Apr 122017
 
 April 12, 2017  Posted by at 8:25 pm Finance Tagged with: , , , , , , ,  8 Responses »
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Frederick Carl Frieseke Girl In Blue Arranging Flowers 1915

 

Potential earthquakes and black swans are right ahead of us. What else is new? On April 16, Turkey has a referendum to decide whether Erdogan will become de facto supreme ruler. What happens if he loses the referendum is completely unclear, undiscussed even, but it’s obvious a loss would have the country shake on its already shaky foundations.

The Turkish economy is in horrible shape and Erdogan’s post-coup firings (hundreds of thousands) and jailings (tens of thousands) have made large parts of society unattended. The biggest of which may well be the army; you can’t fire large numbers of officers and pilots and expect to retain the same strike effectiveness.

Erdogan’s ongoing war on the Kurds is also turning against him, or at least internationally. Both Russia and the US acknowledge the important role Kurdish forces play in the battle against ISIS, and they’re not going to turn against them. So while Turkey demands a major role in neighboring Syria, it has essentially been put off-side, or benched.

Russia maintains (some of) its boycotts of Turkish products ($260 million worth of tomatoes) that were the result of Erdogan downing a Russian jet in late 2015, and the refuses to deliver arch-enemy Gülen, despite Michael Flynn’s best efforts. This means, by the way, that the country simply hasn’t provided irrefutable proof of the man’s role in the coup (if it was ever a real coup).

If Erdogan cannot come up a winner on Sunday, he would lose a lot of face. And he might lose more than that. Of course one must question if it’s even a option that the Turkish people vote NO, and that that would subsequently be announced as the referendum result. He controls just about anything in the country already; why not this too, by right or by might?!

 

Second black swan: France. It could be a genuine black one, as in unexpected. Less than two weeks before the first round of the presidential election, all of a sudden another contender has come to the fore. Far left Jean-Luc Mélenchon was never given any chance of winning, but one TV debate later his popularity is rising fast.

The French have long been tired of their political system, and this time around that could mean all established parties are out. Even perhaps including Emmanuel Macron, who doesn’t belong to a party but is still perceived as a member of the establishment, no matter how hard he tries not to be.

Come round two on May 7, voters might be faced with the -stark- choice between far left and far right, with a big gaping empty hole in between. That would leave no option of a ‘safe choice’, the big hope of everyone who doesn’t like Marine Le Pen. It would also leave no candidate who unwaveringly supports the euro or even the EU.

In fact, it’s ironic -make that funny- to what extent far left and far right ideas ‘meet in the middle’. Add to the irony that Melenchon’s rise makes a Le Pen presidency that much more likely, because a ‘communist’ is seen as at least as dangerous as Le Pen. That might give her the undecided votes she will need to prevail.

 

US Secretary of State Rex Tillerson is in Moscow, he’s way out of his league, and he knows it. His task is, if you read between the lines, to deliver warnings and threats to Putin and Russian Foreign Minister Lavrov, but both are not only at least as smart as Rex, they have the many years of experience in international politics that he woefully lacks.

The White House issued a ‘we can prove it was Assad, and it was sarin’ report yesterday, but they can not. The sarin accusation even makes little sense given the photos of people attending to the victims with bare hands. Accusing Russia of being complicit in Assad attacking his own people with gas/chemicals doesn’t really fly either.

Tillerson said earlier in the week that Russia is either ‘incompetent or complicit’, that it should have made sure Assad had no chemical arsenal. But a 2013 treaty between the US and Russia established a UN body, the Organisation for the Prohibition of Chemical Weapons (OPCW), that is responsible for that. And the US is part of that body, and as such co-responsible.

And yes, there will be people saying that Russia delivered chemical capacity to Assad despite the treaty. But why should it? That question falls into the same category as why Assad would use chemicals to begin with at this point in time. It makes no sense, there is no logic. But then in the US logic has been in short supply for a while, certainly when politics are concerned.

Tillerson apparently was told to tell Russia that it has to stop supporting Assad or else, but that is just real dumb. Syria is Russia’s only haven in the Middle East, and there’s no chance they will give it up. And why should they? Would the world be a better place if the US can do whatever it wants in the region? Haven’t the utterly failed regime changes in Iraq and Libya done enough damage?

Sure, Assad may be a shaky asset. But what about the Saudi’s and their western-supported obliteration of the entire nation and peoples of Yemen? Want to look at some pictures that can drive Ivanka to tears? You won’t see them in your media, and neither will she. It’s all just biased nonsense, and by now it’s hard to see how Trump will find his own way in, let alone find his way out of, this foreign swamp.

Threatening Russia is certainly not that way. But sure, the President must feel eager to disprove the unproven non-stop allegations of collaboration between him and Putin. And the one-sided attacks did indeed stop only when the bombs started to fall. It’s all so predictable it makes you want to puke all over your morning paper all over every single morning, Groundhog Day style.

 

The New York Times was awarded a Pulitzer for “agenda-setting reporting on Vladimir Putin’s efforts to project Russia’s power abroad”. I kid you not. The American press has lost all concerns about its own credibility, and the Pulitzers follow them with a vengeance. And that same press did a weather-vane like 180 as soon as 59 Tomahawks were aimed and fired at an abandoned airport in the sand.

They were anti-Trump mongers the whole time, and changed like a leaf on a tree in seconds, to become pro-war mongers. It’s something to behold. They love him! The starkest example, among too many to keep count of, was presented in a publication named The Hill, which we are apparently supposed to take serious. It’s just another WaPo and NYT clone, but this thing by “General Anthony J. Tata, Opinion Contributor” sums it all up too nicely to ignore:

Trump’s Adherence To American Values Demonstrates His Commitment To Protecting Us

In the wake of Tuesday’s Syrian chemical weapons attack on innocent civilians, President Barack Obama will be remembered as America’s modern day Neville Chamberlain, the infamous United Kingdom Prime Minister who appeased Nazi Germany in 1938 by signing the Munich Agreement, setting the stage for the holocaust. Contrast Obama’s negligence with President Donald Trump’s decisive action a mere two days following the Syrian violation of international law. The Syrian government used chemicals to brutalize its citizens in Khan Sheikhoun.

President Trump immediately denounced the attacks, labeling them, “An affront to humanity.” Less than 72 hours later he ordered the launch of 60 cruise missiles to destroy the airfield from which the bomb delivering airplanes departed. If Obama’s passivity in the face of weapons of mass destruction (WMD) deployed in Syria in 2013 lends to Chamberlain comparisons, President Donald Trump’s military action against Syria this week compares favorably to Winston Churchill, Chamberlain’s effective wartime successor.

Just as Chamberlain and Churchill viewed Nazi Germany differently, how could two modern day American presidents see essentially the same horrifying pictures of chemical weapons attack victims and come to two decidedly different conclusions about their terror and an effective response?

Jarring images of Tuesday’s sarin nerve agent attack on its citizens that circulated the world this week were similar to those that went viral in 2013: bodies torqued in gruesome death poses, patients oozing bodily fluids from their mouths and noses, and children running blind through the streets. In 2013, an unimpressed President Obama found a passive, ineffective diplomatic solution relying on unreliable Russian oversight. Syria obviously maintained and built its weapons of mass destruction stockpiles. The United Nations was even in on the deal, declaring that there were no more chemical weapons in Syria.

There’s so much stupidity and mendacity in that, you really have to take some time out to let it sink in. But it’s also very representative of American media these days. CNN, WaPo, NYT, they’re all full of people who by now must feel really shortchanged because Trump hasn’t dropped many more bombs on Syria, and they’re more than willing not to show us the pictures of the children those bombs would maim and kill. After all, how many pictures have you seen of Yemen’s death and famine?

When Trump told Maria Bartiromo that “we’re not going into Syria”, you can bet your buttocks lots of executives behind the desks there were thinking of one thing only: how do we get him to do it anyway? They still have hope there’ll be a major war soon, I guarantee you that.

But Putin is not going to move an inch, not on Syria and not on anything else. He knows the US army can do a lot of damage, but it can’t win. It hasn’t won an actual war in many decades, and it won’t win this one either if whoever’s in Washington decides to start it.

Before I started writing this I was thinking about Rip van Winkle rather than Groundhog Day. The whole media 180, and the war cries, are exactly like they were in 2003. Now, Rip van Winkle allegedly slept for 20 years, not 14, but hey, details. The cute thing about the Rip van Winkle story is also in the details:

When he awakens, Van Winkle discovers shocking changes: his musket is rotting and rusty, his beard is a foot long, and his dog is nowhere to be found. He returns to his village, where he recognizes no one. Van Winkle returns just after an election, and people are asking how he voted. (Wikipedia)

That election thing is priceless. But Rip woke up to find his entire world completely changed. Whereas today’s hollow US war talk is something we’ve seen before, and many times. That’s more Groundhog Day style. There must be a way to connect the two stories in a way that fits today’s reality. Whoever finds it is in Hollywood blockbuster territory.

War is far too popular in America. It’s scary. Not least of all because the US has zero chance of winning. For the same reasons, by the by, that it can’t fix its health care system.

America as a country, a society, is not effective enough anymore to win anything, there’s no chance of a concerted effort, it’s too inward looking and distracted by TV-shaped reality and ‘social’ media, and its entire society is aimed only at maximizing profit at the expense of one’s own neighbors. America has turned into cats in a sack.

But yes, these are often the most dangerous times in the existence of an empire. The waning days. The downward slope. The swans that will pop up in that are definitely black; there’s no predicting those graceful beauties.

Apr 122017
 
 April 12, 2017  Posted by at 9:09 am Finance Tagged with: , , , , , , , , , , ,  2 Responses »
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Elliott Erwitt Trocadero, Paris 1950

 

The Tesla Ponzi Is Not ‘Inexplicable’ At All (WS)
Millennials Are Abandoning Postwar Engines of Growth: Suburbs and Autos (CHS)
Slowdown in US Borrowing Defies Easy Explanation (WSJ)
US Companies Now Have $1.6 Trillion Stashed In Tax Havens (Ind.)
Trump Declines To Endorse Bannon, Says US ‘Not Going Into Syria’ (MW)
Beware The Dogs Of War: Is The American Empire On The Verge Of Collapse? (JW)
A Breakthrough Alternative To Growth Economics – The Doughnut (G.)
The Commodification of Education (Steve Keen)
The Fed Could Use Less Book Learning and More Street Smarts (Ricketts)
Spectre Of Russian Influence Looms Large Over French Election (G.)
Moment Of Reckoning In Turkey As Alleged Coup Plotters Go On Trial (G.)
Greece: Cash and Apartments for Refugees with UNHCR Aid (GR)
Why The Human Race Is Heading For The Fire (G.)

 

 

People tend to forget that there are no functioning asset markets left. But there really aren’t.

The Tesla Ponzi Is Not ‘Inexplicable’ At All (WS)

Electric cars have been around for longer than internal combustion engines. When they first appeared in the 1800s, they competed with steam-powered cars and horses. What Tesla has done is put them on the map. That was a huge feat. Now every global automaker has electric cars. They all, including Teslas, still have the same problem they had in the 1800s: the battery. But those problems – costs, weight or range, and time it takes to charge – are getting smaller as the technology advances. And the competition from the giants, once batteries are ready for prime-time, will be huge, and global. So in March, Tesla sold 4,050 new vehicles in the US, according to Autodata. All automakers combined sold 1.56 million new vehicles in the US.

This gave Tesla a record high market share of an invisibly small 0.26%. Volume-wise, it’s in the same ballpark as Porsche. GM sold 256,007 new vehicles in March, for a market share of 16.5%. In other words, GM sold 63 times as many new vehicles as Tesla did. For percent-lovers, that’s 6,221% more. Even if Tesla quadruples its sales in the US, it still will not amount to a significant market share. Then there is Tesla’s financial performance. It lost money in every one of its 10 years of existence. Here are the “profits” – um, net losses – Tesla racked up, in total $2.9 billion:

We constantly hear the old saw that stock prices reflect future earnings and/or cash flows, and that looking back ten years has no meaning for the future. Alas, after 10 years of producing losses, Tesla shows no signs of making money in the future. It might instead continue burning through investor cash by the billions. Based on the logic that stock prices reflect future earnings, its shares should be at about zero. This chart compares Tesla’s net losses (red bars) and GM’s net income (green bars), in millions of dollars. Over those eight years going back to 2010, Tesla lost $2.7 billion; GM earned $47.1 billion:

[..] In comparison with GM, Tesla is ludicrously overvalued. But it’s not “inexplicable.” It’s perfectly explicable by the wondrously Fed-engineered stock market that has long ago abandoned any pretext of valuing companies on a rational basis. And it’s explicable by the hype – the “research” – issued by Wall Street investment banks that hope to get fat fees from Tesla’s next offerings of shares or convertible debt. The amounts are huge, going back ten years: Last month, Tesla raised another $1.2 billion, after having raised $1.5 billion in May 2016. There will be more. Tesla is burning a lot of cash. Investment banks get rich on these deals. The bonuses are huge. So it’s OK to hype Tesla’s stock and sell it to their clients. Everybody wins in this scenario – except for a few despised short sellers who’re hung up on their silly notion of reality.

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They simply can’t afford it.

Millennials Are Abandoning Postwar Engines of Growth: Suburbs and Autos (CHS)

If anything defined the postwar economy between 1946 and 1999, it was the exodus of the middle class from cities to suburbs and the glorification of what Jim Kunstler calls Happy Motoring: freeways, cars and trucks, ten lanes of private vehicles, the vast majority of which are transporting one person. The build-out of suburbia drove growth for decades: millions of new suburban homes, miles of new freeways, sprawling shopping malls, and tens of millions of new autos, trucks, and SUVs, transforming one-car households into three vehicle households. Then there was all the furnishings for those expansive new homes, and the credit necessary to fund the homes, vehicles, furnishings, etc. Now the Millennial generation is turning its back on both of these bedrock engines of growth.

As various metrics reveal, the Millennials are fine with taking Uber to work, buying their shoes from Zappos (return them if they don’t fit, no problem), and making whatever tradeoffs are necessary to live in urban cores. Simply put, the natural progression of this generation is away from suburban malls, suburban home ownership and the car-centric commuter lifestyle that goes with suburban homeownership. Saddled with insanely high student debt loads imposed by the rapaciously predatory higher education cartel, Millennials avoid additional debt like the plague. Millennials have relatively high savings rates. As for a lifetime of penury to service debt–hey, they already have that, thanks to their “I borrowed $100,000 and all I got was this worthless college degree” student loans.

Consider the secondary effects of these trend changes. If Millennials are earning less and already carrying heavy debt loads, who is going to buy the Baby Boom’s millions of pricey suburban McMansions? The answer might be “no one.” If vehicle sales decline, all the secondary auto-related sales decline, too. Auto insurance, for example. Furnishing a small expensive urban flat requires a lot less furnishings than a 3,000 square foot suburban house. What happens to sales of big dining sets and backyard furniture? As retail malls die, property taxes, sales taxes and payroll taxes decline, too. Many cheerlead the notion of repurposed commercial space, but uses such as community college classes pay a lot less per square foot than retail did, and generate little in the way of sales and payroll taxes. Financial losses will also mount. Valuations and property taxes will decline, and commercial real estate loans based on nose-bleed valuations and high retail lease rates will go south, triggering significant financial-sector losses.

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I’d think it couldn’t be easier.

Slowdown in US Borrowing Defies Easy Explanation (WSJ)

One of the great mysteries and biggest concerns in the economy right now is the slowing growth in bank lending. Economists are searching for answers but none are entirely satisfying. Total loans and leases extended by commercial banks in the U.S. this year were up just 3.8% from a year earlier as of March 29, according to the latest Federal Reserve data. That compares with 6.4% growth in all of last year, and a 7.6% pace as of late October. The slowdown is more surprising given the rise in business and consumer confidence since the election. And it is worrisome because the lack of business investment is considered an important reason why economic growth has remained weak. Loans to businesses have slowed most sharply, with the latest data showing commercial and industrial loans up just 2.8% from a year earlier, compared with 8.9% growth in late October.

Economists at Goldman Sachs estimate the slowdown in commercial and industrial lending alone equates to a $100 billion shortfall in loans. Investors may start to get more clarity on what is causing the slowdown when banks start reporting first-quarter earnings on Thursday. One explanation is that many companies have been tapping corporate bond markets to lock in low rates, and in some cases to pay down more expensive bank debt. In the first quarter of this year, corporate bond issuance rose by 18% from a year earlier, according to the Securities Industry and Financial Markets Association. But one reason for the increase is that the first quarter of 2016 was dismal because of market turmoil. The rise isn’t enough to explain the entire shortfall in lending.

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The Trump tax plan is way off schedule.

US Companies Now Have $1.6 Trillion Stashed In Tax Havens (Ind.)

The 50 biggest US companies stashed another $200bn of profits in offshore tax havens in 2015 alone, taking the total to approximately $1.6 trillion, according to new analysis. Donald Trump’s plans to slash taxes for corporations and wealthy individuals and impose a border tax will harm average consumers further, Oxfam said in a report published on Tuesday. The 50 largest companies disclosed use of 1,751 subsidiaries in countries classed as tax havens by the OECD and the US National Bureau of Economic Research, an increase of 143 on a year earlier, the charity found. The true number may be far higher as only “significant” subsidiaries have to be disclosed. Big multinationals such as Google, Amazon and Apple have come under fire for routing sales through countries such as Bermuda, Ireland and Luxembourg, which offer them low tax rates.

While this is legal, critics say it does not reflect where the firms actually do business. The top rate of US corporate tax is 35% – one of the highest rates in the world, incentivising many companies to hold billions offshore. Mr Trump has pledged to reduce this to 15% and a one-off rate of 10% for money currently held abroad. That will hand a $328bn tax break to the 50 biggest companies, with Apple, Pfizer and Microsoft the biggest gainers, accounting for 40% of the total, Oxfam estimated. While some have welcomed the move as a sensible way to bring profits of US companies back to the country, Oxfam warns that it risks accelerating a race to the bottom that will harm consumers in America as well as the world’s poor as global tax rates plummet.

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Scott Adams forecast three phases for opinion of Trump. First people would call him Hitler, then incompetent, then ‘competent but I don’t like it’. Is he on track?

Trump Declines To Endorse Bannon, Says US ‘Not Going Into Syria’ (MW)

President Donald Trump declined to give top adviser Steve Bannon a vote of confidence during a New York Post interview published Tuesday, in which he also said the U.S. was not headed toward a ground war in Syria. There have been reports of discord among Trump’s top White House advisers, and rumors that controversial chief strategist Bannon may be on the way out. Last week, Bannon and Trump’s son-in-law, Jared Kushner, were reportedly told to iron out their differences. When asked Monday by Post columnist Michael Goodwin if he still had confidence in Bannon, Trump didn’t exactly give a ringing endorsement: “I like Steve, but you have to remember he was not involved in my campaign until very late. I had already beaten all the senators and all the governors, and I didn’t know Steve.”

