU, it has served its purpose but now members’ interests have become too different from each other.

OPEC Members’ Rift Deepens Amid Falling Oil Prices (WSJ)

A rift between OPEC members deepened over the weekend, as producers in the cartel moved in different directions amid falling oil prices. Venezuela, which has been one of the most outspoken proponents of a production cut by the Organization of the Petroleum Exporting Countries, called over the weekend for an emergency meeting of the group to respond to falling prices. But Kuwait said Sunday that OPEC was unlikely to act to rein in output. Saudi Arabia, meanwhile, appeared to expand on its recent move to defend its market share at the expense of other members by aggressively courting customers in Europe. Traders said Saudi Arabia is now asking for stronger commitments from some of its buyers in Europe, a move that would lock in those customers, including any new ones it would gain with recent price reductions.

Also on Sunday, Iraq’s State Oil Marketing Company cut the price of Basrah Light crude in November for Asian and European buyers by 65 cents to a discount of $3.15 a barrel below the Oman/Dubai benchmark for Asian customers and $5.40 below the Brent benchmark for European customers, according to official selling prices published by the company. The moves and countermoves are the latest in a time of particular discord in OPEC. The organization was founded to leverage members collective output to help influence global prices. In recent periods of low prices, Saudi Arabia OPEC s top producer and de facto leader has managed to cobble together some level of consensus. But even modest cooperation between many members has broken down, and Saudi Arabia, in particular, has moved to act on its own. While it cut output earlier this summer, other members didn’t go along. Since then, it has dropped its prices.

Each member has a different tolerance for lower prices. Kuwait, the United Arab Emirates and Saudi Arabia generally don t need prices quite as high as Iran and Venezuela to keep their budgets in the black. Late Friday, Venezuelan Foreign Minister Rafael Ramirez, who represents Caracas in the group, called for an urgent meeting to tackle falling prices. The group’s next regular meeting is set for late next month. But on Sunday, Ali al-Omair, Kuwait’s oil minister, said there had been no invitation for such a meeting, suggesting the group would need to stomach lower prices. He said there was a natural floor to how low prices could fall at about $76 to $77 per barrel, near what he said was the average production costs per barrel in Russia and the U.S.

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Well, that’s too bad then, isn’t it?

Draghi Says Growing ECB Balance Sheet Is Last Stimulus Tool Left (Bloomberg)

President Mario Draghi said expanding the European Central Bank’s balance sheet is the last monetary tool left to revive inflation although there is no target for how much it might be increased. “It’s very difficult for me to give you an exact figure at this point in time,” Draghi told reporters in Washington today during the annual meeting of the International Monetary Fund. “I gave you a kind of ballpark figure, say about the size the balance sheet had at the start of 2012.”

The ECB is trying to spur inflation from its lowest in almost five years as its economy risks sliding into its third recession since 2008. The central bank’s balance sheet, which can be boosted by buying assets or accepting collateral in return for loans, now stands at €2.1 trillion ($2.7 trillion) compared with a 2012 peak of €3.1 trillion. Recent interest rate cuts, the offering of cheap loans to banks and the forthcoming purchase of private-sector assets should have a sizable impact on the balance sheet, Draghi said. He denied the ECB is purposefully trying to weaken the euro, saying it has no target for its value and that its recent decline reflects international differences in monetary policy. Draghi also said the ECB sees no serious risk of a bubble in the sovereign debt market.

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For Merkel and the Bundesbank to give in now would seem to risk political suicide.

Draghi-Weidmann Fight Intensifies as ECB Debates Action (Bloomberg)

Mario Draghi and Jens Weidmann are clashing anew over how much more stimulus the ailing euro-area economy needs from the European Central Bank. As Europe’s woes again proved the chief concern at weekend meetings of the International Monetary Fund in Washington, President Draghi repeated he’s ready to expand the ECB’s balance sheet by as much as €1 trillion ($1.3 trillion) to beat back the threat of deflation. Bundesbank head Weidmann responded by saying that a target value isn’t set in stone. The differences at the heart of policy making risk leaving the ECB hamstrung as the region’s economy stalls and inflation fades further from the central bank’s target of just below 2%. History suggests Draghi will ultimately prevail over his German colleague.

