Aug 172018
 
 August 17, 2018  Posted by at 1:34 pm Finance Tagged with: , , , , , , , , , , , ,  


William Hogarth Humours of an Election, Plate 2 1754

 

Two thirds of Americans want the Mueller investigation (inquisition, someone called it) over by the midterm elections. Trump lawyer Rudy Giuliani has said that if Mueller wants to interview Trump, he’ll have to do so before September 1, because the Trump camp doesn’t want to be the one to unduly influence the elections. Mueller himself appears to lean towards prolonging the case, and that may well be with an eye on doing exactly that.

And there’s something else as well: as soon as the investigation wraps up, Trump will demand a second special counsel, this time to scrutinize the role the ‘other side’ has played in the 2016 presidential election and its aftermath. He’s determined to get it, and he’ll fire both Jeff Sessions and Rod Rosenstein if they try to stand in his way.

There have of course been tons of signs that it’s going to happen, but we got two significant ones just the past few days. The first is the termination of John Brennan’s security clearance. It looks impossible that no additional clearances will be revoked. There are more people who have them but would also be part of a second special counsel’s investigation. That doesn’t rhyme.

The second sign is Senator Rand Paul’s call for immunity for Julian Assange to come talk to the US senate about what he knows about Russian involvement in the 2016 election. Obviously, we know that he denies its very existence, and has offered to provide evidence to that end. But before he could do that, a potential deal with the DOJ to do so was torpedoed by then FBI chief James Comey and Senator Mark Warner.

Both will also be part of the second investigation. Rand Paul’s motivation is simple: Assange’s testimony could be a very significant part of the process of figuring out what actually happened. And that should be what everybody in Washington wants. Question is if they all really do. That’s -ostensibly- why there is the first, the Mueller Russian collusion, investigation. Truth finding.

But Mueller doesn’t appear to have found much of anything. At least, that we know of. He’s locked up Paul Manafort on charges unrelated to collusion, put him in isolation and dragged him before a jury. But don’t be surprised if Manafort is acquitted by that jury one of these days. The case against him seemed a lot more solid before than it does now. A jury that asks the judge to re-define ‘reasonable doubt’ already is in doubt, reasonable or not. And that is what reasonable doubt means.

 

But it wasn’t just Brennan and Comey and Peter Strzok and Lisa Page and all the rest of them in the intelligence community who played questionable roles around the election and the accusations of Russian meddling in it. The American media were also there, and very prominently. Which is why when 300 papers publish editorials pushing against Trump ‘attacking’ the media, you can’t help but -wryly- smile.

Why does Trump attack the press? Because they’ve been attacking him for two years, and they’re not letting go. So the press can attack the president, but he cannot fight back. That’s the rationale, but with the Mueller investigation not going anywhere it’s a hard one to keep alive.

There are three reasons for the behavior of the New York Times, WaPo, MSNBC, CNN et al. The first is political, they’re Democrat hornblowers. The second is their owners have a personal thing against Donald Trump. But these get trumped by the third reason: Trump is their golden goose. Their opposition makes them a fortune. All they need to do is publish articles 24/7 denouncing him. And they have for two years.

That puts the 300 papers’ editorials in a strange light. Many of them would have been fighting for their very lives if not for anti-Trump rhetoric. All 300 fit neatly and easily in one echo chamber. And, to put it mildly, inside that chamber, not everyone is always asking for evidence of everything that’s being said.

It’s not difficult to whoop up a storm there without crossing all your t’s. And after doing just that for 2 years and change, it seems perhaps a tad hypocritical to claim that you are honest journalists just trying to provide people with the news as it happened.

Because when you’ve published hundreds, thousands of articles about Russian meddling, and the special counsel that was named to a large degree because of those articles, fails to come up with any evidence of it, it will become obvious that you’ve not just, and honestly, been reporting the news ‘as it happened’. You have instead been making things up because you knew that would sell better.

And when the second special counsel starts, where will American media be? Sure, it may not happen before the midterms, and you may have hopes that the Democrats win those bigly, but even if that comes to pass (slim chance), Trump will still be president, and the hearings and interviews won’t be soft and mild. Also, there will be serious questions, under oath, about leaks to the press.

 

Still, whichever side of this particular fence you’re on, there’s one thing we should all be able to agree on. That is, when we get to count how many of the 300 editorials have actually mentioned, let alone defended, Julian Assange, and I’ll bet you that number is painfully close to zero, that is where we find out how honest this defense of the free press is.

If for you the free press means that you should be able to write and broadcast whatever you want, even if it’s lacking in evidence, as much of the Russiagate stuff obviously is, and you ‘forget’ to mention a man who has really been attacked and persecuted for years, for publishing files that are all about evidence, you are not honest, and therefore probably not worth saving.

Julian Assange and WikiLeaks are the essence of the free press. A press that is neutral, objective, fearless and determined to get the truth out. The New York Times and CNN simply don’t fit that description -anymore-. So when their editors publish calls to protect free press, but they leave out the one person who really represents free press, and the one person who’s been tortured for exactly that, you have zero credibility.

Sure, you may appear to have credibility in your echo chamber, but that’s not where real life takes place, where evidence is available and where people can make up their own minds based on objective facts provided by real journalists.

You guys just blew this big time. You don’t care about free press, you care about your own asses. And the second special counsel is coming. Good luck. Oh, and we won’t forget your silencing of Assange, or your attacks on him. If you refuse to do it, WE will free the press.

 

 

Aug 122018
 
 August 12, 2018  Posted by at 9:06 am Finance Tagged with: , , , , , , , , , , , ,  


Salvador Dali Elephants 1948

 

Rand Paul Against the World (AC)
Saudi Arabia’s PIF and SoftBank Not Interested in Tesla Buyout (WS)
China Scrambles to Cool Overheated Real Estate Market (ET)
Beijing Struggles To Defuse Anger Over China’s P2P Lending Crisis (R.)
DNC Serves WikiLeaks With Lawsuit Via Twitter (CBS)
More Than 100 Constituencies That Backed Brexit Now Want To Stay In EU (G.)
Russia Defense Minister Warns Germany Against ‘Strength & Unity’ Strategy (RT)
New Zealand To Ban Foreigners From Buying Homes (SMH)
Crashed: How a Decade of Financial Crises Changed the World (Varoufakis)
Gene-Editing Startups Ignite The Next ‘Frankenfood’ Fight (R.)
UK Outlets Review Sale Of Monsanto’s Roundup After US Cancer Verdict (G.)
The Oceans’ Last Chance (G.)

 

 

’Rand Paul has persuaded the president that we are not for regime change in Iran..’

Rand Paul Against the World (AC)

President Trump has been known to be hawkish on Iran. Politico observed Wednesday: “Trump has drawn praise from the right-wing establishment for hammering the mullahs in Tehran, junking the Iran nuclear deal and responding to the regime’s saber rattling with aggressive rhetoric of his own….” There are also powerful factions in Congress and Washington with inroads to the president that have been itching for regime change for years. “The policy of the United States should be regime change in Iran,” says Senator Tom Cotton, once rumored to be Trump’s pick to head the CIA. So what, or who, is stopping the hawks?

Politico revealed Wednesday some interesting aspects of the relationship between Senator Rand Paul and the president, particularly on foreign policy: “While Trump tolerates his hawkish advisers, the [Trump] aide added, he shares a real bond with Paul: ‘He actually at gut level has the same instincts as Rand Paul…’.” On Iran, Politico notes, “Trump has stopped short of calling for regime change even though Secretary of State Mike Pompeo, Secretary of Defense James Mattis, and Bolton support it, aligning with Paul instead, according to a GOP foreign policy expert in frequent contact with the White House.”

But this part of the story was the most revelatory: “’Rand Paul has persuaded the president that we are not for regime change in Iran,’ this person said, because adopting that position would instigate another war in the Middle East.” This is significant, not because Trump couldn’t have arrived at the same position without Paul’s counsel, but because it’s easy to imagine him embracing regime change, what with virtually every major foreign policy advisor in his cabinet supporting something close to war with Iran. “Personnel is policy” is more than a cliché.

Read more …

Musk will have to clarify his ‘Funding Secured’, either to his board or the SEC. Preferably both.

Saudi Arabia’s PIF and SoftBank Not Interested in Tesla Buyout (WS)

The whole scheme kicked off when Tesla CEO Elon Musk tweeted during trading hours that he was “considering” taking Tesla private, “Funding secured,” which caused the already ludicrously overvalued shares to spike. Later he added, “Investor support is confirmed.” But no details, no names, no tidbits, not even a tease. Two days earlier, he’d tweeted that “even Hitler was shorting Tesla stock.” We can brush off the Hitler tweet as just one more Musk idiocy gone awry, but “Funding secured” and “Investor support is confirmed” are big-ass phrases for a public-company CEO discussing a buyout that would be valued at $72 billion. Now some folks, including those at the SEC’s San Francisco office, are wanting to know where exactly this money is going to come from – and if funding was even remotely “secured.”

The Tesla true believers instantly figured that a deal had already been worked out, either with SoftBank or with Saudi Arabia’s Public Investment Fund (PIF), or with both, or whatever. Turns out, it’s not going to be SoftBank, and it’s not going to be the Saudis, either. They’re not interested in creating the magic to pull this off. Reuters reported today that a source “familiar with PIF’s strategy,” said that the fund was not, as Reuters put it, “currently getting involved in any funding process for Tesla’s take-private deal.” PIF had made headlines recently when it came out that it had acquired a stake in Tesla of just below 5% by buying its shares (TSLA) in the market. None of this money went to Tesla. It went to Tesla shareholders that wanted to get out.

Read more …

They don’t seem to be getting it done.

China Scrambles to Cool Overheated Real Estate Market (ET)

The Chinese government went all out during the first half of 2018 to cool an overheated real estate market. Major cities in China have issued regulations for their local real estate markets more than 260 times through July of this year, according to data from Centaline Property Agency, one of the largest property agencies in Hong Kong. That’s an all-time high and marks an 80 percent increase in frequency compared to the same period in 2017. In July alone, more than 60 cities announced more than 70 revised sets of real estate regulatory policies. Chinese cities have sought to keep housing prices from skyrocketing by limiting the number of properties one can purchase and sell, raising the minimum down-payment ratio for homebuyers, and boosting the time period between a purchase and when a unit can be then listed on the market for resale.

The Chinese Communist Party has made it a political priority to “resolutely contain the rise of housing prices,” as discussed during a meeting of the Party’s powerful 25-member Politburo on July 31, according to state-run media Xinhua. While prices in the real estate markets of some first- and second-tier cities appear to have leveled off, prices in most third- and fourth-tier cities continue to soar. In June, among China’s designated 70 large and medium-sized cities, 63 experienced a price increase for newly built commodity housing units, or privately developed housing on leased land, compared with last year, according to official data released by China’s National Bureau of Statistics. Prices for new commodity housing and “second-hand housing”—units previously owned that are now on the market for sale—in 31 second-tier cities also increased, by 6.3 percent and 4.6 percent, respectively, in June.

Read more …

Shadow banks and P2P -there’s overlap- have been instrumental in China’s runaway growth.

Beijing Struggles To Defuse Anger Over China’s P2P Lending Crisis (R.)

Peter Wang was asleep at his home in Beijing last Monday when police officers arrived before dawn to detain him, saying he had helped organize a protest planned for later that day. Across the city, others who had lost money investing in China’s online peer-to-peer (P2P) lending platforms – including some who had traveled from as far away as Shandong and Shanxi provinces – got similar visits from police. By the time they were released, the demonstration they had planned using social media chat groups had fizzled amid a massive security response around the China Banking and Insurance Regulatory Commission (CBIRC) headquarters in the heart of Beijing’s financial district.

[..] The size of China’s P2P industry is far bigger than in the rest of the world combined, with outstanding loans of 1.49 trillion yuan ($217.96 billion), according to data tracker p2p001.com, run by the Shenzhen Qiancheng Internet Finance Research Institute. P2P, in which platforms gather funds from retail investors and loan the money to small corporate and individual borrowers, promising high returns, started flourishing nearly unregulated in China in 2011. At its peak in 2015, there were about 3,500 such businesses. But after Beijing began a campaign to defuse debt bubbles and reduce risks in the economy, including the country’s enormous non-bank lending sector, cracks began to appear as investors pulled their funds.

Since June, 243 online lending platforms have gone bust, according to wdzj.com, another P2P industry data provider. In that period, the industry saw its first monthly net fund outflows since at least 2014, the data provider said. The latest burst of anger, which led to the planned protests, flared up ahead of a June 30 deadline for companies to comply with new business practice standards, which are still being finalised but could include bank custodianship of investor funds and tougher disclosure requirements. Many of them shut down rather than do so, Zane Wang, chief executive of online micro-loan provider China Rapid Finance, told Reuters. That caused panic in the broader market. Investors tried to pull funds from P2P companies, causing liquidity problems for many smaller operators, Wang said, although larger ones are faring better.

Read more …

But who exactly has been served? Assange can’t read Twitter.

DNC Serves WikiLeaks With Lawsuit Via Twitter (CBS)

The Democratic National Committee on Friday officially served its lawsuit to WikiLeaks via Twitter, employing a rare method to serve its suit to the elusive group that has thus far been unresponsive. As CBS News first reported last month, the DNC filed a motion with a federal court in Manhattan requesting permission to serve its complaint to WikiLeaks on Twitter, a platform the DNC argued the website uses regularly. The DNC filed a lawsuit in April against the Trump campaign, Russian government and WikiLeaks, alleging a massive conspiracy to tilt the 2016 election in Donald Trump’s favor. All of the DNC’s attempts to serve the lawsuit via email failed, the DNC said in last month’s motion to the judge, which was ultimately approved.

The lawsuit was served through a tweet from a Twitter account established Friday by Cohen Milstein, the law firm representing the DNC in the suit, with the intent of serving the lawsuit. The DNC argued the unusual method of serving a lawsuit over Twitter was feasible because WikiLeaks, founded by Julian Assange, frequently uses Twitter and had even suggested it had read the DNC’s lawsuit. On April 21, the WikiLeaks Twitter account tweeted, “Democrats have gone all Scientology against @WikiLeaks. We read the DNC lawsuit. Its primary claim against @WikiLeaks is that we published their ‘trade secrets.’ Scientology infamously tried this trick when we published their secret bibles. Didn’t work out well for them.'”

The DNC also noted last month that there is some legal precedent for serving the lawsuit on Twitter. The U.S. District Court for the Northern District of California, the DNC notes, decided service by Twitter was a reasonable way to alert the defendant, who had an active Twitter account. “WikiLeaks seems to tweet daily,” the DNC said in the motion made to the judge last month.

Read more …

Cats in a sack.

More Than 100 Constituencies That Backed Brexit Now Want To Stay In EU (G.)

More than 100 Westminster constituencies that voted to leave the EU have now switched their support to Remain, according to a stark new analysis seen by the Observer. In findings that could have a significant impact on the parliamentary battle of Brexit later this year, the study concludes that most seats in Britain now contain a majority of voters who want to stay in the EU. The analysis, one of the most comprehensive assessments of Brexit sentiment since the referendum, suggests the shift has been driven by doubts among Labour voters who backed Leave. As a result, the trend is starkest in the north of England and Wales – Labour heartlands in which Brexit sentiment appears to be changing.

The development will heap further pressure on Jeremy Corbyn to soften the party’s opposition to reconsidering Britain’s EU departure. Researchers at the Focaldata consumer analytics company compiled the breakdown by modelling two YouGov polls of more than 15,000 people in total, conducted before and after Theresa May published her proposed Brexit deal on 6 July. It combined the polling with detailed census information and data from the Office for National Statistics. The study was jointly commissioned by Best for Britain, which is campaigning against Brexit, and the anti-racist Hope Not Hate group. The 632 seats in England, Scotland and Wales were examined for the study. It found that 112 had switched from Leave to Remain. The new analysis suggests there are now 341 seats with majority Remain support, up from 229 seats at the referendum.

Read more …

Russia remembers Germany 70 years ago.

Russia Defense Minister Warns Germany Against ‘Strength & Unity’ Strategy (RT)

The Russian defense minister has reminded his German counterpart that approaching Moscow from a “position of unity and strength” is not the wisest idea, citing the bitter history of WWII that should’ve made Berlin more prudent. “We are open for dialogue. We are ready for a normal cooperation, but not at all from a position of strength,” Sergey Shoigu told Rossiya 24 TV station. “I certainly hope that the time when we could be talked to, as someone once said, as a second- or third-class country has now irretrievably passed.”

Referring to the original question from the host, Yevgeniy Popov, who noted the recent call by the German Defense Minister, Ursula von der Leyen, to engage in dialogue with Moscow only from a “position of unity and strength,” Shoigu reminded his counterpart that, while Russia seeks peace, it will not tolerate being coerced. “After everything Germany has done to our country, I think, they should not talk on the issue for another two hundred years,” Shoigu said. “Ask your grandparents about their experience of talking to Russia from the position of strength. They will probably be able to tell you.” Shoigu explained that NATO, including Germany, cannot come to grips with the reality of seeing Russia return to the world stage as an independent actor with a strong and powerful military force.