“I’m my own strategist and it wasn’t like I was going to change strategies because I was facing crooked Hillary.” “Steve is a good guy, but I told them to straighten it out or I will,” Trump said. In the same interview, Trump told Goodwin that, despite last week’s airstrike, U.S. policy toward Syria has not changed. “We’re not going into Syria,” Trump said. “Our policy is the same — it hasn’t changed. We’re not going into Syria.” Trump also acknowledged a growing rift with Russia — “We’re not exactly on the same wavelength with Russia, to put it mildly” — again called the nuclear deal with Iran “the single worst deal ever,” and said of the worsening nuclear situation with North Korea: “I knew I was left a mess, but it’s worse than I thought.”

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Cue Rome.

Beware The Dogs Of War: Is The American Empire On The Verge Of Collapse? (JW)

Waging endless wars abroad (in Iraq, Afghanistan, Pakistan and now Syria) isn’t making America—or the rest of the world—any safer, it’s certainly not making America great again, and it’s undeniably digging the U.S. deeper into debt. In fact, it’s a wonder the economy hasn’t collapsed yet. Indeed, even if we were to put an end to all of the government’s military meddling and bring all of the troops home today, it would take decades to pay down the price of these wars and get the government’s creditors off our backs. Even then, government spending would have to be slashed dramatically and taxes raised.

You do the math.
• The government is $19 trillion in debt.
• The Pentagon’s annual budget consumes almost 100% of individual income tax revenue.
• The government has spent $4.8 trillion on wars abroad since 9/11, with $7.9 trillion in interest. As the Atlantic points out, we’re fighting terrorism with a credit card.
• The government lost more than $160 billion to waste and fraud by the military and defense contractors.
• Taxpayers are being forced to pay $1.4 million per hour to provide U.S. weapons to countries that can’t afford them.
• The U.S. government spends more on wars (and military occupations) abroad every year than all 50 states combined spend on health, education, welfare, and safety.
• Now President Trump wants to increase military spending by $54 billion.
• Add in the cost of waging war in Syria, and the burden on taxpayers soars to more than $11.5 million a day. Ironically, while presidential candidate Trump was vehemently opposed to the U.S. use of force in Syria, and warned that fighting Syria would signal the start of World War III against a united Syria, Russia and Iran, he wasted no time launching air strikes against Syria.

Clearly, war has become a huge money-making venture, and the U.S. government, with its vast military empire, is one of its best buyers and sellers. Yet what most Americans—brainwashed into believing that patriotism means supporting the war machine—fail to recognize is that these ongoing wars have little to do with keeping the country safe and everything to do with enriching the military industrial complex at taxpayer expense. The rationale may keep changing for why American military forces are in Afghanistan, Iraq, Pakistan and now Syria. However, the one that remains constant is that those who run the government—including the current president—are feeding the appetite of the military industrial complex and fattening the bank accounts of its investors.

Case in point: President Trump plans to “beef up” military spending while slashing funding for the environment, civil rights protections, the arts, minority-owned businesses, public broadcasting, Amtrak, rural airports and interstates. In other words, in order to fund this burgeoning military empire that polices the globe, the U.S. government is prepared to bankrupt the nation, jeopardize our servicemen and women, increase the chances of terrorism and blowback domestically, and push the nation that much closer to eventual collapse. Obviously, our national priorities are in desperate need of an overhauling.

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Interesting but hardly a breakthrough. It’s not all that hard.

A Breakthrough Alternative To Growth Economics – The Doughnut (G.)

Raworth begins by redrawing the economy. She embeds it in the Earth’s systems and in society, showing how it depends on the flow of materials and energy, and reminding us that we are more than just workers, consumers and owners of capital. This recognition of inconvenient realities then leads to her breakthrough: a graphic representation of the world we want to create. Like all the best ideas, her doughnut model seems so simple and obvious that you wonder why you didn’t think of it yourself. But achieving this clarity and concision requires years of thought: a great decluttering of the myths and misrepresentations in which we have been schooled. The diagram consists of two rings. The inner ring of the doughnut represents a sufficiency of the resources we need to lead a good life: food, clean water, housing, sanitation, energy, education, healthcare, democracy.

Anyone living within that ring, in the hole in the middle of the doughnut, is in a state of deprivation. The outer ring of the doughnut consists of the Earth’s environmental limits, beyond which we inflict dangerous levels of climate change, ozone depletion, water pollution, loss of species and other assaults on the living world. The area between the two rings – the doughnut itself – is the “ecologically safe and socially just space” in which humanity should strive to live. The purpose of economics should be to help us enter that space and stay there. As well as describing a better world, this model allows us to see, in immediate and comprehensible terms, the state in which we now find ourselves. At the moment we transgress both lines. Billions of people still live in the hole in the middle. We have breached the outer boundary in several places.

An economics that helps us to live within the doughnut would seek to reduce inequalities in wealth and income. Wealth arising from the gifts of nature would be widely shared. Money, markets, taxation and public investment would be designed to conserve and regenerate resources rather than squander them. State-owned banks would invest in projects that transform our relationship with the living world, such as zero-carbon public transport and community energy schemes. New metrics would measure genuine prosperity, rather than the speed with which we degrade our long-term prospects.

Such proposals are familiar; but without a new framework of thought, piecemeal solutions are unlikely to succeed. By rethinking economics from first principles, Raworth allows us to integrate our specific propositions into a coherent programme, and then to measure the extent to which it is realised. I see her as the John Maynard Keynes of the 21st century: by reframing the economy, she allows us to change our view of who we are, where we stand, and what we want to be. Now we need to turn her ideas into policy. Read her book, then demand that those who wield power start working towards its objectives: human prosperity within a thriving living world.

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Hungry for knowledge, or hungry for a paycheck? Our education systems are a giant failure.

The Commodification of Education (Steve Keen)

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A real life consequence of Commodification of Education. Intellectual Yet Idiot.

The Fed Could Use Less Book Learning and More Street Smarts (Ricketts)

I’ll bet pundits and pollsters will forever ponder how Donald Trump got elected. For me, it’s straightforward: The American people—or at least enough of them to propel Mr. Trump into office—wanted to infuse practical business experience into the government. To borrow a phrase from my friend, the economist Larry Lindsey, voters rejected the political ruling class in favor of real-world experience. Which brings me to the Federal Reserve. In 2012 Jim Grant, the longtime financial journalist, delivered a speech at the Federal Reserve Bank of New York. “In the not quite 100 years since the founding of your institution,” he said, “America has exchanged central banking for a kind of central planning and the gold standard for what I will call the Ph.D. standard.” Central banking, in other words, is now dominated by academics. And while I don’t blame them for it, academics by their nature come to decision-making with a distinctly—you guessed it—academic perspective.

The shift described by Mr. Grant has had consequences. For one thing, simplicity based on age-old practice has been replaced by complexity based on econometric theory. Big Data has played an increasingly prominent role in how the Fed operates, even as the Fed’s role in the economy has deepened and widened. Rather than enlisting business leaders and bankers to fulfill the Fed’s increasingly complex mission, the nation’s political and monetary authorities turned primarily to the world’s most brilliant economists, who can be thought of more and more as monetary scientists. “Central bankers have invited politicians to abdicate leadership authority to an inbred society of PhD academics who are infected to their core with groupthink, or as I prefer to think of it: ‘groupstink,’” argues former Dallas Fed analyst Danielle DiMartino Booth in a new book.

Ten of the 17 current Fed governors and regional bank presidents have doctorates in economics. Few have much experience in the private economy. Most have spent the bulk of their careers at the classroom lectern or in Washington. This is a sea change. In past decades, Fed members and governors frequently had experience in banking, industry and agriculture. Do the results indicate that our pursuit of intellectual horsepower has produced a stronger economy? Today’s labor-force participation rate is lower than at any time since the late 1970s; an oven from Sears that cost $160 in 1975 would cost more than $400 today; and despite unprecedented intervention in the economy, America has experienced its worst recovery since the Great Depression.Given the cumulative genius of the leaders of the Federal Reserve System, and the highly sophisticated quantitative tools and policies the Fed has developed under their direction, why aren’t we doing better?

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Just one example of how deluded the UK, like the US, has fast become when it comes to Russia. ‘Putin Did It’ is very much alive. It’s getting mighty tiresome.

Spectre Of Russian Influence Looms Large Over French Election (G.)

The golden domes of one of Vladimir Putin’s foreign projects, the recently built Russian Holy Trinity cathedral in the heart of Paris, rise up not far from the Elysée palace, the seat of the French presidency. Dubbed “Putin’s cathedral” or “Saint-Vladimir”, it stands out as a symbol of the many connections the French elite has long nurtured with Russia, and which the Kremlin is actively seeking to capitalise on in the run-up to the French presidential election. France is an important target for Russia’s soft power and networks of influence. The country is a key pillar of the European Union, an important Nato member and home to Europe’s largest far-right party, the Front National, whose leader, Marine Le Pen, is expected to reach the 7 May run-off in the presidential vote and has benefited from Russian financing.

Le Pen took the extraordinary step of travelling to Moscow to meet Putin in March, just a month before the French vote, to boost her international profile and showcase her closeness to the Russian president’s worldview – including his virulent hostility towards the EU and his vision of a “civilisational” clash with radical Islam. Yet she is far from being the only presidential candidate to favour warmer relations with Russia, nor to reflect a certain French fascination with the Kremlin strongman. [..] Russian meddling in elections has become a hot political topic in the US, and there has been much speculation about Russia’s attempts to favour Brexit as well as anti-EU parties in the Netherlands and Germany. But France is now widely seen as the key country where Russia has a strategic interest in encouraging illiberal forces and seeking to drive wedges between western democracies.

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One shudders to imagine what happens if Erdogan loses the Sunday April 16 referendum. And also what happens if he wins.

Moment Of Reckoning In Turkey As Alleged Coup Plotters Go On Trial (G.)

Turkish prosecutors are laying the groundwork for large-scale trials of hundreds of people accused of participating in a coup attempt last July, an undertaking that is already transforming society and will be a reckoning of sorts for a nation that has endured much upheaval in recent years. Authorities say the trials will shed light on alleged links between the accused and Fethullah Gülen, an exiled US-based preacher with a vast grassroots network. The onset of the trials has refocused attention on the large-scale purges of Turkey’s government, media and academia after the coup attempt, in which tens of thousands of people – many with no known links to the Gülenists – were dismissed or jailed. Meanwhile, Turkey is preparing for a referendum on Sunday on greater presidential powers, which could prove the most significant political development in the history of the republic.

“What happened on 15 July [the day of the attempted coup] and what is now happening for months is completely transformative for Turkey,” said a journalist who worked for a Gülen-affiliated media outlet and requested anonymity for fear of reprisals. “One big part of society has been subjected to extreme demonisation in a process that cost them their jobs, reputation, freedom or ultimately their lives. Another part of the society has been filled with anger and radically politicised. “Nothing can be the same as before 15 July any longer – ever,” he added. Turkish courts have already begun several parallel trials over the coup attempt. Last month prosecutors demanded life sentences for 47 people accused of attempting to assassinate the president, Recep Tayyip Erdogan, on the night of the putsch, and the largest trial yet opened on 28 February in a specially built courtroom outside Ankara filled with more than 300 suspects accused of murder and attempting to overthrow the government.

About 270 suspects, including Gülen, went on trial in absentia in Izmir in January, and an indictment issued in late February alleges that Gülenists infiltrated the state and charges 31 members of the military with attempting to overthrow the constitutional order. The state intelligence agency, the National Intelligence Service (MIT), has sent prosecutors in Ankara a list of 122,000 individuals who allegedly used a secure messaging app, ByLock, which security officials say was widely used by the Gülen network for communications.

Read more …

Handing out money and housing to refugees while Greeks themselves are hungry and homeless. Great plan.

Greece: Cash and Apartments for Refugees with UNHCR Aid (GR)

Migration Deputy Minister Yiannis Mouzalas announced on Monday that refugees will be getting cash instead of free meals and will be staying in rented apartments in order to decongest migrant camps. In a joint press conference with the participation of Representative of the United Nations High Commissioner for Refugees (UNHCR) in Greece Philippe Leclerc, President of Union of Municipalities of Thesssaly Giorgos Kotsos and Larissa Mayor Apostolos Kaloyiannis, Mouzalas explained the project of decongestion of migrant camps and relocation of refugees in urban centers and smaller municipalities. Mouzalas said that refugees will be getting cash in hand for their meals instead of rations and will be staying in apartments under the UNHCR program, so that they will be getting primary care. The program applies for 10,000 asylum seekers in 2017 and another 10,000 in 2018.

The deputy minister clarified that the apartments will be rented by owners under free market conditions and the municipalities will assist the implementation of the program. This way, he said, local communities will benefit financially. The program will apply provided that the EU-Turkey agreement for refugee returns will continue to apply. This way, Mouzalas continued, the 40 camps across Greece that host 40,000 asylum seekers will be reduced to 17-20 with a maximum of 500 people each for 2017. In 2018, another 10,000 asylum seekers will be relocated under the program. The project will start with 500 refugees leaving the Koutsohera camp and moving to Larissa, a municipality that expressed interest in the program. As the program progresses, the camps in Thessaly (Koutsohera, Volos and Trikala) will eventually close and refugees will relocate in municipalities.

“The UN will help in the expansion of the hospitality program for refugees in apartments to improve their living conditions,” Leclerc said. The program has already been implemented in Athens, Thessaloniki and Livadia. The president of the Union of Municipalities of Thesssaly underlined that the program gives municipalities the opportunity to inject money to local communities through the leasing of the apartments and the cash the refugees would spend on food. The Larissa Mayor said that “The municipality of Larissa will work in this direction. Previously there was pressure to accommodate migrants in apartments, but it was too early. Today we are not afraid to do it.”

Read more …

The green movement condemns itself by offering only half solutions. Saving the planet would require drastic changes to everyone’s lifestyle and comfort. Instead we get CON21.

Why The Human Race Is Heading For The Fire (G.)

The future for humanity and many other life forms is grim. The crisis gathers force. Melting ice caps, rising seas, vanishing topsoil, felled rainforests, dwindling animal and plant species, a human population forever growing and gobbling and using everything up. What’s to be done? Paul Kingsnorth thinks nothing very much. We have to suck it up. He writes in a typical sentence: “This is bigger than anything there has ever been for as long as humans have existed, and we have done it, and now we are going to have to live through it, if we can.” Hope finds very little room in this enjoyable, sometimes annoying and mystical collection of essays. Kingsnorth despises the word’s false promise; it comforts us with a lie, when the truth is that we have created an “all-consuming global industrial system” which is “effectively unstoppable; it will run on until it runs out”.

To imagine otherwise – to believe that our actions can make the future less dire, even ever so slightly – means that we probably belong to the group of “highly politicised people, whose values and self-image are predicated on being activists”. According to Kingsnorth, such people find it hard to be honest with themselves. He was once one of them. “We might tell ourselves that The People are ignorant of The Facts and that if we enlighten them they will Act. We might believe that the right treaty has yet to be signed, or the right technology yet to be found, or that the problem is not too much growth and science and progress but too little of it. Or we might choose to believe that a Movement is needed to expose the lies being told to The People by the Bad Men in Power who are preventing The People from doing the rising up they will all want to do when they learn The Truth.”

He says this is where “the greens are today”. Environmentalism has become “a consolation prize for a gaggle of washed-up Trots”. As a characterisation of the green movement, this outbreak of adolescent satire seems unfair. To suggest that its followers become activists only because their “values and self-image” depend on it implies that there is no terror in their hearts, no love of the natural world, nothing real other than their need for a hobby.

Read more …

Feb 232017
 
 February 23, 2017  Posted by at 2:47 pm Finance Tagged with: , , , , , , , , ,  16 Responses »
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Times Square New York City, 1958

 

A few days ago, I wrote an essay entitled “Not Nearly Enough Growth To Keep Growing”, in which I posited, among many other things, that “..the Automatic Earth has said for many years that the peak of our wealth was sometime in the 1970’s or even late 1960’s” along with the question “..was America at its richest right before or right after Nixon took the country off the gold standard in 1971?”

That same day, I received an email from (very) long time Automatic Earth reader and afficionado Ken Latta, who implied he thought the peak of American wealth was even earlier. That turned into a nice conversation. I really like the way his head works to frame his words. And Ken knows what he’s talking about by grace of the fact that he was a witness to it all.

I like that he defines wealth as “best measured by the capacity to be utterly wasteful”, and the early 1960’s in America as “a golden age, overshadowed, of course, by excess hubris.”. And I wonder many of you would agree that America was at the summit of its wealth perhaps as much as 55-60 years ago?

Here’s his first mail:

Ken Latta: Ilargi, A darned good editorial, but I would like to suggest a different baseline for America’s peak wealth. As experienced by the common man, now pronounced “deplorable”.

In my humble estimation based on having been there at the time. Peak wealth occurred somewhere in the neighborhood of 1963. It was a time when the Beach Boys and their music biz competitors were making money with songs about hi-powered cars and a life of surfing waves. Working Joes bought those cars and drove them on the street. Those on the coasts spent inordinate amounts of time surfing. A lot of ordinary car buyers were committed to trading in every three years. Some of the better off even thought every two years was the way to go. We wuz feelin invincible and we enjoyed such a comfortable way of life without forcing the majority of our wimmin into wage slavery. It was a golden age, overshadowed, of course, by excess hubris.

The national perception of wealthiness was such that the Pedernales Poltroon (LBJ) felt emboldened to declare simultaneous war on Poverty and Viet-Nam. When both had finished kicking our ass, wealth was something only to be found in the future. The best and the brightest immediately set about creating ways to steal that wealth. Most of the female population faced a choice between wage slavery or more privation than they were prepared to tolerate.

So, here we are in that future with the wealth thoroughly plundered and nothing much more comforting to anticipate than a new version of iPhone. Wealth is best measured by the capacity to be utterly wasteful and today for a large segment a new phone seems to be close to the limit. As for a big segment of new car buyers, instead of trying to calculate the optimal trade-in period, many focus on hiding it from the repo man.

To which I replied:

Yeah, there’s a good argument to be made for 1963 as well. But then, the whole Woodstock thing seems similar to that, in the terms you use. The carefree and wasteful. Where did the hippies get the time to be hippies? Then again, you could argue that Woodstock was already a first protest against that very attitude. On the finance front, Nixon couldn’t pay back everyone in gold anymore, so that’s a bad sign right there. His 1971 move was born of necessity.

And Ken said:

Ken Latta: I just picked 1963 because it happened to be a significant year for me personally. I don’t think it really useful to think of peaks as being so much like a curve with zero radius. I’d really put the period of peak actual American wealth as approximately 1958 to about 1967. Being a hippy didn’t cost much and in most cases their parents could comfortably provide their essentials. Hippies weren’t opposed to working, when they needed to, and they generally existed within a sharing economy.

Yes, Nixon had no choice on closing the gold window. The rumors of Fort Knox vault being more or less empty might well be true. What we know is that in recent times we always steal the bank gold from our conquests. Somali pirates are second raters in comparison.

I suspect that an important factor behind the gold rush might have been a consequence of an MIC logistical move prior to our little Viet-Nam adventure. A huge stockpile of decommissioned WW-II bomb casings had been sold for scrap to European companies. You know since we weren’t going to fight any more non-nuke wars. The Pentagon desperately bought them back because we had very limited production capacity at the beginning of the project for rapid promotion of military officers. That must have created a pretty big pile of Eurodollars and de Gaulle seems to have preferred gold.

