James McNeill Whistler Nocturne Blue and Gold Southampton Water 1872
$21 trillion to buy out a broken system.
Back in late 2016, we showed the unprecedented domination of capital markets by central banks using a chart from Citi, which had put together a fascinating slideshow asking simply “Where is the utility in marginal QE” and specifically pointing out that the longer unconventional monetary policy such as QE continues, the bigger its marginal cost, until eventually QE becomes a detriment. A broad criticism of monetary policy, the presentation carried an amusing footnote: “This presentation does not change any of Citi’s existing, published views on the actual future path of monetary policy. It is merely intended as a contribution to the ongoing debate about the efficacy of available policy tools” – after all, the last thing the market wanted is the realization that even banks no longer have faith in the central planners.
Incidentally, Citi’s broad critique of global QE took place when central banks owned just over $18 trillion in assets. Fast forward to today when in its latest update of central bank holdings, Citi shows that as of this moment not only has the total increased by another $3 trillion to a grand total of $21 trillion and rising, but that the big six central banks now own over 40% of global GDP, more than double the 17% they held before the financial crisis less than a decade ago. Which is remarkable in a world where there is still some confusion about what is behind the “global coordinated recovery”, and where there are deluded people who claim that central banks are now out of the picture.
I admit: it was the headline. Nothing much else there.
Global debt has reached record heights without any signs of relief. While central bankers try to explain away the phenomenon of these out-of-control numbers, it’s not much of a mystery. Immediate consumption with the promise of repayment sometime in the future has consequences. Global debt is staggering to the point most of it will never be repaid. Certainly not in our generation. Perhaps by our grandchildren, but as global debt keeps mounting, the picture is doubtful. The per capita global debt is $30,000. Who, exactly, will be making repayments? Economists insist that the 2007 financial crisis could not have been predicted. Yet, all the signs of out-of-control credit where there.
Today, economists are repeating the same mantra, despite the spiraling world debt. The question is not if the next bubble will strike. It’s a matter of when. The math is fairly simple. The more a country increases its debt to simply stay afloat, the more like the increasing debt will cause a tightening of credit. The next step in the equation is a burst bubble and economic crisis. This is what happened in 1929, happened again in 2007, and it’s happening now. Past behavior is the best predictor of future behavior. Out-of-control credit will undoubtedly slow down the US’s current economic growth. It probably won’t cause an outright crisis. Other countries may not be as fortunate.
Countries such as China, Belgium, South Korea, Australia, and Canada are experiencing an unprecedented credit bubble, with few systems in place to control it. The resulted inflation or simply write-offs of debts could result in a global financial disaster we have not seen before. The current economic upswing is unlikely to continue.
Coming out of the sophomore year. Cohn wanted to be Chief of Staff… Still, Bolton would be a grave mistake, he would be shredded.
Even before he decided to launch a trade war and roll the nuclear dice by agreeing in the course of a West Wing afternoon to a risky sit-down with Kim Jong Un, Donald Trump was telling friends he was tired of being reined in. “I’m doing great, but I’m getting all these bad headlines,” Trump told a friend recently. A Republican in frequent contact with the White House told me Trump is “frustrated by all these people telling him what to do.” With the departures of Hope Hicks and Gary Cohn, the Trump presidency is entering a new phase—one in which Trump is feeling liberated to act on his impulses. “Trump is in command. He’s been in the job more than a year now. He knows how the levers of power work. He doesn’t give a fuck,” the Republican said.
Trump’s decision to circumvent the policy process and impose tariffs on imported steel and aluminum reflects his emboldened desire to follow his impulses and defy his advisers. “It was like a fuck-you to Kelly,” a Trump friend said. “Trump is red-hot about Kelly trying to control him.” According to five Republicans close to the White House, Trump has diagnosed the problem as having the wrong team around him and is looking to replace his senior staff in the coming weeks. “Trump is going for a clean reset, but he needs to do it in a way that’s systemic so it doesn’t look like it’s chaos,” one Republican said. Sources said that the first officials to go will be Chief of Staff John Kelly and National Security Adviser H.R. McMaster, both of whom Trump has clashed with for months.