“We are not going to threaten anyone. We’re not going to start a war with anyone,” Shoigu said, noting, however, that Russian President Vladimir Putin is taking unprecedented measures to make sure the military is fully ready for any untoward surprises. “We’re doing a massive job to restore our army. Yes, the time has passed when we had no funds or time for the army.” “We now have a totally different army. And if that frightens someone, do come visit to see how we live,” he added, in an interview recorded after the wrap-up of the Army Games in Russia, extending an invitation to the NATO militaries so far missing out on the biggest annual international military competition.

Read more …

But there are exceptions.

New Zealand To Ban Foreigners From Buying Homes (SMH)

Foreigners face a ban on buying homes in New Zealand after a spending splurge by millionaires seeking doomsday bolt-holes crowded out local buyers and pushed up property prices. Home purchases by tycoons such as tech billionaire Peter Thiel, the PayPal founder, and Matt Lauer, the former NBC host who lost his job after allegations of sexual misconduct, have led the New Zealand government to crack down on the trend. The country’s allure for the mega-rich planning a safe space to ride out the apocalypse has become almost a cliché in recent years. Reid Hoffman, LinkedIn co-founder, told The New Yorker last year: “Saying you’re buying a house in New Zealand is kind of a wink, wink, say no more”.

But the country’s centre-Left government, led by prime minister Jacinda Ardern, is blaming the apocalypse preppers for a major housing crisis, with rates of homelessness among the highest in the developed world. Ms Ardern’s Labour Party is adamant that a law change banning foreigners from buying most types of homes in the country – due to pass through parliament next week – will help damp down property prices. It also plans to build 100,000 affordable properties in a decade, resolve New Zealand’s zoning and infrastructure woes, and bolster its ailing construction industry. The bill will still allow foreigners to buy new apartments in large developments and multi-storey blocks. Existing homes remain off limits to non-residents, but people from Australia and Singapore will be exempt from the ban, due to free-trade rules.

Read more …

Yanis reviews a book by Adam Tooze.

Crashed: How a Decade of Financial Crises Changed the World (Varoufakis)

Every so often, humanity manages genuinely to surprise itself. Events to which we had previously assigned zero probability push us into what the ancient Greeks referred to as aporia: intense bafflement urgently demanding a new model of the world we live in. The financial crash of 2008 was such a moment. Suddenly the world ceased to make sense in terms of what, a few weeks before, passed as conventional wisdom – even McDonald’s, for goodness sake, could not secure an overdraft from Bank of America!

Moments of aporia produce collective efforts to respond to our bewilderment. In the late 18th century, the pains of the Industrial Revolution begat free-market economics. The crisis of 1848 brought us the Marxist tradition. The great depression produced both Keynes’s General Theory and Friedman’s monetarism. Over the past decade, the 2008 crash has given rise to a cottage industry of books, articles, documentaries, even films but not, so far, an overarching theory. Now, a compelling new book has arrived which deserves to be at the top of the reading list of anyone interested in the events of 2008 and eager to make sense of the aftermath .

Written by Adam Tooze, an English economic historian at Columbia University (and, in the interest of full disclosure, a colleague), Crashed: How a Decade of Financial Crisis Changed the World combines simple explanations of complex financial concepts with a majestic narrative tracing the prehistory and destructive path of the crisis across the planet (including long, apt and erudite chapters on Russia, the former Soviet satellites, China and south-east Asia). It also offers original insights into the nature of the wounded beast (financialised capitalism). Of the myriad unacknowledged truths that Tooze illuminates, some examples follow.

Read more …

Nowhere is mankind’s insanity more on display than here. If you can’t oversee the consequences of your actions, the precautionary principle applies. Not the profit principle.

Gene-Editing Startups Ignite The Next ‘Frankenfood’ Fight (R.)

In a suburban Minneapolis laboratory, a tiny company that has never turned a profit is poised to beat the world’s biggest agriculture firms to market with the next potential breakthrough in genetic engineering – a crop with “edited” DNA. Calyxt Inc, an eight-year-old firm co-founded by a genetics professor, altered the genes of a soybean plant to produce healthier oil using the cutting-edge editing technique rather than conventional genetic modification. Seventy-eight farmers planted those soybeans this spring across 17,000 acres in South Dakota and Minnesota, a crop expected to be the first gene-edited crop to sell commercially, beating out Fortune 500 companies.

Seed development giants such as Monsanto, Syngenta and DowDuPont have dominated genetically modified crop technology that emerged in the 1990s. But they face a wider field of competition from start-ups and other smaller competitors because gene-edited crops have drastically lower development costs and the U.S. Department of Agriculture (USDA) has decided not to regulate them. Relatively unknown firms including Calyxt, Cibus, and Benson Hill Biosystems are already advancing their own gene-edited projects in a race against Big Ag for dominance of the potentially transformational technology. “It’s a very exciting time for such a young company,” said Calyxt CEO Federico Tripodi, who oversees 45 people. “The fact a company so small and nimble can accomplish those things has picked up interest in the industry.”

Gene-editing technology involves targeting specific genes in a single organism and disrupting those linked to undesirable characteristics or altering them to make a positive change. Traditional genetic modification, by contrast, involves transferring a gene from one kind of organism to another, a process that still does not have full consumer acceptance. Gene-editing could mean bigger harvests of crops with a wide array of desirable traits – better-tasting tomatoes, low-gluten wheat, apples that don’t turn brown, drought-resistant soybeans or potatoes better suited for cold storage. The advances could also double the $15 billion global biotechnology seed market within a decade, said analyst Nick Anderson of investment bank Berenberg.

[..] Biotech firms hope the technology can avoid the “Frankenfood” label that critics have pinned on traditional genetically modified crops. But acceptance by regulators and the public globally remains uncertain. The Court of Justice of the European Union ruled on July 25 that gene-editing techniques are subject to regulations governing genetically modified crops. The ruling will limit gene-editing in Europe to research and make it illegal to grow commercial crops. The German chemical industry association called the decision “hostile to progress.”

Read more …

Afraid they’ll be sued too?

UK Outlets Review Sale Of Monsanto’s Roundup After US Cancer Verdict (G.)

One of the UK’s largest DIY retailers is reviewing the sale of Roundup weedkiller products amid mounting concerns about their use, after a US jury found that the herbicide had caused a terminally ill man’s cancer. The manufacturer of the weedkiller, Monsanto, has insisted that British consumers are safe to continue using Roundup products, which are widely sold at DIY stores and used by British farmers. But a spokesperson for Homebase said it would be reviewing its product range after the ruling in California. A spokesperson for B&Q said it had already been undertaking a broader review of all garden products in an attempt to manage the range responsibly.

[..] Monsanto’s vice-president, Scott Partridge, said on Friday that hundreds of studies had shown that glyphosate, one of the world’s most widely used herbicides and a key ingredient of Roundup, does not cause cancer. Monsanto would be appealing against the jury’s verdict, he added. “It is completely and totally safe, and the public should not be concerned about this verdict. It is one that we will work through the legal process to see if we can get the right result. The science is crystal-clear,” he said. “The jury made a decision, but the decision that a jury or a judge makes has to be based on the weight of the evidence, and the overwhelming weight of the evidence that went in the trial was that science demonstrates glyphosate is safe; there’s no credible evidence to the contrary.”

[..] The scientific world, however, has raised doubts about glyphosate. A ruling in 2015 by the World Health Organization’s international agency for research on cancer (IARC) classified glyphosate as “probably carcinogenic to humans”. Campaigners are now calling for a review of pesticide regulations in the UK after the case, saying that glyphosate poses a risk to public health, soils and the environment. More than 2m hectares (5m acres) of farmland across Britain are treated with glyphosate annually, according to a study of government data by Oxford Economics. Emma Hockridge, head of policy at the Soil Association, described the ruling as a “dramatic blow” to the pesticide industry. “This is a landmark case, which highlights not only the problems caused by glyphosate, but also the whole system of pesticide use. We need to urgently change our systems of weed control to stop relying on herbicides,” she said.

Read more …

“It has taken years of negotiations to set up this conference. If we miss this opportunity, we will probably not get another opportunity to save the high seas for another 40 years. By then, there will probably not be much left that is worth protecting.”

The Oceans’ Last Chance (G.)

The leatherback turtle is one of our planet’s most distinctive creatures. It can live for decades and grow to weigh up to two tonnes. It is the largest living reptile on Earth and its evolutionary roots reach back more than 100 million years. “Leatherbacks are living fossils,” says oceanographer Professor Callum Roberts, of York University. “But they are not flourishing. In fact, they are being wiped out at an extraordinary rate, particularly in the Pacific Ocean, where their numbers have declined by 97% over the past three decades. They are now critically endangered there.” Leatherbacks are suffering for several reasons. They have been hunted for their meat for centuries and the spread of tourist resorts disrupts turtles when they come ashore to lay their eggs on sandy beaches.

But the cause of the most recent, most massive decline in numbers of Dermochelys coriacea has a far more pernicious cause: long-line fishing in the high seas. Some trawlers now drag fishing lines that are more than 75 miles long, each bristling with hooks. Tens of thousands of sea turtles get snagged on these and drown every year. “It is tragic,” says Roberts. And this carnage goes unchecked – for the simple reason that there is no protection at all for species, endangered or otherwise, on seas outside national waters. The list includes fish and seabirds, plus fragile ecosystems such as deep-sea corals. “Outside national waters, in the high seas, it is essentially a no man’s land when it comes to protecting sensitive environments and their inhabitants,” says Paul Snelgrove, a deep-sea biologist at Memorial University in St John’s, Canada. “It is a highly unsatisfactory state of affairs.”

Read more …

Aug 092018
 


René Magritte The evening gown 1954

 

Julian Assange has received an letter from the US Senate asking him to testify in front of them. What to make of that is not entirely clear. Far as I know, Assange offered such testimony multiple times, under the ‘right standards’. The Senate ostensibly wants this to take place behind closed doors, and it’s hard to see how that would fit Assange’s standards. But who knows?

What struck me was that the letter was signed by Senators Richard Burr (R-NC) and Mark Warner (D-VA). and especially the latter runs like a red thread through everything that has to do with Assange and the US. It reminded me of what John Solomon said in his June 25 piece ‘How Comey Intervened To Kill Wikileaks’ Immunity Deal’ about Assange lawyer Adam Waldman, who according to Solomon has a ‘Forrest Gump-like penchant for showing up in major cases of intrigue’.

Mark Warner has that, too. What made me return to this is that in his piece yesterday on the Senate request, Tyler Durden, referring to Solomon’s article, wrote: After Assange’s request was run up the flag pole, Senator Warner was issued a “stand-down” order by Comey.. And I thought: I’m not sure that’s entirely correct, and not only because Comey cannot ‘order’ a US Senator to do anything.

The stand down order was not for Warner, he just passed it on to Waldman and his counterpart acting for the DOJ, David Laufman, head of Justice’s counterintelligence and export controls section. NOTE: we don’t even know if the stand down didn’t really come from Warner, or Comey AND Warner, or someone else altogether.

What we do know is that it was a very peculiar order at a very peculiar moment in time, because the intelligence community could have gotten something tangible and valuable out of the negotiations. Solomon: “..officials “understood any visibility into his thinking, any opportunity to negotiate any redactions, was in the national security interest and worth taking,” says a senior official involved at the time.

They were well on their way to -at least potentially- save the lives of CIA operatives and assets. Negotiations had been going on for at least 2 months, and probably more like three. But then Assange offered to provide evidence that he didn’t get the DNC files from Russia. And that seems to have changed the atmosphere. Tyler has some more about this, outside of the Solomon piece:

‘Last August, Congressman Dana Rohrabacher travelled to London with journalist Charles Johnson for a meeting with Assange, after which Rohrabacher said the WikiLeaks founder offered “firsthand” information proving that the Trump campaign did not collude with Russia, and which would refute the Russian hacking theory.’ After Trump denied knowledge of the potential deal, Rohrabacher raged at Trump’s Chief of Staff, John Kelly, for constructing a “wall” around President Trump by “people who do not want to expose this fraud.”

NOTE: that meeting took place 4-5 months AFTER the Comey (et al?) stand down order. So Assange was still reaching out and offering to spare individual CIA assets. He has released a lot of the CIA Vault 7 files, but not all. To my knowledge he has held back on that to this day.

 

I don’t know how much you still follow from the pro-Russiagate press, which is about the entire US MSM, but Rohrabacher is habitually called a traitor, a Putin puppet and worse for talking to Russians, just like he is for going to see Assange. Once you start trying to find a way out of the ever tighter woven Russia Russia web, you’re fair game. Even if that’s simply your job as a Congressman, or at least your interpretation of what the job entails.

Back to Solomon for a bit. What he describes is not some amnesty deal, but a “Queen for a Day” proffer. Which in this case was essentially a safe passage guarantee for Assange to leave the Ecuador embassy only to go talk to US government people. We don’t know all the prospective topics of the talks, and they don’t seem to have agreed on a location (London, Washington?!) before the Comey order. Solomon:

Not included in the written proffer was an additional offer from Assange: He was willing to discuss technical evidence ruling out certain parties in the controversial leak of Democratic Party emails to WikiLeaks during the 2016 election. The U.S. government believes those emails were hacked by Russia; Assange insists they did not come from Moscow.

“Mr. Assange offered to provide technical evidence and discussion regarding who did not engage in the DNC releases,” Waldman told me. “Finally, he offered his technical expertise to the U.S. government to help address what he perceived as clear flaws in security systems that led to the loss of the U.S. cyber weapons program.”

That is just funny: Assange offered to help the CIA on its security systems. That must have pissed them off mightily, because it can only mean they really needed to strengthen security (or he wouldn’t have brought it up). But then Waldman reaches out to Warner, in what may well have been a fatal mistake. The talks with the DOJ were going well, and might have been enough. Getting politics involved in it was one took over the line:

[..] Just a few days after the negotiations opened in mid-February, Waldman reached out to Sen. Warner; the lawyer wanted to see if Senate Intelligence Committee staff wanted any contact with Assange, to ask about Russia or other issues. Warner engaged with Waldman over encrypted text messages, then reached out to Comey. A few days later, Warner contacted Waldman with an unexpected plea.

“He told me he had just talked with Comey and that, while the government was appreciative of my efforts, my instructions were to stand down, to end the discussions with Assange,” Waldman told me. Waldman offered contemporaneous documents to show he memorialized Warner’s exact words.

Waldman couldn’t believe a U.S. senator and the FBI chief were sending a different signal, so he went back to Laufman, who assured him the negotiations were still on. “What Laufman said to me after he heard I was told to ‘stand down’ by Warner and Comey was, ‘That’s bullshit. You are not standing down and neither am I,’” Waldman recalled.

A source familiar with Warner’s interactions says the senator’s contact on the Assange matter was limited and was shared with Senate Intelligence chairman Sen. Richard Burr (R-N.C.). But the source acknowledges that Warner consulted Comey and passed along the “stand down” instructions to Waldman: “That did happen.”

Okay, so we have Warner very much in the thick of the DOJ negotiations with Assange. Fast forward to late June 2018, when his name pops up again in a list of 10 Democratic Senators who asked Vice President Mike Pence to, on a visit to Ecuador, ask new president Lenin Moreno, to revoke Assange’s asylum on the London embassy.

 

 

Warner is there, along with such fine human beings as Dianne Feinstein, and the two Dicks Durbin and Blumenthal. Wikileaks, which posted the list, suggested: “Remember them”. Looks like an idea. Why would the Democratic party want Assange delivered to the lions? Oh, right, Russia Russia, the entirely unproven allegations which they are so desperate to tie Assange into.

They can’t prove any of the many allegations of Russian meddling, let alone their role in Hillary’s election loss, and they can’t prove any allegation against Julian Assange, at least none that he could be charged for/with, but tie Russia and WikiLeaks together and they feel they no longer have to prove anything at all, that mere allegations are strong enough.

If there is no crime Assange can be accused of, you just label him a terrorist, and all your legal problems disappear. Because terrorism can be anything, and because of national security reasons, any evidence, whether it exists or not, must be treated in secret. What reason, what grounds, do these Senators have to ask Ecuador to revoke Assange’s asylum? What legal grounds could possibly exist? We have no way of knowing, and because they label Julian a terrorist, we have no right to, either. Or so they claim.

This is called abomination of justice. In the same way that America and Britain’s treatment of him is called torture. And no, that is not too strong a term. A man who has never been charged with a crime by anyone, in any country, is being tortured. Julian has severe, painful, dental problems, he has developed a condition that makes his legs swell, and his bone density is dropping fast due to extended lack of sunlight.