When Tricky closed the window we were already poor and Detroit’s new cars were almost without exception, junk. They like to credit news anchor Walter Cronkite for ending the war when he told his audience that the war couldn’t be won. I suspect we was put up to it by Washington when they could no longer ignore that it was unaffordable. It has been downhill ever since. The borgified media cooperated in obscuring that by focusing our attention on acts of petty criminals, acts of god, the Kardashian sisters and their ilk. Plus, of course, random examples of techno dazzlement.

That’s when I thought getting an article out of him would be great:

You should write an article about this. It’s the most crucial thing, and I wasn’t there. Why that period was what it was, vs not being what this one is, will be a very big story.

And he complied. So here’s Ken Latta:

 

 

Ken Latta: A recent post on The Automatic Earth contained a question regarding the point of peak wealth in The United States and whether President Nixon’s closing of the gold window initiated the decline. Being now 73 years old and still able to recall many impressions of that era, I pondered the issue to see if I might come up with a somewhat acceptable answer.

Back in the day we commonly joked that statistics lie and we have the numbers to prove it. Us having the numbers was the joke part. When it comes to concepts like wealth, I do not see numbers such as GDP as being reliable indicators. As the French and Russian revolutions revealed, a grossly unequal society is a poor society. Though it might display an image of being rich and powerful, that is only a mirage.

As was once common knowledge to most Earthlings, the 1930’s saw wealth disappear all over the world. That was the common view, but it is wrong. The social wealth was well and truly squandered during the first three decades of the twentieth century. The creeping social impoverishment just burst into public view in the 30’s. As is the custom, when poverty haunts the land barbarians will appear at the gates. And so the first half of the fifth decade was devoted to destroying as much of civilization as was deemed feasible at the time.

The USA government borrowed massive amounts of money to create the means of wreaking such havoc. There are always consequences from such actions. At the beginning of USA mobilization almost all of its industrial capacity was re-engineered and expanded to efficiently produce war materiel. The factories hummed and employed large numbers of women on the production lines. A consequence was the very limited availability of consumer goods, which were subject to rationing. With steady pay envelopes and little available to buy, lots of small denomination war bonds were sold to the populace. We might assume that some of it found its way into mattresses.

 

When peace broke out the populace had surplus cash and claims against the government. They were exuberant over victory and tired of not having anything new to enjoy. Millions of men were being discharged from the armed forces and those young factory girls wanted some babies. Those men would replace many of the women in the factories, but the factories needed to retool again to produce the consumer goods everybody wanted. Part of the new consumer demand was met by selling military surplus goods to the public. A lot of jeeps, trucks, industrial tools, materials such as steel panels for Quonset Huts and even light aircraft and cargo planes ended up in the hands of former GI Joe’s.

The Industrial Concerns gained another respite when President Truman signed an executive order declaring the USA would be forever more a permanent war economy. So outfits like Boeing, Douglas, Lockheed, Martin et al could keep right on producing large numbers of warplanes. Shipyards continued building aircraft carriers, submarines, etc. New versions of battle tanks rolled off the lines every few years. And of course, the nuclear devices kept getting more powerful and numerous.

Those GI Joe’s had experienced in the services a sense of brotherhood and unity in the face of us versus them. They brought those ideas into the factories and cemented the gains made by prewar union organizers. Very lucrative contracts were forced on employers and for once national wealth was being spread fairly evenly across social strata.

 


Ad for Ford Woodie, 1960

 

The working class began to feel sufficiently wealthy that they turned to indulging their fantasies and emulating as best they could the actions of the truly rich. Around the middle of the 1950’s they increasingly opted for more luxuriously appointed and/or higher performance cars and trucks than the economical versions that had been the norm for that class. Many also embraced the published suggestions that these vehicles should be traded for a new one every three years, which at that time was the standard term for auto financing.

In other words, why enjoy the net worth benefits of driving a paid for vehicle when you could enjoy the increased status of once again driving a brand new car. The propaganda was quite effective and the practice quite wasteful. They discovered the joys of power boating and over time the boats kept getting bigger and fancier. It is with much justification that this period is often described as the Golden Age. It wasn’t just that so many people were living well. It was a time when the working class seemed to have been most comfortable with their civilization. I put it down to people having full permission to be as wasteful as they wanted.

 

It could not last. The rulers filled with hubris arrogantly declared simultaneous war on poverty, Viet-Nam and the Moon. While also running a bodacious arms race with the USSR. At first it seemed to bode well for old GI Joe. The already very active military industries had to gear up to supply the weapons, munitions and materiel. Not to mention moon rockets. More good jobs to be had. But, as it turned out only the Moon war went mostly as planned. Though there were casualties. The flamboyant Gus Grissom and two crew mates were burned alive in a sealed Apollo capsule while waiting for launch. The Moon war ended with a unilateral cease fire when it was finally determined there was nothing there worth destroying. Aside from some junk scattered across the Lunar landscape, the Moon was left largely unmolested. Except for a few pounds of stolen rocks.

The other two wars unleashed a whole lot of grief across the land. GI Joe found himself looking out across a land he no longer understood. His kids had become hippies, freedom riders and flag burners. A good many had fled to Canada. The kids that failed to avoid the draft, after too many bad experiences in pursuit of an apparently phantom goal started behaving mutinously. A not entirely rare action was to slip an armed hand grenade into an officers tent. It happened to a young Marine officer who the author had met at my fiancée’s family home prior to his shipping out.

 

The Golden Age was over. Worse yet, petroleum geologist M. King Hubbert’s prediction of a peak of US oil production in the early 70’s was about to come true. Confidence began to wain and habits changed. Auto buyers increasingly focused on finding a model that might last long enough to get it paid for and be economical to operate. The door was opened for Japan and Germany to sell cars here and they soon sold a lot of them. US manufacturers fell victim to a labor force that no longer believed and management hubris.

The nation was hemorrhaging dollars to Europe, Japan and the OPEC cartel. According to the Bretton Woods agreement, those dollars were convertible to gold. Some nations, in particular France under de Gaulle, decided they wanted the gold. As the gold pile diminished, Nixon had no choice and closed the so called gold window thus breaking the Bretton Woods agreement. The subsequent creeping expansion of poverty and financial insecurity has reduced our civilization to a sullen mockery of its glory days.

The period following WW-II was anomalous for the era in that the State was encumbered with enormous debt while private debt was very modest. According to economists like Michael Hudson and Steve Keen, that is a recipe for citizen prosperity. The post war era seems to be a good example. Prior to the war state debt had been very low and private debt had swollen enormously. That ended rather badly. As Keen insists, private debt is a killer. A good reason being for example that it’s hard to repossess a government, but things like cars and houses are fairly trivial exercises.

When people see themselves as at constant risk of losing almost everything they are rarely happy campers. During the 70’s buyers and their lenders began offering ridiculous prices for houses. Car dealers often marked desirable new cars above MSRP. In the years that followed almost everything was bought on credit. To paraphrase Sen. Dirksen, a debt here a debt there after a while it turns into a real nightmare.

 

According to Dr. Hudson, in ancient Babylon credit was widely used. The principle creditors were the palace and the temple. It mostly consisted of running a tab for citizens using their services and buying supplies and typically paid when the crop came in. A practice of our small town grocer back in the 50’s. Though not for such extended periods. The custom of their civilization was, on ascension of a new king or crop failure or a war, to forgive all the palace and temple debts. This was deemed necessary to prevent too many of the population from falling into bondservitude, which would have brought down the kingdom.

In more recent times that was called a debt jubilee. It could work because most debt was owed to entities that had ultimate claims on all wealth in the domain. They could handle writing off debt without suffering bankruptcy. Private creditors, written as banksters, cannot do so unless the Palace (White House) and Temple (Federal Reserve) pay them full price for their worthless paper. In 2008 even the intellectually challenged GW Bush observed that ‘this sucker could go down’. I would never bet that it won’t go down next time, which could be most any time now. The barbarians are already wearing war paint (well actually pussy hats) and brandishing war clubs (signs on sticks). One can guess that unaccredited schools may already be training a cadre of mixologists in the proper preparation of Mr Molotov’s favorite cocktail.

It seems like a cosmic joke that Hammurabi and his ilk had better economic advisors than any of our modern meathead leadership. Of course, in his time civilization and turning wasteful practices into wealth was still a fairly new idea. It’s an old idea now apparently closing in on its pull date. I am drawn to wonder if civilization could ever have worked any other way. I’m calling it not very likely.

 

 

Feb 182017
 
 February 18, 2017  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
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Unknown California State Automobile Association signage 1925

 

“That War You Ordered….” (Jim Kunstler)
US ‘Unwavering’ In NATO Support – Pence (BBC)
European Union President Rejects Trump Call For More NATO Spending (CNBC)
Four NATO Nations Would Pick Russia to Defend Them If Threatened (BBG)
Who Really Rules The United States? (FreeB)
Australia Headed For ‘Economic Armageddon’ (News.com.au)
China Is Going Broke (Jim Rickards)
Brexit Was A Revolt Against Snobs Like Tony Blair (Spec.)
Small Businesses Face Being ‘Driven Out Of London’ (Ind.)
Norway Central Bank Chief Warns Of Sharp Drop In Wealth Fund (BBG)
Only Germans Love the Euro These Days (BBG)
How Do You Say Deja Vu In Greek? (R.)
Can Tax Increases Bring Inflation To Greece? (KTG)
Greek Labor Minister Says Pensioners Can Barely Make Ends Meet (K.)

 

 

Hard to find any news articles these days that are not severely biased. So let’s go with Jim.

“That War You Ordered….” (Jim Kunstler)

The Russia paranoia frenzy is serious business because it indicates that a state-of-war exists between the permanent bureaucracy of government (a.k.a. the Deep State) and the new Trump administration. There are features of the struggle that ought to be much more disturbing than the dubious alleged monkey business about Russia hacking the election and the hoo-hah around a single intercepted phone call between Michael Flynn and the Russian ambassador, made to open a line-of-communication between high-ranking officials, strictly routine business in any other administration. Most disturbing are signs that the so-called intelligence community (IC) has gone rogue in collusion with forces aligned around Democratic Party functionaries up to and including former president Obama and Hillary Clinton, along with CNN, The Times, The Wash-Po, NBC News and a few other mouthpieces of the defeated establishment.

Obama and Hillary remain conspicuously sequestered from this maelstrom, but they must be working their phones like nobody’s business. (Is the IC monitoring them, too, one wonders?) Until his Queeg-on-steroids news conference late yesterday, Trump laid pretty low after General Flynn was thrown under the bus, but he must be plotting counter-moves, with Bannon and Steven Miller straining at their leashes, slavering for blood. Will some employees over at the CIA and the — what? — sixteen other IC outposts that stud the government like shipworms in a rotting hulk — be called on the carpet of the oval office, and possibly handed pink slips? How do you drain that swamp in Langley, VA? Perhaps with subpoenas? Surely Jeff Sessions over at the Department of Justice has got to be weighing action against the IC leakers. That shit is against the law.

The next disturbing element of the situation is all the war-drum beating by the same cast of characters: the IC, the Democratic Party, and major media. Why in hell are we antagonizing Russia? In the last month of Obama’s term — and for the first time in many years — NATO moved a bunch of tanks close to Russia’s border with the Baltic states. Do you really think Russia wants to reoccupy these countries for the pleasure of subsidizing them and draining the Russian treasury? In those twilight days of Obama, government officials made wild and unspecific charges about “Russian aggression,” and vague assertions about Russian plans to dominate the global scene. ajor what-the-fuck there. There’s the ugly situation in Ukraine, of course, but that was engineered by Obama’s state department.

Do you know why Russia annexed Crimea after that? It couldn’t have been for more transparently rational reasons. And what exactly is our beef with Russia in Syria? That they’re trying to prop up the Assad government because the last thing the Middle East needs is another failed state with no government whatsoever? What’s our plan for Syria, anyway? Same as Somalia, Iraq, and Libya? These stories about Russia’s intentions seem insane on their face. It’s amazing that readers of The New York Times swallow them whole. It must say something about the deterioration of the coastal gene pool. The story-mongers have a purpose though: to promote a state of permanent hostility, neo-cold-war style, to justify the grotesquely overgrown operations of the IC.

Read more …

Hollow words.

US ‘Unwavering’ In NATO Support – Pence (BBC)

The US will be “unwavering” in its support for Nato, vice-president Mike Pence told European leaders at the Munich Security Conference. In the first major foreign policy address for the Trump administration, Mr Pence said the US would “stand with Europe today and every day”. But he told the gathered leaders that European countries were “failing to pay their fair share” on defence. That failure “erodes the foundation of our alliance”, he said. Apart from the US, only four other nations had met a commitment to spend 2% of GDP on defence, “The time has come to do more,” he said.

President Donald Trump warned before taking office that the US might not uphold its commitment to come to the defence of Nato allies who were not perceived to have contributed enough financially. Mr Pence went on to say that the US would “continue to hold Russia accountable, even as we search for new common ground, which as you know, President Trump believes can be found”. Mr Pence said Russia must honour the Minsk peace accords on Ukraine and de-escalate its military operations in the east of the country.

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Juncker makes sense for a change.

European Union President Rejects Trump Call For More NATO Spending (CNBC)

European Commission President Jean-Claude Juncker has said Europe should resist U.S. pressure to spend more spending on defense. U.S. President Donald Trump has criticized the NATO defense alliance, suggesting he could withdraw support if European countries did not raise defense spending to at least 2% of their economic output.In a speech on the sidelines of the Munich Security Conference Thursday, Juncker, who heads the EU’s executive arm, suggested some resistance to Trump’s threat was in order. “It has been the American message for many, many years. I am very much against letting ourselves be pushed into this,” he said. Juncker also said the EU’s other spending commitments made up for any shortfalls in military funding. “Modern politics cannot just be about raising defense spending,” he said.

“If you look at what Europe is doing in defense, plus development aid, plus humanitarian aid, the comparison with the United States looks rather different,” he said. Juncker added that European nations should bundle their defense spending better and spend the money more efficiently. At a NATO meeting Wednesday, the U.S. Defense Secretary James Mattis reinforced Trump’s message, warning treaty allies they must boost their defense spending or America could “moderate its commitment.” “Americans cannot care more for your children’s future security than you do. I owe it to you to give you clarity on the political reality in the United States and to state the fair demand from my country’s people in concrete terms,” he said in a speech to NATO allies in the Belgian city of Brussels on Wednesday.

Read more …

Originally filed by reporter (see URL) as: “Melania Trump’s Slovenia Would Pick Russian Over US Protection”. Say no more.

Four NATO Nations Would Pick Russia to Defend Them If Threatened (BBG)

Who you gonna call? For the citizens of four NATO countries asked which military power they’d want fighting on their side if attacked, the answer was simple – Russia. That was among the findings of a multi-nation Gallup poll published just ahead of Friday’s annual gathering of the transatlantic security community in Germany that appeared to map out shifts in the post-Cold War security alliances which have come under renewed strain and scrutiny since Donald Trump’s election to the U.S. presidency. By far the largest number of countries polled by WIN/Gallup International chose the U.S. for their go-to defense partner, suggesting that it remains the world’s only military power with truly global reach and alliances. At the same time, however, China and Russia picked each other, war-torn Ukraine and Iraq split down the middle, while those four members of the U.S.-led North Atlantic Treaty Organization – Bulgaria, Greece, Slovenia and Turkey – plumped for Russia.

As U.S. Secretary of Defense James Mattis tours Europe delivering a message of tough love to NATO allies – increase spending or see the U.S. “moderate’’ its support – the poll shows the world’s gradual political reorganization around different security poles, according to Kancho Stoychev, vice president of WIN/Gallup International. “It isn’t surprising that Russians and Chinese chose each other, but it is new,’’ said Stoychev. “It shows us something very important – that U.S. policy over the last 20 years has driven Russia into the arms of China, which is quite strange because Russia is fundamentally a part of Europe.’’ At the same time, some of the results in European NATO countries showed how their fundamental security choices were moving beyond the alliance, he said. Bulgaria and Greece, for example, see their biggest security threat coming from Turkey.

Read more …

Right wing. As I said, very hard to find anything unbiased. All heels are dug in deeply.

Who Really Rules The United States? (FreeB)

Donald Trump was elected president last November by winning 306 electoral votes. He pledged to “drain the swamp” in Washington, D.C., to overturn the system of politics that had left the nation’s capital and major financial and tech centers flourishing but large swaths of the country mired in stagnation and decay. “What truly matters,” he said in his Inaugural Address, “is not which party controls our government, but whether our government is controlled by the people.” Is it? By any historical and constitutional standard, “the people” elected Donald Trump and endorsed his program of nation-state populist reform. Yet over the last few weeks America has been in the throes of an unprecedented revolt. Not of the people against the government—that happened last year—but of the government against the people. What this says about the state of American democracy, and what it portends for the future, is incredibly disturbing.

There is, of course, the case of Michael Flynn. He made a lot of enemies inside the government during his career, suffice it to say. And when he exposed himself as vulnerable those enemies pounced. But consider the means: anonymous and possibly illegal leaks of private conversations. Yes, the conversation in question was with a foreign national. And no one doubts we spy on ambassadors. But we aren’t supposed to spy on Americans without probable cause. And we most certainly are not supposed to disclose the results of our spying in the pages of the Washington Post because it suits a partisan or personal agenda. Here was a case of current and former national security officials using their position, their sources, and their methods to crush a political enemy. And no one but supporters of the president seems to be disturbed.

Why? Because we are meant to believe that the mysterious, elusive, nefarious, and to date unproven connection between Donald Trump and the Kremlin is more important than the norms of intelligence and the decisions of the voters. But why should we believe that? And who elected these officials to make this judgment for us? Nor is Flynn the only example of nameless bureaucrats working to undermine and ultimately overturn the results of last year’s election. According to the New York Times, civil servants at the EPA are lobbying Congress to reject Donald Trump’s nominee to run the agency. Is it because Scott Pruitt lacks qualifications? No. Is it because he is ethically compromised? Sorry. The reason for the opposition is that Pruitt is a critic of the way the EPA was run during the presidency of Barack Obama. He has a policy difference with the men and women who are soon to be his employees. Up until, oh, this month, the normal course of action was for civil servants to follow the direction of the political appointees who serve as proxies for the elected president.

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Personal debt.

Australia Headed For ‘Economic Armageddon’ (News.com.au)

Australia is headed for an “economic Armageddon”, with record household debt, record foreign debt and a massive housing bubble creating a perfect storm that could “wipe out” millions of families if there is a global shock. That is the apocalyptic warning of a former government economic advisor, who says the government needs to cut tax incentives such as negative gearing and welfare handouts and the RBA needs to increase interest rates in order to avoid a “devastating depression”. Corporate governance specialist John Adams, who was an economics and policy advisor to Senator Arthur Sinodinos and management consultant to a big four accounting firm, believes he has found seven disturbing signs that the global economy is primed for a major fall. Worse still, Australia is particularly vulnerable because of significant structural imbalances, including record levels of household debt not seen since the lead up to the last great depression in the 1920s.