On Tuesday, Trump met with John Bolton in the Oval Office. When he plans to visit Mar-a-Lago next weekend, Trump is expected to interview more candidates for both positions, according to two sources. “He’s going for a clean slate,” one source said. Cohn had been lobbying to replace Kelly as chief, two sources said, and quit when he didn’t get the job. “Trump laughed at Gary when he brought it up,” one outside adviser to the White House said. Next on the departure list are Jared Kushner and Ivanka Trump. Trump remains fiercely loyal to his family, but various distractions have eroded their efficacy within the administration. Both have been sidelined without top-secret security clearances by Kelly, and sources expect them to be leaving at some point in the near future.
But he’s clear.
Hours after European Union trade chief Cecilia Malmstrom said she had “no immediate clarity” on whether the bloc will be let off the hook from planned U.S. tariffs, President Donald Trump laid down his conditions and repeated a threat if they’re not met. “The European Union, wonderful countries who treat the U.S. very badly on trade, are complaining about the tariffs on Steel & Aluminum,” he wrote on Twitter. “If they drop their horrific barriers & tariffs on U.S. products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!” Trump’s response came after Malmstrom on Twitter described what she called “frank” but fruitless talks with U.S. Trade Representative Robert Lighthizer in Brussels on Saturday.
There was still “no immediate clarity on the exact U.S. procedure on exemption,” Malmstrom, the 28-nation bloc’s trade commissioner, said after the meeting that also included Japanese Trade Minister Hiroshige Seko. “As a close security and trade partner of the U.S. the EU must be excluded from the announced measures,” she said. Canada, Mexico and Australia have secured exemptions from the tariffs of 25% on imported steel and 10% on aluminum announced by Trump, though Canada’s and Mexico’s were conditioned on progress renegotiating NAFTA. Trump has called the tariffs a matter of national security while threatening to tax European car imports and impose “reciprocal taxes” on countries that charge higher duties on U.S. goods than the U.S. now charges on their products.
Just as China’s economic model is about to ‘go into a next phase..’
China’s parliament voted to repeal presidential term limits, allowing President Xi Jinping to retain power indefinitely in a formal break from succession rules set up after Mao Zedong’s turbulent rule. The rubber-stamp National People’s Congress agreed Sunday to strike a 36-year-old constitutional provision barring the president from serving more than two consecutive terms. The amendment – announced by the Communist Party two weeks ago – removes the only barrier keeping Xi, 64, from staying on after his expected second term ends in 2023. The vote – never in doubt – gives Xi more time to enact plans to centralize party control, increase global clout and curb financial and environmental risks.
It also ties the world’s most populous country more closely to the fate of a single man than at any point since reformer Deng Xiaoping began establishing a system for peaceful power transitions in the aftermath of Mao’s death. Before Sunday’s vote in Beijing, Donald Trump had joked that Xi was “now president for life.” The NPC could appoint Xi to a second term as soon as Saturday. “In the long run, the change may bring some uncertainties, like ‘key man’ risk,” Yanmei Xie, a China policy analyst for Gavekel Dragonomics in Beijing, said before the vote. “Dissenting is becoming riskier. The room for debate is becoming narrower. The risk of a policy mistake could become higher and correcting a flawed policy could take longer.”
They all reported on the Megyn Kelly interview a while ago. Now all of a sudden there’s a new headline from that same interview. And.. “he even said it might be Jews..”
Russian President Vladimir Putin has told NBC News that he “couldn’t care less” if Russian citizens tried to interfere in the 2016 American presidential election because, he claims, they were not connected to the Kremlin. In an exclusive and at-times combative interview with NBC’s Megyn Kelly, Putin again denied the charge by U.S. intelligence services that he ordered meddling in the November 2016 vote that put Donald Trump in the White House. “Why have you decided the Russian authorities, myself included, gave anybody permission to do this?” asked Putin, who will probably be returned as president in the March 18 elections.
Putin was unmoved by an indictment filed by special counsel Robert Mueller last month that accused 13 Russian nationals and three Russian companies of interfering in the election – including supporting Trump’s campaign and “disparaging” Hillary Clinton’s. Mueller is investigating whether the Trump campaign colluded with the Kremlin. “So what if they’re Russians?” Putin said of the people named in last month’s indictment. “There are 146 million Russians. So what? … I don’t care. I couldn’t care less. … They do not represent the interests of the Russian state.” Putin even suggested that Jews or other ethnic groups had been involved in the meddling.