These people have simply decided to wait it out, so they don’t have to go through elaborate legal procedures that they may well lose, to wait until Assange has no choice but to walk out of the embassy, or be carried out on a stretcher or in a coffin. It’s not even possible to list all the British, American, Ecuadorian and international laws his treatment violates.

Someone should give it a try, though. Just like someone should investigate Mark Warner’s role in all of this. Warner was pivotal in killing off the Assange legal teams’ talks with the DOJ, he asked Ecuador to stop Assange’s asylum (which is so illegal you don’t even want to go there), and now he requests for Assange to appear before the US Senate.

Someone investigate that guy. If I can say one last thing, it would be that Warner exemplifies all that is wrong with the US Democratic Party. He’s the Forrest Gump of all their future election losses. The Democrats should be standing up to protect people like Assange, but instead they follow the example of Hillary, who said about Assange “can’t we drone this guy?”.

Yeah, the very guy who’s never been charged with a single crime. She undoubtedly said it in the same tone of voice as her insane cackle of “We came, we saw, he died” about Gaddafi. Looked at Libya lately?

The essence of this is that we will be better people, and better societies, with Julian Assange around to help us be better. Without him, things look a whole lot darker. We need to be able to hold politicians, corporations and secret services to account. And the more they resist this, often in illegal ways, the more we must insist.

The idea was never that we must answer to them. They must answer to us, and we must be able to throw them out when they cross legal and moral lines. It’s beyond the pale that that has to be explained once again. And trying to explain that, with examples, is all that Julian Assange has ever done.

 

 

May 162018
 


Carl Spitzweg The raven 1845

 

Julian Assange appears to be painfully close to being unceremoniously thrown out of the Ecuadorian embassy in London. If that happens, the consequences for journalism, for freedom of speech, and for press freedom, will resound around the world for a very long time. It is very unwise for anyone who values truth and freedom to underestimate the repercussions of this.

In essence, Assange is not different from any journalist working for a major paper or news channel. The difference is he published what they will not because they want to stay in power. The Washington Post today would never do an investigation such as Watergate, and that’s where WikiLeaks came in.

It filled a void left by the media that betrayed their own history and their own field. Betrayed the countless journalists throughout history, and today, who risked their lives and limbs, and far too often lost them, to tell the truth about what powers that be do when they think nobody’s looking or listening.

Julian is not wanted because he’s a spy, or even because he published a number of documents whose publication was inconvenient for certain people. He is wanted because he is so damn smart, which makes him very good and terribly effective at what he does. He’s on a most wanted list not for what he’s already published, but for what he might yet publish in the future.

He built up WikiLeaks into an organization that acquired the ultimate trust of many people who had access to documents they felt should be made public. They knew he would never betray their trust. WikiLeaks has to date never published any documents that were later found out to be false. It never gave up a source. No documents were ever changed or manipulated for purposes other than protecting sources and other individuals.

 

Julian Assange built an ’empire’ based on trust. To do that he knew he could never lie. Even the smallest lie would break what he had spent so much time and effort to construct. He was a highly accomplished hacker from a very young age, which enabled him to build computer networks that nobody managed to hack. He knew how to make everything safe. And keep it that way.

Since authorities were never able to get their hands on WikiLeaks, its sources, or its leader, a giant smear campaign was started around rape charges in Sweden (the country and all its citizens carry a heavy blame for what happened) and connections to America’s favorite enemy, Russia. The rape charges were never substantiated, Julian was never even interrogated by any Swedish law enforcement personnel, but that is no surprise.

It was clear from the get-go what was happening. First of all, for Assange himself. And if there’s one thing you could say he’s done wrong, it’s that he didn’t see the full impact from the campaign against him, sooner. But if you have the world’s largest and most powerful intelligence services against you, and they manage to find both individuals and media organizations willing to spread blatant lies about you, chances are you will not last forever.

If and when you have such forces running against you, you need protection. From politicians and from -fellow- media. Assange didn’t get that, or not nearly enough. Ecuador offered him protection, but as soon as another president was elected, they turned against him. So have news organizations who were once all too eager to profit from material Assange managed to obtain from his sources.

 

That the Guardian today published not just one, not two, but three what can only be labeled as hit pieces on Julian Assange, should perhaps not surprise us; they fell out a long time ago. Still, the sheer amount of hollow innuendo and outright lies in the articles is astonishing. How dare you? Have you no shame, do you not care at all about your credibility? At least the Guardian makes painfully clear why WikiLeaks was needed.

No, Sweden didn’t “drop its investigation into alleged sexual offences because it was unable to question Assange”. The Swedes simply refused to interview him in the Ecuador embassy in London, the only place where he knew he was safe. They refused this for years. And when the rape charges had lost all credibility, Britain asked Sweden to not drop the charges, but keep the pressure on.

No, there is no proof of links from Assange to Russian hackers and/or to the Russian government. No, there is no proof that DNC computers were hacked by Russians to get to John Podesta’s emails. In fact there is no proof they were hacked at all. No, Ecuador didn’t get tired of Julian; their new president, Moreno, decided to sell him out “at the first pressure from the United States”. Just as his predecessor, Correa, said he would.

Julian Assange has been condemned by Sweden, Britain, the US and now Ecuador to solitary confinement with no access to daylight or to medical care. Without a trial, without a sentence, and on the basis of mere allegations, most of which have already turned out to be trumped up and false. This violates so many national and international laws it’s futile to try and count or name them.

It also condemns any and all subsequent truth tellers to the prospect of being treated in the same way that Julian is. Forget about courts, forget about justice. You’ll be on a wanted list. I still have a bit of hope left that Vladimir Putin will step in and save Assange from the gross injustice he’s been exposed to for far too many years. Putin gets 100 times the lies and innuendo Assange gets, but he has a powerful nation behind him. Assange, in the end, only has us.

What’s perhaps the saddest part of all this is that people like Chelsea Manning, Kim Dotcom, Edward Snowden and Julian Assange are among the smartest people our world has to offer. We should be cherishing the combination of intelligence, courage and integrity they display at their own risk and peril, but instead we let them be harassed by our governments because they unveil inconvenient truths about them.

And pretty soon there will be nobody left to tell these truths, or tell any truth at all. Dark days. By allowing the smartest and bravest amongst us, who are experts in new technologies, to be silenced, we are allowing these technologies to be used against us.

We’re not far removed from being extras in our own lives, with all significant decisions taken not by us, but for us. America’s Founding Fathers are turning in their graves as we speak. They would have understood the importance of protecting Julian Assange.

To say that we are all Julian Assange is not just a slogan.

 

 

Apr 232018
 
 April 23, 2018  Posted by at 9:49 am Finance Tagged with: , , , , , , , , , ,  


Russell Lee Highway tavern. Crystal City, Texas 1939

 

A Google Breakup Would Fit the EU’s Logic (BBG)
Customs Union U-Turn By May Could Inspire Brexiter Cabinet Revolt (G.)
The Windrush Story Was Not A Rosy One Even Before The Ship Arrived (G.)
Britain, Headquarters Of Fraud (G.)
China Q1 Imports From North Korea Fall 87% Year-On-Year (R.)
How China Is Buying Its Way Into Europe (BBG)
China Factory Crackdown Masks Sweeping Takeover By The State (BBG)
Canadians Just Set A New Record For Borrowing Against Their Homes (BD)
MSM Is Frantically Attacking Dissenting Syria Narratives (CJ)
WikiLeaks To Countersue Democrats; “Discovery Is Going To Be Amazing Fun” (ZH)
One In Eight Bird Species Is Threatened With Extinction (G.)

 

 

Does Google think it can win this?

A Google Breakup Would Fit the EU’s Logic (BBG)

On Thursday, the European Parliament backed the idea of breaking up Google. It doesn’t have the power to do it, but the legislators’ decision is a notable part of a backlash against the remedial action Google took after the European Commission fined it 2.4 billion euros ($2.95 billion) for abusing its dominant position in shopping search. That backlash can lead to dire consequences for the search giant. The commission found last June that by giving its own product comparison service, Google Shopping, prime “real estate” at the top search result pages, Google was hampering competition for independent shopping comparison websites. The company’s remedy is to hold auctions for spaces in the special box in which comparison results appear if a user searches for a product to buy.

Google Shopping bids in these auctions on the same terms as its rivals, and Google has promised to keep the service profitable so it can’t outbid the competition every time with the company’s vastly superior resources. Yet, months after the remedy was applied, it’s next to impossible to run into a non-Google offer in that box. The original complainants, notably the U.K. firm Foundem, have been campaigning to have Google declared non-compliant. Foundem’s argument is laid out in an interactive presentation released on April 18. The British company argues that even though Google claims to run Google Shopping at arm’s length, it’s merely an obfuscation, a meaningless accounting arrangement. In reality, Google as a whole still harvests 100% of the profit from the ads in runs after winning auctions – plus 80% of the profits from competing services’ ads in the form of their winning bids.

“While Google’s promise to run Google Shopping at a notional ‘profit’ may allow rival services to bid their way into ‘the box,’ it does nothing to address the seismic inequality between bids that cost you nothing and bids that cost you most of your incentive and ability to innovate and grow,” Foundem wrote in the presentation. The annual report on competition policy from the European Parliament’s Committee on Economic and Monetary Affairs, which the legislature approved on Thursday, shows that at least some in the “Brussels bubble” that rules the EU are receptive to Foundem’s argument. “Without a full-blown structural separation between the company’s general and specialised search services, an auction-based approach might not deliver equal treatment,” the report says.

[..] If Google is declared non-compliant, its parent company, Alphabet Inc., can be forced to pay up to 5 percent of its daily turnover for every day that it has violated the commission’s ruling, meaning, theoretically, since last September. Taking Alphabet’s average daily revenue in the fourth quarter of 2017 as a base, that’s about $17.6 million a day for seven months and counting. This could end up being worse than the original fine, which Google is appealing. Even a breakup could be preferable to paying this sort of penalty for a protracted period.

Read more …

The mess spreads.

Customs Union U-Turn By May Could Inspire Brexiter Cabinet Revolt (G.)

Theresa May could face a cabinet revolt on a customs union as peers prepare to inflict more defeats on the government over the EU withdrawal bill in a key week for the future of the UK’s relations with Europe. Amid Brexiter threats of a leadership challenge, the former cabinet minister Nicky Morgan, who chairs the Treasury committee, said party rebels should be careful what they wished for. “This sabre-rattling is not coming from the section of the party that I represent. It is coming from the pro-Brexit section of the party and is deeply unhelpful,” she said. Government hopes of avoiding a hard border in Ireland either through technological innovation or regulatory alignment have been set back after they were rejected during preliminary negotiations in Brussels.

That has led to speculation that May is preparing to concede on a customs union, which has been a red line since the prime minister’s conference speech in October 2016. Reports over the weekend suggested a “wargaming” exercise into the consequences of a concession showed that not even leading Brexiters such as Michael Gove, the environment secretary, or Boris Johnson, the foreign secretary, would resign. But a source close to Gove reiterated his opposition: “Michael believes respecting the referendum result means taking back control of trade policy. He fully supports the prime minister’s position that this means leaving the customs union.” Although the loss of other pledges in negotiations have been reluctantly accepted, such as the promise to reclaim control over fishing quotas from March 2019, accepting continued membership of a customs union would be of a different and much larger scale.

Read more …

Superiority complex writ large

The Windrush Story Was Not A Rosy One Even Before The Ship Arrived (G.)

This is a year so overflowing with anniversaries that it was perhaps always going to draw our attention to the histories of race and migration in Britain. June marks the 70th anniversary of the arrival of the Empire Windrush at Tilbury Docks, carrying 492 West Indians who were looking to rewrite their fortunes in a Britain desperate for labour. The Windrush is now so much part of British history that almost instantly it became the shorthand used to describe the generation of black Britons whose plight has so shocked the country.

Friday 20 April was an anniversary of a darker kind, 50 years since Enoch Powell delivered his “rivers of blood” speech. That toxic diatribe, with its unsubtle references to “piccaninnies” and the “whip hand”, remains politically radioactive half a century later, as Radio 4 discovered last weekend when it broadcast the speech in an anniversary documentary. Today is the sombre anniversary of the murder of Stephen Lawrence, 25 years ago.

But there is another 2018 anniversary that, until last week, might well had passed by quietly, hardly noticed. This year marks 70 years since the passing of the 1948 British Nationality Act, which was being debated while the Windrush was crossing the Atlantic; gaining royal ascent in July 1948, as the Windrush pioneers were settling into their new jobs. Although now obscure, it was a law that Powell once referred to as “that most evil statute”. Much of what has happened over the past week can be traced back to that forgotten but critical piece of legislation. The act was intended to reaffirm what many in the late 1940s regarded as a “time-honoured principle”, the doctrine that all British subjects should have the automatic right to travel to and settle in the United Kingdom.

[..] Even before the Windrush had left Jamaica, the prime minister, Clement Attlee, had examined the possibility of preventing its embarkation or diverting the ship and the migrants on board to East Africa. After the vessel had arrived at Tilbury, the colonial secretary, Arthur Creech Jones, is said to have reassured his cabinet colleagues that, although “these people have British passports and must be allowed to land there’s nothing to worry about because they won’t last one winter in England” (detailed in Randall Hansen’s book Citizenship and Immigration in Post-War Britain). When that prediction was proved false, ministers began to consider how they might revoke the commitments enshrined in the 1948 act.

What followed was a two decade-long political struggle to change Britain’s immigration law and reduce the flow of immigrants from the so-called New Commonwealth. This is the other side of the Windrush story. In 1971, a new immigration act finally achieved that aim and stemmed the flow of migrants from the New Commonwealth. The same law granted those who had already arrived indefinite leave to remain. That would have been the end of the story, had not, in 2013, those thousands been pushed into Theresa May’s “hostile environment”. The current crisis is a relic left by the political struggle to row back from the commitments made in the 1948 act.

Read more …

Competition for the title is stiff.

Britain, Headquarters Of Fraud (G.)

Officials get fed up with accusations that Britain is a cesspool of dirty money; that they do too little to check the wealth hidden behind shell corporations. They grouse among themselves that their critics overlook the work they’re doing to expose the money flows and to drive out the corrupt. When they do get a win, therefore, they trumpet it. Last month, Companies House successfully prosecuted someone who had lied in setting up a company, the kind of white-collar crime committed by the sophisticated fraudsters who fleece ordinary Brits every day, and the government went large. “This prosecution – the first of its kind in the UK – shows the government will come down hard on people who knowingly break the law and file false information on the company register,” crowed business minister, Andrew Griffiths, in a press release.

A Warwickshire businessman called Kevin Brewer had pleaded guilty, paid a fine and the government’s costs: a total of more than £12,000. His crime had been to falsely claim that two companies he created belonged, in one case, to the MP Vince Cable, and, in the other, to the MP James Cleverly, Lady Neville-Rolfe and an imaginary Israeli. At first, the public response to the news was everything the press release’s authors could have hoped for. The Times splashed with the details of the crime – the government was tough on fraud, tough on the causes of fraud. But the victory was short-lived.

Within a month of the triumphant press release, Tory MP John Penrose, the government’s anti-corruption champion, was slamming the prosecution as “a bone-headed exercise in shooting the messenger”. Brewer may have been, by his own admission, naive, but he was trying to expose a flaw in British regulations that enables frauds totalling hundreds of billions of pounds. His reward was years of being ignored and, finally, a criminal record. “That has to be wrong,” said Penrose.

Read more …

Can we check this?

China Q1 Imports From North Korea Fall 87% Year-On-Year (R.)

China’s imports from North Korea fell 87% in the first quarter from a year earlier to 448.8 million yuan ($71.31 million), customs data showed on Monday, while exports to North Korea were down 46.1% to 2.68 billion yuan. For March, China’s exports to North Korea were 907.54 million yuan while imports from North Korea were 78.5 million yuan. China’s March total trade with North Korea was 986.07 million yuan, customs data showed.

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Cue protectionism.

How China Is Buying Its Way Into Europe (BBG)

For more than a decade, Chinese political and corporate leaders have been scouring the globe with seemingly bottomless wallets in hand. From Asia to Africa, the U.S. and Latin America, the results are hard to ignore as China has asserted itself as an emerging world power. Less well known is China’s diffuse but expanding footprint in Europe. Bloomberg has crunched the numbers to compile the most comprehensive audit to date of China’s presence in Europe. It shows that China has bought or invested in assets amounting to at least $318 billion over the past 10 years. The continent saw roughly 45% more China-related activity than the U.S. during this period, in dollar terms, according to available data.

The volume and nature of some of these investments, from critical infrastructure in eastern and southern Europe to high-tech companies in the west, have raised a red flag at the EU level. Leaders that include Angela Merkel and Emmanuel Macron are pressing for a common strategy to handle China’s relentless advance into Europe, with some opposition from the EU’s periphery. We analyzed data for 678 completed or pending deals in 30 countries since 2008 for which financial terms were released, and found that Chinese state-backed and private companies have been involved in deals worth at least $255 billion across the European continent. Approximately 360 companies have been taken over, from Italian tire maker Pirelli to Irish aircraft leasing company Avolon, while Chinese entities also partially or wholly own at least four airports, six seaports, wind farms in at least nine countries and 13 professional soccer teams.