“There’s an enormous conflict within the Governing Council on what the ECB should do,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. “Clearly, it’s Draghi against Weidmann once again. In the end, Draghi will get his way and we will see quantitative easing next year.” The ECB is swelling its balance sheet as it seeks to revive inflation of 0.3%, the lowest in almost five years. By buying private-sector assets, as it plans to do from this month, or continuing to accept collateral from banks in return for cheap loans, it is pushing liquidity into the economy. Still unresolved is if it will ultimately buy sovereign debt, a taboo subject in Germany where politicians worry it amounts to financing governments and removing pressure on them to act.

Building up assets is the last monetary tool the ECB has left after it cut interest rates to a record low, Draghi said on Oct. 11 in Washington. Action taken so far pushed the euro as low as $1.2501 this month, the least since 2012. The ECB’s balance sheet now stands at €2.05 trillion, below the 2012 peak of €3.1 trillion and €2.7 trillion at the start of that year. “I gave you a kind of ballpark figure, say about the size the balance sheet had at the start of 2012,” Draghi told reporters. Weidmann responded within minutes. “I don’t need to explain to you that there has been communicated a certain target value for the balance sheet,” he said. “How formal this target value is, that’s a different question.”

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This is what Beppe Grillo is fighting to prevent. Wholesale dumping of national assets. Why should any nation want that?

Italy on Sale to Chinese Investors as Recession Bites (Bloomberg)

Clotilde Narzisi and Luca Soliman have run the Caffe Orefici, 200 feet from Milan’s iconic Duomo Cathedral, for 10 years. Forced to sell their business because of high taxes, they say their only hope now is to leave it in Chinese hands. “They are the only ones who are buying,” said 43-year-old Narzisi during a break after the lunch-time rush of businessmen and shoppers in the heart of Italy’s financial capital. “We want to sell, taxes are too high; we work eight hours a day for the state and one hour for us.” Caffe Orefici is among the 18,000 advertisements from businesses and individuals that have been published since February last year on Vendereaicinesi.it — sell to the Chinese — a website that helps Italians, stricken by the third recession in six years, attract bids for properties, products and services from Chinese suitors. While Italian stores turn to the local Chinese community, the country’s largest companies are seeking investments directly from the Asian giant.

Italy has been China’s biggest target in Europe after the U.K. this year, with cross-border acquisitions for $3.43 billion, according to Bloomberg available data. Prime Minister Matteo Renzi, who’s struggling to cut Europe’s second-biggest debt of more than €2 trillion ($2.53 trillion), urged Chinese investors in June during a Beijing visit to buy stakes in Italian companies, following his counterparts in Greece and Portugal who tapped Chinese money to raise revenue and exit bailout programs.[..] While unemployment near a record of 12.7% and fiscal burden at an all-time high make it difficult for Italians to access credit, the 321,000 Chinese living in the country are better positioned as they can count on family networks rather than banks for financing, said Toppino, who’s from the northwestern town of Alba. Renzi flew to China in June with a delegation of dozens of Italian companies to help broker deals. A few weeks later, Italy’s state lender announced the sale of a stake in energy grids holding company CDP Reti to State Grid of China for €2.1 billion.

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The technocrats are trying to take over. Hollande starts to look like Tony Blair without the charisma.

French Ministers Tussle Over Urgency of Benefit-System Revamp (Bloomberg)

Two of Francois Hollande’s top ministers sent differing signals on how quickly to revamp the unemployment-benefits system, keeping alive a debate the French president sought to suppress. For Finance Minister Michel Sapin, the matter can wait until the scheduled talks between labor unions and business in mid-2016. Economy Minister Emmanuel Macron indicated more urgency, saying the government can move faster. The issue was raised last week by Prime Minister Manuel Valls, who said the wasteful system needs to be fixed in the “short term.” Hours later, Hollande shot down the suggestion, saying the government “has enough on its plate.” Sapin is siding with the president.