“Australians should be concerned over the state of both the Australian and global economy,” Mr Adams told news.com.au. “The data clearly demonstrates that there are significant structural economic imbalances in the Australian economy. Significant expansion of the broad money supply and record low interest rates by the Reserve Bank of Australia as well as generous tax incentives and welfare provisions by the Federal Government have led Australians to amass record levels of personal debt which have fuelled the creation of asset bubbles, particularly in housing. “Millions of Australians are not only doing it tough through significant cost of living and debt serving pressures, but are at significant risk of being financially wiped out if an unanticipated adverse international economic shock were to hit Australia such as a new global financial crisis.”

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End of the year?

China Is Going Broke (Jim Rickards)

[..] of the 2.9 trillion, about one trillion of that is not liquid, meaning it’s wealth of some kind, it represents investment, but China wanted to improve their returns actually on their investments, so they invested in hedge funds, they invested in private equity funds, they made direct investments in gold mines in Zambia and so forth, so about a trillion of that is, it’s wealth, but it’s not liquid. It’s not money that you can use to pay your bills. So now, we’re down to 1.9 trillion liquid. Well, about another trillion is going to have to be held in what’s called a “precautionary reserve” to bail out the Chinese banking system.

When you look at the Chinese banking system, private estimates are that the bad debts are 25% of total assets. Banks usually run with 5, maybe 7-8% capital. Even if you said 10% capital, well, if 25% of your assets are bad, that completely wipes out your capital, so the Chinese banking system is technically insolvent, even though they don’t admit that. I mean, they cook the books, they take these bad loans. Let’s say I’m a bank and I have a loan to a state owned enterprise, a steel mill or something and the guy can’t pay me, can’t even come close to paying me and the loan’s due, I say, “Well, look, you owe me 300 million dollars. I’ll tell you what. I’ll give you a new loan for 400 million dollars, but I’ll take the money and pay myself back the old loan plus the interest, and then I’ll give the new loan to your maturity and I’ll see you in two years.”

So, if you did that in the U.S. banking system you’d go to jail. You’re not allowed to do that. You’re throwing good money after bad and you’re supposed to right off a loan that is clearly not performing or where the borrower is unable to pay. But in this case, it’s just extend to pretend, and so it’s still on the books, in my example, 400 million dollar good loan with a two year maturity, but in fact it’s a rotten loan that the guy couldn’t pay in the first place, and now he just can’t pay a bigger amount. He’s probably going to go bankrupt and I’ll have to write it off at the end of the day. So, with that as background for the Chinese banking system, people kind of shrug and say, “Well, can’t China just bail it out? They’ve got all this money.”

Well, the answer is they could, and they’ve done so before, and they can bail it out, but it’s going to trust a trillion dollars, so you’ve got to put a trillion dollars to one side, for when the time comes, to bail out the banking system. Well, now you’re down to 900 billion, right? Remember, we started with four trillion, 1.1 trillion’s out door, 1 trillion’s illiquid, 1 trillion you’ve got to hold to one side to bail out the banking system, well now you only have 900 billion of liquid assets to defend your currency, to prop up the Chinese yuan. But the problem is the reserves are going out the door at a rate of, it varies month to month, 30, 40, 50 billion dollars a month. Some months more, some months over 100 billion dollars.

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Blair getting involved will be a huge boon for Brexit.

Brexit Was A Revolt Against Snobs Like Tony Blair (Spec.)

The brass neck of Tony Blair. The Brexit vote was ‘based on imperfect knowledge’, says the man who unleashed barbarism across the Middle East on the basis of a student dissertation he printed off the internet. Who marched thousands into unimaginable horror on the basis of myth and spin. That NHS claim on the side of the Leave bus is small fry, infinitesimally small fry, in comparison with the guff this bloke came out with. It didn’t cause anyone to die, for one. For Blair to lecture the British people about truth is an affront to memory and decency and reason. No self-respecting citizen should put up with it. Blair made his comments about our ‘imperfect knowledge’ – dimwits that we are – in a speech for Open Britain, a cross-party pro-EU group, in London this morning.

The speech sums up the elitism and arrogance and contempt for democracy of those Remainers who just cannot accept that they lost. ‘The people voted without knowledge of the true terms of Brexit’, Blair haughtily declared. Rubbish. We all knew what it meant to tick the box saying ‘Leave the European Union’ — it meant leaving the European Union. It meant what it said — and we meant what we said. Blair and the connected, moneyed weepers for the EU who make up Open Britain can’t get their heads around this. They think we didn’t know what we were doing. And so they’ve come to enlighten us and make us think again. Remainers must ‘rise up’, says Blair, and turn the throng’s ‘imperfect knowledge’ into ‘informed knowledge’ by giving us ‘easy to understand’ information about how Brexit will ‘cause real damage to the country’.

Risen, brave, ‘informed’ Remainers must hold back the ‘rush over the cliff’s edge’, he said. The whole thing stinks to the heavens of paternalism. Blair is positioning himself and his switched-on mates as the possessors of information that we the imperfect plebs lack. Like lemmings we’re leaping off the cliff, and this good man must save us. He must impart to us his wisdom — in ‘easy to understand’ ways, of course, because we can’t handle anything too complex — and in the process fulfil the duty of the political leader to ‘give answers’ rather than ‘ride the anger’ of the public. He depicts Open Britain as cool and knowledgable, and Leavers as uninformed and angry. It’s positively aristocratic, with Open Britain fancying itself as the small but beautiful font of wisdom in a land of madness.

[..] Blair spoke in the language of revolution. Remainers must ‘rise up’. He talked about the need for a ‘revolt’, by ‘force of argument’, against the Leave vote. Excitable media outlets have gone even further, describing his speech as a call ‘for people to “rise up” against Brexit’, a plea that ‘Britain must rise up against Brexit’.

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How to kill a city, part 826.

Small Businesses Face Being ‘Driven Out Of London’ (Ind.)

An increase in business rates is one of biggest issues concerning small businesses in London, easily trumping fears around economic uncertainty and worries relating to recruiting the right talent. According to a survey by the Federation of Small Businesses (FSB) and trade body Camden Town Unlimited, the average micro business in the city, defined as a company with fewer than 10 employees, will be paying business rates of £17,000 as of April this year under a Government hike. “London is in serious danger of losing its vital support system of micro and small businesses,” the FSB’s chair for London, Sue Terpilowski, said in a statement. “We need to realise that the hard costs of operating a business in the capital are starting to outweigh the benefits which simply does not make economic sense – and so tacking these burdens at the spring Budget is critical,” Ms Terpilowski added.

Business rates – which are sometimes referred to as non-domestic rates – are levies that companies occupying commercial properties pay. That tax goes towards covering the cost of services provided by local authorities and the emergency services. The survey found that close to three quarters – 74% – of businesses consider rates to be one of the biggest issues affecting them, while 36% cited economic uncertainty, and, one third said that the difficulty around recruiting the right staff was their biggest concern. “The new business rates will drive firms out of London, force some businesses to cut staff or close down altogether,” said Simon Pitkeathley, the chief executive of Camden Town Unlimited.

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Fast and furious. Caught in the oil wars.

Norway Central Bank Chief Warns Of Sharp Drop In Wealth Fund (BBG)

Norway’s central bank governor sharpened his warning on rising spending of oil revenue as he drew up scenarios for a 50% loss of capital over the next 10 years for the world’s biggest sovereign wealth fund. Governor Oystein Olsen said that the continued rise in oil cash spending, which now accounts for about 20% of the budget and 8% of GDP, must now be halted to protect the $900 billion fund, the world’s largest sovereign pool of cash. “With a high level of oil revenue spending, there’s a risk of a sharp reduction in the fund’s capital,” Olsen said in the traditional Annual Address in Oslo Thursday. “This could, for example, happen if a global recession triggers both a decline in oil revenue and low or negative returns on the fund’s capital.” Government withdrawals from the fund are estimated to jump about 25% this year after an historic first outflow last year. The Conservative-led government was last year forced to dip into the oil fund for the first time to cover budget needs and protect the economy amid a plunge in oil prices.

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Why the euro is doomed.

Only Germans Love the Euro These Days (BBG)

French presidential candidate Marine Le Pen unsettled investors with her pledge to pull France out of the euro and re-denominate all French debt in newly minted francs. Polls suggest Le Pen won’t get the chance; she is expected to lose a second-round runoff. Even if polls are correct this time, that doesn’t mean the euro is safe. In fact, political support for the single currency has been waning – especially in Germany’s two largest euro-zone trading partners. In both France and Italy, there is now a plurality of support for candidates who advocate a withdrawal from the euro, with pro-euro candidates gathering less than 30% in polls. In France, anti-euro candidates – Le Pen and Socialist Jean-Luc Melanchon – together have nearly 40% support.

Of course, that doesn’t mean that all of Le Pen’s supporters, or Melanchon’s, oppose the euro. Most French voters still tell pollsters they favor the euro; but clearly that support waning, as the latest Eurobarometer poll showed. Anti-euro sentiment, once a blip on the fringes of public opinion, is now credible and has found its way onto political platforms. Respondents are asked whether they think the euro is a good or bad thing for their country. In Italy, the euro gets even less love than in France, with 47% saying the euro is a “bad” thing for their country. That is in stark contrast to Germany, where there is now a clear majority in favor of the euro. This chart shows how opinion has changed over time:

This is a dramatic reversal in opinion: A German population that was initially reluctant to give up the Deutsche mark is now firmly wedded to the euro, while support in France and Italy has declined (particularly sharply in Italy’s case). But this shift is the logical result of the euro’s structural deficiencies. German industry, whose productivity has been increasing more than its European counterparts, now dominates the continental economy. While German unemployment was decreasing and its economy recovering from the financial crisis, Italy was stagnant with rising unemployment. Already saddled with a very large public debt (now over 130% of gross domestic product), Italy could neither reflate its economy, nor bail out its banks, while whole segments of its industry, particularly in lower and medium-cost goods, have disappeared.

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Damning: 56% of Greeks make less than €8,600 a year. And the Troika wants to tax them more. “..the tax- free income threshold, now at about €8,600 per person per year, a number the IMF maintains lets some 56% of wage-earning Greeks escape paying income tax.”

How Do You Say Deja Vu In Greek? (R.)

[..] it would not be trite to say that another festering row with Greece is the last thing the euro zone needs when faced with a protectionist U.S. president, Britain leaving the European Union, and anti-euro politicians vying for power or presence in French, Dutch and German elections. So EU officials have been urging speed in finding agreement and calmly warning of instability ahead if none is found. “There is a common understanding that time lost in reaching an agreement will have a cost for everyone,” the European commissioner responsible for the euro, Valdis Dombrovskis, told Greek news portal Euro2day. The issue, however, is multi-layered and thus particularly complex. Part of it is about what kind of primary surplus – what is left in a surplus budget before debt obligations – Greece must reach and run for some time.

The bailout, signed by Greece and euro zone lenders, says 3.5% of GDP(which would be by far the highest in the euro zone). The IMF, the other major lender, says that is undoable without further Greek belt-tightening. It says 1.5% of GDP and some form of debt relaxation – for example, over what is paid when – would be more realistic and sustainable. The IMF, furthermore, says it won’t participate in any bailout that it does not believe to be viable. Germany and others say that the IMF must be a part of the bailout or there is no deal. Both lenders have told Greece they want about €3.6 billion in additional savings, including a reduction in the tax- free income threshold, now at about €8,600 per person per year, a number the IMF maintains lets some 56% of wage-earning Greeks escape paying income tax.

Greece says no. Its economy contracted again in the fourth quarter of 2016, nearly one in four Greeks is unemployed and its pensioners have already seen 11 cuts to income. So plenty of scope for crisis – if not quite yet.

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Good example of why rising prices do not equal inflation. Greece is deflating like mad. Money velocity has plummeted, making recovery impossible.

Can Tax Increases Bring Inflation To Greece? (KTG)

Special consumption fees imposed on fuel, coffee, tobacco products and telecommunications beginning of the year skyrocketed consumer prices and led to the inevitable: inflation. According to Greek Statistics Authority ELSTAT inflation reached 1.5% in January from 0.3% in December. ‘This is almost a five-year high and above market expectations that were forecasting a 0.4% for January,’ Reuters notes. I do not know how ‘markets’ make their forecasts, but real Greek life shows a different picture. The supermarkets had massive discount offers in a plethora of goods in December. The special fees imposed as of 1.1.2017 were not immediately seen in supermarket prices but in fuel and tobaccoo products and telecommunications. Super markets kept offering discounts until around January 20th. Then the “households party” was over.

On February 1st, the price for half a kilo filter coffee went up to €7.68 from €5.46. Apparently sales stagnated, the import company lowered the price by 1 euro. A week later, the discount offer was just 50 cents. Officially, the special fee was supposed to be €2-3 per kilo of roasted coffee. In real life, the increase is higher €2.12 for just half a kilo. Similarly, the price for 400-gr package for a cocoa drink of a well known international brand went up to €3.40 from €2.60. At the same time, the cheaper soft package disappeared from the supermarket shelves. Here to note that for year the hard package used to contain 500gr. Sometime in 2010, I was badly surprised to see the package was down to 400gr, while the price remained the same.

In real life, I have to spend a total of €9 to €10 more per supermarket visit once a week. This makes a nice sum of €40 more per month. And that’s alone for the supermarket. Add the increases in other sectors and start the calculation.

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As the EU keeps stressing the importance of unity, the Troika inches ever closer to causing a civil war in Greece. Unity is not just a word.

Greek Labor Minister Says Pensioners Can Barely Make Ends Meet (K.)

Greece’s Minister of Labor, Social Security and Social Solidarity Effie Achtsioglou insisted in a letter published Friday in the Financial Times that Greek pensioners have barely enough to live on and urged IMF chief Christine Lagarde to listen. “We cannot accept IMF insistence on further cuts in pensions. As minister for pensions I must answer, hoping that IMF managing director Christine Lagarde will listen,” she said, ahead of Monday’s Eurogroup, in a bid to explain why Greece cannot make any more pension cuts. “The narrative about Greek pensions is driven by demands of its creditors. They argue that the pension system is overgenerous and a drain on the economy,” she said, adding that it is based on the crude statistic that pensions require annual transfers from the state budget of around 11% of GDP in Greece compared with the eurozone average of 2.25%.

This comparison, she said, is misleading. “Following the implementation of the new pension law last year, total state financing of pensions is projected at less than 9% of GDP,” she explained. “The bottom line is that Greece’s old people are much worse off than elsewhere in Europe because they do not have access to other benefits. Per capita income for individuals aged over 65 is about €9,000, compared with €20,000 in the eurozone.” she added, asking “how could the major problem confronting Greece be overgenerous pensions, when 43% of pensioners receive less than €660 a month?.”

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PRESS CONFERENCE

searching
inside his cranium

trying to find
a brain to rack,

he found the word
”uranium”

and launched
an unclear attack

Brian Bilston

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

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

 

 

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

Trump’s Declaration of War (Paul Craig Roberts)

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

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

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

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

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WSJ licking up to power?

The Audacity of Trump (WSJ)

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

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

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

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Hard not to be happy about this.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Read more …

Treating people like tradable resources is always a bad idea.

The Curse of Econ 101 (Atlantic)

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

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

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

Read more …

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

Economics, Society, And The Environment (EI)

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

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

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

Read more …

This will not end well.

Turkish Parliament Approves Constitutional Reform, Expanded Powers For Erdogan

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

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

Read more …

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

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

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

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

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

Read more …

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

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

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

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

Read more …

Nov 132016
 
 November 13, 2016  Posted by at 5:57 pm Finance Tagged with: , , , , , , , , ,  16 Responses »
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Esther Bubley Waiting for Greyhound bus trip from Memphis to Louisville, KY 1943

 

Been scribbling several some post-election notes over the past few days, it seemed a good idea to not publish things too soon after the upset, even if I at least had the advantage that it wasn’t that much of a surprise or upset. But I’ve read far too many people too eager to write about how they haven’t moved an inch, and too many others who have -mostly reluctantly- moved but don’t know how or where to. It’s okay to think about such matters first, guys and dolls. Make that: it’s better. There’s too much nonsense out there as is. Why bother adding to the pile? Here’s a few thoughts in no particular order:

 

 

The transition we find ourselves in, into an era as profoundly different as it will be from the one that preceded it, can only possibly be chaotic. Smooth is not an option. Because it takes much time for people to recognize let alone accept that there is such a transition to begin with, and not everyone acknowledges or accepts it at the same time. Many never will at all, they will be left behind in their own realities tied down by the chains of what once was.

This transition is the one away from economic growth and globalization -centralization in general- and towards smaller, less centered and grandiose, politics and markets. It is not an idealistic transition towards self-sufficiency, it’s simply and inevitably what’s left once unfettered growth hits the skids. It doesn’t have to be anywhere near as bad as people would have you believe, or at least not necessarily so. What could make it real bad, though, is the widespread resistance and denial which seem certain to meet it.

Our entire worldviews and ‘philosophies’ are based on ever more and ever bigger and then some, and our entire economies are built upon it. That has already made us ignore the decline of our real markets for many years now. We focus on data about stock markets and the like, and ignore the demise of our respective heartlands and flyover countries, even as we experience Brexit and Trump and similar movements set to come to many more countries.

Donald Trump looks very much like the ideal fit for this transition – but nor because he understands the issue itself, or its implications. What matters is he promises to bring back jobs to America, and that’s what the country needs. Not so they can then export their products, but to consume them at home, and sell them in the domestic market.

That is the future of the world post-growth, and post-globalization. Every country and every society needs to focus on self-reliance, not as some idealistic luxury choice, but as a necessity. And that is not as bad or terrible as people would have you believe, and it’s not the end of the world. What would be terrible is if all we do is try and restart growth and globalization, because that would be a hideous waste of time and resources.

You’ll be flooded in the years to come, even more than today if you can imagine, with terms like protectionism and isolationism and even populism, but ignore all that. There’s nothing economically -let alone morally- wrong with people producing what they and their families and close neighbors themselves want and need without hauling it halfway around the world for a meagre profit, handing over control of their societies to strangers in the process.

There’s nothing wrong or negative with an American buying products made in America instead of in China. At least not for the man in the street. It’s not a threat to our ‘open societies’, as many claim. That openness does not depend on having things shipped to your stores over 1000s of miles, that you could have made yourselves at a potentially huge benefit to your local economy. An ‘open society’ is a state of mind, be it collective or personal. It’s not something that’s for sale.

 

 

Earlier this week I read what looks to be an apt observation: ‘Every white person in New York who didn’t vote for Trump is now out in the streets protesting against him’. But the people who protest now are miles off target and months too late: they should have stood up for Bernie when it became clear that the Hillary camp and the DNC conspired to oust him. Indeed, Bernie himself should have stood up back then, not for himself but for his supporters; they would have stood up with him.

Whether they all like it or not, being asleep and/or silent when big things happen that count, does carry a price. If you drop the ball, you can’t just pick it back up again and pretend it didn’t fall. Shouting ‘not my president’ in the wake of an election is a sign of weakness, no matter how well-intentioned. The protests should have taken place before the election, not after.

Moreover, to a large extent people are up in protest against the image the Hillary campaign and the media have painted of Trump, not the man himself. A difference they cannot see. Would these same people have been protesting if Hillary had won? No, they wouldn’t. But why?