Importantly, the available figures underestimate the true size and scope of China’s ambitions in Europe. They notably exclude 355 mergers, investments and joint ventures—the primary types of deals examined here—for which terms were not disclosed. Bloomberg estimates or reporting on a dozen of the higher-profile deals among this group suggest an additional total value of $13.3 billion. Also not included: greenfield developments or stock-market operations totaling at least $40 billion, as compiled by researchers at the American Enterprise Institute and the European Council on Foreign Relations, plus a $9 billion stake in Mercedes-Benz parent company Daimler AG by Zhejiang Geely chairman Li Shufu reported by Bloomberg.

Read more …

Anbang was just the start.

China Factory Crackdown Masks Sweeping Takeover By The State (BBG)

President Xi Jinping’s big push to curb pollution and excess capacity in steel and other industries is also consolidating his government’s control over them. Just last year, the state’s share of steel capacity increased to 67% from 60% while aluminum smelting saw about an equal increase, J Capital Research estimates. In coal, which began consolidating years earlier, the government now controls 80% of capacity compared with about 45% in 2010, according to the Hong Kong-based firm. Xi’s campaign has boosted corporate profits, ended years of deflation, and stabilized debt growth to help underpin the first full-year economic acceleration last year since 2010.

But his aim for a “bigger, better and stronger” state role also means those bloated companies risk stifling private ones, as the Communist Party strengthens its grip on the economy. Call it “de facto nationalization,” says Jude Blanchette, China practice lead at Crumpton Group in Arlington, Virginia, and a former Conference Board researcher in Beijing. “We’re clearly seeing the re-strengthening of state-owned enterprises, oftentimes at the zero-sum expense of private players. Private folks are exiting the market either because they’re pushed out or they can’t survive.” State gains in heavy industry follow a broad SOE comeback since Xi took power in 2013. Their share of fixed-asset investment stopped falling in 2014 and rebounded over the next three years, says Andrew Batson at Gavekal Dragonomics.

The state is also extending control over the private sector away from heavy industry as it cracks down on debt. Once-acquisitive insurer Anbang Insurance was seized by the government, and regulators have curtailed the activities of conglomerates including Dalian Wanda and HNA. Such consolidation may spur blowback from the U.S. and other countries. President Donald Trump already brands China a strategic rival, slapping tariffs on its goods and criticizing industrial policy for subsidizing state enterprises in a push to dominate tech sectors.

“The idea, promoted during the Zhu Rongji era, that state enterprises should be independent, profit-seeking companies that just happen to be owned by the state has essentially been abandoned,” said Batson, referring to the former premier. “The government thinks that SOEs are there to serve its overall strategic goals.”

Read more …

Words fail.

Canadians Just Set A New Record For Borrowing Against Their Homes (BD)

Canadian real estate related debt tapering? That would be ridiculous! Filings obtained from the Office of the Superintendent of Financial Institutions (OSFI) show, after a brief decline in January, the balance of loans secured by residential real estate hit a new high in February. More interesting is the segment of loans being used for personal consumption, is growing at the fastest pace in years. Loans secured by residential real estate are exactly what they sound like. They’re loans that you pledge your home equity in order to secure. The most common example would be a Home Equity Line of Credit (HELOC). You know, the same type of loan the Canadian government is discretely paying to teach you how to borrow. There’s also more productive uses, like when you start a new business and need to use your home as security – just in case you aren’t able to pay your loan shark bank back.

Either way, debt is debt. The big difference to note is a loan secured for personal reasons, is considered non-productive. The borrower isn’t expected to take a calculated risk, in order to earn more money. A business loan is considered productive, since it might generate more money. This isn’t just our opinion, banks actually classify these loans separately in their filings. Today we’ll go through the aggregate of these numbers, then break them down segment by segment. Loans secured by real estate hit a new all-time high in February. The total balance of loans secured with real estate racked up to $283.65 billion, up 0.77% from the month before. This represents a 7.79% increase compared to the same month last year. It almost looked like Canadians were reeling that debt in January, with a tiny decline. Instead it made a monster move, more than making up the ground lost the month before.

Read more …

A media war.

MSM Is Frantically Attacking Dissenting Syria Narratives (CJ)

It’s getting too blatantly obvious, like a stranger coming up to you and talking about climate change while openly masturbating; what he is doing would eclipse interest in whatever he is saying. The frenetic publication of hit pieces against anyone who fails to fall in line with the establishment Syria narrative is fast becoming the real story here. Many of these recent hit pieces are coming out of the UK, which is interesting given the way a BBC reporter recently admonished her interviewee for questioning the official story about the alleged Douma chemical attacks because his words could hurt the “information war” effort against Russia.

If this view is widespread among British journalists (and recent headlines by the Times, the Independent and the Telegraph suggest that it may be), this means we’re looking at an environment wherein reporters aren’t even pretending it’s their job to be truthful, tell all sides of a story and hold power to account, but rather to manufacture support for escalations against Russia and undermine anyone who resists. Today yet another mainstream smear piece has been published about Vanessa Beeley, an investigative journalist who has done extensive work on the ground in Syria, which the UK’s Huffington Post branch hilariously titled “How An Obscure British Blogger Became Russia’s Key Witness Against The White Helmets”.

Its author, senior Huffpo editor Chris York, doesn’t explain how we’re meant to see an investigative journalist practicing the definition of investigative journalism on the ground in a war-torn nation as “an obscure blogger”, but he has said that he has two more such articles on the way. Who do these people think they’re kidding? Are we truly meant to believe that people expressing skepticism about the authenticity of a “civil defense group” in a distant Middle Eastern country is suddenly the most dangerous thing in the world?

Are we really meant to think it’s normal for all these mass media corporations to suddenly start ferociously attacking anyone who expresses skepticism about the military agendas of western forces that have an extensive and well-documented history of using lies, propaganda and false flags to manufacture support for military agendas? Are we really meant to believe that Syria, a nation for which the US and UK have been plotting regime change for many years, is just now in sore need of humanitarian regime change? And that anyone who says otherwise just loves Bashar al-Assad, Vladimir Putin and dead babies?

Read more …

I asked before: did the DNC think this through?

WikiLeaks To Countersue Democrats; “Discovery Is Going To Be Amazing Fun” (ZH)

WikiLeaks has hit back against a multimillion-dollar lawsuit filed by the Democratic National Committee (DNC), announcing over Twitter that they are seeking donations for a counter-suit, noting “We’ve never lost a publishing case and discovery is going to be amazing fun,” along with a link which people can use to donate to the organization. Discovery is a pre-trial process by which one party can obtain evidence from the opposing party relevant to the case. The Trump campaign, which is also named in the DNC filing, says the lawsuit will provide an opportunity to “explore the DNC’s now-secret records.”

Hours after the Washington Post broke the news of the lawsuit, President Trump tweeted “Just heard the Campaign was sued by the Obstructionist Democrats. This can be good news in that we will now counter for the DNC server that they refused to give to the FBI,” referring to the DNC email breach. Trump also mentioned “the Debbie Wasserman Schultz Servers and Documents held by the Pakistani mystery man and Clinton Emails.” In a statement which goes into the various items they’ll be pursuing in court, the Trump campaign said the following: “While this lawsuit is frivolous and will be dismissed, if the case goes forward, the DNC has created an opportunity for us to take aggressive discovery into their claims of ‘damages’ and uncover their acts of corruption for the American people..”

If this lawsuit proceeds, the Trump Campaign will be prepared to leverage the discovery process and explore the DNC’s now-secret records about the actual corruption they perpetrated to influence the outcome of the 2016 presidential election. Everything will be on the table, including: • How the DNC contributed to the fake dossier, using Fusion GPS along with the Clinton Campaign as the basis for the launch of a phony investigation. • Why the FBI was never allowed access to the DNC servers in the course of their investigation into the Clinton e-mail scandal. • How the DNC conspired to hand Hillary Clinton the nomination over Bernie Sanders. • How officials at the highest levels of the DNC colluded with the news media to influence the outcome of the DNC nomination. • Management decisions by Debbie Wasserman Schultz, Donna Brazile, Tom Perez, and John Podesta; their e-mails, personnel decisions, budgets, opposition research, and more.

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It’s much worse than the title suggests.

One In Eight Bird Species Is Threatened With Extinction (G.)

One in eight bird species is threatened with global extinction, and once widespread creatures such as the puffin, snowy owl and turtle dove are plummeting towards oblivion, according to the definitive study of global bird populations. The State of the World’s Birds, a five-year compendium of population data from the best-studied group of animals on the planet, reveals a biodiversity crisis driven by the expansion and intensification of agriculture. In all, 74% of 1,469 globally threatened birds are affected primarily by farming. Logging, invasive species and hunting are the other main threats.

“Each time we undertake this assessment we see slightly more species at risk of extinction – the situation is deteriorating and the trends are intensifying,” said Tris Allinson, senior global science officer for BirdLife International, which produced the report. “The species at risk of extinction were once on mountaintops or remote islands, such as the pink pigeon in Mauritius. Now we’re seeing once widespread and familiar species – European turtle doves, Atlantic puffins and kittiwakes – under threat of global extinction.” According to the report, at least 40% of bird species worldwide are in decline, with researchers blaming human activity for the losses.

After farming, logging is a key factor in declines of 50% of the most globally endangered species, followed by invasive species (39%), hunting and trapping (35%), climate change (33%) and residential and commercial development (28%). The illegal killing of birds – usually because of traditional hunting – results in an estimated 12 to 38 million individual birds dying or being taken each year in the Mediterranean region alone

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Apr 212018
 
 April 21, 2018  Posted by at 9:00 am Finance Tagged with: , , , , , , , , , , , ,  


James McNeill Whistler Morning Glories 1869

 

A US Recession Ahead? Fed Policymakers Say Not To Worry (R.)
If Treasuries Reach 3%, That Would Be Big (BBG)
Kim Jong-Un Halts Nuclear & Missile Tests, Shuts Down Testing Site (RT)
DNC Sues Russia, Trump, Wikileaks For Conspiring To Hurt Hillary in 2016 (ZH)
DNC Lawsuit Against WikiLeaks a Serious Threat to Press Freedom (IC)
Trump To “Counter” DNC Lawsuit (ZH)
Comey Memos Probed By DOJ For Classified Info Leaks (ZH)
Wells Fargo’s $1 Billion Pact Gives U.S. Power to Fire Managers (BBG)
IMF’s Thomsen Proposes Broadening Greek Tax Base (K.)
Windrush: When Even Legal Residents Face Deportation (Atlantic)

 

 

The illusion of control. Watch the hand.

A US Recession Ahead? Fed Policymakers Say Not To Worry (R.)

As the gap between short- and long-term borrowing costs hovers near its lowest in more than 10 years, speculation has risen over whether the so-called yield curve is signaling that a recession could be around the corner. Not to worry, two influential Federal Reserve policymakers said on Friday. Another, whose views are typically outside the mainstream at the Fed, disagreed. Growth prospects look pretty strong, which is why the Fed is raising short-term interest rates, the two sanguine policymakers explained. Those rate hikes, they said, are in and of themselves acting to flatten the yield curve. In addition, they argued, the curve will likely steepen as the U.S. government runs a bigger deficit and issues more debt.

The calming comments, from the New York Fed’s incoming chief John Williams and from Chicago Fed President Charles Evans in back-to-back but separate appearances, appeared calculated to allay concern about a potential slowdown ahead. “The yield curve is not nearly as much of a concern as I might have pointed to a couple months ago,” Evans said in Chicago after a speech, in response to a reporter’s question. Williams, who will leave his current job as San Francisco Fed president in June to take over at the New York Fed, also said he expects the Fed’s shrinking balance sheet will help steepen the curve by putting upward pressure on longer-term rates.

In January the U.S. Congress passed a budget deal that boosts U.S. government spending, following a December tax package that slashes corporate tax rates. Both changes are expected to lead to an increase in government borrowing in coming years. The Fed policymakers reason that a bigger supply of debt should put downward pressure on Treasury prices and deliver a corresponding lift to yields. “We’ve got more fiscal debt in train in the U.S. That has to be funded,” and will likely push up long rates and steepen the yield curve, Evans said. At their March meeting, Fed officials “generally agreed that the current degree of flatness of the yield curve was not unusual by historical standards,” according to the meeting minutes.

Read more …

Where the Fed loses control.

If Treasuries Reach 3%, That Would Be Big (BBG)

The global bond market’s primary benchmark, the 10-year U.S. Treasury yield, is knocking on the door of 3 percent, a level it hasn’t topped in more than four years. That’s more than just a nice round number. Higher yields make the burden of everything from mortgages to student loans and car payments even heavier. Some market gurus see it as a turning point with effects that could be felt for years — and not just in bonds. With the Federal Reserve signaling interest rates are going up even more, investors in riskier assets like stocks and high-yield debt are left to wonder if this is how their post-recession party ends.

1. What’s so important about yield? A bond’s yield is a measure of the return an investor can expect from buying it. It’s determined by the bond’s interest rate and the price paid for it. For instance, buying a security that pays a fixed 2 percent (the “coupon”) at face value (known as “par”) results in a yield of 2 percent. Buying it at a cheaper price would raise the yield for the investor, while paying a premium would reduce the overall yield. (Maybe the most confusing aspect of the bond market to outsiders is the inverse relationship between price and yield.)

2. How do you determine the benchmark 10-year yield?In the $14.9 trillion Treasuries market, the benchmark is based on the most recently auctioned 10-year security (known as the “on-the-run”). It’s the best measure because it tends to have a price close to par and a coupon close to the current yield. On Friday, the 10-year yield closed at 2.96 percent.

3. Why are yields going up?The Fed is raising its short-term lending rate as the U.S. economy strengthens, after holding it near-zero in the wake of the financial crisis. The three rate hikes last year pushed up two- and five-year Treasury yields in particular, but they’ve also affected 10-year yields as central bankers expect more boosts this year. Another reason: inflation is showing signs of picking up, which erodes the value of bonds’ fixed payments and leads investors to demand higher yields.

4. Why is 3 percent a milestone?Since 2011, it’s been touched only twice, briefly, in 2013 and early 2014, before a bond bull market drove yields to record lows. But 3 percent has also been cited by prominent fixed-income investors like Jeffrey Gundlach at DoubleLine Capital and Scott Minerd at Guggenheim Partners as critical to determining whether the three-decade bull market in bonds is at an end. In the mind of analysts who look at market patterns, once the yield breaks much beyond the 3.05 percent, to levels last reached in 2011, that threshold could flip to a floor from a ceiling.

5. Why does it matter?The 10-year Treasury yield is a global benchmark for borrowing costs. Corporations will have to pay more to issue debt, which they’ve done cheaply in recent years. So will state and local governments, which could jeopardize investments in public infrastructure. Homeowners will face higher mortgage rates (or lose out on refinancing at a lower cost). Taking out loans for cars or college could also become more expensive.

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A Nobel Peace Prize.

Kim Jong-Un Halts Nuclear & Missile Tests, Shuts Down Testing Site (RT)

North Korea’s nuclear and ballistic missile programs have allowed it to secure strategic stability and peace, so there is no need for additional missile and nuclear tests anymore, Kim Jong-un has proclaimed. “From April 21, 2018, nuclear tests and intercontinental ballistic missile tests will be discontinued,” the Korean Central News Agency cited Kim as saying at a plenary meeting of the central committee of the ruling Worker’s Party of Korea (WPK). Furthermore, since North Korea’s nuclear test center has “completed” its mission, it “will be discarded in order to ensure the transparency of the nuclear test suspension,” KCNA reported.

Announcing the new course, the ruling party has declared that North Korea “will never use nuclear weapons, unless there is nuclear threat or nuclear provocation to our country, and in no case we will proliferate nuclear weapons and nuclear technology.” In the announcement, North Korea noted that the “suspension of nuclear testing is an important process for global nuclear disarmament.” Therefore, North Korea is willing to join international denuclearization efforts. North Korea’s last major missile test took place on November 29. Pyongyang announced at the time that it had tested a new type of intercontinental ballistic missile known as the Hwasong-15 that could reach the entire continental United States.

US President Donald Trump, who has traded insults and threats with Kim since taking office, tweeted that the latest decision by Pyongyang is “good news for North Korea and the world,” calling it “big progress.” China has also hailed the move, expressing hope that Pyongyang will continue towards the path of denuclearization and “political settlement” on the Korean Peninsula. “Denuclearization of the peninsula and lasting peace in the region are in line with the common interests of the people of the peninsula,” the Chinese Foreign Ministry said in a statement on Saturday.

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Have they really thought this through?