“The year 2015 should be used to think about an improvement of the unemployment insurance mechanism that would increase the incentive to resume work,” Sapin said in an interview with Bloomberg Television in Washington. Asked about the same issue in an interview yesterday in the newspaper Le Journal du Dimanche, Macron was more strident. “There shouldn’t be any taboo or posturing,” he said. “The unemployment insurance system has a €4 billion ($5.1 billion) deficit. What politician can be satisfied with that? There was reform but not enough. We cannot leave it at that.” Macron also said “we have six months to create a new reality in France and Europe.”

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Bye bye suppliers.

China Steel Now As Cheap As Cabbage (MarketWatch)

As global steel prices face downward pressure from falling demand, the situation in China is making the problem all the more intractable, as overcapacity is prompting Chinese steel enterprises to cut their prices in order to boost exports. Data from the China Iron & Steel Association (CISA) showed Monday that domestic steel prices have been falling for 12 straight weeks, with the Steel Composite Price Index down more than 13% compared since the end of last year, even as the nation’s construction activity and real-estate market are cooling significantly. The average price for the range of steel products on offer has fallen to 3,212 yuan ($520) per metric ton for the first half of the year, down 28% from the average price in 2012, CISA data showed.

And as a People’s Daily report said Monday, the price level means the steel is now almost as cheap by weight as Chinese cabbage. “Sharply slowing steel demand growth in an oversupplied sector is the key reason for China’s currently low steel prices,” CIMB analysts said in a recent note. Standard & Poor’s also cited Chinese oversupply as the largest headache for steel makers in the rest of Asia, and is likely to remain so. A recent survey by CISA said the steel-billet inventory of key enterprises was up 36% in July, compared to a year earlier, steel-product inventory climbed 21.3%. Pressures arising from expanding inventories and sluggish domestic demand have made for cut-throat competition among China’s steel mills, resulting in meager profits. The margin for China’s large and medium-sized steel companies was 0.54% for the first seven months of 2014, CISA said.

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Not one single digit coming out of China can be trusted. Every bracket, semi-colon and comma has a political agenda behind them. Not saying it’s different in the US. Just that the discrepancy between official numbers and alternative data is growing. Today’s 15.3% YoY export increase report looks very suspicious.

China Central Bank: No Major Stimulus Needed in ‘Foreseeable Future’ (WSJ)

The chief economist at China’s central bank said Saturday that he doesn’t see any reason for large-scale fiscal or monetary stimulus “in the foreseeable future” despite slowing growth in the world’s second-largest economy and disagreements about the depth and timing of economic overhauls. Speaking in Washington at a meeting of the Institute of International Finance, a financial-industry group, Ma Jun said the Chinese job market “looks pretty stable” despite wobbly economic growth. And, he said, leverage in certain sectors – including real estate, certain state-owned enterprises and local-government financing vehicles – was already too high, and that further lending to these areas should be avoided. In Beijing, debate about how to manage the country’s slowdown has been intense.

The People’s Bank of China so far has bolstered the economy using narrow stimulus measures, including targeted lending in sectors like agriculture and public housing. But The Wall Street Journal reported last month that Chinese leaders are considering replacing the central bank’s governor, Zhou Xiaochuan, as part of internal battles over whether larger-scale expansion of credit should be used to spur economic growth. Mr. Ma on Saturday instead emphasized the importance of reforms to prevent slower growth from turning into a broader crisis. The government is working on improving the productivity of state-owned companies and better controlling their spending, he said. Beijing also is endeavoring to allow more companies both public and private to go bankrupt, which is “warranted,” he added.

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“Market action is narrowing in a classic pattern that reflects the effort of investors to reduce risk around the edges of their portfolios, in what typically proves an ill-founded belief that a falling tide will not lower all ships.”