“Maybe they’re not even Russians,” he said. “Maybe they’re Ukrainians, Tatars, Jews, just with Russian citizenship. Even that needs to be checked. Maybe they have dual citizenship. Or maybe a green card. Maybe it was the Americans who paid them for this work. How do you know? I don’t know.” Asked whether he was concerned about Russian citizens attacking U.S. democracy, Putin replied that he had yet to see any evidence that the alleged interference had broken Russian law. “Are we the ones who imposed sanctions on the United States? The U.S. imposed sanctions on us.” “We in Russia cannot prosecute anyone as long as they have not violated Russian law,” he said. “At least send us a piece of paper. … Give us a document. Give us an official request. And we’ll take a look at it.”
U.S. intelligence agencies and many Western analysts have said that Russian interference came at the orders of the Kremlin. Putin, Russia’s longest-serving leader since Stalin, dismissed this. “Could anyone really believe that Russia, thousands of miles away … influenced the outcome of the election? Doesn’t that sound ridiculous even to you?” he said. “It’s not our goal to interfere. We do not see what goal we would accomplish by interfering. There’s no goal.”
In praise of austerity, of destroying the social and health care systems. A class society, more suited to the 19th than the 21st century.
Families struggling to make ends meet will be hit by the biggest annual benefits cut for six years, according to a new analysis that exposes the impact of continuing austerity measures on the low paid. Chancellor Philip Hammond is preparing to give a stripped-down spring statement on Tuesday, where he is expected to boast of lower than expected borrowing figures. He will use them to suggest Britain has reached a “turning point”. He will point to forecasts showing the “first sustained fall in debt for a generation” to claim “there is light at the end of the tunnel” in turning around Britain’s finances. However, he will be speaking just weeks before a further public spending squeeze will see the second largest annual cut to the benefits budget since the financial crash.
According to new research by the Resolution Foundation thinktank, the changes from April will save around £2.5bn and dent the incomes of the “just about managing” families that Theresa May has vowed to help. The cuts will affect around 11 million families, including 5 million of the struggling families that the prime minister stated she would focus on. There will also be some good news for the low paid, with more than 1.5 million workers set to benefit from a 4.4% pay rise when the national living wage increases from £7.50 to £7.83 at the start of April. However, that measure will be outweighed by the effective £2.5bn cuts to working-age benefits.
The real face of the British government.
MPs are demanding an urgent explanation from ministers after being told that £817m allocated for desperately needed affordable housing and other projects in cash-strapped local authorities has been returned to the Treasury unspent. The surrender of the unused cash has astonished members of the cross-party housing, communities and local government select committee at a time when Theresa May has insisted housebuilding is a top priority and when many local authorities are becoming mired in ever deeper financial crises. On Monday the committee, which discovered the underspend for 2017-18, will interrogate housing minister Dominic Raab and homelessness minister Heather Wheeler on the issue, before Tuesday’s spring statement by the chancellor, Philip Hammond.
He is under heavy pressure from MPs, and the Tory-controlled Local Government Association, to signal extra help for the local authority sector, which has seen budget cuts of around 50% since 2010. The acting chair of the committee, the Tory MP Bob Blackman, said: “We will be wanting to know why this very large sum has not been spent at a time of great strain on local authority budgets, and why it was not channelled to other spending projects. It does not help those of us who argue that more should be given to local authorities if the chancellor knows money he gave last time has not even been spent.” MPs believe they can argue for more for local authorities because Hammond will announce that unexpectedly high tax receipts have left the Treasury with a windfall of between £7bn and £10bn.
Never trust anything that sounds even remotely like “Institute for Fiscal Studies”. This wanker goes on to praise the achievements of Britain’s austerity.
When the chancellor Philip Hammond sits down on Tuesday after delivering his first spring statement – the streamlined replacement for what we used to call the budget – one man will be greatly in demand, popping up on every media outlet to tell us what the figures on borrowing levels and the projected deficit really mean. That man is Paul Johnson, director of the Institute for Fiscal Studies (IFS). I suggest to him that his official role is to pour a bucket of cold water over Hammond’s head, and he doesn’t disagree. [..] The idea of the spring statement, with the budget now pushed back to autumn, is to tell us where we are financially, and to kickstart consultations about the long-term fiscal challenges facing the UK. That, for Johnson, is the important bit.