DNC Sues Russia, Trump, Wikileaks For Conspiring To Hurt Hillary in 2016 (ZH)

Did The Democrats’ “The Russians did it” narrative just jump the shark? The Washingtoin Post reports that The Democratic National Committee filed a multimillion-dollar lawsuit Friday against the Russian government, the Trump campaign and the WikiLeaks organization alleging a far-reaching conspiracy to disrupt the 2016 campaign and tilt the election to Donald Trump. The lawsuit alleges that in addition to the Russian Federation, the General Staff of the Armed Forces of the Russian Federation, Wikileaks and Guccifer 2.0, top Trump campaign officials, including Donald Trump Jr, Roger Stone, Jared Kushner, Paul Manafort and pretty much everyone else who has been mentioned in the same paragraph as Trump….

… conspired with the Russian government and its military spy agency to hurt Democratic presidential nominee Hillary Clinton and help Trump by hacking the computer networks of the Democratic Party and disseminating stolen material found there. [..] The suit filed today seeks millions of dollars in compensation to offset damage it claims the party suffered from the hacks. The DNC argues that the cyberattack undermined its ability to communicate with voters, collect donations and operate effectively as its employees faced personal harassment and, in some cases, death threats.

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And Julian Assange is not allowed to see this. Let alone defend himself. A pattern in his life.

DNC Lawsuit Against WikiLeaks a Serious Threat to Press Freedom (IC)

The Democratic National Committee (DNC) filed a lawsuit this afternoon in a Manhattan federal court against the Russian Government, the Trump campaign and various individuals it alleges participated in the plot to hack its email servers and disseminate the contents as part of the 2016 election. The DNC also sued WikiLeaks for its role in publishing the hacked materials, though it does not allege that WikiLeaks participated in the hacking or even knew in advance about it; its sole role, according to the DNC’s lawsuit, was publishing the hacked emails.

The DNC’s suit, as it pertains to WikiLeaks, poses a grave threat to press freedom. The theory of the suit – that WikiLeaks is liable for damages it caused when it “willfully and intentionally disclosed” the DNC’s communications (paragraph 183) – would mean that any media outlet that publishes misappropriated documents or emails (exactly what media outlets quite often do) could be sued by the entity or person about which they are reporting, or even theoretically prosecuted for it, or that any media outlet releasing an internal campaign memo is guilty of “economic espionage” (paragraph 170).

It is extremely common for media outlets to publish or report on materials that are stolen, hacked, or otherwise obtained in violation of the law. In October, 2016 – one month before the election – someone mailed a copy of Donald Trump’s 1995 tax returns to the New York Times, which published parts of it even though it is illegal to disclose someone’s tax returns without the taxpayer’s permission; in March, 2017, MSNBC’s Rachel Maddow did the same thing with Trump’s 2005 tax returns.

In April, 2016, the Washington Post obtained and published a confidential internal memo from the Trump campaign. Media outlets constantly publish private companies’ internal documents. Just three weeks ago, BuzzFeed obtained and published a secret Facebook memo outlining the company’s internal business strategies, the contents of which were covered by most major media outlets. Some of the most important stories in contemporary journalism have come from media outlets obtaining and publishing materials that were taken without authorization or even in violation of the law. Both the New York Times and Washington Post published thousands of pages from the top secret Pentagon Papers after Daniel Ellsberg took them without authorization from the Pentagon – and they won the right to publish them in the U.S. Supreme Court.

The Guardian and the Washington Post won the 2014 Pulitzer Prize for Public Service for publishing and reporting on huge numbers of top secret documents taken by Edward Snowden from the NSA. The Guardian, the New York Times, and numerous papers from around the world broke multiple stories by publishing classified classified documents downloaded by Chelsea Manning without authorization and sent to WikiLeaks. In 2016, more than 100 newspapers from around the world published and reported on millions of private financial documents known as the “Panama Papers,” which were taken without authorization from one of the world’s biggest offshore law firms and revealed the personal finances of people around the world.

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Did the DNC see this coming, and is that why they sued first?

Trump To “Counter” DNC Lawsuit (ZH)

President Trump is eager to go head-to-head with the DNC which filed a multimillion-dollar lawsuit on Friday against several parties, including the Russian government, the Trump campaign and the WikiLeaks organization – alleging a “far-reaching conspiracy to disrupt the 2016 campaign and tilt the election to Donald Trump.” Hours after the Washington Post broke the news of the lawsuit, Trump tweeted “Just heard the Campaign was sued by the Obstructionist Democrats. This can be good news in that we will now counter for the DNC server that they refused to give to the FBI,” referring to the DNC email breach. Trump also mentioned “the Debbie Wasserman Schultz Servers and Documents held by the Pakistani mystery man and Clinton Emails.”

The “Pakistani mystery man” is a clear reference to former DNC CHair Debbie Wasserman Schultz’s longtime IT employee and personal friend, Imran Awan – whose father, claims a Daily Caller source, transferred a USB drive to the former head of a Pakistani intelligence agency – Rehman Malik. Malik denies the charge. Of note, the DNC would not allow the FBI to inspect their servers which were supposedly hacked by the Russians – instead relying on private security firm Crowdstrike. Meanwhile, the “Wasserman Schultz Servers” Trump mentions is likely in reference to the stolen House Democratic Caucus server – which Imran Awan had been funneling information onto when it disappeared shortly after the House Inspector General concluded that the server may have been “used for nefarious purposes.”

Imran Awan, his wife Hina Alvi and several other associates ran IT operations for at least 60 Congressional Democrats over the past decade, along with the House Democratic Caucus – giving them access to emails and computer data from around 800 lawmakers and staffers – including the highly classified materials reviewed by the House Intelligence Committee.

Napolitano: He was arrested for some financial crime – that’s the tip of the iceberg. The real allegation against him is that he had access to the emails of every member of congress and he sold what he found in there. What did he sell, and to whom did he sell it? That’s what the FBI wants to know. This may be a very, very serious national security situation.

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“..all of Comey’s memos – all of them, were classified at the time they were written, and they remain classified.”

Comey Memos Probed By DOJ For Classified Info Leaks (ZH)

The Department of Justice (DOJ) inspector general is now conducting an investigation into classification issues concerning the “Comey memos” leaked to the New York Times by former FBI Director James Comey. Sources tell the Wall St. Journal that at least two of the memos which Comey leaked to his “good friend,” Columbia Law Professor Daniel Richman, contained information that officials now consider classified – prompting the review by the Office of the Inspector General, headed by Michael Horowitz. “Of those two memos, Mr. Comey himself redacted elements of one that he knew to be classified to protect secrets before he handed the documents over to his friend. He determined at the time that another memo contained no classified information, but after he left the Federal Bureau of Investigation, bureau officials upgraded it to “confidential,” the lowest level of classification.” -WSJ

Comey told Congressional investigators that he considered the memos to be personal rather than government documents. The memos – leaked through Richman, were a major catalyst in Deputy Attorney General Rod Rosenstein’s decision to appoint former FBI Director Robert Mueller as special counsel to investigate Russian interference in the 2016 US election. While Richman told CNN “No memo was given to me that was marked ‘classified,’ and James Comey told Congressional investigators he tried to “write it in such a way that I don’t include anything that would trigger a classification,” it appears the FBI’s chief FOIA officer disagrees.

We previously reported that Senator Chuck Grassley (R-IA) said four of the 7 Comey memos he reviewed were “marked classified” at the “Secret” or “Confidential” level – however in January the FBI’s chief FOIA officer reportedly told Judicial Watch – in a signed declaration, that every single Comey memo was classified at the time. “We have a sworn declaration from David Hardy who is the chief FOIA officer of the FBI that we obtained just in the last few days, and in that sworn declaration, Mr. Hardy says that all of Comey’s memos – all of them, were classified at the time they were written, and they remain classified.” -Chris Farrell, Judicial Watch

Therefore, Farrell points out, Comey mishandled national defense information when he “knowingly and willfully” leaked them to his friend at Columbia University. It’s also mishandling of national defense information, which is a crime. So it’s clear that Mr. Comey not only authored those documents, but then knowingly and willfully leaked them to persons unauthorized, which is in and of itself a national security crime. Mr. Comey should have been read his rights back on June 8th when he testified before the Senate. Farrell told Lou Dobbs “Recently retired and active duty FBI agents have told me – and it’s several of them, they consider Comey to be a dirty cop.”

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“Wells Fargo fined twenty days worth of net income sounds a lot less daunting than $1 billion..”

Wells Fargo’s $1 Billion Pact Gives U.S. Power to Fire Managers (BBG)

Wells Fargo’s $1 billion fine won’t close the book on fallout from its consumer scandals. The nation’s third-largest bank submitted to an unprecedented order Friday that would give the Office of the Comptroller of the Currency the right to remove some of the lender’s executives or board members. That comes on top of the penalties Wells Fargo will pay to settle U.S. probes into mistreatment of consumers, the largest sanction of a U.S. bank under President Donald Trump. The OCC said it “reserves the right to take additional supervisory action, including imposing business restrictions and making changes to executive officers or members of the bank’s board of directors.” The agency could also veto potential executive candidates.

The bank will pay $500 million in penalties each to the OCC and the Consumer Financial Protection Bureau, according to a statement Friday. Wells Fargo warned shareholders last week it would soon face a fine of that size, which it will book retroactively in the first quarter. The bank remains under a Federal Reserve penalty that bans growth in total assets. “CEOs who hoped the Trump administration would be universally lenient regulators missed the difference between a dislike for rules that stifle innovation and employment and a dislike for rules against wrongdoing,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

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Squeezing that stone for all he’s worth.

IMF’s Thomsen Proposes Broadening Greek Tax Base (K.)

Poul Thomsen, director of the International Monetary Fund’s European department, on Friday spoke in favor of broadening Greece’s tax base though he stopped short of determining whether the IMF would call for reductions to the tax-free threshold (due to come into effect in January 2020) to apply a year in advance. Speaking in Washington, where the IMF is holding its Spring Meetings, Thomsen said that raising taxes had played a large part in the country’s fiscal adjustment in recent years but that Greece must find a way of meeting fiscal targets that is “growth-friendly.” The IMF will not impose any specific policies, he said but proposed a “discussion” about the timing of tax reforms.

As regards the Fund’s potential role in Greece’s third international bailout, which expires in August, he said at least one bailout review must be carried out before a decision can be made as well as agreement to lighten Greece’s debt. “Time is running short for us to be able to activate the program,” he said. A discussion on debt measures is likely to take place at the next meeting of eurozone finance ministers, scheduled for April 27 in Sofia. Talks there will also focus on a growth plan that the government has presented to bailout auditors. Finance Minister Euclid Tsakalotos on Friday met in Washington with European Economic and Monetary Affairs Commissioner Pierre Moscovici, Eurogroup Chairman Mario Centeno and European Central Bank President Mario Draghi and is to meet Thomsen and IMF chief Christine Lagarde on Saturday.

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If this doesn’t bring down the government, Britain has a whale of a problem. And no excuses. May suddenly offering them money now, after being exposed, is perhaps the worst part of it. You can’t buy off blatant racism with taxpayer money. And those taxpayers should let that be known, very loudly. Or they’re just as guilty.

Windrush: When Even Legal Residents Face Deportation (Atlantic)

In the aftermath of World War II, the British government invited thousands of people from Caribbean countries in the British Commonwealth to immigrate to the United Kingdom and help address the war-torn country’s labor shortages. Now, nearly 70 years later, many of those same people, now elderly, are having their legal status in the country questioned and are facing deportation. Though the deportation threats date as far back as October, the crisis burst into wider view this week after Caribbean diplomats representing a dozen Commonwealth nations chastised the U.K. government publicly. “This is about people saying, as they said 70 years ago, ‘Go back home.’ It is not good enough for people who gave their lives to this country to be treated like this,” Guy Hewitt, the high commissioner from Barbados to the U.K., said at a gathering of the diplomats.

The migrants are known as the “Windrush generation,” named for the HMT Empire Windrush that brought the first group of them to the U.K. in June 1948. Of the half a million people who immigrated to the U.K. from the Commonwealth between then and 1971, an estimated 50,000 lack the proper documentation to prove it. In a meeting with Caribbean leaders on Tuesday, U.K. Prime Minister Theresa May apologized “for any anxiety that has been caused” and promised no deportations would take place. Still, such assurances won’t necessarily convince those who remain skeptical of the U.K.’s strict immigration policies—ones May herself championed when she served as home secretary between 2010 and 2016.

During that time, May sought to meet then-Prime Minister David Cameron’s goal of reducing net immigration to the tens of thousands by making the U.K. a “hostile environment” for illegal immigration. In practice, this meant requiring doctors, employers, landlords, and schools to confirm that those whom they served were in the country legally. “The determination was to go systematically through any interaction people might have with the state, short of putting checkpoints in the road, just to have people’s immigration status checked,” Polly Mackenzie, the director of cross-party think tank Demos and the former policy director to Deputy Prime Minister Nick Clegg, told me. The Windrush generation wasn’t supposed to be part of that calculus—they had immigrated to the country legally and were thereby entitled to public services, including the right to education, healthcare, and social security.

But after the implementation of the “hostile environment” policies in 2012, these individuals suddenly had to prove their right to live and work in the country—a right which was guaranteed to them under the Immigration Act of 1971, though not everyone obtained the documentation to confirm it. This documentation problem arose in part from the fact that so many people belonging to the Windrush generation immigrated to the U.K. as children, often on their parents’ passport. What’s more, the British government didn’t keep records of who was permitted to stay in the country, nor did they issue documentation confirming it. What little records the government did keep, such as the landing cards documenting the arrival dates of Windrush-era immigrants, were discarded in 2010.

For some, the result was catastrophic. In one case, a woman had lived and worked in the U.K. for 50 years before she was wrongfully declared an illegal immigrant and almost forced on a plane to her native Jamaica. In another, a man who had lived in the U.K. for 59 years received a letter that not only informed him of his illegal status in the country, but also offered him “help and support on returning home voluntarily.” Perhaps one of the most severe cases concerned a man who, after living in the U.K. for 44 years, had his cancer treatment through the National Health Service withheld because he couldn’t provide sufficient documentation to prove he lived in the country continuously since immigrating from Jamaica in 1973.

Read more …

Feb 032018
 
 February 3, 2018  Posted by at 11:08 am Finance Tagged with: , , , , , , , , , , , ,  


Frank Larson Times Square, New York 1954

 

FISA Memo Released: Here’s What It Says (ZH)
Dow Plummets 666 Points, Capping Worst Week In 2 Years (CNBC)
Did The Market Just Get “Woke?” (Roberts)
Over $100 Billion Wiped Off Global Cryptocurrency Market In 24 Hours (CNBC)
Bitcoin Ban Expands Across Credit Cards as Big US Banks Recoil (BBG)
Sotu Klaatu Barada Nikto (Jim Kunstler)
UK Interest Rates Will Rise At The End Of February (G.)
Green Brexit Is Impossible To Guarantee, EU Is Warned (G.)
German Carmakers Have Lost All Moral Standing (Spiegel)
How YouTube’s Algorithm Distorts Truth (G.)
Blockchain To Track Congo’s Cobalt From Mine To Mobile (R.)
Congo Gripped By Fear As Thousands Flee ‘Bone-Chilling’ Violence (G.)
WikiLeaks Has Published Leaks On Trump Admin And Russia, Seeking More (CJ)
‘Ultra-Processed’ Products Now Half Of All UK Family Food Purchases (G.)

 

 

The differences in interpretation across the aisle are far more stunning than the memo itself is.

FISA Memo Released: Here’s What It Says (ZH)

Update: The just released FISA memo accuses senior officials at the DOJ of inappropriately using biased opposition research into then-candidate Trump to obtain surveillance warrants on transition team members as part of the federal investigation into the Trump campaign and Russia. According to the document, information from the the so-called Steele dossier was “essential” to the acquisition of surveillance warrants on Trump campaign aide Carter Page. It claims that then-deputy FBI director Andrew McCabe told the committee in December that without the information from the Steele dossier, no surveillance warrant for Page would have been sought. The memo alleges that the political origins of the dossier — paid for by Hillary Clinton and the DNC — were not disclosed to the clandestine court that signed off on the warrant request.

The document claims that although the FBI had “clear evidence” that the author of the dossier, former British spy Christopher Steele, was biased against Trump, it did not convey that to the surveillance court when making its warrant applications. Steele told then-associate deputy attorney general Bruce Ohr that he was “desperate that Donald Trump not get elected and was passionate about him not being president,” the memo says. House conservatives have touted the memo’s revelations as “worse than Watergate” and hinted that it could prove the undoing of the federal investigation into Trump’s campaign. Meanwhile, Democrats on the panel say that it is a cherry-picked set of inaccurate accusations designed to kneecap special counsel Robert Mueller. They have drafted their own counter-memo to rebut the Republican-drafted document, but the majority voted against immediately making that document public earlier this week.