Air-Pockets, Free-Falls, and Crashes (John Hussman)

In recent weeks, the market has transitioned to the most hostile return/risk profile we identify: the pairing of overvalued, overbought, overbullish conditions with deterioration in market internals and price cointegration – what we call “trend uniformity” – across a wide range of stocks, sectors, and security types (see my September 29, 2014 comment Ingredients of a Market Crash). As in 2007 and 2000, we’re observing characteristic features of that shift. One of those features is that early selling from overvalued bull market peaks tends to be indiscriminate, as deterioration in market internals and the “average stock” often precedes substantial losses in the major indices. As of Friday, only 28% of NYSE stocks are above their respective 200-day moving averages. In the current cycle, both the Russell 2000 small-cap index, and the capitalization-weighted NYSE Composite set their recent highs on July 3, 2014, failing to confirm the later high in the S&P 500 on September 18, 2014.

Through Friday, the NYSE Composite is down -7.3% from its July 3rd peak, and the Russell 2000 is down -12.8%, while the S&P 500 is down only -4.0% over the same period. What’s happening here is that selling is being partitioned in secondary stocks, and more recently high-beta stocks (those with greatest sensitivity to market fluctuations). Market action is narrowing in a classic pattern that reflects the effort of investors to reduce risk around the edges of their portfolios, in what typically proves an ill-founded belief that a falling tide will not lower all ships. Abrupt market losses are typically not responses to obvious “catalysts” but instead reflect a shift in investor preferences toward risk aversion, at a point where risk premiums are quite thin and prone to an upward spike to normalize them. That’s essentially what’s captured by the combination of overvalued, overbought, overbullish coupled with deteriorating internals.

Another characteristic of these shifts is increasing volatility at short intervals – what I described at the 2007 peak and in early-2008 by analogy to “phase transitions” in particle physics. The extreme daily and intra-day market volatility in recent sessions is typical of that dynamic. [..] No doubt – this pile of zero-interest hot potatoes has helped to compress risk premiums across the entire range of risky assets toward zero (and we estimate, in some cases, below zero). But understand that the bulk of the advance in financial assets in recent years has not been a reasonable response to the level of interest rates, but instead reflects a dangerous compression of risk premiums.

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Farage has 25% of the votes in recent polls. He can allow Cameron to stay in power in exchange for an early referendum on Britain’s EU membership. In one place – region or nation – or another in Europe, people will vote to leave.

Surging British Anti-EU UKIP Party Demands Early ‘Brexit’ Vote (Reuters)

Britain’s anti-EU UK Independence Party said on Sunday it would use its growing success to try to secure an early referendum on leaving the European Union, after its support hit a record high of 25% in an opinion poll. The poll, published days after UKIP won its first elected seat in Britain’s parliament at the expense of Prime Minister David Cameron’s Conservative Party, suggested it could pick up more seats than previously thought in a national election in May. UKIP favours a British exit from the European Union, known as a ‘Brexit’, and tighter immigration controls. It has shaken up the British political landscape, challenging its traditional two-party system and piling pressure on Cameron to tack further to the right.

UKIP leader Nigel Farage said he would demand that Cameron bring forward a planned referendum on EU membership from 2017 to next year if UKIP polled strongly and the prime minister needed its support to stay in office. “I’m not prepared to wait for three years. I want us to have a referendum on this great question next year and if UKIP can maintain its momentum and get enough seats in Westminster we might just be able to achieve that,” Farage told the BBC. UKIP’s rise threatens Cameron’s re-election drive by splitting the right-wing vote, increases the likelihood of another coalition government, and poses a challenge to the left-leaning opposition Labour party in northern England too.