If the spring statement works, it is an opportunity to counteract the short-termism that bedevils British politics and to start thinking about the issues that really matter – the ageing population, the buckling health service, the lack of any coherent plan for social care, the fact that soon taxes are going to have to rise or public services will fall to pieces. There comes a point when you can no longer kick the can down the road because the road is no longer usable. The Office for Budget Responsibility numbers cited in the spring statement will be better than those projected last autumn because tax receipts have been higher than anticipated, and Johnson reckons Hammond will indulge in some self-congratulation for having met the government’s austerity targets (albeit two years later than his predecessor George Osborne forecast) and eliminated the deficit on day-to-day spending.
But Johnson is ready with his bucket of cold water. “Chancellors always talk up the positive numbers,” he says, “but we’re not out of austerity; we’re nowhere near out of austerity. There are still big spending cuts and big social security cuts to come.” [..] He says the government has done well to get the deficit under control [..] Local government until 2014 was coping fine. It really isn’t any more. Clearly, the health service is struggling in a way that, three or four years ago, it wasn’t. So it feels as if we’ve got to the crunch point. We’re really beginning to feel the cost.” Government borrowing is now back to pre-financial crash levels. “It is quite an achievement to have got borrowing down from the highest level since the war to pretty much normal kinds of levels,” he says.
Followed by a car sales promo. No. 1 advertizers for newspapers.
The march of the brand new car once seemed unstoppable. Cheap finance and personal contract plans (PCPs) fuelled a boom in new cars, accounting for more than 80% of all new car registrations. A fall at the start of 2017 was blamed on a collapse in consumer confidence in diesel vehicles and last year remains one of the highest on record for new car registrations. However, the latest figures reveal that the number of new cars registered in February fell by 2.8% compared with the same month last year, making it the 11th month in a row to show a decline. And once again it’s being blamed on falling demand for diesel vehicles; diesel cars accounted for just 35% of the new cars registered last month, compared with more than 44% in February 2017.
[..] The previous surge in new car registrations had been partly fuelled by changes to the way we buy vehicles. Buying a brand new car with a relatively small deposit and monthly fee can be more immediately affordable than buying an older car upfront. 37% of car buyers claim to have bought on finance because it enabled them to spread out their payment monthly, 36% to get a better deal and, revealingly, 36% because they couldn’t afford to purchase a car otherwise. [..] Justin Benson, KPMG’s UK head of automotive, says: “Consumers aren’t necessarily turning away from car finance. There is, however, evidence to suggest that the new car market is pretty saturated, ie most cars in the last few years have been bought using PCP plans. So many are using the vehicles they already have and we are seeing a drop in demand – although Brexit is also in the back of people’s minds.”
Hollow phrases: “Washington has repeatedly called upon Turkey to stop its “aggression” against the Afrin region..”
Turkey’s leader has scorched NATO allies over their failure to support his “counter-terrorist” operation in the Kurdish-held Syrian region of Afrin, but expressed gratitude that they at least had no guts to openly oppose Ankara. President Recep Tayyip Erdogan delivered the inflammatory comments while speaking before a gathering of his ruling AK Party in the Turkish city of Mersin on Saturday. “Hey NATO where are you? We’re fighting so much. NATO, Turkey is not a NATO country? Where are you? You’ve invited NATO-member states to Afghanistan,” Erdogan said. NATO members not only show no support towards Turkey’s Operation Olive Branch and would even openly oppose Ankara’s actions in Syria, but did not have the guts to do so, Erdogan claimed.
The offensive against Kurdish militias in Syria’s region of Afrin was launched late in January. Turkey describes the militias as offshoots of the terrorist-labeled outlawed Kurdistan Workers’ Party (PKK). So far, 3,213 “terrorists” have been killed during the operation, carried out by Turkish troops and affiliated Free Syrian Army (FSA) militants, Erdogan stated. “In fact, they would openly oppose Turkey in Syria if they could. But seeing Turkey’s adamant position, they did not find [the] resolve to do so,” the president said. The Turkish leader also reiterated his earlier statements, that his only goal in Syria was the “fight against terrorism.” When Ankara reaches it, the troops will be pulled out of the country, he stated.
[..] Washington has repeatedly called upon Turkey to stop its “aggression” against the Afrin region, omitting the fact that the US-led coalition itself spent years in Syria without any invitation from the government or international approval. The recent UNSC resolution, which urged a 30-days Syria-wide ceasefire, has been also used to call upon Erdogan to halt the invasion. “Turkey is more than welcome to go back and read the exact text of this UN Security Council resolution, and I would suggest that they do so,” US State Department spokeswoman Heather Nauert said on February 27, stating that the Afrin region was “certainly within Syria.”