Many voices expressed the wish that Americans would vote for Hillary, a story about a woman and a glass ceiling, instead of for the male and allegedly sexist and misogynist Donald Trump. Simply because she’s a woman, and it’s time for a female president.

These voices have been consistently and for a long time been blind to the fact that Hillary’s campaign and Foundation, in legal, shady and downright illegal ways, have long been financed to a substantial degree by uber-rich men in charge of Middle East oil extracting nations who have far more misogynist views and attitudes towards women than Trump will ever have.

These men carry things like misogyny, racism, xenophobia and homophobia high and proudly in their banners. Also, they’re well on their way towards obliterating not just an entire country in Yemen, but indeed an entire people, all with the enthusiastic support of Obama, Hillary and their friends and donors in the arms industry. And lest we forget, they sponsor ISIS too. Is that the future Americans want?

 

 

The bright side is the chances of a war with Russia have gone down substantially. While the odds have gone up dramatically of much fewer US servicemen and -women being sent abroad to engage in endless and countless battles and wars that never seemed to have much to do with the US, going back all the way to Korea and Vietnam.

How can either of these things can be perceived as negative? The continuation and expansion of -often proxy- hostilities versus Moscow would have been cast in stone had Hillary been elected, it was a milestone of her entire campaign. And a major part of this would have been fought at some desert location in the Middle East.

Where America has needlessly squandered the lives of many of its young and finest, to and in a mad scramble over control of oil resources which has resulted in nothing but a shapeless chaos that has equally needlessly killed millions of people, sent millions of others fleeing their homes and razed entire ancient civilizations, accomplishments that will follow America around the world for many years to come. Is that the future Americans want? Double down?

There’s -undeniably- still a risk that Donald Trump will succumb to the mighty hand of the military industrial complex. But at the same time, he may well be the country’s -and the world’s- best if not only chance at making that hand that much less mighty. There may be many things wrong with Trump -there are- but being in the pockets of arms manufacturers and other doctors of death is so far not among them, to our best knowledge.

 

 

Hillary and her crowd ran the entire election process from inside a cocoon, built largely on hubris and a lack of contact with the world outside. They had the media so much on their side that TV and newspapers became part of the Hillary cocoon, and reporters got locked into a groupthink mode that then in its turn infected the campaign itself.

What I mean is you can’t stop at saying Trump is a disaster, so let’s pick the other side, it was always very much a choice between two disasters. And at the same time, as I wrote at the Automatic Earth the day of the election, the US presidency is a poisoned chalice. There’s nothing simple about this.

Trump means a big clean-up for the GOP, and the Hillary loss means the chance for the Democrats to do the same. You bet those folks realize achingly well they could have won with Bernie. Hopefully that wing can take over substantially from the lying conniving machinery the DNC has turned out to be.

Someone summed it up as: Trump swept aside the Republicans, the Democrats, the Bush dynasty and the Clinton dynasty, all in one fell swoop, and we should perhaps be thankful to him for that.

 

 

Trump has run his campaign catering to the anger that exists among Americans. And people experience and label that as ‘terrible’ and ‘awful’. His Republican friends and opponents find it terrible, because it scares the bejeezus out of them, and they’re too scared to go anywhere near that anger. Trump embraced the anger. Because he knew from the start, instinctively, that it was the only way he could win.

And you can think like the majority of your peers do, that all that commingling with the anger, with racists and bigots and what have you, is inexcusable. But what you miss out on if you take that approach and hold on to it, is that in that case the anger does not get addressed at all. It’s instead left free to just wander over the land and fester and grow on society, out of reach of politics, media, everything.

A certain by now very vilified cartoonist explained that what Trump does is to ‘feel’ what the angry crowd wants, and then play into it by making over the top statements targeted at the anger. That way this crowd will follow him, gather around him. This has worked like a charm. But no, that doesn’t make him look like a certain German dictator.

Because it does not mean that Trump is going to literally do everything he said in the over the top statements he made. It’s all just a basic sales trick. Trump makes the angry people feel like he knows, and cares about, their grievances. Just like a car salesman makes you think he knows just what you want and need in a car, and praises the assets of that car in such a way that it touches that part of you which makes you want the car.

But that doesn’t mean at the end of the day he’ll drive the same car home that you just bought off of him. He makes you think he is like you, and knows what you want, so he can sell you that car. That’s all. He’s judged you to be the right ‘target’ for that vehicle.

That is how Trump has reeled in America’s hidden anger, how he has gathered its lost hidden mob. And before you say anything else, it’s perhaps a good idea to wonder where that anger would go without Trump. Because it’s not going to go away by itself. It’s been growing and festering for a long time, and it’s well-armed, lest you forget.

The question then becomes: would America be a better, or a safer, place if the entire angry part of its population had again, and still, been ignored by everyone? Or is it better to have them gathered under the umbrella of Donald Trump? Take your pick. Don’t be shy.

Another way to phrase the issue is this: without the exact same sales tactics that Trump used to ‘gather the anger’ around him, the TV ads (most ads in general) you see on a daily basis would look completely different. Whatever products these ads sell, from detergents to cars, they do it by referring to your unconscious, not your rational abilities.

The ads, like Trump, sell feelings, not facts (if you don’t get that, you’re lost).

Yet nobody would think of taking the companies whose products are advertized this way to court -nobody even gets really angry with them- because the happy smily people and unending open roads bathed in sunshine from the ads do not magically appear once you purchase the product. We would even find that crazy, that anyone might take the images shown in the ads, literally.

We should interpret Trump’s campaign words along those same lines, the same way we ‘undergo’ the ads that play to our subconscious. The problem is, how do you do that? How do you interpret what you are largely unaware of on a rational level?

The president-elect will now need the same skills in order to ‘come down that mountain’ without antagonizing each and every side of the discussion, of the nation. He’ll have to convince the liberal camp that he didn’t mean everything he said in a literal sense, while at the same time keeping his ‘angry mob’ satisfied that he will do enough of what he promised them.

That will take a lot of persuading. But at the same time that happens to be the one thing he’s really good at. He’ll have to convince his voters that he’s not breaking his promises, just adjusting them in ways that will, if at all possible, be even more beneficial to them than the original ones.

Difficult, but if he can convince them that there are signs, delivered relatively fast, that their living conditions are improving, he may succeed. They just vent their anger at people that are visibly not themselves, but that’s not where the anger stems from.

 

 

There are all sorts of nasty things going on, racists and supremacist etc. But you can’t say that Trump caused that to happen. The most you could say is that he gives the people involved in that stuff the idea that because someone finally hears them, they can, are allowed to, make themselves heard.

But just because a few loose cannons let loose, doesn’t mean America has 60 million loose cannons who all voted for Trump and should all be condemned including Trump himself for good measure because there’s a few incidents. Not only is that a misinterpretation of what goes on, it prevents you from understanding what lies behind.

Those incidents at least have a lot to do with the fact that so many ignored Americans live in what Washington has long considered flyover country. It would be a lot more positive and productive at this point in time if everyone looks at what they themselves have gotten wrong over the past years -not just this election campaign- before pointing fingers at everyone but themselves.

But seeing the dug-in heels in Britain almost five months after the Brexit vote, it’s hard to get your hopes up about people coming together, or even doing some genuine introspection. It’s easier to just remain stuck in your comfy little rut.

Thing is, the world is rapidly changing -it already has-, America is changing, Britain is, and many more countries will, it just takes an election to show how much. We’re transitioning to a next phase, and trying to deny we are with all our might, good luck and good night.

Or in a more poetic fashion – we can do that too-:

 

the blizzard of the world
has crossed the threshold
and it has overturned
the order of the soul

 

 

 

 

Nov 082016
 
 November 8, 2016  Posted by at 4:59 pm Finance Tagged with: , , , , , , , ,  2 Responses »
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Joe Schwartz/Jewish Museum May Day Parade, New York City 1936

Neither candidate in the US presidential election has had many specifics to offer on their economic ideas and projected policies, and that may be a smart move for both. If only because none of the two has indicated any real understanding of what awaits America as per November 9. And I don’t mean where the stock markets will be tomorrow morning, or the price of gold, though short term volatility is obviously certain.

The November 7 rally on Wall Street made plenty clear where everyone’s bets are placed -on Hillary-, so much so that there’s not much of a rally left if she wins. A Trump win could well see some panic, downward pressure for the dollar and stocks, upward pressure for gold, but there’s no telling how long that would last.

It’s the medium to long term future that’s far more interesting. Because who wins makes no difference for the reality of the US economy. It’s been abysmal for years, and there are no plans available for turning that around. Government debt – across the board- and budget deficits don’t help, but they’re not the biggest deal; the US controls its own currency.

It’s private debt, consumer debt, that will offer the winner his or her poisoned chalice. With 94 million Americans not counted as part of the workforce, and untold million others in jobs that pay hardly or no living wage, with so many millions of jobs that no longer pay sufficient or even any benefits, consumer spending has nowhere to go but down.

In an economy where that spending is good for 70% of GDP -perhaps a bit less by now, a bad enough sign-, taking spending power away from people is deadly. The only way people have been able to either keep up appearances or even just make ends meet is going into debt.

 

 

This graph from Wolf Richter shouldn’t really need any explanation, but people have been so numbed by endless repetitions of sunny skewed data that it does. Sure, mortgage debt no longer looks as bad, thanks to foreclosures, jingle mail etc. So Wolf depicts debt without mortgages.

In just 9 years, from let’s say Bear Stearns to roughly this summer, consumer debt in America has gone up more than 50% ex-mortgages. And it’s not as if it was low in 2007, quite the contrary. The graph shows us what the American economy has survived on. It’s as plain vanilla as that. It’s the only graph you need, all the rest is just decoration. And it’s every inch as scary as it looks.

There was a time when America worked for its money, for its homes, for its cars, its healthcare, for the education of its children. There was a time when America produced and sold enough to be able to afford all that. Those days are long gone. Today, the prospect is one of borrowing more money to be able to pay back what you borrowed yesterday.

If and when interest rates start to rise, either in and of themselves or because the Fed has an epiphany, all that debt will get much harder, and much more expensive, to repay. Increasingly, Americans will unceremoniously and rapidly start to fall off the back end of the truck, and one by one lower consumer spending even more.

There’s nothing a new president can do about this. There is a slight difference, granted, in that Hillary largely thinks she can let things continue as they have -but look at that graph, they cannot continue!-, while Donald Trump wants to tear up international trade deals and bring back jobs to America.

Trump’s idea look a tad wiser, but so much manufacturing infrastructure has been obliterated that there’s no telling how fast it can be rebuilt. It’ll take years, for sure. Moreover, America cannot produce most items as cheap as many other countries can, so already squeezed consumers will get squeezed even more.

It’ll have to be back all the way to Henry Ford, paying people more so they can afford what they produce. But, again, look at that graph. If Americans didn’t have that debt burden, and again that’s ex-mortgages, the ‘Ford model’ might have been more feasible. It is not now.

Either of the candidates would have had to base their campaigns on a story of ‘we need to take a few steps back in order to do better later’, and that’s still a politically deadly message in today’s realm of eternal growth, fictional as it may be. People will vote for the better promise, not for the more realistic one. After all, how can they tell? It’s not as if the media will enlighten them.

There’s only one set of possible circumstances under which people will even just accept the ‘few steps back’ idea, and that’s wartime. Which is exactly what Hillary seems to be going for, judging from her neverending anti-Russia, anti-Putin and anti-Assad ‘utterances’ that look very hard to step back from. Maybe she understands America’s economic predicament better than I think?!

I like Wikipedia’s definition of a Pyrrhic victory, couldn’t hardly have put it better myself: “A Pyrrhic victory is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. Someone who wins a Pyrrhic victory has been victorious in some way. However, the heavy toll negates any sense of achievement or profit.”

That sounds about right. I just have the idea that Hillary would enjoy it a bit more, and more blindly, than the Donald would. But it wouldn’t make much difference regardless. Obama’s had the luck that he’s been able to hide the economic downfall on his watch behind a $10+ trillion increase in the Fed balance sheet and a multiple trillion, 50% increase in household debt.

The next president won’t have any such gift thrown into their laps. The new president will have to empty the poisoned chalice.

Imagine being -almost- 70 years old, well-off, and still wanting that job. What’s that make a body? In urgent need of a lifetime of therapy? Mariana Trench-deep unhappy?

And on top of that both candidates already know close to half the country hates their guts to begin with.

Remember, not even Socrates could beat the poisoned chalice.

 

 

Oct 282016
 
 October 28, 2016  Posted by at 9:11 am Finance Tagged with: , , , , , , , , ,  Comments Off on Debt Rattle October 28 2016
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Theodor Horydczak Washington Monument 1933

China Capital Flight Flashes Warning As Authorities Prick Property Bubble (AEP)
Unacceptable Cures for the Days Ahead (Dent)
Japan Consumer Prices Keep Falling, Household Spending Slips (BBG)
Bank of Japan Loses Bark And Bite Under Humbled Kuroda (R.)
The Gap Between Poor And Rich Regions In Europe Is Widening (Economist)
Xi Jinping Becomes ‘Core’ Leader Of China (R.)
Waking Up in Hillary Clinton’s America (Nomi Prins)
Donald Trump Has Won, Even If He Loses The US Election (Malmgren)
Why Is the Foreign Policy Establishment Spoiling for More War? (Kucinich)
Assange First Interview Since Being Censored (JJ)
Wither Democracy (Lessig)
Calais Children Abandoned At Former ‘Jungle’ Camp Site (EuO)

 

 

“The worry is a “negative feedback loop between a weakening yuan and capital flight”.

China Capital Flight Flashes Warning As Authorities Prick Property Bubble (AEP)

Capital outflows from China are accelerating. The hemorrhage has reached the fastest pace since the currency panic at the start of the year. The latest cycle of credit-driven expansion has already peaked after 18 months. Beijing has had to slam on the brakes, scrambling to control property speculation that the Communist authorities themselves deliberately fomented. How this episode could have happened is astonishing, given that premier Li Keqiang has warned repeatedly that excess credit is becoming dangerous and will ultimately doom China to the middle income trap. It will be clear by early to mid 2017 that the economy is rolling over and that the underlying ‘quality of growth’ has deteriorated yet further. “We think the recovery will run out of steam early next year,” said Chang Liu from Capital Economics.

This stop-go rotation – an all-too familiar pattern – coincides with an incipient liquidity squeeze in global finance as dollar LIBOR and Eurodollar rates ratchet upwards. A rate rise by the US Federal Reserve will clinch it. Since the commodity rebound is in great part driven by demand for Chinese industry and construction – and by a touching belief that China’s economy will sail majestically through 2017 – this looming slowdown spells trouble. Stress is already visible in the capital account. Morgan Stanley estimates that net outflows reached $44bn in September. Capital Economics thinks the figure was closer to $55bn, led by a surge in purchases of off-shore securities through the Shanghai-Hong Kong Stock Connect Scheme.

This does not yet match the capital flight seen late last year when a mismanaged shift in exchange rate policy set off outflows averaging $70bn a month, and triggered the global equity rout of January and February. But it is nearing a neuralgic threshold for currency traders. Beijing is clearly alarmed. Nikkei’s Yusho Cho reports that the authorities have ordered banks in Shanghai and Guangzhou to restrict access to foreign currency, and have imposed a “gag order” to keep it quiet. Institutions must now justify why they need foreign exchange. The worry is a “negative feedback loop between a weakening yuan and capital flight”. The central bank (PBOC) spent roughly $50bn defending the yuan last month, but this has not stopped the exchange rate sliding to 6.77 against the dollar – the weakest in six years.

The PBOC has burned through $800bn of foreign reserves since mid-2014, when they peaked at $4 trillion. It still has ample fire-power but bond sales automatically tighten China’s internal monetary policy since it is hard to sterilize the effect, and tightening may the last thing they want if the economy is slowing hard next year. “Our view is that the RMB (yuan) will depreciate 20pc against the US dollar to 8.1 by the end of 2018 as deflation of the property bubble leads to more capital outflows,” Zhiwei Zhang from Deutsche Bank. “This is deflationary for global trade.”

Read more …

Velocity of money is the no. 1 Deflation indicator.

Unacceptable Cures for the Days Ahead (Dent)

Then Dr. Lacy Hunt took the stage… As I was telling Boom & Bust subscribers in their 5 Day Forecast email on Monday, he’s the only economist (outside of Steve Keen from Australia, who’s currently in hibernation in London) that I recommend you to follow. He’s classically trained and deeply knowledgeable, and goes beyond the theoretical nature of his chosen field. He understands how debt and financial bubbles build and deleverage, a rarity among economists today. And he has possibly the best explanation of money velocity. Basically, it’s a sign of how productive investment in the economy is. Productive investment creates more profits, jobs and expansion, and hence, greater M2 velocity. Speculation, stock buybacks or empty buildings do not. His money velocity chart was my favorite of the conference.

With this single chart, Lacy shows the level and falling trends for money velocity across the U.S., Europe, Japan and China. And as you can see, the most unproductive investment is in China! See, solid proof from perhaps the most competent economist in America! Building stuff for no one isn’t productive for the economy. This is the most concrete proof yet of something that should be obvious. Despite 6-10% growth rates, China’s money velocity is even lower than Japan’s most dismal “coma economy” that is surviving solely on endless QE as they age and see exponential growth in debt levels… Do you get this? China is worse than Japan when you reflect the truth of money velocity. You can also see why we are the best house in a bad neighborhood. Our money velocity, despite continually slowing since 2000, is 50% stronger than the euro and three times that of Japan and China.

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The end of Abenomics nears..

Japan Consumer Prices Keep Falling, Household Spending Slips (BBG)

Japan’s consumer prices fell for a seventh straight month and household spending slumped again in September, underscoring the challenges Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda face in trying to revive the world’s third-largest economy. The downbeat inflation and spending data came despite an increasingly tight labor market. The unemployment rate slipped to 3% in September, equal to the lowest since 1995. The low jobless figure hasn’t yet resulted in significant wage gains, a key element of efforts to reflate Japan’s economy.

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…and that is also the end of Kuroda.

Bank of Japan Loses Bark And Bite Under Humbled Kuroda (R.)

As his term winds down, Bank of Japan Governor Haruhiko Kuroda has retreated from both the radical policies and rhetoric of his early tenure, suggesting there will be no further monetary easing except in response to a big external shock. In a clear departure from his initial “shock and awe” tactics to jolt the nation from its deflationary mindset, he has even taken to flagging what little change lies ahead, trying predictability where surprise has failed. This new approach will be on show next week, when the BOJ is set to keep policy unchanged despite an expected downgrade in forecasts that could show Kuroda won’t hit his perpetually postponed 2% inflation target before his five-year term ends in April 2018. “The days of trying to radically heighten inflation expectations with shock action are over,” said a source familiar with the BOJ’s thinking. “No more regime change.”

Kuroda told parliament last week that while the BOJ might again stretch the timing for its inflation target, he saw no need to ease at the Oct. 31-Nov. 1 policy meeting. “There may be some modification to our forecast that inflation will hit our 2% target during fiscal 2017,” he said, the first time he has offered hints on upcoming projections. In the past, the market has learned to expect the unexpected. In 2013, when the BOJ deployed its massive asset-buying program, dubbed “quantitative and qualitative easing” (QQE), his shock therapy boosted stocks and weakened the yen. Further surprises came with an expansion of QQE in October 2014, and then the switch to negative rates early in 2016, which he had denied was an option just days before. But the law of diminishing returns bought him less bang for each buck.