It also adds to pressure on Cameron from within parts of his own party to become more Eurosceptic. Cameron has promised to try to renegotiate Britain’s EU relations if re-elected next year, before offering Britons a membership referendum in 2017. But some of his own lawmakers want him to take a tougher line and to bring forward the vote. UKIP won European elections in Britain in May, has poached two of Cameron’s lawmakers since late August, and will try to win a second seat in parliament in a by-election next month. Before Sunday, most polling experts had forecast it could win only a handful of the 650 seats in parliament in 2015. But based on the result of a Survation poll for The Mail on Sunday, the party could win more than 100 seats in 2015.

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” … there is exclusivity even around the use of violence. The state can legitimately use force to impose its will and, increasingly, so can the rich. Take away that facility and societies will begin to equalise.”

Monkeys, the Queen and Inequality (Russell Brand)

“The definition of being rich means having more stuff than other people. In order to have more stuff, you need to protect that stuff with surveillance systems, guards, police, court systems and so forth. All of those sombre-looking men in robes who call themselves judges are just sentinels whose job it is to convince you that this very silly system in which we give Paris Hilton as much as she wants while others go hungry is good and natural and right.” This idea is extremely clever and highlights the fact that there is exclusivity even around the use of violence. The state can legitimately use force to impose its will and, increasingly, so can the rich. Take away that facility and societies will begin to equalise. If that hotel in India was stripped of its security, they’d have to address the complex issues that led to them requiring it.

“These systems can be very expensive. America employs more private security guards than high-school teachers. States and countries with high inequality tend to hire proportionally more guard labour. If you’ve ever spent time in a radically unequal city in South Africa, you’ll see that both the rich and the poor live surrounded by private security contractors, barbed wire and electrified fencing. Some people have nice prison cages, and others have not so nice ones.” Matt here, metaphorically, broaches the notion that the rich, too, are impeded by inequality, imprisoned in their own way. Much like with my earlier plea for you to bypass the charge of hypocrisy, I now find myself in the unenviable position of urging you, like some weird, bizarro Jesus, to take pity on the rich. It’s not an easy concept to grasp, and I’m not suggesting it’s a priority. Faced with a choice between empathising with the rich or the homeless, by all means go with the homeless.

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The consequences of the choices you make, or let others make for you. Australia seems to think this is alright.

Poverty Ensnares 1-in-7 Australians Even After Decades of Growth (Bloomberg)

One in seven Australians live below the poverty line, even after more than two decades of economic growth, an Australian Council of Social Service report showed. The poverty rate in Australia climbed to 14% in 2012, or 2.55 million people, from 13% in 2010, the council said yesterday in a report. This included 603,000 children, or 18% of the total. The poverty line is defined as 50% of median disposable income, a standard measure of financial hardship in wealthy countries, it said. “The child poverty rate should be of deep concern to us all, with over a third of children in sole-parent families” falling into this category, Cassandra Goldie, chief executive officer of Acoss, said in a statement. “This is due to the lower levels of employment among sole-parent households, especially those with very young children, and the low level of social security payments for these families.”

While a mining-investment boom sustained growth and employment in Australia’s economy, which has avoided recession since 1991, increasing numbers of people have missed out and instead seen their finances stretched by high housing costs. People in Sydney, with a population of 4.4 million Australia’s biggest city, are more likely to be in poverty than those in any other state capital, mainly because of high housing costs, the report showed. 15% of Sydneysiders fall into this category. New South Wales is the only state where a higher proportion of city residents than those in non-metropolitan areas live in poverty. “The humiliation, deprivation and depth of despair some people feel is all too often either unknown or forgotten in the public stories and discourse about people living on welfare benefits,” David Thompson, chief executive officer of Jobs Australia, a body for nonprofit organizations that assist the unemployed, said in the statement. “It is not them or us, they are us. And we would all do well to remember that, in a blink of an eye, it could be us.”

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Not a new issue, but awfully hard to prove. And until we can, it will simply continue. The precautionary principle is always trumped by the dollar.