Don’t say you weren’t warned.
As tensions rise over the detention of two Greek soldiers who crossed the Turkish border accidentally and over Turkish aggression off Cyprus, statements by both Greek and Turkish officials over the weekend underscored the fragility of the situation. In an interview with French daily Liberation on Saturday, Greek Defense Minister Panos Kammenos declared that “Greece is very close to a fatal accident with Turkey,” referring to Turkish violations of Greek air space and territorial waters. “We are obliged to defend our territory which is not only Greek but also European,” he said. Late last week, meanwhile, Kammenos had referred to two Greek soldiers being detained in Turkey as “hostages.”
Meanwhile, in an interview with German weekly Die Zeit published on Saturday, Turkish Foreign Minister Mevlut Cavusogu said Turkey’s judiciary was seeking to determine whether the Greek soldiers crossed into Turkey by accident or deliberately. Asked whether Ankara was considering exchanging the two men with eight Turkish servicemen who fled to Greece following an attempted Turkish coup in 2016, Cavusoglu ruled out such a prospect. “We do not want such an agreement,” he said.
Oh yes, it will. Brussles won’t set its slaves free voluntarily.
Greece will probably not need a precautionary credit line after its bailout ends in August if the country sticks to reforms, the head of Europe’s rescue fund said in an interview released on Saturday. Greece has received 260 billion euros in financial aid from euro zone countries and the IMF since 2010, and its third bailout expires in August. The country regained market access last year but some European Union policymakers and Greek central bankers believe Athens cannot go it alone without a standby line of credit after its financial support ends. But a precautionary credit line would come with conditions attached, something the government is keen to avoid after eight years of austerity that has worn down Greeks and hurt its popularity in polls.
In an interview with Proto Thema newspaper, the head of the European Stability Mechanism (ESM), Klaus Regling, said having a precautionary arrangement available is good because it gives more assurances to markets, investors and the Greek population. “But it very much depends whether it’s really needed,” he said. “If everything remains quiet, reforms continue and Greece continues to develop its market access, then based on what we know today it’s probably not needed.” The ESM and the European Financial Stability Facility are Greece’s largest creditors, together holding more than half of its 332 billion euro public debt, a sum equal to nearly 180% of economic output.
They talk the talk because their pollsters say they must. And then deflect responsibility because they have no intention of doing anything. This way it becomes along term issue; the public must be heard first, and that takes years.
A tax on disposable cups is ridiculous. Just ban them, what’s the problem?
The public will be urged by the Government to suggest tax changes to curb plastic pollution, amid growing criticism that ministers are dragging their heels. A “call for evidence” on how tax incentives could cut the amount of single-use plastics – such as cutlery, foam trays and coffee cups – that end up littering the land and poisoning the seas will be launched. But the move, in Tuesday’s Spring Statement, is not expected to include any specific proposals, nor will a formal consultation be launched by the Treasury. Philip Hammond, the Chancellor, will tell MPs he is determined that Britain will “lead the world in creating innovative solutions to tackling this global problem”.
But the call for evidence was first proposed by Mr Hammond four months ago, the delay prompting criticism that ministers have simply “talked the talk on plastic pollution”. A proposal for a 25p “latte levy” on disposable coffee cups, made by a cross-party Commons committee in January was met with a cool response from the Government. In January, Theresa May delivered the first major speech on the environment from a sitting prime minister since 2004 and published a 25-year Environment Plan with the ambition of abolishing plastic waste by 2042. However, it was widely criticised for being vague, for the lack of proposed legislation and for the lengthy timescales for dealing with the problems involved. [..] The UK still creates 2.26 million tons of plastic packaging waste a year and recycles only around a third.
On Tuesday, Mr Hammond will say the call for evidence is intended to find ways to use the tax system to deliver both technological progress and behavioural change. Individuals, green groups and industry will be urged to have their say, as the Chancellor announces a £20m innovation fund for businesses and universities to develop the new technologies and approaches needed. The Chancellor said: “Single-use plastics waste is a scourge to our environment. From crisp packets to coffee cups, each year the UK produces millions of tonnes of waste which is neither recyclable nor biodegradable. “That’s why I want British businesses and universities to lead the world in creating innovative solutions to tackling this global problem.