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Nice research, the graph shows hoe German data hide the sinking of Europe. Quite poorly reported, though.

The Gap Between Poor And Rich Regions In Europe Is Widening (Economist)

The beautiful but rubbish-strewn streets of Catania, Sicily’s second-biggest city, are a world away from swanky Trento, in the country’s richer north. About a quarter of Sicilians are “severely materially deprived”—meaning that they cannot afford things like a car, or to heat their home sufficiently—compared with just 5% in Trento. Italy is not unique. In many places, the divide within countries appears to be getting worse. According to an analysis by The Economist, the gap between richer and poorer regions of euro-zone countries has increased since the financial crisis. Our measure of regional inequality looks at the average income per head of a country’s poorest region, expressed as a%age of the income of that country’s richest part. The weighted average for 12 countries shows that regional inequality was declining in the years leading up to the financial crisis of 2007-08, but has increased since then (see chart).

The poorest area in Slovakia, the euro zone’s most geographically unequal economy, now has an income per person of just 28% of the richest, a slight fall from before the crisis. In Calabria, Italy’s poorest region, income per person as a share of the country’s best-off part, the province of Bolzano, was 45% in 2007 but is only 40% now. Elsewhere poor regions of the euro zone have seen income falling in both relative and absolute terms. An exception is Germany: in its once-communist east, excluding Berlin, GDP per person reached 67% of that in former West Germany last year. (Most of the catch-up took place in the early 1990s, but continues more slowly.) Deindustrialisation is partly to blame. Most of the euro zone’s 19 members have fewer manufacturing jobs than in 2008.

Manufacturing employment is high in many of Europe’s poorer countries, but they have lost international competitiveness in part because of an overvalued euro. Tight public spending also plays a role. Since 2008 the number of civil servants in the euro zone has fallen by about 6%. This has often hurt needy regions most. Cuts in welfare benefits also hit harder. A paper by Luca Agnello, Giorgio Fazio and Ricardo Sousa, three economists, found that austerity led to higher regional inequality in 13 European countries between 1980 and 2008. This suggests that the problem will continue: public funds will be tight for years to come, while weak public spending on education and infrastructure will crimp future growth. Even if the euro zone starts to grow strongly again, the geographical scars will be plain to see.

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China will be calling out loud for a strong leader as its economy grinds to a halt.

Xi Jinping Becomes ‘Core’ Leader Of China (R.)

China’s Communist party has given the president, Xi Jinping, the title of “core” leader, putting him on par with previous strongmen Mao Zedong and Deng Xiaoping, but signalled his power would not be absolute. A lengthy communique released after a four-day meeting of senior officials in Beijing emphasised the importance of collective leadership. The system “must always be followed and should not be violated by any organisation or individual under any circumstance or for any reason”, the party said. But all members should “closely unite around the central committee with comrade Xi Jinping as the core”, said the document, released through state media. The core leader title marks a significant strengthening of Xi’s position before a key party congress next year, at which a new standing committee, the pinnacle of power in China, will be constituted.

Since assuming office almost four years ago, Xi has rapidly consolidated power, including heading a group leading economic change and appointing himself commander-in-chief of the military, though as head of the central military commission he already controlled the armed forces. While head of the party, the military and the state, Xi had not previously been given the title “core”. Deng coined the phrase “core leader”, and said he, Mao Zedong and Jiang Zemin were core leaders, meaning they had almost absolute authority and should not be questioned. Xi’s immediate predecessor, Hu Jintao, was never called the “core”. The plenum meeting paves the way for a congress, held every five years, in autumn 2017, at which Xi will further consolidate his power and which could indicate who may replace him at the 2022 congress.

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Nomi’s very mild and polite.

Waking Up in Hillary Clinton’s America (Nomi Prins)

To date, $10 trillion worth of assets sits on the books of the Big Six banks. Since 2008, these same banks have copped to more than $150 billion in fines for pre-crisis behavior that ranged on the spectrum of criminality from manipulating multiple public markets to outright fraud. Hillary Clinton has arguably taken money that would not have been so available if it weren’t for the ill-gotten gains those banks secured. In her usual measured way, albeit with some light admonishments, she has told them what they want to hear: that if they behave – something that in her dictionary of definitions involves little in the way of personalized pain or punishment – so will she.

So let’s recap Hillary’s America, past, present, and future. It’s a land lacking in meaningful structural reform of the financial system, a place where the big banks have been, and will continue to be, coddled by the government. No CEO will be jailed, no matter how large the fines his bank is saddled with or how widespread the crimes it committed. Instead, he’s likely to be invited to the inaugural ball in January. Because its practices have not been adequately controlled or curtailed, the inherent risk that Wall Street poses for Main Street will only grow as bankers continue to use our money to make their bets. (The 2010 Dodd-Frank Act was supposed to help on this score, but has yet to make the big banks any smaller.)

And here’s an obvious corollary to all this: the next bank-instigated economic catastrophe will not be dealt with until it has once again crushed the financial stability of millions of Americans. The banks have voted with their dollars on all of this in multiple ways. Hillary won’t do anything to upset that applecart. We should have no illusions about what her presidency would mean from a Wall Street vs. Main Street perspective. Certainly, JPMorgan Chase CEO Jamie Dimon doesn’t. He effectively endorsed Hillary before a crowd of financial industry players, saying, “I hope the next president, she reaches across the aisle.” For Wall Street, of course, that aisle is essentially illusory, since its players operate so easily and effectively on both sides of it. In Hillary’s America, Wall Street will still own Main Street.

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“Reality TV Land will immediately install itself in the Oval Office if he wins. Then, anything goes.”

Donald Trump Has Won, Even If He Loses The US Election (Malmgren)

Donald Trump has already won the US presidential election and Hillary Clinton has already lost it, even if she emerges with the title of commander-in-chief. It is already apparent that Trump will not skulk off the global stage. Nor will he have to. Consider what happens if he loses the presidential race. He will most likely launch a reality TV show that will undoubtedly attract a record number of viewers. From this ridiculously unconstrained and lucrative perch, he’ll relentlessly attack President Clinton, the Republican Party and the Democratic Party alike. In retrospect, it will be clear that his entire campaign was a trailer for the blockbuster show that follows. In this way he will continue to influence, if not dominate, public opinion.

[..] he won’t go away. Neither will the forces that swept him to the top of politics: the anger, the loss, the sense of unfairness, the inability of the traditional parties to deliver a better outcome for most Americans. Meanwhile, the expectation that a Clinton presidency could conquer these forces is also likely to be proved false. The Oval Office is a highly constrained place that limits the influence of its occupant especially in the face of broader political disarray. She can try and set the tone but the rest of the political establishment looks too dysfunctional, and largely unwilling, to be able to help her. Her presidency seems set to open with high expectations and low approval ratings. Trump, however, could move to the next phase of his career with low expectations and high TV ratings.

Both have faced threats of prosecution throughout this long and increasingly ugly campaign. But, does Trump care if the courts or the government put his tax returns or the sexual allegations against him to the test? He won’t. Will he care if his emails are leaked? No. The real “public prosecutor” for Trump is the Fourth Estate – the media. It will prosecute him just as relentlessly if he becomes commander-in-chief but probably with the same limited impact. Will it matter to Clinton if her emails, from the past or future, are displayed to the public? Will it matter if the Clinton Foundation faces further allegations of “crooked” behaviour? But, we live in the internet age. The real “public prosecutor” for Clinton is and will remain Julian Assange and Wikileaks. His sights will continue to be firmly set on her. He does not care about Trump and Trump doesn’t care about him. Once again, Trump wins.

Trump’s only real threat of looking like the loser comes if the polls are wrong and he ends up winning. Many wonder whether he really wants the job. After all, the Oval Office is the political equivalent of a straightjacket. In theory, Trump won’t be able to shoot words from the hip so freely once he is sitting in the big shiny chair with his finger on the literal and metaphorical button. But, Reality TV Land will immediately install itself in the Oval Office if he wins. Then, anything goes. In the meantime, he will “win” in his effort to redefine America’s political landscape. As president, it won’t matter to him if the House and Senate block him. He is not concerned with process. His job is to break down the traditional political establishment.

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“Any report advocating war that comes from any alleged think tank ought to be accompanied by a list of the think tank’s sponsors and donors..”

Why Is the Foreign Policy Establishment Spoiling for More War? (Kucinich)

The American people are fed up with war, but a concerted effort is being made through fearmongering, propaganda, and lies to prepare our country for a dangerous confrontation, with Russia in Syria. The demonization of Russia is a calculated plan to resurrect a raison d’être for stone-cold warriors trying to escape from the dustbin of history by evoking the specter of Russian world domination. It’s infectious. Earlier this year the BBC broadcast a fictional show that contemplated WWIII, beginning with a Russian invasion of Latvia (where 26% of the population is ethnic Russian and 34% of Latvians speak Russian at home). The imaginary WWIII scenario conjures Russia’s targeting London for a nuclear strike.

No wonder that by the summer of 2016 a poll showed two-thirds of UK citizens approved the new British PM’s launching a nuclear strike in retaliation. So much for learning the lessons detailed in the Chilcot report. As this year’s presidential election comes to a conclusion, the Washington ideologues are regurgitating the same bipartisan consensus that has kept America at war since 9/11 and made the world a decidedly more dangerous place. The DC think tanks provide cover for the political establishment, a political safety net, with a fictive analytical framework providing a moral rationale for intervention, capitol casuistry. I’m fed up with the DC policy elite who cash in on war while presenting themselves as experts, at the cost of other people’s lives, our national fortune, and the sacred honor of our country.

Any report advocating war that comes from any alleged think tank ought to be accompanied by a list of the think tank’s sponsors and donors and a statement of the lobbying connections of the report’s authors. It is our patriotic duty to expose why the DC foreign-policy establishment and its sponsors have not learned from their failures and instead are repeating them, with the acquiescence of the political class and sleepwalkers with press passes.

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“As I said it has long been our analysis that Hillary Clinton will win the election because she has all the establishments on her side..”

Assange First Interview Since Being Censored (JJ)

“Wikileaks is one of the fighting dogs that has a lot of energy and runs around fighting all the time. It is built to fight it loves nothing more than to fight. And so when my internet was cut off we had long ago made strategic contingency plans for exactly this situation. So despite bombs raining down on us from statements by high US officials, media and so on this is exactly the sort of situation we enjoy so there was not even one day pause. We just continued on publishing the next day even though I was cut off from my team.” “As I said it has long been our analysis that Hillary Clinton will win the election because she has all the establishments on her side and we can see it in terms of polling.

If someone like Donald Trump – who has a great many problems I’m sure all of you are aware of it – but if he managed to get up to the 48% or 50% level in the polling which he has just on two occasions across the different polls united, immediately those big media networks and the funders get together and smash him back down. So I don’t think there’s any chance of Donald Trump winning the election. That would probably be bad inside the United States. It would probably be good outside the United States. Even with the amazing material we have published and will continue to publish because even though we publish it and there’s a lot of people reading it on the internet directly, most of the media originations in the United States are very strongly aligned with Hillary Clinton.

Two reasons really, a lot of them are owned by big businesses which are owned by banks which like Hillary Clinton. And the other is a class reason. Most journalists and media workers are very middle class and Donald Trump represents in their minds, white trash. So to do anything that looks to be like it might be supporting Donald Trump looks like you’re supporting white trash. And to those rivals that they have within their class they are white trash. So it lowers their social status and that’s a very dangerous thing to do in an institution, to have your social status lowered, because someone might get your job or the job that you want to have within the institution. So there is a lot of conformity and fear around criticizing Hillary Clinton in any way at all and it reduces the impact of even very significant material that is being released.”

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Can Iceland give the world back its lost democracy?

Wither Democracy (Lessig)

On the eve of the Icelandic Elections… WITHER DEMOCRACY, by Professor Lawrence Lessig, speaking from the University of Iceland. Lessig explains how democracy has failed the US and other citizens of the world, and how Iceland is on the brink of implementing an entirely new and improved system, based on a PEOPLE’S CONSTITUTION. Yes, it’s a world first, but then Iceland was the first country ever to form a parliament. Lester Lawrence “Larry” Lessig III is an American academic, attorney, and political activist. He was the co-founder, with our beloved Aaron Swartz, of Creative Commons. He is the Roy L. Furman Professor of Law at Harvard Law School; and the former director of the Edmond J. Safra Center for Ethics at Harvard University.

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Our moral bankruptcy in all its splendor.

Calais Children Abandoned At Former ‘Jungle’ Camp Site (EuO)

Scores of children have been left out in the cold, after French authorities flattened the make-shift migrants camp in Calais, in northern France, earlier this week. Journalists report that around a hundred children were sleeping rough on the remains of the camp, among burned-out shacks and riot police. The Guardian spoke to children who had been lured off the camp site, with promises of being transferred to reception centres where their asylum claims would be assessed. Instead, riot police cornered the group while bulldozers razed the camp. Media and NGO reports of the children’s treatment triggered protests of British home secretary Amber Rudd, who told her French counterpart, Bernard Cazeneuve, on Thursday, that children remaining in Calais had to be properly protected.

Cazeneuve later issued a statement saying he was surprised by Rudd’s declaration. He said France had given shelter to 1,451 minors since 17 October recalling that Britain had a legal duty to take those children that have a link to the UK, for instance through family. 274 children have been allowed to travel to the UK in the last two weeks. The decision to clear the camp came from French president Francois Hollande, calling it a ”humanitarian emergency” during a visit in September. French authorities started evacuating the camp, also known as the Jungle, on Monday (24 October) and said they had relocated almost all of the 6,000 people estimated to have been living there to other parts of France. [..] British baroness Shas Sheehan, who has been working as a volunteer teacher in the camp prior to its dismantlement, accused France and the UK of human rights violations, pointing to official assurances by both sides that the site wouldn’t be demolished before all the children were safeguarded.

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Oct 262016
 
 October 26, 2016  Posted by at 9:52 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 26 2016
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Dorothea Lange Depression refugee family from Tulsa, Oklahoma 1936

The Euro Has Been A Disaster For Southern European Production (Gefira)
Washington: Don’t Think It’s Over When Trump Loses (Steve Keen)
213 North American Oil Industry Companies Have Now Declared Bankruptcy (FF)
China Tightens Capital Controls Amid Yuan’s Continuing Slide (Nikkei)
London House Prices Forecast to Plunge as Brexit Chokes Market (BBG)
AT&T Is Spying On Americans For Profit (DB)
The US Is Currently Bombing Seven Countries (PF)
Trump Says Clinton Policy On Syria Would Lead To World War Three (R.)
Most Americans Do Not Feel Represented By Democrats Or Republicans (G.)
The Biggest F*ck Ever Recorded In Human History (Michael Moore)
Antarctic Glaciers Are Melting at a ‘Staggering’ Rate (Gizm.)

 

 

Why it has to stop. Or rather, why it will be stopped.

The Euro Has Been A Disaster For Southern European Production (Gefira)

Some say that the common currency prevents less productive economies from cheating by weakening their national currencies and forces them to become more efficient and competitive. Industrial production data shows that it is not the case. Italy, France, Greece and Portugal have not only stopped producing more; they are producing now less than in 1990! The decay started immediately after the introduction of the euro in 2002! The OECD industrial production data analysis leads to the following conclusions: 1. since 1990 industrial production (manufacturing and construction included) has been growing in volume at large, even in the most developed countries; 2. the disproportion between industrial output in Germany and two other biggest euroarea economies, Italy and France, occurred already just after the 2001-2002 crisis; 3. Southern Europe’s economies have lost their ability to rebound in industrial production alongside the adoption of the euro.

1. Industrial output can increase In most of the most developed countries in the world industrial production has grown in volume since 1990, although a great deal of manufacturing capacities have been moved from the West to the emerging markets. Moreover, in countries like the USA, Israel, Switzerland, Austria and Germany the output has surpassed the 2008 pre-crisis levels. However, if we take a look at the euroarea or the Group of Seven (G7), then numbers are still lower than in 2008 but definitely higher than in 1990.

2. The euroarea has a problem A closer look at the European industrial production numbers gives a clear signal: something bad has happened after 2000. Before the introduction of euro, production trends ran more or less in the same direction. Meanwhile after the 2001-2002 crisis, French and Italian output did not rebound, while production in Germany expanded enormously and was able to reach the 2008 level quickly after the last crisis. Industry in France and Italy not only has not rebounded but also has started to curb.

3. Southern Europe will not rebound with the euro
Countries with a sovereign currency can easily build up their economies because of one simple mechanism: depreciation. A relatively strong currency (strong in comparison to the economic condition) would not have to be a problem for Italy or Greece if there still were some capacities for more debt. Then internal consumption could prop up industrial production. But Spain, Greece, Italy and Portugal have had neither a weak sovereign currency nor the possibility of incurring more debt.

Industry is very important for the economy, as it creates jobs and innovations. The euroarea in the current form is preventing Southern Europe’s industry from developing because of a different type of economy there. “Roman” economies are not worse than than Germany’s. They just need other tools, so restricting all these various economies in the German fashion will destroy the euro as well as the European unity.

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Steve Keen on which employment numbers are actually relevant. Curious to see how many people think Hillary’s got it in the bag. As an example, here’s a Bloomberg poll that just came out:

Washington: Don’t Think It’s Over When Trump Loses (Steve Keen)

Trump’s fans certainly have their “dark fantasies”, but Washington and Krugman have a “bright fantasy” if they believe that unemployment is genuinely low. My favourite and unimpeachable proof that this is false is an easily-obtained data series: the percentage of Americans aged 25-54 who have a job. While the “Unemployment Rate” is back within half a per cent of its pre-crisis low, the percentage of Americans aged 25-54 who have a job today is 2% lower than it was before the crisis. Perhaps an even more important fact that explains the anger behind Trump (and Sanders too, before he was eliminated by the Democratic Party’s peculiar primary process) is that the employment rate actually peaked in 2000, and even after this recovery, it is still 4% lower than in 2000 (78% today versus 82% in 2000).

What that means in terms of people with jobs is even more telling. The number of people aged 25-54 with a job in the USA peaked at 104.7 million in December 2007. It bottomed at 100.3 million in October 2013, and as of February 2015 (the most recent data) it was 101.2 million. So when Washington is talking about achieving “full employment” again, there are still more than 3 million less people employed today than in 2007. Demographic change has caused this segment of the population to decline since December 2007—from 126 million then to 125 million in February 2015—but that still means 2 million more people are unemployed today than in 2007. So if you look at the unemployment rate, everything is wonderful. That seems to be what Washington insiders—all with well-paying jobs—are doing. But if you look at the employment rate, the economy is still in the doldrums. Which series is telling the truth about the US economy?

The employment to population ratio is telling the truth, because it’s derived by asking employers how many people they have on their payroll. The unemployment rate, on the other hand, lies about the real level of unemployment, because it is derived by asking individuals whether they fulfil a number of criteria, including whether they have looked for a job in the last 4 weeks. The employment ratio accurately tells you the number of people receiving a salary; the unemployment ratio does not accurately tell you who is not receiving one. It’s no comfort to someone not receiving a salary to be told that they are not also unemployed, according to the official definition. Their justified reaction is to tell the “official definition” what to do with itself.