The memo is based on a slate of highly-classified materials provided to the committee by the Justice Department itself, in a closed-door deal brokered by Speaker Paul Ryan (R-Wis.). Naturally, the DOJ has claimed that the release of the memo is an abrogation of the terms of that deal, an assertion spokesmen for both Ryan and Nunes have rejected. Meanwhile, the underlying evidence remains classified, a state of affairs that Democrats and some national security analysts say makes it impossible to independently verify the memo’s conclusions. As The Hill reported earlier, ahead of the document’s release, Paul Ryan privately urged House Republicans not to overplay the document — and not to tie it to the Mueller investigation.

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10 years ago, a drop of 777 was the biggest news on the planet. Today, 666 gets poo-poohed into nothingness.

Dow Plummets 666 Points, Capping Worst Week In 2 Years (CNBC)

U.S. stocks fell sharply on Friday after a stronger-than-expected jobs report sent interest rates higher. The Dow Jones industrial average dropped 665.75 points to close at 25,520.96, capping off the index’s sixth-largest points decline ever. The 30-stock index also fell below 26,000. Friday also marked the first time since June 2016 that the Dow fell at least 500 points. The S&P 500 fell 2.1% and finished at 2,762.13, with energy as the worst-performing sector. The Nasdaq composite plunged 1.96% to 7,240.95 as a decline in Apple and Alphabet offset a strong gain in Amazon shares. The Dow posted its worst day since June 2016. The S&P 500 and Nasdaq had their biggest one-day fall since September 2016 and August 2017, respectively.

“The key for the market today is rising interest rates,” said Mike Baele, managing director at U.S. Bank Wealth Management. “The old adage is: ‘Bull markets don’t die of old age, they are killed by higher interest rates.’ That looms large.” The U.S. economy added 200,000 jobs in January, according to the Bureau of Labor Statistics. Economists polled by Reuters expected growth of 180,000. Wages, meanwhile, rose 2.9% on an annualized basis. The report sent interest rates higher. The benchmark 10-year yield rose to 2.85% on the back of the report, hitting a four-year high. Investors have been jittery about the recent rise in interest rates, worrying they may be rising too fast. On Friday, the 30-year yield rose its highest level since March.

Bank stocks fell as the yield curve widened. The SPDR S&P Bank exchange-traded fund, which tracks bank stocks, dropped 1.2%. Banks typically benefit from higher interest rates. This has been a volatile week for U.S. stocks. The Cboe Volatility index, widely considered the best fear gauge in the market, rose from 11.08 this week to 17.31.

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That graph is stunning.

Did The Market Just Get “Woke?” (Roberts)

Since the beginning of this year, we have been warning of the potential for a correction. Of course, such warnings seemed pointless as the nearly “parabolic” rise in the markets seemed unstoppable. But all of a sudden, something seems to have changed as the market stumbled this past week and has been unable to regain its footing.

So, what “woke” the markets? Was it the sudden realization that Central Banks globally are reducing Q.E. programs? Or, that economic growth may be weaker than expected given recent numbers? Or, something else? Whatever, the excuse turns out to be, the real culprit is seen in the chart below.

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By now, there are some really big losers out there.

Over $100 Billion Wiped Off Global Cryptocurrency Market In 24 Hours (CNBC)

Over $100 billion was wiped off the global cryptocurrency market in 24 hours on Friday amid concerns over tighter regulation and worries that the bitcoin price was manipulated on a major exchange. The total market capitalization or value of all cryptocurrencies in circulation stood at $405 billion Friday morning New York time, according to data from CoinMarketCap.com, which takes into account the prices of digital coins across a number of key exchanges. This was a fall of $112.6 billion in value from a day before. Cryptocurrencies have seen a major sell-off this week. Bitcoin fell below $9,000 on Thursday and briefly dropped below $8,000 Friday morning, according to CoinDesk’s bitcoin price index, which tracks prices from four major cryptocurrency exchanges.

Other major coins including ethereum and ripple were down 12% and 13%, respectively, compared to a day ago as of 9:58 a.m., ET, Friday. The cryptocurrency world has been plagued by a spate of negative news. India’s Finance Minister Arun Jaitley said the country wants to “eliminate” the use of digital currencies in criminal activities, signaling tighter regulation in the country. The New York Times reported Wednesday that an increasing number of digital currency investors are worried the price of bitcoin and other digital currencies have been inflated by cryptocurrency exchange Bitfinex, which is included in CoinDesk’s price index. Bloomberg reported Tuesday that in December, the U.S. Commodity Futures and Trading Commission subpoenaed Bitfinex and a cryptocurrency company called Tether, which is run by many of the same executives.

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What, they figured there was no more profit in there?

Bitcoin Ban Expands Across Credit Cards as Big US Banks Recoil (BBG)

A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife. JPMorgan Chase, Bank of America and Citigroup said they’re halting purchases of Bitcoin and other cryptocurrencies on their credit cards. JPMorgan, enacting the ban Saturday, doesn’t want the credit risk associated with the transactions, company spokeswoman Mary Jane Rogers said. Bank of America started declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards, according to a memo. It doesn’t affect debit cards, said company spokeswoman Betty Riess.

And late Friday, Citigroup said it too will halt purchases of cryptocurrencies on its credit cards. “We will continue to review our policy as this market evolves,” company spokeswoman Jennifer Bombardier said. Allowing purchases of cryptocurrencies can create big headaches for lenders, which can be left on the hook if a borrower bets wrong and can’t repay. There’s also the risk that thieves will abuse cards that were purloined or based on stolen identities, turning them into crypto hoards. Banks also are required by regulators to monitor customer transactions for signs of money laundering – which isn’t as easy once dollars are converted into digital coins.

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From before the memo release. As I said, it’s the interpretation more than the memo itself.

Sotu Klaatu Barada Nikto (Jim Kunstler)

The situation certainly puts the nation in a quandary. An uncouth and ridiculous President called forth to battle a vicious, dishonest, bureaucracy and in particular its gigantic, out-of-control “security” apparatus, which appears to have been hijacked by politically interested parties — namely, the minions of Hillary Clinton. You have been reminded here before that history is the supreme prankster. In Fourth Turning terms, the poor old disintegrating USA pined for a “gray champion” and all it got was this booby prize: a Manhattan real estate schmikler with a mean streak. Well, that’s how things roll in a long emergency. And this might only be the beginning of it. In any case, it appears that the FBI, in the hallowed words of Ricky Ricardo, has got some ‘splainin’ to do.

Recall, it was not so long ago that the FBI was run by a cross-dressing maniac addicted to blackmail, so let’s not act as if the agency was something that the Lord Yahweh brought into being on the fifth day of creation, after the lobsters and the cockateels. Granted, J. Edgar Hoover was a hard act to follow, but we are now, evidently, living in an age of even lower men (and women, to be fair). CNN reminded viewers relentlessly last night that The Memo was sure to be a disappointment, a “nothingburger,” for a nation that expects a righteous half-pound beef patty with lettuce, tomato, pickle, and special sauce on a sesame bun. Personally, I expect something more like a three-day-old dead carp in a plain brown wrapper. Maybe “the Resistance” will try to make gefilte fish out of it, which is a burger of sorts: chopped meat, anyway.

Meanwhile, we await the report of DOJ Inspector General Michael Horowitz, who has been rooting around in the same burger den as the House and Senate committees, questioning the same cast of characters. The DOJ report is liable to be more damaging than The Memo. The whole nasty gumball of suspicion and innuendo seems destined to climax in a constitutional crisis. Ludicrous as it seems — like some rogue army out of the stupid Star Wars epic — the “Resistance” bethinks itself the nation’s savior. In the best American tradition, they’ll burn the joint down in order to save it.

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Another little Brexit surprise.

UK Interest Rates Will Rise At The End Of February (G.)

There’s going to be an interest rate rise on 28 February. In just a few weeks you are going to see about 0.25% added to mortgage and savings rates. But you won’t see a press release from the Bank of England that the base rate has gone up. Instead, for the first time in years, banks are going to be scrambling to offer savers better rates – and the losers will be anyone taking out a new mortgage. So what’s happening? On 28 February an extraordinary financial measure, put in place in the days after the Brexit vote, will end. It was called the Term Funding Scheme and was designed to make sure that the 0.25% rate cut in the wake of the shock referendum result in 2016, did actually feed through the financial system (while keeping them profitable). Under the scheme, banks and building societies were able to borrow money from the Bank of England almost for free.

They did so with gusto. They have so far taken £106bn under the scheme, equal to around £3,500 for every working person in the country. Lloyds took £18bn, RBS £14bn, Barclays £10bn, Nationwide £9.5bn and Santander £8bn. Nearly everyone rushed to grab their share: from the tiny Holmesdale building society – which took £4m – through to the Nottingham building society (£395m) and Virgin Money (£4.2bn). Specialist lender Aldermore, which does a lot of buy-to-let mortgages, has drawn £1.4bn from the scheme over a period during which its total net lending has been £1.5bn. It underlines just how important the cash has been. With all this money gushing out of the Bank of England, it has meant that no one has really had to bother chasing savers for their money. So savings rates, already massively depressed by the 2012 Funding for Lending Scheme, were hit further.

But the corner will be turned on 28 February. On that date, the banks and building societies will have to start repaying that £106bn. They’ll have a few years to do it, so maybe I’m being a little dramatic suggesting rates will rise overnight. But let’s say I wouldn’t, right now, lock myself into Lloyds’ one-year bond paying 0.4% or NatWest’s two-year bond paying 0.85%. The banks are going to have to offer much better rates than that to bring the money in. Some of the big banks may pooh-pooh this. Yes, £18bn sounds like a lot for Lloyds, but then it has an £800bn balance sheet, so it’s hardly fatal. But when rivals start offering as much as 3% to get you to move money, banks won’t have a choice but to raise rates. According to Paul Richards, chairman of Insignis Cash Solutions: “It’s likely we will see a 0.25%-0.5% increase in longer-term savings rates over the next 12 months and potentially up to 1% over the next 24-36 months, which could leave a one-year term account getting close to the 3% level.”

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Why should the EU feel ‘warned’ about what may happen when the UK is no longer part of the EU?

Green Brexit Is Impossible To Guarantee, EU Is Warned (G.)

The European Conservative and Reformist group which represents Conservative MEPs has has said Brexit will make it “impossible” to guarantee that current environmental standards can be maintained in Britain or the EU. A leaked document seen by the Guardian also calls for “the closest possible working relationship” between the EU and UK after Brexit, and for a “no regression clause” in future British trade deals. This would “limit any negative effects from deregulation,” says the paper, which was submitted to the European parliament’s Brexit environment steering group. Some Conservative MEPs claimed not to have seen the report that was submitted. The parliament’s Brexit coordinator, Guy Verhofstadt, told the Guardian: “Suggestions that the UK might seek to lower environmental standards after Brexit are alarming and contradict the commitments made by prime minister May in her Florence speech.”

They also showed why a future deal “must contain precise and detailed safeguards, with robust sanctions, to ensure the maintenance of high standards and a level playing field,” he said. The EU’s environmental laws are among its most popular, with polls showing that over 80% of Britons support the same levels of protection – or higher – after Brexit. During the referendum campaign, key government ministers said EU laws such as the birds and habitats directive were “spirit-crushing” and would be scrapped. But Theresa May has sought to defuse fears of conservation backsliding by trying to make the environment a selling point of leaving the bloc. “Let me be very clear,” May said in a speech last month. “Brexit will not mean a lowering of environmental standards.” “We will use the opportunity Brexit provides to strengthen and enhance our environmental protections – not to weaken them.”

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Still haven’t seen one word about prosecuting the people behind all this. Incredible.

German Carmakers Have Lost All Moral Standing (Spiegel)

Starting in 2007, BMW, Daimler, Volkswagen and Bosch maintained a joint lobby organization that was disguised as a research institute. The European Research Association for the Environment and Health in the Transportation Sector (EUGT) purported to dedicate itself to the “environmental-medical effects of road traffic.” But the staff in leadership posts alone shows that the institute was in no way interested in independent research. EUGT head Michael Spallek, for example, had previously spent years employed as a leading company doctor at VW. He retained his VW email address, even after his move to EUGT. The results of the institute’s research were accordingly one-sided. The efficacy of low emission zones in cities that place restrictions on driving cars with high emissions?

There’s no proof, according to one essay the lobby group managed to place in a trade publication for respiratory medicine. Nighttime noise pollution from cars? It’s no problem, as long as it’s continuous. Do diesel emissions cause cancer? Can’t be proven. A short time later, former VW manager and EUGT head Spallek approved the tests with the monkeys. “We have finished our discussions with the company lawyers,” Spallek wrote in an email dating June 14, 2013. The lawyers had given the green light for the study to be carried out, but with one restriction: Non-human primates were to be used instead of human volunteers. Several VW executives at the time were copied in the message, including Stuart Johnson, the head of the company’s Engineering and Environmental Office in the United States.

But it doesn’t appear as though any critical questions were asked. The aim of the experiment with the monkeys had been to deliver definitive proof of how clean “German diesel” really is. The case files compiled by attorney Melkersen illustrate the zeal with which VW’s people organized the test. Nothing was left to chance when engineer James Liang began his journey with a bright-red VW Beetle from California to New Mexico at the beginning of October 2014. The engineer from company headquarters in Wolfsburg, Germany, was already under pressure, even at that point. The U.S. environmental authorities had expressed their doubts about the emissions values of the allegedly squeaky-clean car. VW Chairman Martin Winterkorn had been breathing down his staff’s necks, too. The new diesel models needed to provide the company with a breakthrough in the important U.S. market. As such, anything that might possibly preserve diesel’s environmentally friendly façade had priority.

Which is where the monkeys came in. As of Oct. 2, all final preparations had been made for the test. The VW man moved assiduously around the red Beetle, which had been placed on a chassis dynamometer. The experiment would be led by Jacob McDonald, an athletic young biologist who had quickly risen in his career at the Lovelace Respiratory Research Institute (LRRI). McDonald found it strange that an engineer from Volkswagen would be present for the test. “It’s the first time that I’ve experienced that,” he would later say. And what he really couldn’t grasp was why the VW people wanted to transmit the entire test data in real-time to their research center in California. Engineer Liang had even brought along a transmission device especially for the task.

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YouTube has the lowest common denominator down to a T. So let kids see videos of kids beating up kids. They’re sure to keep watching.

How YouTube’s Algorithm Distorts Truth (G.)

There are 1.5 billion YouTube users in the world, which is more than the number of households that own televisions. What they watch is shaped by this algorithm, which skims and ranks billions of videos to identify 20 “up next” clips that are both relevant to a previous video and most likely, statistically speaking, to keep a person hooked on their screen. Company insiders tell me the algorithm is the single most important engine of YouTube’s growth. In one of the few public explanations of how the formula works – an academic paper that sketches the algorithm’s deep neural networks, crunching a vast pool of data about videos and the people who watch them – YouTube engineers describe it as one of the “largest scale and most sophisticated industrial recommendation systems in existence”.

Lately, it has also become one of the most controversial. The algorithm has been found to be promoting conspiracy theories about the Las Vegas mass shooting and incentivising, through recommendations, a thriving subculture that targets children with disturbing content such as cartoons in which the British children’s character Peppa Pig eats her father or drinks bleach. Lewd and violent videos have been algorithmically served up to toddlers watching YouTube Kids, a dedicated app for children. One YouTube creator who was banned from making advertising revenues from his strange videos – which featured his children receiving flu shots, removing earwax, and crying over dead pets – told a reporter he had only been responding to the demands of Google’s algorithm. “That’s what got us out there and popular,” he said. “We learned to fuel it and do whatever it took to please the algorithm.”

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How to make rape, murder and pillage more efficiently. And what does Amnesty say? ‘We’re not against it’.

Blockchain To Track Congo’s Cobalt From Mine To Mobile (R.)

Blockchain is to be used for the first time to try to track cobalt’s journey from artisanal mines in Democratic Republic of Congo through to products used in smartphones and electric cars. Sources close to a pilot scheme expected to be launched this year say the aim is eventually to give manufacturers a way of ensuring the cobalt in lithium-ion batteries for products such as iPhones and Teslas has not been mined by children. Tracking cobalt presents many challenges as scores of informal mine sites would have to be monitored, all players in the supply chain would need to buy into the scheme, and accurate, electronic data would need to be transmitted from remote areas – all in a vast country plagued by lawlessness.

But companies are under growing pressure from consumers and investors to show the cobalt they use has come through supply chains free of rights abuses, just as they have for minerals used in electronics such as tantalum, tin, tungsten and gold. Businesses in China, the main destination for Congolese cobalt from artisanal mines, have set up a Responsible Cobalt Initiative, which has been joined by tech giants such as Apple and Samsung, to address child labor. The problem they face is that there are few sure-fire ways of tracing cobalt from the informal mines that produce up to a fifth of the cobalt from Congo, the world’s biggest producer. “The demand to make cobalt more sustainable is going to continue growing, meaning there is a will to find a solution and blockchain will be part of that,” said a source with the project.