Drugs Flushed Into The Environment Linked To Wildlife Decline (Guardian)

Potent pharmaceuticals flushed into the environment via human and animal sewage could be a hidden cause of the global wildlife crisis, according to new research. The scientists warn that worldwide use of the drugs, which are designed to be biologically active at low concentrations, is rising rapidly but that too little is currently known about their effect on the natural world. Studies of the effect of pharmaceutical contamination on wildlife are rare but new work published on Monday reveals that an anti-depressant reduces feeding in starlings and that a contraceptive drug slashes fish populations in lakes. “With thousands of pharmaceuticals in use globally, they have the potential to have potent effects on wildlife and ecosystems,” said Kathryn Arnold, at the University of York, who edited a special issue of the journal Philosophical Transactions of the Royal Society B. ”Given the many benefits of pharmaceuticals, there is a need for science to deliver better estimates of the environmental risks they pose.”

She said: “Given that populations of many species living in human-altered landscapes are declining for reasons that cannot be fully explained, we believe that it is time to explore emerging challenges,” such as pharmaceutical pollution. Research published in September revealed half of the planet’s wild animals had been wiped out in the last 40 years. In freshwater habitats, where drug residues are most commonly found, the research found 75% of fish and amphibians had been lost. A few dramatic examples of wildlife harmed by drug contamination have been discovered previously, including male fish being feminised by the synthetic hormones used in birth-control pills and vultures in India being virtually wiped out by an anti-inflammatory drug given to the cattle on whose carcasses they feed. Inter-sex frogs have also recently been found in urban ponds contaminated with wastewater.

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Not so sure about this, but let’s hear the arguments.

10 Reasons To Quit The US For Europe (MarketWatch)

The European economy may be limping along, but Americans living there say there are other reasons why they call Europe home — or maison, casa or zuhause. More Americans are moving overseas. The Social Security Administration currently sends 613,650 retirement-benefit payments outside the U.S., more than double the 242,128 benefit payments sent abroad in 2002. The number of Americans who actually gave up their citizenship rose to 3,000 in 2013, three times as many as in 2012. Others — like Richard Wise, 54, who moved to London in 2012 — took their passports. Contrary to popular opinion on food in Britain, famous for bangers and mash, Wise says, “the food stopped sucking a long, long time ago.” Some Americans left for a quieter life. Sarah McCullough Canty, 47, moved to the west of Ireland in 2002. “My husband is from Ballydehob, West Cork, so the choice to go to his homeland was easy,” she says. “It’s one of the most beautiful places on earth.”

She doesn’t have to worry about shootings and gun crime. “My children are free to roam the streets of the village with no fear,” she says. “They are not exposed to hard drugs.” (Of course, that’s certainly not the case in larger Irish cities like Limerick and Dublin.) Older people, in particular, seem to fare well in Europe — a potential draw for America’s aging boomers. Norway is the best place to live for over-60s, according to the “Global AgeWatch Index,” released this week by HelpAge International, a London-based nonprofit group. Norway replaced Sweden as the No. 1 place to live, as measured by four key issues: income security, health, personal capability and an enabling environment. Sweden was No. 2, followed by Switzerland, Canada, Germany, The Netherlands and Iceland. The U.S. came in at No. 7. Japan, New Zealand and the U.K. completed the Top 10.

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“The economy will grow at half last year’s pace, the World Bank forecast, even before the volatility in the global commodity markets threatened more upheaval in a country that’s had to rebuild itself since the end of a twelve-year civil war in 2002.”

Ebola-Stricken Sierra Leone Double-Whammied by Iron Ore Plunge (Bloomberg)

In Sierra Leone, one of the poorest countries in Africa, the hardships of Ebola hit at victims and non-victims alike. Sulaiman Kamara, a handcart pusher in Freetown before the outbreak began in May, used to earn 50,000 Leones ($11) a day, before a shriveling economy took away his job. The 42-year-old father of three now hawks cigarettes and candy on streets with shuttered shops and restaurants, empty hotels and idling taxis. Some days, he’s lucky to make a quarter of his former earnings. Things are about to get worse again. Iron ore, the biggest export earner, is in a major tailspin, leaving Sierra Leone’s two miners on the verge of collapse and jeopardizing 16% of GDP in a country where output per person was just $809 last year. Used in steelmaking, iron ore has slumped 39% this year as the world’s largest miners spend billions of dollars expanding giant pits in Australia and Brazil.