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A few billion here and a few billion there in debt.

213 North American Oil Industry Companies Have Now Declared Bankruptcy (FF)

Fewer and fewer oil exploration and production companies are declaring bankruptcy. But more oilfield service companies are. So far this month, only one North American E&P firm filed for Chapter 11 protection, according to data released on Tuesday by the Dallas law firm Haynes & Boone. That’s down from two in September, three in August and four in July. But it’s been an especially tough few months for service companies. As crude prices began crashing in 2014, drillers started idling rigs. That led to fewer jobs for the companies that make their money helping producers pump oil and gas. Moreover, when producers did hire service companies, they often forced them to heavily discount their rates.

Eight service companies filed this month. Seven filed last month, and eight again the month before. Almost 50 have filed in the last six months, half of the 108 over two years. In total, 213 North American oil and gas companies have now filed for bankruptcy since the start of 2015, listing more than $85 billion in debt. The most recent exploration firm: the private oil and gas company Mountain Divide, based in Montana, filed on Oct. 14, and listed $83 million in debt. On the oilfield services side, Houston-based Key Energy Services filed on Monday, with more than $1 billion in debt. And Basic Energy Services, headquartered in Fort Worth, said Monday it had reached an agreement with debt holders to file by Tuesday.

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While at the same time letting Chinese foreign purchases escalate.

China Tightens Capital Controls Amid Yuan’s Continuing Slide (Nikkei)

China has toughened restrictions on capital flows to prevent a negative feedback loop between a weakening yuan and capital flight. The State Administration of Foreign Exchange has introduced new capital measures in areas such as Shanghai and Guangzhou since the beginning of autumn, asking foreign and regional banks to cap the amount of foreign currency they will sell to customers during 2016. These limits, though ostensibly up to banks’ discretion, are set by negotiation with authorities and so are essentially directed by the government, a financial sector source said. A gag order has been imposed surrounding the measures, the source said. Some banks apparently have set steep exchange rates to pre-emptively curb foreign currency sales, a practice that could pose issues for foreign companies in China trying to repatriate earnings, for example.

China’s trade has flagged in recent months, with exports dropping 10% in September from the year-earlier level in dollar terms. The prospect of an interest rate hike in the U.S., meanwhile, has market players expecting further declines in the yuan’s value. Stashing assets abroad, rather than keeping them in China, is increasingly seen as the safer option. This view has led to further selling of the yuan, giving rise to a downward spiral that capital controls aim to break. Both the foreign exchange regulator and the People’s Bank of China have given banks several directives this year to curb outflows and the currency’s slide. Institutions are asked to report on corporate clients’ plans for buying foreign currency. Large fund transfers that involve foreign currency purchases must be explained by the institutions ahead of time. Individuals traveling overseas are asked to make reservations when exchanging money.

The yuan continues to depreciate despite these efforts. The central bank Tuesday set its daily guidance rate for the Chinese currency at 6.77 yuan to the dollar – just a little shy of the 6.82- to 6.83-to-the-dollar range at which the yuan was fixed for nearly two years following the September 2008 financial crisis. At the time, the goal was to prevent the currency from strengthening to stave off an economic slump. The concern now is that the yuan will become weaker and capital will flow out.

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The best thing to could happen in Britain.

London House Prices Forecast to Plunge as Brexit Chokes Market (BBG)

London property prices are set to fall next year as uncertainty about Britain’s exit from the EU damps the U.K. housing market, according to the Centre for Economics and Business Research. London, and especially the priciest areas of the capital’s housing market, will be most affected, with prices dropping 5.6% in 2017, according to the consultancy’s predictions. Across the U.K., while property value growth will accelerate to 6.9% in 2016, it’s set to slow to 2.6% next year. “Nervousness and uncertainty are starting to show,” said Kay Daniel Neufeld, an economist at Cebr. “We expect to see house-price growth across the U.K. slowing considerably in the fourth quarter of 2016, a trend that is set to continue in 2017.”

While the housing market was already facing headwinds from tax changes before June’s EU referendum, investors are becoming increasingly nervous about the possibility of a so-called hard Brexit. That could see the U.K. giving up membership of Europe’s single market for goods and services to secure greater control of immigration. Accelerating inflation, increasing unemployment and slowing business investment are all set to weigh on house prices, while curbs on migration and a retreat from the single market could slow demand from international buyers, the Cebr said.

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Wait till we find out what Google does.

AT&T Is Spying On Americans For Profit (DB)

In 2013, Hemisphere was revealed by The New York Times and described only within a Powerpoint presentation made by the Drug Enforcement Administration. The Times described it as a “partnership” between AT&T and the U.S. government; the Justice Department said it was an essential, and prudently deployed, counter-narcotics tool. However, AT&T’s own documentation—reported here by The Daily Beast for the first time—shows Hemisphere was used far beyond the war on drugs to include everything from investigations of homicide to Medicaid fraud. Hemisphere isn’t a “partnership” but rather a product AT&T developed, marketed, and sold at a cost of millions of dollars per year to taxpayers.

No warrant is required to make use of the company’s massive trove of data, according to AT&T documents, only a promise from law enforcement to not disclose Hemisphere if an investigation using it becomes public. These new revelations come as the company seeks to acquire Time Warner in the face of vocal opposition saying the deal would be bad for consumers. Donald Trump told supporters over the weekend he would kill the acquisition if he’s elected president; Hillary Clinton has urged regulators to scrutinize the deal. While telecommunications companies are legally obligated to hand over records, AT&T appears to have gone much further to make the enterprise profitable, according to ACLU technology policy analyst Christopher Soghoian.

“Companies have to give this data to law enforcement upon request, if they have it. AT&T doesn’t have to data-mine its database to help police come up with new numbers to investigate,” Soghoian said. AT&T has a unique power to extract information from its metadata because it retains so much of it. The company owns more than three-quarters of U.S. landline switches, and the second largest share of the nation’s wireless infrastructure and cellphone towers, behind Verizon. AT&T retains its cell tower data going back to July 2008, longer than other providers. Verizon holds records for a year and Sprint for 18 months, according to a 2011 retention schedule obtained by The Daily Beast.

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Just so you know.

The US Is Currently Bombing Seven Countries (PF)

For this fact check, we wondered if the U.S. is bombing seven countries. That at least has been so: In September 2014, PunditFact rated True a bombed-countries claim by Ryan Lizza of The New Yorker. Lizza referred to President George W. Bush and his successor, Barack Obama, in a tweet that said: “Countries bombed: Obama 7, Bush 4.” At the time, the U.S. on Obama’s watch had bombed Afghanistan, Iraq, Pakistan, Somalia, Yemen, Libya and Syria. When we asked Stein for her backup information, spokeswoman Meleiza Figueroa pointed out various web posts including a September 2014 CNN news story stating that Obama had ordered air strikes in seven countries through the bulk of his eight years in the office.

[..] The Bureau of Investigative Journalism, a nonprofit news service based at City University London, maintains a running list of U.S. military actions in a number of countries. The bureau annotates each incident with links to press reports. When we looked, the bureau’s accounts by country indicated the latest U.S drone strike in Pakistan occurred in May 2016; the latest strike in Somalia was in September 2016; and the latest U.S. strikes in Yemen and Afghanistan were in October 2016. Separately, we noticed, the Department of Defense said in an Oct. 11, 2016, web post that countries including the U.S. battling the Islamic State of Iraq and the Levant, or ISIL, have conducted 15,634 air strikes to date – 10,129 in Iraq, 5,505 in Syria – with the U.S. conducting 6,868 in Iraq and 5,227 in Syria. In a Sept. 30, 2016, post, the U.S. Air Force said attacks from the air have affected ISIL’s “ability to fight and conduct operations in Iraq, Syria and Afghanistan.”

Too, in August 2016, the New York Times reported the U.S. had “stepped up a new bombing campaign against the Islamic State in Libya, conducting its first armed drone flights from Jordan to strike militant targets” in Libya’s coastal city of Sirte. That news story quoted Obama saying during a news conference that the airstrikes were critical to helping Libya’s fragile United Nations-backed government to drive Islamic State militants out of Sirte, which the group has controlled since June 2015. Obama promised the air campaign would continue as long as necessary to make sure that the extremist group “does not get a stronghold in Libya,” the newspaper said.

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Trump -rightly- mirrors something I said a few days ago in Ungovernability “..her harsh criticism of Putin raised questions about “how she is going to go back and negotiate with this man who she has made to be so evil,” if she wins the presidency.”

Trump Says Clinton Policy On Syria Would Lead To World War Three (R.)

U.S. Republican presidential nominee Donald Trump said on Tuesday that Democrat Hillary Clinton’s plan for Syria would “lead to World War Three,” because of the potential for conflict with military forces from nuclear-armed Russia. In an interview focused largely on foreign policy, Trump said defeating Islamic State is a higher priority than persuading Syrian President Bashar al-Assad to step down, playing down a long-held goal of U.S. policy. Trump questioned how Clinton would negotiate with Russian President Vladimir Putin after demonizing him; blamed President Barack Obama for a downturn in U.S. relations with the Philippines under its new president, Rodrigo Duterte; bemoaned a lack of Republican unity behind his candidacy, and said he would easily win the election if the party leaders would support him.

“If we had party unity, we couldn’t lose this election to Hillary Clinton,” he said. On Syria’s civil war, Trump said Clinton could drag the United States into a world war with a more aggressive posture toward resolving the conflict. Clinton has called for the establishment of a no-fly zone and “safe zones” on the ground to protect non-combatants. Some analysts fear that protecting those zones could bring the United States into direct conflict with Russian fighter jets. “What we should do is focus on ISIS. We should not be focusing on Syria,” said Trump as he dined on fried eggs and sausage at his Trump National Doral golf resort. “You’re going to end up in World War Three over Syria if we listen to Hillary Clinton.”

[..] On Russia, Trump again knocked Clinton’s handling of U.S.-Russian relations while secretary of state and said her harsh criticism of Putin raised questions about “how she is going to go back and negotiate with this man who she has made to be so evil,” if she wins the presidency.

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“Less than half the public (43%) say they have a great deal of confidence that their vote will be counted accurately..”

Most Americans Do Not Feel Represented By Democrats Or Republicans (G.)

As they go to the polls in a historic presidential election, more than six in 10 Americans say neither major political party represents their views any longer, a survey has found. Dissatisfaction with both Democrats and Republicans has risen sharply since 1990, when less than half held that neither reflected their opinions, according to research by the Public Religion Research Institute (PRRI). The seventh annual 2016 American Values Survey was carried out throughout September among a random sample of 2,010 adults in all 50 states. Both party establishments have been rattled by the outsider challenges of Donald Trump, who was successful in winning his party’s nomination, and Bernie Sanders, who was not. In a year that seems ripe for third-party candidates, Libertarian Gary Johnson and Jill Stein of the Green party are seeking to capitalise but have fallen back in the polls in recent weeks.

61% of survey respondents say neither political party reflects their opinions today, while 38% disagree. 77% of independents and a majority (54%) of Republicans took this position, while less than half (46%) of Democrats agree. There was virtually no variation across class or race. Both Democratic presidential nominee Hillary Clinton and Republican standard bearer Trump continue to suffer historically low favourability ratings, with less than half of the public viewing each candidate positively (41% v 33%). Clinton is viewed less favourably than the Democratic party (49%), but Trump’s low rating is more consistent with the Republican party’s own favourability (36%).

The discontent with parties and candidates extends to the electoral process itself, which Trump claims is rigged against him. Less than half the public (43%) say they have a great deal of confidence that their vote will be counted accurately, while 38% have some confidence and 17% have hardly any confidence. [..] The PRRI found that pessimism about the direction of the US is significantly higher today (74%) than it was at this time during the 2012 presidential race, when 57% of the public said the country was on the wrong track.

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Slightly confused: I thought he was pro-Hillary?!

The Biggest F*ck Ever Recorded In Human History (Michael Moore)

I know a lot of people in Michigan that are planning to vote for Trump and they don’t necessarily agree with him. They’re not racist or redneck, they’re actually pretty decent people and so after talking to a number of them I wanted to write this. Donald Trump came to the Detroit Economic Club and stood there in front of Ford Motor executives and said “if you close these factories as you’re planning to do in Detroit and build them in Mexico, I’m going to put a 35% tariff on those cars when you send them back and nobody’s going to buy them.” It was an amazing thing to see. No politician, Republican or Democrat, had ever said anything like that to these executives, and it was music to the ears of people in Michigan and Ohio and Pennsylvania and Wisconsin – the “Brexit” states.

You live here in Ohio, you know what I’m talking about. Whether Trump means it or not, is kind of irrelevant because he’s saying the things to people who are hurting, and that’s why every beaten-down, nameless, forgotten working stiff who used to be part of what was called the middle class loves Trump. He is the human Molotov Cocktail that they’ve been waiting for; the human hand grande that they can legally throw into the system that stole their lives from them. And on November 8, although they lost their jobs, although they’ve been foreclose on by the bank, next came the divorce and now the wife and kids are gone, the car’s been repoed, they haven’t had a real vacation in years, they’re stuck with the shitty Obamacare bronze plan where you can’t even get a fucking percocet, they’ve essentially lost everything they had except one thing – the one thing that doesn’t cost them a cent and is guaranteed to them by the American constitution: the right to vote.

They might be penniless, they might be homeless, they might be fucked over and fucked up it doesn’t matter, because it’s equalized on that day – a millionaire has the same number of votes as the person without a job: one. And there’s more of the former middle class than there are in the millionaire class. So on November 8 the dispossessed will walk into the voting booth, be handed a ballot, close the curtain, and take that lever or felt pen or touchscreen and put a big fucking X in the box by the name of the man who has threatened to upend and overturn the very system that has ruined their lives: Donald J Trump.

They see that the elite who ruined their lives hate Trump. Corporate America hates Trump. Wall Street hates Trump. The career politicians hate Trump. The media hates Trump, after they loved him and created him, and now hate. Thank you media: the enemy of my enemy is who I’m voting for on November 8. Yes, on November 8, you Joe Blow, Steve Blow, Bob Blow, Billy Blow, all the Blows get to go and blow up the whole goddamn system because it’s your right. Trump’s election is going to be the biggest fuck ever recorded in human history and it will feel good.

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“.. like ice cubes rising as a soft drink is poured into a glass.”

Antarctic Glaciers Are Melting at a ‘Staggering’ Rate (Gizm.)

Scientists have long viewed the Amundsen sea embayment as the Achilles heel of West Antarctica, with papers in the 1970s and ‘80s describing it as “uniquely vulnerable,” “unstable,” and the “weak underbelly” of the continent. The fear, then and now, was that warm ocean waters lapping against the foot of the glaciers could cause the ice to pop up off of its rocky floor, like ice cubes rising as a soft drink is poured into a glass. When ice detaches from its so-called “grounding line,” it kickstarts a chain reaction that can trigger a lot of melting. “When water gets between ice and land, it moves quickly, bringing lots of heat in, and melting the ice above it more rapidly,” said Thomas Wagner, the director of NASA’s polar science program. “The Amundsen sea embayment is a place where we know this is happening.”

Indeed, satellite and radar data show that two of West Antarctica’s largest glaciers, Pine Island and Thwaites, have seen their grounding line retreat many miles since 2000, causing fresh water to pour off the ice and into the ocean. This process is so effective that glaciologists recently declared the total collapse of the Amundsen sea embayment—whose glaciers contain enough water to raise global sea levels by four feet—to be “unstoppable.” Here’s the rub: We still have no idea how quickly all of that ice will go, meaning we have no idea whether to prepare for a lot more sea level rise in ten years, in a generation, or at the end of the century. A new study, led by glaciologist Ala Khazendar of NASA’s Jet Propulsion Laboratory, points to ice disappearing sooner rather than later.

For years, NASA has been conducting an airborne campaign called Operation Ice Bridge, flying across sections of our planet’s north and south polar ice sheets and using ground-penetrating radar to measure changes beneath the surface. When Khazendar examined Ice Bridge’s datasets for the Amundsen sea embayment, he realized that NASA flew almost exactly the same path in 2009 that it did in 2002. “This presented an excellent opportunity to look at how ice thickness changed,” he said.

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NOTE: we know our Comments section doesn’t function properly. We’re looking into it.

Oct 212016
 
 October 21, 2016  Posted by at 9:43 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 21 2016
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Lewis Wickes Hine Game of craps. Cincinnati, Ohio 1908

 

 

NICOLE FOSS is the keynote speaker tonight, October 21, at the

Community Solutions Conference
McGregor Hall, Antioch College
Yellow Springs, Ohio
7.30 pm

 

 

Dollar Near 7-Month High As Euro Slides, Asia Slips (R.)
Another Thing Trump, Hillary Get Wrong In This Election: The National Debt (F.)
Trump’s Candidacy – the Good and the Bad of It (Stockman)
China Property Prices Rise At Fastest Pace On Record In September (CNBC)
Yuan Hits Record Low Against Dollar in Offshore Trading (WSJ)
China’s Property Frenzy Spurs Risky Business (WSJ)
China’s Local Governments Are Getting Into The Venture Capital Business (BBG)
The Sharing Economy is Creating a Dickensian World (Das)
‘Lions Hunting Zebras’: Ex-Wells Fargo Bankers Describe Abuses (NYT)
Washington Foreign Policy Elites Not Sorry To See Obama Go (WaPo)
Hacking Democracy (ZH)
Italy Shields Russia From EU Sanctions Threat (EUO)
Draghi Says Athens Should Focus On Reforms, And The Eurozone On Debt (Kath.)
126,956 Greeks Work In Private Sector For €100 Per Month (KTG)

 

 

“The European Central Bank removed a source of immediate risk for traders by revealing that it did not discuss tapering its QE program at this month’s meeting..”

Dollar Near 7-Month High As Euro Slides, Asia Slips (R.)

Asian stocks were mostly lower on Friday as the dollar climbed to seven-month highs against a basket of currencies and dragged down crude oil prices, cooling investor risk appetite. The greenback was boosted by a fall in the euro after the ECB shot down talk it was contemplating tapering its monetary easing – sending the common currency to its lowest since March. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3%. South Korea’s Kospi lost 0.4% and Australian stocks shed 0.1%, weighed down by a retreat in energy shares. Singapore fell 0.4% while Shanghai added 0.3%. Japan’s Nikkei rose 0.3% , brushing a six-month high, as the yen weakened against the dollar.

U.S. stocks ended a choppy session on Thursday slightly lower as investors digested the latest round of earnings, with a sharp drop in telecoms offset by gains in healthcare. The ECB left its ultra-loose monetary policy unchanged on Thursday but kept the door open to more stimulus in December, with ECB President Mario Draghi dousing recent market speculation that the central bank may begin tapering its €1.7 trillion asset-buying program. “The European Central Bank removed a source of immediate risk for traders by revealing that it did not discuss tapering its QE program at this month’s meeting,” wrote Ric Spooner, chief market analyst at CMC Markets. “Decisions are being deferred until December pending the outcome of research – meaning that meeting will be a key focus for markets.”

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Debt explained in the vein of Steve Keen.

Another Thing Trump, Hillary Get Wrong In This Election: The National Debt (F.)