[..] Sheila Warren, head of blockchain policy at the World Economic Forum, said it was an open question how well it could work in Congo given the prevalence of conflict, lawlessness and an opaque legal system. “We are prototyping, iterating, testing, scaling,” said Warren, who is working with experts to see how blockchain can improve mineral supply chains. “The technology is not the hard part.” Amnesty International, which detailed the extent of child labor in cobalt mining in Congo in a 2016 report, said it was looking at blockchain, especially with a view to tracing payments to middlemen. “You have to be wary of technological solutions to problems that are also political and economic, but blockchain may help. We’re not against it,” said Amnesty researcher Mark Dummett.

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It is our governments who are behind this. And our media who don’t tell us about that. How anyone can protest when the Congo is labeled a shithole is beyond me. That takes a very large object up one’s behind.

Congo Gripped By Fear As Thousands Flee ‘Bone-Chilling’ Violence (G.)

The UN refugee agency has become the latest aid organisation to voice its alarm over rising violence in the east of the Democratic Republic of the Congo that has forced thousands of people to flee their homes. Amid a worsening humanitarian crisis, almost 7,000 people have crossed to neighbouring Burundi and 1,200 into Tanzania in the past week, according to the UN High Commissioner for Refugees. “Refugees we have spoken to say they fled forced recruitment, direct violence and other abuses by armed groups. Others say they fled in anticipation of military operations and out of fear,” said spokesperson Babar Baloch. Earlier this week, the World Food Programme and the Food and Agriculture Organisation described “alarming food insecurity” in the country, sparked by an extension of conflict into areas previously considered stable, such as the provinces of Kasai and Tanganyika.

Last month, Jean-Philippe Chauzy, DRC’s chief of mission for the International Organisation for Migration (IOM), said the humanitarian crisis in DRC was at “breaking point” amid a massive escalation of inter-ethnic conflict and widespread insecurity. The number of people coping with extreme hunger has risen by 2 million over the past six months, reaching 7.7 million – about 10% of the population. More than 4 million children under the age of five are at risk of acute malnutrition, said the agencies. “The humanitarian situation in the DRC is at breaking point, as is our capacity to respond to extremely limited funding,” said Chauzy. “The stories that Congolese who have been forced from their homes are telling are bone-chilling. They have been through so much already – torture, rape and murder of their loved ones. We cannot stand idly by as they suffer in silence.”

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Without WikiLeaks, we’d be stumbling even more in the dark. We don’t do nearly enough to protect them. We let whoever claim that Assange is some Russian agent, and we owe him a lot more respect than that.

WikiLeaks Has Published Leaks On Trump Admin And Russia, Seeking More (CJ)

Democrats believe that Assange is a Trump-supporting Kremlin asset while Trump supporters believe Assange is a based MAGA hat-wearing ally to their cause, the former because they were told to believe that by CNN and the Washington Post and the latter because they’ve seen him championed by Fox’s Sean Hannity and the elaborate 4chan hoax “QAnon”. Neither could be further from the truth. Today Assange responded to a call for transparency on Trump “tax returns, corporate records, campaign emails, and other documents relevant to Donald Trump’s Russia/WikiLeaks connections” from toxic neocon David Frum with the words “Go for it” and a link to WikiLeaks’ leak submission service. This is not the first time WikiLeaks has solicited documents on the Trump administration, and it won’t be the last.

Since long before the election and continuing through to the present, WikiLeaks has been harshly criticizing the president’s refusal to release his tax returns and publicly asking for leakers to submit them. They are on record trying to persuade Donald Trump Jr to do the same in a conversation that has been spuriously criticized but which when examined impartially is plainly just a leak publishing outlet soliciting a potential source. More importantly, WikiLeaks has already published Trump administration leaks. Its Vault 7 and Vault 8 leak drops exposing the CIA’s scary surveillance and hacking tools are comparable to NSA leaks from Edward Snowden against the Obama administration, and much like the Obama administration’s vindictive backlash against Snowden we are seeing similar retaliation from the Trump administration for the CIA leaks.

Trump’s CIA Director has pledged to shut down WikiLeaks as “a non-state hostile intelligence service often abetted by state actors like Russia,” and his Attorney General has statedthat Assange’s arrest is a priority, which Trump himself has said he would permit. Mike Pompeo’s increasingly vitriolic and threatening rhetoric about WikiLeaks is reminiscent of Joe Biden’s labeling Assange a “hi-tech terrorist” eight years ago. WikiLeaks in reality is not a friend of Republicans anymore than it’s a friend of Democrats, because WikiLeaks is and always will be first and foremost an enemy of corrupt power. The liberals who used to love Assange when he was dropping leaks about the Bush administration now hate him, and the conservatives who used to attack him as an enemy now celebrate him as a hero. This dynamic will necessarily switch again when more leaks drop and conservatives see clearly that Assange’s principles are not for sale.

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An epic tale for future historians. When we found how to feed ourselves, all of us, with good food, we decided not to do that. There’s some deeper meaning there, we don’t have the ability to do this right. We may be smart, but only superficially. And moreover, if we did get it right, we’d end up with 30-40 billion people here. So we poison ourselves.

‘Ultra-Processed’ Products Now Half Of All UK Family Food Purchases (G.)

Half of all the food bought by families in the UK is now “ultra-processed”, made in a factory with industrial ingredients and additives invented by food technologists and bearing little resemblance to the fruit, vegetables, meat or fish used to cook a fresh meal at home. Research by global nutrition experts reveals the scale of our food evolution, from farm-fresh to factory-manufactured. “Real food” has been replaced by salty snacks and sugary cereals, industrially-made bread and desserts, ready-meals and reconstituted meats alongside sweetened soft drinks. The study of 19 European countries is published this month in a special issue of the journal Public Health Nutrition. It shows that UK families buy more ultra-processed food than any others in Europe, amounting to 50.7% of the diet.

Germany comes second, on 46.2% and then Ireland on 45.9%. While the figures are not directly comparable, extracted from national surveys carried out differently and from different years, the trend is clear. The UK data they analysed came from the Living Costs and Food Survey 2008, the latest available. They categorised foods into four groups. More than a quarter of food (28.6%) was unprocessed or minimally so, 10.4% was processed cooking ingredients such as vegetable oil and 10.2% was ordinarily processed, such as cheese or cured meat. Ultra-processed food amounts to more than all the other groups combined.

Professor Carlos Monteiro from the University of Sao Paulo in Brazil, who led the research team, told the Guardian of his deep concern about the links between ultra-processed food with obesity and poor health. Ultra-processed foods may look attractive and are designed with sweet or salty tastes that make us want more. But there is nothing nutritious about them, Monteiro said. “Take breakfast cereals. If you take Froot Loops, for instance, more than 50% is sugar,” he told the Guardian. “[But] there is no fruit … “Ultra-processed foods are essentially new creations of the food industry with very low cost ingredients in a very attractive product.”

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Jan 082018
 
 January 8, 2018  Posted by at 10:41 am Finance Tagged with: , , , , , , , , , , , ,  


James Karales Selma to Montgomery March Alabama 1965

 

Beijing’s Yuan Ambitions Look Dashed (BBG)
Two Major Apple Shareholders Push for Study of iPhone Addiction in Children (BBG)
New Jersey Poised To Bar Drunken Droning (R.)
South Korea Inspects Six Banks Over Crypto Currency Services To Clients (R.)
Bitcoin Futures Traders Are Quietly Building A Big Short Position (ZH)
Australia Forecasts 20% Iron Ore Price Drop In 2018 (R.)
Australia Government Can’t Supply Its Way To Housing Affordability (SMH)
Rising Volatility Begets Rising Volatility (Peters)
The Artificial Liquidity Bubble (Henrich)
Wikileaks Publishes Michael Wolff’s Entire Sold Out Trump Book As A PDF (ZH)
US Freezes While Sydney Sizzles: World’s Temperature Extremes Span 85ºC (BBG)

 

 

It’s not as if a strong yuan is all that good for China. A stable one might be. But the bottom line remains: nobody wants it.

Beijing’s Yuan Ambitions Look Dashed (BBG)

As 2018 gets underway, China seems to be on top again. The yuan has strengthened 6.8% against the dollar over the past 12 months and foreign-exchange reserves are growing. Not so fast.Remember November 2015, when the IMF- with some fanfare – agreed to add the yuan to its prestigious special drawing rights currency basket. Talk then was of the yuan one day becoming one of the world’s reserve currencies, perhaps even rivaling the dollar.Two years on and central banks aren’t buying the notion. Although China’s currency has a weight of more than 10% in the SDR basket, which gives equal importance to a country’s trade status and balance-sheet metrics, just 1.1% of the world’s forex reserves were held in yuan versus 63% in dollars as of the third quarter.

It’s understandable that central banks have been shying away from the euro. German two-year bunds have been offering a negative yield since mid-2014. But why the yuan? China’s short-dated government notes offer among the best interest rates: Part of the explanation is liquidity. According to the Bank of International Settlements, in 2016, the yuan constituted only 4% of the world’s currency trades. The dollar, through pairs with the euro and the yen, accounted for 88% of transactions.

Then there’s the question of time. It could be decades before any currency, yuan or bitcoin, replaces the greenback.But China itself is also to blame. It seems to have abandoned its great yuan ambitions.What happened to the dim sum bond market? The Chinese government, along with policy banks, sold fewer than $3 billion of offshore yuan notes last year, a sharp pullback from 2016 and 2015. And oddly, last October, China sold its first sovereign dollar debenture since 2004 – a move that was widely interpreted as Beijing wishing to develop a vibrant international bond market for its state-owned enterprises. The panda bond market, where foreign companies raise yuan onshore, is also going nowhere. Hungary had a small, 1 billion yuan ($154 million) issue in July, while the Philippines keeps delaying its plans. China has also hit the pause button on the idea of trading oil in yuan.

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Curious new problems.

Two Major Apple Shareholders Push for Study of iPhone Addiction in Children (BBG)

Two big shareholders of Apple are concerned that the entrancing qualities of the iPhone have fostered a public health crisis that could hurt children – and the company as well. In a letter to the smartphone maker dated Jan. 6, activist investor Jana Partners and the California State Teachers’ Retirement System urged Apple to create ways for parents to restrict children’s access to their mobile phones. They also want the company to study the effects of heavy usage on mental health. “There is a growing body of evidence that, for at least some of the most frequent young users, this may be having unintentional negative consequences,” according to the letter from the investors, who combined own about $2 billion in Apple shares. The “growing societal unease” is “at some point is likely to impact even Apple.”

“Addressing this issue now will enhance long-term value for all shareholders,” the letter said. It’s a problem most companies would kill to have: Young people liking a product too much. But as smartphones become ubiquitous, government leaders and Silicon Valley alike have wrestled for ways to limit their inherent intrusiveness. France, for instance, has moved to ban the use of smartphones in its primary and middle schools. Meanwhile, Android co-founder Andy Rubin is seeking to apply artificial intelligence to phones so that they perform relatively routine tasks without needing to be physically handled. Apple already offers some parental controls, such as the Ask to Buy feature, which requires parental approval to buy goods and services. Restrictions can also be placed on access to some apps, content and data usage.

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I must admit, another new problem, and one that hadn’t occurred to me yet.

New Jersey Poised To Bar Drunken Droning (R.)

U.S. drone sales in 2017 topped $1 billion for the first time ever, but don’t raise a glass too quickly if you are in New Jersey, where lawmakers are poised to outlaw drunken droning next week. It is one of a wave of U.S. states moving to bring the unmanned aircrafts’ high-flying fun back to earth. New Jersey’s Assembly is slated to vote on a bill approved by the state Senate to ban inebriated or drugged droning, as well as to outlaw flying unmanned aircraft systems over prisons and in pursuit of wildlife. The vote was set for Thursday but postponed until Monday because of a severe snowstorm that triggered a state of emergency in New Jersey. “It’s basically like flying a blender,” said John Sullivan, 41, of New York, a drone buff and aerial cinematographer.

He said he opposed drunk droning but also fretted about regulatory overreach. “If I had like one drink, I’d be hesitant to even fly it.” A 2015 drone crash on the White House lawn fueled debate in the U.S. Congress over the need for drone regulations. It was a drunken, off-duty employee of the National Geospatial-Intelligence Agency who flew the 2-foot-by-2-foot (60 cm by 60 cm) “quadcopter” from a friend’s apartment balcony and lost control of it over the grounds surrounding the White House, the New York Times reported. [..] “Like any technology, drones have the ability to be used for good, but they also provide new opportunities for bad actors,” said Assemblywoman Annette Quijano of Elizabeth, New Jersey. She backed the bill, which would impose a punishment of up to six months prison and a $1,000 fine for drunk droning.

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A big gap: “..bitcoin’s global price average was trading at $16,294 while in South Korean markets, it stood at 25 million won, or $23,467.35..?

South Korea Inspects Six Banks Over Crypto Currency Services To Clients (R.)

South Korean financial authorities on Monday said they are inspecting six local banks that offer virtual currency accounts to institutions, amid concerns the increasing use of such assets could lead to a surge in crime. The joint inspection by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) will check if banks are adhering to anti-money laundering rules and using real names for accounts, FSC Chairman Choi Jong-ku told a press conference. [..] Choi said the inspections are intended to provide guidance to banks and are not the result of any suspected wrongdoing. “Virtual currency is currently unable to function as a means of payment and it is being used for illegal purposes like money laundering, scams and fraudulent investor operations,” said Choi. “The side effects have been severe, leading to hacking problems at the institutions that handle cryptocurrency and an unreasonable spike in speculation.”

A Woori Bank spokesperson told Reuters the bank was filling out a checklist for the inspection. The spokesperson said Woori had stopped providing virtual account services last month as the costs of using a real-name transaction system were too prohibitive. [..] Choi said authorities are also looking at ways to reduce risks associated with cryptocurrency trading in the country, which could include shutting down institutions that use such currencies. Last month, the government said it would impose additional measures to regulate speculation in cryptocurrency trading within the country, including a ban on anonymous cryptocurrency accounts and new legislation to allows regulators to close virtual coin exchanges if needed.

Bitcoin and other virtual coins have been extremely popular in South Korea, drawing wide investments from housewives and students. Government officials have expressed concern over frenzied speculation, with South Korea’s central bank chief warning of “irrational exuberance” in trading of virtual currency last month. A South Korean cryptocurrency exchange, Youbit, shut down and filed for bankruptcy in December after it was hacked twice last year, highlighting security and regulatory concerns. South Korea’s virtual currency exchanges have been more vulnerable to hackers as bitcoin trades at higher rates on local exchanges than they do elsewhere. As of 0710 GMT, bitcoin’s global price average was trading at $16,294 while in South Korean markets, it stood at 25 million won, or $23,467.35, according to Coinhills.com.

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Bitcoin and Ripple are falling, ether rises.

Bitcoin Futures Traders Are Quietly Building A Big Short Position (ZH)

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event: while it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world’s most popular cryptocurrency has stagnated since the beginning of December when first the Cboe then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000. And while bitcoin futures markets volumes have been lower than most had expected, the past 4 weeks have provided enough data to observe how volumes and open interest have evolved.

We discussed previously that Bitcoin futures were off to a slow start in the first week of trading, with volumes of CBOE Bitcoin futures averaging just around $40MM per day, despite intense media hype helping fuel heavy trading when both contracts launched, at least in the first hours of trading. Since then, volumes spike briefly in the following week coinciding with the launch of the CME futures, with volumes of on both exchanges at relatively similar levels. Then, as JPM’s Nikolaos Panagirtzoglou shows, after a spike in volumes to around $200mn on 22 December, which saw sharp swings in underlying Bitcoin prices, volumes have averaged around $50mn and $60mn per day on the CBOE and CME futures, respectively.

One month after their launch, futures trading volumes remain very modest compared to average Bitcoin trading volumes of around $15bn per day since futures contracts were launched according to coinmarketcap.com data. While open interest in both the CBOE and CME contracts has risen steadily, it too remains rather modest at around $60mn and $70mn, respectively. Putting futures volumes in context, on Friday, the combined size of the bitcoin-futures markets at the two exchanges was roughly $150 million, measured in terms of the value of outstanding contracts, while the total value of all bitcoins in existence was around $290 billion.

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That’s a big drop.

Australia Forecasts 20% Iron Ore Price Drop In 2018 (R.)

Australia on Monday said it expects iron ore prices to average $51.50 a tonne this year, down 20% from 2017, because of rising global supply and moderating demand from top importer China as its steel sector shrinks. The world’s top three mining companies, BHP and Vale rely heavily on iron ore sales for the bulk of their revenue despite efforts to diversify more into other industrial raw materials, such as copper, aluminium and coal. Brazil-based Vale is planning to lift iron ore exports 7% in 2018 to 390 million tonnes. In Australia, Rio Tinto and BHP, along with Fortescue Metals Group aim to add about 170 million tonnes of new capacity over the next several years.