Digging up ore that’s less rich in iron and operating with restrictions imposed to stop the disease’s spread, local producers can’t compete. “The impact of Ebola in terms of iron ore revenue is huge,” said Lansana Fofanah, a senior economist in Sierra Leone’s Ministry of Finance and Economic Development. “Iron ore is responsible for the country’s double digit growth since 2011 until the Ebola outbreak.” Iron ore contributes more in mining royalties than any other mineral to government revenue, which has plunged since the outbreak began, and as the budget deficit worsens, the International Monetary Fund has agreed to step in. The economy will grow at half last year’s pace, the World Bank forecast, even before the volatility in the global commodity markets threatened more upheaval in a country that’s had to rebuild itself since the end of a twelve-year civil war in 2002.

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Full protective gear works great. Until you have to take it off. And: “We know that Mr. Duncan got dialysis. He also got a breathing tube inserted into his lungs. And those are procedures in which there is a danger of contamination of health care workers. ‘Those high-risk procedures were undertaken “as a desperate measure to try to save [Duncan’s] life,’ Frieden said, adding that he was unaware of any prior Ebola patient receiving either of those treatments.”

If “The Protocols Work,” How Did Dallas Nurse Get Ebola?

When the first U.S. Ebola patient turned up at a Dallas hospital late last month, public health officials were quick to reassure the public that the health care system was prepared to handle it and prevent the deadly disease from spreading. “We are stopping Ebola in its tracks in this country,” Dr. Tom Frieden, director of the Centers for Disease Control and Prevention, said on Sept. 30, after Dallas patient Thomas Eric Duncan’s Ebola test came back positive. “We can do that because of two things: strong infection control that stops the spread of Ebola in health care; and strong core public health functions.” But news that a nurse who treated Duncan became infected in the process has cast doubt on whether those safety precautions were good enough or were properly followed. The nurse at Texas Health Presbyterian Hospital was wearing full protective gear when she treated Duncan, but somehow got infected anyway. Frieden said Sunday that the CDC was conducting an investigation into what went wrong, to try to prevent it from happening again.

“It is deeply concerning that this infection occurred,” Frieden acknowledged. “We don’t know what occurred… but at some point there was a breach in protocol and that breach in protocol resulted in this infection.” The reality is, even when health care workers know the proper steps, small – but potentially deadly – lapses can still happen. “It’s hard to stick to the protocol 100% of the time when you’re responding to emergencies; you get lax,” Dr. Dalilah Restrepo, an infectious diseases specialist at Mount Sinai Roosevelt and Mount Sinai St. Luke’s in New York City, told CBS News in an interview last week. The protocol for dealing with Ebola governs the steps hospitals and health care workers take to isolate an Ebola patient and the protective gear they wear to avoid infection. Personal protective equipment – the head to toe “spacesuit” gear – is impervious to the infectious bodily fluids that can spread Ebola from person to person. But for health care workers, taking off contaminated gear without infecting themselves is tricky and requires training and practice.

“In taking off equipment, we identify this as a major area for risk,” Frieden said. “When you have gone into contaminated gloves, masks or other things, to remove those without risk of contaminated material touching you and being then on your clothes or face or skin and leading to an infection is critically important and not easy to do right.” Restrepo echoed concern about the hazards involved in safely removing protective gear. “We’ve seen in the removal process there’s always a risk for infection,” she said. The best practice, she explained, is to have someone trained in infectious disease control responsible for helping a doctor or nurse remove their protective gear every time they leave a patient’s room. “It’s pretty much from the ground up. Booties come off first,” she said. The priority is to keep contamination away from the eyes, nose and mouth, the primary means of transmission.

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