As if there aren’t enough things to be upset about as it is, here’s another: neither candidate’s position on the debt and the deficit makes economic sense (something they each reinforced in last night’s Las Vegas debate). If they act on their campaign promises, we will most certainly be facing an economic downturn, if not an outright disaster. 1. Public sector deficits must, by definition, be private sector surpluses. If one entity spends more than it earns (the public sector) then another must earn more than it spends (you and me). This is an inescapable accounting identity. 2. Public sector debt must, by definition, be a private sector asset. If one entity adds liabilities, another adds assets–another inescapable law of accounting. 3. It is impossible for a nation to be forced to default in debt denominated in its own currency. Not unlikely, not improbable, but impossible. This is not my opinion, it’s a fact, albeit a poorly known one.

4. U.S. public debt to foreign countries like China has nothing to do with the budget deficit. It’s a result of the trade deficit. The federal government’s budget could have been in surplus for the past 100 years, but whenever we buy more from China than we sell to them, they have leftover cash which they use to buy our financial assets. These may include but are not limited to Treasury Bills. No amount of budget balancing will affect debt to China. 5. The private sector cannot consistently generate sufficient demand to create jobs for everyone who wants one. As technology and productivity have increased, so it has become more difficult. Entrepreneurs cannot be blamed for adding self-checkout lanes, they have families and stockholders. But it means the store can sell the same volume of output with fewer employees–unemployment therefore rises.

Hence, we need the public sector to spend in deficit so that a.) the private sector can net save and b.) jobs are created to supplement those generated by the market system. And it creates neither a default risk nor inflation–unless we are already at full-employment, which means we don’t need to be spending that much in the first place! It is noteworthy that when, in the midst of the Great Depression, the government decided to try to reduce the deficit, unemployment jumped from 14% (after having fallen from nearly 25%) to 19%. Once WWII hit, however, any worries about government spending went right out the window and unemployment plummeted to 1.9%. There’s no reason we can’t be there right now. Only bad policy can stand in our way.

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Dave’s new book, Trumped, is out. “God help America if she becomes president.

Trump’s Candidacy – the Good and the Bad of It (Stockman)

America is heading for a devastating financial collapse and prolonged recession that will make the last go-round look tame by comparison. The entire recovery is one giant Potemkin village of phony economics and egregious financial asset inflation. It isn’t even a mixed or debatable story. Beneath the “all is awesome” propaganda of the establishment institutions is a broken system hurtling toward ruin. For example, during the month of July 2016, when the Democrats were convening in Philadelphia to confirm a third Obama term and toast 25-years of Bubble Finance, exactly 98 million Americans in the prime working ages of 25 to 54 years had jobs, including part-time gigs and self-employment. That compares to 98.1 million during July 2000. That’s right. After 16 years of the current regime we have 5 million more prime working age Americans and not a single one of them with a job.

At the same time, the number of persons in households receiving means-tested benefits has risen from 50 million to 110 million. Even as the economic wagon has faltered and become loaded with dependents, however, the financial system has grown by leaps and bounds. For example, during those same 16 years public and private debt outstanding in America has risen from $28 trillion to $64 trillion. The value of publicly traded equity has increased from $25 trillion to $45 trillion. And the net worth of the Forbes 400 has nearly doubled from $1.2 trillion to $2.4 trillion. In a word, the U.S. economy is a ticking time bomb. Main Street economics and Wall Street finance have become radically and dangerously disconnected owing to the reckless falsification of financial markets by the Fed and Washington’s addiction to endless deficits and crony capitalist bailouts and boodle.

There is not a remote chance that this toxic brew can be sustained much longer. Under those circumstances the very last thing America will need in 2017–18 when it hits the fan is a lifetime political careerist and clueless acolyte of the state who knows all the right words and harbors all the wrong ideas. Indeed, during the coming crisis America will need a brash disrupter of the status quo, not a diehard defender. Yet when the Dow index drops by 7,000 points and unemployment erupts back toward double digits, Hillary Clinton’s only impulse will be to double down. That is, to fire-up the printing presses at the Fed from red hot to white heat, plunge the nation’s fiscal equation back into multi-trillion deficits and crank-out Washington’s free stuff like never before.

A combination of a Clinton White House and the devastating day of reckoning just ahead would result in Big Government on steroids. It would also tilt the Imperial City toward war in order to distract the nation’s disgruntled voters in their tens of millions. Indeed, her prospective war cabinet — including Victoria Nuland and Michéle Flournoy — is comprised of the actual architects of Washington’s unprovoked NATO siege on Russia’s own doorsteps. God help America if she becomes president.

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And Beijing keeps pretending they want to cool it down.

China Property Prices Rise At Fastest Pace On Record In September (CNBC)

China property prices rose at the fastest pace on record in September, fueling fears of a market bubble in the world’s second-largest economy. Property prices climbed 11.2% on-year in September in 70 major cities while prices were up 2.1% from August, according to Reuters calculations using data from the National Bureau of Statistics. In August, prices rose 9.2% from a year ago. Home prices in the second-tier city of Hefei recorded the largest on-year gain at 46.8%, compared with on-year gains of 40.3% in August. Top August performer Xiamen posted an on-year rise of 46.5% against an increase of 43.8% in August. Prices in Shenzhen, Shanghai and Beijing rose 34.1%, 32.7% and 27.8% on an annual basis respectively, according to Reuters.

Underpinning the strong growth was simply “debt” said independent analyst, Fraser Howie, who is also co-author of “Red Capitalism” and “Privatizing China.” “A decade ago you could make a case for strong property in China (with) genuine demand and relatively low leverage in the sector. This is certainly not the case now. You are seeing a lot of leverage in the property sector, both retail and commercial,” he told CNBC’s “Squawk Box”. The quick gains in property prices in China came after the Chinese government introduced measures aimed at boosting home sales earlier this year to reduce large inventories in an effort to limit an economic slowdown. Recent fears of overheating, however, prompted local governments in China to announce a flurry of property market cooling measures in recent weeks. Any impact from those measures was not reflected in the latest data.

Despite the property cooling measures, Howie said the broad theme of how the Chinese government was responding to the situation was recurrent. “For five to six years or so, you have on-again-off-again cooling measures in the property market, trying to make property more affordable and it’s still nowhere near affordable,” he added. The Chinese government, he said, “has no clear plan”. “It’s just a bubble, they try to pull it back; they rein it in a bit, they let it go again when it impacts the real economy.”

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It’s gettiing time for the IMF to comment on this.

Yuan Hits Record Low Against Dollar in Offshore Trading (WSJ)

The yuan hit a record low against the U.S. dollar in offshore trading Friday after strong earnings on Wall Street and weakness in the euro boosted the strength of the greenback. The dollar reached a high of 6.75651 against the Chinese currency, which trades freely around the clock in offshore markets such as Hong Kong, its biggest trading center. It was last trading up 0.2% at 6.7582. The yuan has been traded outside China since 2010. Hong Kong’s markets are closed today as a typhoon lashes the city, with the yuan breaching its previous record around 7.41 a.m. local time, typically a time when market liquidity is thin. The People’s Bank of China later set its daily reference rate for the yuan traded in mainland China at 6.7558 against the U.S. dollar.

Onshore, the yuan is allowed to trade 2% either side of this level. The currency last traded at 6.7519 against the greenback, while its offshore counterpart weakened further after the fixing. “Overnight we saw a broadly stronger U.S. dollar,” says Qi Gao, Asia foreign exchange strategist at Scotiabank. He anticipates further strength in the greenback in the weeks running up to the U.S. Federal Reserve’s December meeting, at which the central bank may deliver its first rate increase in a year.

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“This is actually what we’re told by banks’ client managers to do to meet [regulatory] requirements.”

China’s Property Frenzy Spurs Risky Business (WSJ)

Xiong Meifang was about $30,000 short two months ago for a 30% down payment on an $895,000 apartment in the southern part of Beijing. To make up the difference, the 31-year-old graphic designer took out a line of credit from a national bank. She said the bank told her she could use the loan however she wanted. China bans borrowing for down payments. A surge in such financing offered by nonbank lenders earlier this year led to a regulatory clampdown. But as banks increasingly turn to mortgage lending, there are new signs of risky practices. In some instances, banks offer credit lines to borrowers buying apartments with few questions asked. In others, banks work with independent loan brokers or property agents to funnel money into down-payment financing.

Data released Tuesday showed medium- and long-term household loans, almost all of which are mortgages, made up 60% of all new loans created in the third quarter, up from 47% in the second quarter and 23% in the first. Easy credit has fanned a property-buying craze in many Chinese cities this year, helping shore up an otherwise weak economy. Government data on Wednesday showed GDP expanded by 6.7% from a year earlier in the third quarter, matching expectations, largely on the strength of the hot property market and loose monetary policies. In the past two weeks, two dozen cities have asked banks to tighten home-lending standards. Financial regulators are seeking to rein in the relatively new practice of banks working with brokers and others, such as developers, to help home buyers come up with down payments.

[..] On paper, the purpose of the loan can’t be for the home purchase itself. But the company could help arrange a contract with, say, a decorator, to show a bank that the loan would be for home decoration, the representative said, adding that ultimately the bank can’t check how the money is used. [The broker] charges a 3% flat fee on the amount of any loans it helps arrange. “It’s all legal, of course,” said the representative. “This is actually what we’re told by banks’ client managers to do to meet [regulatory] requirements.”

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While they have huge debts with the shadow banks. What could go worng?

China’s Local Governments Are Getting Into The Venture Capital Business (BBG)

China’s next billion-dollar startup could have backing from an investor with more money than Warren Buffett and a knack for promoting spicy duck-neck delicacies. The Hubei provincial government is armed with 547 billion yuan ($81 billion) earmarked for investments that can diversify a job base dependent on steel, mining and cars. And the bureaucrats in the heartland region along the Yangtze River are letting professionals do the work – allocating the money to investment houses Sequoia Capital, TCL Capital and CBC Capital. Local governments across China are getting into the venture-capital business, deploying a combined 3 trillion yuan as the Communist Party resolves to modernize the economy and reduce debt-fueled spending on infrastructure. The money is meant to spur development of biotechnology, internet and high-end manufacturing companies that can replace the stumbling heavy industries sapping economic growth.

“Our focus is more on the sector than the return,” said Wang Hanbing, who oversees $6 billion as chairman of the Yangtze River Industry Fund, one of several using Hubei government money. “We encourage people to bring real jobs back to Hubei.” China is grappling with a profusion of economic difficulties such as declining exports, surging home prices and skyrocketing corporate debt. The State Council signaled last month it had a bigger appetite for venture capital, urging local administrations to play a leading role and promising to level the playing field for foreign VC funds. Policy makers want to curb the proliferation of borrowing by regional authorities to pay for infrastructure projects that prop up growth. Local government financing vehicles borrow on behalf of governments, which often are barred from doing so. Through September, the debt issued by more than 1,600 such vehicles soared 47% from a year ago to 1.5 trillion yuan.

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The same effect as globalization: bring down wages..

The Sharing Economy is Creating a Dickensian World (Das)

Cheerleaders frame the sharing economy in lofty utopian terms: The sharing economy isn’t business but a social movement, transforming relationships between people in a new form of internet intimacy and humanitarianism. Exchanges are economic. Buyers are primarily concerned about access to services at low costs rather than social objectives. Providers are motivated by money, using their assets and labor to get by in an unforgiving and poor economic environment.

The major financial backers of the sharing economy aren’t philanthropists. They are Wall Street and Silicon Valley’s 1%, related venture-capital firms and a few institutional investors, such as sovereign-wealth funds. The amount of capital provided is substantial. Given the normal five-to-seven-year cycle for such investments, the pressure to deliver results will increase, bringing it into conflict with the social or altruistic objectives espoused. Ultimately, the sharing economy will influence how traditional businesses operate. Traditional automobile makers could offer a car-sharing service, such as BMW’s Drive Now. Users can access a car as needed, paying only for usage. These types of changes may decrease rather than increase revenue as it substitutes hiring arrangements for outright purchases.

But perhaps the real issue is that the sharing economy reverses progress in labor markets. Whatever the gains from increased efficiency, it recreates a Dickensian world for a part of the population. Formal employment protects labor from exploitation and deprivation to varying degrees. The sharing economy transfers the risk of economic uncertainty from the employer to the employee with potentially tragic consequences. Most important, the underlying economic premise is false. Consumption constitutes 60%-70% of activity in advanced economies. In 1914, Henry Ford doubled his workers’ pay from $2.34 to $5 a day, recognizing that paying people more would enable them to afford the cars they were producing. Reduction of income levels and employment security ultimately reduces consumption and economic activity, impoverishing most within societies.

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They should take the lot of them, everyone involved, and ban them from ever working in banking or finance again.

‘Lions Hunting Zebras’: Ex-Wells Fargo Bankers Describe Abuses (NYT)

Mexican immigrants who speak little English. Older adults with memory problems. College students opening their first bank accounts. Small-business owners with several lines of credit. These were some of the customers whom bankers at Wells Fargo, trying to meet steep sales goals and avoid being fired, targeted for unauthorized or unnecessary accounts, according to legal filings and statements from former bank employees. “The analogy I use was that it was like lions hunting zebras,” said Kevin Pham, a former Wells Fargo employee in San Jose, Calif., who saw it happening at the branch where he worked. “They would look for the weakest, the ones that would put up the least resistance.”

Wells Fargo would like to close the chapter on the sham account scandal, saying it has changed its policies, replaced its chief executive and refunded $2.6 million to customers. But lawmakers and regulators say they will not let it go that quickly, and emerging evidence that some victims were among the bank’s most vulnerable customers has given them fresh ammunition. This week, three members of the Board of Supervisors in San Francisco, Wells Fargo’s hometown, introduced a resolution calling on the city to cut all financial ties with the bank. They cited both the recent scandal and past cases — particularly the $175 million that Wells Fargo paid in 2012 to settle accusations that its mortgage brokers had discriminated against black and Hispanic borrowers.

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You may not like Trump, but do you like war any better?

Washington Foreign Policy Elites Not Sorry To See Obama Go (WaPo)

There is one corner of Washington where Donald Trump’s scorched-earth presidential campaign is treated as a mere distraction and where bipartisanship reigns. In the rarefied world of the Washington foreign policy establishment, President Obama’s departure from the White House – and the possible return of a more conventional and hawkish Hillary Clinton — is being met with quiet relief. The Republicans and Democrats who make up the foreign policy elite are laying the groundwork for a more assertive American foreign policy, via a flurry of reports shaped by officials who are likely to play senior roles in a potential Clinton White House. It is not unusual for Washington’s establishment to launch major studies in the final months of an administration to correct the perceived mistakes of a president or influence his successor.

But the bipartisan nature of the recent recommendations, coming at a time when the country has never been more polarized, reflects a remarkable consensus among the foreign policy elite. This consensus is driven by a broad-based backlash against a president who has repeatedly stressed the dangers of overreach and the need for restraint, especially in the Middle East. “There’s a widespread perception that not being active enough or recognizing the limits of American power has costs,” said Philip Gordon, a senior foreign policy adviser to Obama until 2015. “So the normal swing is to be more interventionist.” In other instances, the activity reflects alarm over Trump’s calls for the United States to pull back from its traditional role as a global guarantor of security.

“The American-led international order that has been prevalent since World War II is now under threat,” said Martin Indyk, who oversees a team of top former officials from the administrations of Obama, George W. Bush and Bill Clinton assembled by the Brookings Institution. “The question is how to restore and renovate it.”

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Very clear video. But then, it was of course always a stupid thing to claim that US elections cannot be rigged.

Hacking Democracy (ZH)

“Those who cast the votes decide nothing. Those who count the votes decide everything.” – Joe Stalin.

With the mainstream media lambasting Trump for daring to suggest the election process is rigged – despite hard evidence – this is the hack that proved America’s elections can be stolen using a few lines of computer code. The ‘Hursti Hack’ in this video is an excerpt from the feature length Emmy nominated documentary ‘Hacking Democracy’. The hack of the Diebold voting system in Leon County, Florida, is real. It was verified by computer scientists at UC Berkeley.

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Brussels is as crazy as the US Democrats.

Italy Shields Russia From EU Sanctions Threat (EUO)

Italy has shielded Russia and Syria from a threat of new sanctions, amid warnings by some leaders that Russia was trying to “weaken” the EU. EU leaders said in a joint statement in Brussels on Thursday (20 October) that: “The EU is considering all available options, should the current atrocities [in Syria] continue.” They also urged “the Syrian regime and its allies, notably Russia” to “bring the atrocities to an end”, referring to Russian and Syrian airstrikes on the city of Aleppo in Syria that have caused severe civilian casualties. Germany, France, and the UK had wanted to threaten sanctions more explicitly.

“The EU is considering all options, including further restrictive measures targeting individuals and entities supporting the regime, should the current atrocities continue”, they had suggested saying. Italian prime minister Matteo Renzi led opposition, also shared by some other states, to the threat, diplomats said. He said while leaving the summit that “if we want to speak with Russia then we have to leave the door open”. He also said he did not think “that the difficult situation in Syria could be solved by additional sanctions on Russia”.

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Europe has but one purpose: to humiliate Greece. Britain better watch out.

Draghi Says Athens Should Focus On Reforms, And The Eurozone On Debt (Kath.)

European Central Bank President Mario Draghi on Thursday called on the Greek government to focus its efforts on implementing reforms agreed with the country’s creditors, noting that the ECB will examine the issues of Greece’s debt sustainability and its possible involvement in the Central Bank’s quantitative easing program when the time is right. “Discussions on the sustainability of the Greek debt continued” at an ECB meeting earlier in the day, he said. “We expressed concern, and steps should be taken.” Draghi said the ECB will conduct its own independent assessment of Greece’s debt.

“When the time comes we will examine independently the issue of the debt sustainability,” Draghi said, adding that “until then it is premature to speculate and weave scenarios,” an apparent reference to Greek calls for inclusion in the ECB’s QE program. Draghi appeared to indicate that the ECB would proceed with its assessment of Greece’s debt once there has been action from both sides: work from Athens in implementing reforms and action from Greece’s eurozone partners in lightening its debt burden. The timing of Draghi’s comments was significant. They came a day before Greek Prime Minister Alexis Tsipras is to meet with German Chancellor Angela Merkel on the sidelines of an EU leaders’ summit in Brussels for talks that are expected to touch on Greece’s debt problem and the progress of reforms.

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As supermarket prices are as high as in the rest of Europe.

126,956 Greek Workers Earn €100 Per Month, 343,760 Between €100 and €400 (KTG)

When it comes to escape the nightmare of unemployment, one may grab all possible and impossible opportunities and even accept jobs with wages that let you come home with a loaf of bread, two tomatoes and a tiny piece of cheese. The data released by the Labor Ministry are shocking: 126,956 employees in the private sector are paid a gross monthly salary of €100. 343,760 employees are paid monthly salaries between €100 and €400 gross. This category of workers have part-time or rotating work contracts. Working time: 2-3 days per week or even a few hours a week. €100 per month gross could be €55-60(?) net – enough to cover transport cost and make a living at €1 per day. PS a friend recently got a job for €300 gross – net should be around €250-230. Working hours are 4 hours per day, four days per week. She has been jobless for 4 years.

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