The forecast price decline — from an average of $64.30 a tonne in 2017 — continues into 2019, when the steelmaking raw material will average only $49 a tonne, according to the Department of Industry, Innovation and Science. “The iron ore price is expected to experience some ongoing volatility in early 2018, as the market responds to uncertainty regarding the impact of winter production restrictions on iron ore demand,” the department warned in its latest commodities outlook paper. Iron ore currently sells for about $75 a tonne.

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All it needs to do is let prices crash. Does wonders for affordability.

Australia Government Can’t Supply Its Way To Housing Affordability (SMH)

Sydney and Melbourne are entering a housing downturn. While the government has hoped record high levels of property development would have an impact, research shows supply is not behind the price falls. Housing economists say the market slowdown is not due to additional home building but a drop in demand, in part thanks to the banking regulator making it more difficult for some to get a loan. In fact, the effect of new supply on property prices has been very limited despite state governments largely pinning hopes on a surging home building industry to rein in affordability. In a recent Australian National University paper Regional housing supply and demand in Australia academics Ben Phillips and Cukkoo Joseph found supply levels from 2001 to 2017 were larger than necessary to cover demand requirements, with thousands of excess homes in Sydney, but prices boomed over the time period.

This flies in the face of conventional economic wisdom, with the law of supply and demand dictating that the more of something you make, the cheaper it should be. There are many reasons why housing doesn’t respond to increases in supply in the way the market for coal, apples or t-shirts might be expected to react. When economists are making models they usually assume they are calculating the impacts on a “normal” good. One of the assumptions often made when modelling supply and demand for these goods is that what is produced is all homogenous, that is they are more or less the same. Typically, someone will pay the same amount for one item as they will for another that is identical.

Housing is not in this category. Even in the most sterile of apartment blocks, there will be many different design features, flaws, views and aspects that differ in each unit. The impact of new supply on the property market is limited by whether the type of property being built caters to existing demand. For instance, new apartments on the outskirts of greater Sydney or Melbourne may not appeal to the same market bidding up the price of mansions with water views.

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It’s just like Minsky: stability begets instability.

Rising Volatility Begets Rising Volatility (Peters)

To sell implied volatility at current 50yr lows, investors must imagine tomorrow will be virtually identical to today. They must imagine that bond yields won’t rise despite every major central bank eager to hike interest rates and exit QE. They must imagine that economies at or near full employment will not create inflation; that GDP will neither accelerate nor decelerate; that governments will tolerate historic levels of income inequality despite citizens voting for the opposite; that strongly rising global debts will be supported by structurally decelerating global growth. And volatility sellers must imagine that nine years into a bull market, amplified by a proliferation of complex volatility-selling strategies and passive ETFs with liquidity mismatches, that we will dodge a destabilizing shock to market infrastructure.

I can imagine a few of those things happening, but neither sustainably nor simultaneously. It is much easier to imagine a tomorrow that looks different from today. Also consider that investment banks and asset managers have always devised creative strategies to make money once asset valuations exceed reasonable levels. These perpetual prosperity machines typically combine leverage and alchemy, transforming real risk into perceived safety. Examples abound. But in this cycle, a proliferation of cleverly disguised volatility-selling strategies has dominated. Zero interest rates and quantitative easing left yield-starved investors with few ways to achieve their target returns. Wall Street’s engineers developed many wonderful solutions to this problem. Their magnificence is matched only by the amount of negative convexity now lurking in investment portfolios.

As volatility has declined, investors have had to sell even more of it to sustain sufficient profits. This selling reinforces the trend lower, which produces an illusion that legacy volatility shorts are less risky today than yesterday. Lower volatility thus begets lower volatility. And this also ensures that quantitative models reduce overall portfolio risk estimates, which allows (and in many cases forces) investors to buy more assets at prevailing prices. This in turn reduces volatility, reflexively. Naturally, the reverse is also true. Rising volatility begets rising volatility. And given the unprecedented volatility-selling in this cycle, this market is exposed to a historic reversal somewhere along the path to policy normalization. Which has now begun.

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aka the everything bubble.

The Artificial Liquidity Bubble (Henrich)

8 years after the financial crisis we remain in an environment that is entirely dependent on artificial liquidity, be it via central bank liquidity driven low rates and/or QE or now US fiscal stimulus in the form of tax cuts. And while a reduction in central bank stimulus is anticipated for 2018 the $1.5 trillion US tax cut is the next active artificial boost to hit markets. You can view it perhaps this way: When the US ended QE3 Europe and Japan took over the stimulus baton, and now that Europe is reducing stimulus the US again is taking the lead, this time with fiscal stimulus. It is a bizarre dance that excels in one aspect in particular: It never ends. Consider: German unemployment is at all time lows, and European PMIs are at their highest in over 7 years.

Is the ECB raising rates from record lows? Nope. Has QE ended? Nope. QE continues to run at $30B Euro a month and rates remain in full panic mode. Not what one would’ve expected 8 years ago following a return to full employment. Stimulus programs & interventions used to be methods of crisis management now they have become permanent fixtures in global economies. Why? Because this is what it takes. And they will continue. Japanese Prime Minister Shinzo Abe has just instructed central bank chief Kuroda to keep printing as he decides whether to keep him in his job. Wink wink. Normalizing rates? Reducing balance sheets back to pre-crisis levels? Letting markets run on their own without intervention? Call it the big central banking lie. It will never happen. It can’t. Global debt is now exceeding $233 Trillion.

[..] the math of higher rates doesn’t work and will eventual break the camel’s back. Low rates are an absolute must requirement to keep the construct afloat. It is no accident that Morgan Stanley wealth management has decided to pull out of junk bonds. They are warning of US tax cuts accelerating market excesses bringing about a coming recession. And make no mistake, a recession will come as we are very late in the cycle.

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Count me out.

Wikileaks Publishes Michael Wolff’s Entire Sold Out Trump Book As A PDF (ZH)

Considering that Wikileaks made its name by leaking confidential and/or hard to find documents and information, and also considering the reversal in the Trump administration vis-a-vis Julian Assange, whom it first lauded only to threaten with incarceration in recent months, it is perhaps not surprising that moments ago the official Wikileaks twitter account published Michael Wolff’s controversial – and largely sold out – book, “Fire and Fury” in pdf format.

New Trump book “Fire and Fury” by Michael Wolff. Full PDF: https://t.co/sf7vj4IYAx

— WikiLeaks (@wikileaks) January 7, 2018

Since, somewhat ironically, WikiLeaks picked a google drive to host the leaked pdf, it will unlikely remain available for an extended period, as it would mean substantial lost revenue for book published Henry Holt and Company. So for those who wish to read what all the hoople is about – for free – they are advised to do so sooner rather than later.

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View from the west only. How do you dress for a flight like that?

US Freezes While Sydney Sizzles: World’s Temperature Extremes Span 85ºC (BBG)

Temperature extremes across the globe spanned more than 85 degrees Celsius at the weekend as Sydney melted and parts of the U.S. froze. Western Sydney touched 47.3 degrees Celsius (117 degrees Fahrenheit) on Sunday afternoon local time, the city’s hottest day since 1939. Weekend temperatures at Mount Washington Observatory in New Hampshire plummeted to minus 36 degrees Fahrenheit (minus 38 degrees Celsius). Roads melted, firefighters battled wildfires across New South Wales state and Sydney residents retreated to air-conditioned shopping malls as temperatures surged. English cricket captain Joe Root was hospitalized with severe dehydration after battling Australia in the cauldron of the Sydney Cricket Ground. At the same time, freezing fog and snow buffeted Mount Washington, tying the observatory for the second-coldest place on Earth.

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Dec 152017
 
 December 15, 2017  Posted by at 10:25 am Finance Tagged with: , , , , , , , , , ,  


Gustave Courbet The bathers 1853

 

Central Banks Want World To Party On As They Remove Punch Bowl (BBG)
This Is What Happened To The American Dream – It’s Not Pretty (MW)
The Rude Awakening Of Slumbering Bulls (Roberts)
MiFID’s Cautious Start on Bond-Price Rules Shows Lobbying Impact (BBG)
Why American Capitalism Doesn’t Work For All Americans – Deaton (MW)
Europe’s Sovereign-Bank ‘Doom Loop’ Can’t Be Broken (BBG)
Jim Chanos: We Think Tesla Is Worth Zero (CNBC)
WikiLeaks Recognised As A ‘Media Organisation’ By UK Tribunal (G.)
EU Leaders Clash Over Refugees (R.)
Palau Makes All Visitors Sign Pledge To Respect Environment (G.)
Arctic Warming So Rapid That Computer Measuring It Rejected The Results (Ind.)

 

 

And that’s not going to fly. So back to QE in 2018? Or will they wait so long the damage becomes irreversible (I know it already is, but still..)

Central Banks Want World To Party On As They Remove Punch Bowl (BBG)

Central bankers are gingerly trying to take away the punch bowl without interrupting the party. Led by interest-rate increases by the Federal Reserve and the People’s Bank of China, central banks around the world shifted toward a tighter monetary stance this week. Yet the moves were either so well-telegraphed, or so tiny, and the language about future action so hedged, that there was barely a ripple in financial markets. “They’re terrified of upsetting the markets,” said Paul Mortimer-Lee, chief market economist at BNP Paribas. So “they’re all exiting quite slowly from emergency settings” on monetary policy. The likely result of this leisurely approach: another year of synchronized global growth in 2018.

Indeed, both the Fed and the ECB revised up their forecasts for the growth of their respective economies next year even as they signaled that they would be slowly scaling back the stimulus they are providing. “The global economy is doing well,” Fed Chair Janet Yellen told reporters on Wednesday after the U.S. central bank raised interest rates for the third time this year. “We’re in a synchronized expansion. This is the first time in many years that we’ve seen this.” [..] Policy makers though played down fears that asset price bubbles were building that could threaten the financial system and the economy. “When we look at other indicators of financial stability risks, there’s nothing flashing red there or possibly even orange,” Yellen said.

[..]“Central banks, who’ve been pumping money into the system for the past decade or so, are going to be removing it,” said Iain Stealey, fixed-income portfolio manager at JPMorgan Asset Management in a Bloomberg Television interview on Thursday. “It’s going to be slow to start with, very gradual, but it’s going to be a real change in rhetoric.”

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The course of inequality is very different from one continent to the other.

This Is What Happened To The American Dream – It’s Not Pretty (MW)

There’s one area where there’s been huge growth in the U.S. — the gap between the rich and poor. The divergence in the levels of inequality has been “extreme” between Western Europe and the U.S., according to the 2018 World Inequality Report, released by the World Inequality Lab, a research project in over 70 countries based at the Paris School of Economics, and co-authored by the French economist Thomas Piketty. “The global middle class has been squeezed,” it said. In 1980, the U.S. and Western Europe had similar levels of inequality. And today? Not so much. While the top 1% of earners made up just 10% in both regions in 1980, it increased slightly to 12% in 2016 in Western Europe, but doubled to 20% in the U.S. “Since 1980, income inequality has increased rapidly in North America, China, India, and Russia,” it said.

“The income-inequality trajectory observed in the U.S. is largely due to massive educational inequalities, combined with a tax system that grew less progressive despite a surge in top labor compensation since the 1980s,” it found. In Europe, tax and wage inequality was moderated by educational and wage-setting policies that were more favorable to low and middle-income groups. In the U.S., out of 100 children whose parents are among the bottom 10% of income earners, only 20 to 30 of them actually go to college. However, closer to 90 out of 100 children go to college if their parents are within the top 10% earners. What’s more, research has shown that when elite colleges open their doors to students from poor backgrounds, academic performance at the institution doesn’t decline.

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“Animal spirits”, “irrational exuberance”, “value investing”, “momentum chase”. What is this, verbal bankruptcy?

The Rude Awakening Of Slumbering Bulls (Roberts)

Here’s a little secret, “Animal Spirits” is simply another name for “Irrational Exuberance,” as it is the manifestation of the capitulation of individuals who are suffering from an extreme case of the “FOMO’s” (Fear Of Missing Out). The chart below shows the stages of the previous bull markets and the inflection points of the appearance of “Animal Spirits.” At the peak of previous bull market advances, the markets have entered into an accelerated phase of price advances.

Since “the price you pay day is the value you receive tomorrow,” as famously noted by Warren Buffet, it should not come as a surprise that “value investing” is lagging the “momentum chase” in the market currently. But again, this is something that has historically, and repeatedly occurred, during very late stage bull market advances as the “rationalization” for a “never-ending bull market” is promulgated.

Given the length of the economic expansion, the risk to the “bull market” thesis is an economic slowdown, or contraction, that derails the lofty expectations of continued earnings growth. While tax reform legislation may provide a bump to earnings growth in the near-term, it is the longer-term growth rates of the economy that matters. Furthermore, while providing a tax cut to corporations will certainly boost their bottom line, there is little evidence, historically speaking, “trickle-down economics” actually occurs. If it did, wages as a share of corporate profits wouldn’t look like this.

With an economy that is 70% driven by the 90% of the population who don’t benefit from corporate tax cuts, the long-term effects of a deficit and debt busting tax bill should be worrying investors. But, for now, that is not the case as the rise in “animal spirits” is simply the reflection of the rising delusion of investors who frantically cling to data points which somehow support the notion “this time is different,” a point recently made by Sentiment Trader: “We’ve discussed a multitude of momentum studies in the past month or two, with an almost universal suggestion that the types of readings we’ve seen this year are rare and hard to bust. This unrelenting bid has been one of, if not THE, most compelling bullish argument, and it shows little sign of stopping.”

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K-Street has taken over Brussels too.

MiFID’s Cautious Start on Bond-Price Rules Shows Lobbying Impact (BBG)

For years, the bond industry argued that price-disclosure requirements in MiFID II were unsuited to the market and would hinder trading. With less than 1% of notes affected when the rules kick in on Jan. 3, that lobbying seems to have paid off. The European Securities and Markets Authority said last week that 566 bond instruments out of 61,761 it analyzed were sufficiently liquid to fall under the pre- and post-trade transparency rules in the MiFID II package. Most were sovereign bonds, which are used as collateral in everything from repurchase agreements to derivative trades. About 150 corporate securities made the list, issued by financial firms such as CaixaBank, Italian power giant Enel and telecommunications company Wind Tre. But the small number of securities initially captured by MiFID II means the law’s goal of shedding light on the market may not be achieved anytime soon.

“ESMA’s approach will contribute very little towards improving transparency in this notoriously opaque market segment,” said Christian Stiefmueller, who’s in charge of banking for Finance Watch, a public-interest watchdog in Brussels. “ESMA’s approach is a present to market makers, i.e. traders at the major investment banks, who thrive on a lack of transparency.” As part of its efforts to prevent another financial crisis, the EU is implementing rules designed to shift trading on to exchanges where regulators can track it, boost transparency to protect individual investors and level the playing field for professionals. MiFID II transparency rules require market operators and investment firms that run a trading venue to make public “current bid and offer prices and the depth of trading interests at those prices” continuously during trading hours for some bonds and other non-equity securities.

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People only get poorer, the dream is over.

Why American Capitalism Doesn’t Work For All Americans – Deaton (MW)

MarketWatch: I want to make the bridge from your findings to the economy. You have said that white working class workers are facing a loss of their way of life.

Deaton: This is much more hypothetical because of course, you are saying “what is doing this?” Tying it to the economy is tricky because it is certainly not true that it was the Great Recession that made this happen, for example. And in fact even if you go back to the late 1990s, the patterns of income and so on are not that different across groups. They don’t match up. Any simple story that said “it is the economy stupid,” is stupid. So we trace this back sort of a long way, and if you look at birth cohorts it is like each successive birth cohort is doing worse. They are more susceptible to these deaths throughout life, and the deaths rise with age more rapidly for younger cohorts, so we’re attracted by this idea that there is a cumulative process going on which is steadily getting worse over time. And, you know, the destruction of the way of life of the white working class is maybe a good way of thinking about this.

I mean we are very attracted by that. You know, the ultimate poison may be in the labor market, but, it works through a lot of other bad stuff that is going on — like the decline in marriage rates, the increase in out-of-wedlock childbearing, and all those sort of things. It is those things that get to middle age and your life has not worked out the way you thought, not just in terms of the salary you earned, but also your marital relationship, your kids who you may not know anymore and who are living with someone else. So there are a lot of people who in their 50s that find that their life has just sort of come apart. One story is just that there has been this slow loss of the white working class life. There has been stagnation in wages for 50 years. If you don’t have a university degree, median wages for those people have actually been going down. So it is just like that model, whereby American capitalism really delivered to people who were not particularly well-educated, seems to be broken.

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“..the phenomenon whereby weak banks can destabilize governments that support them and over-indebted governments can push banks holding their bonds over the precipice..”

Europe’s Sovereign-Bank ‘Doom Loop’ Can’t Be Broken (BBG)

Ever since the financial crisis, the European Union has grappled with how to solve the so-called sovereign bank doom loop – the phenomenon whereby weak banks can destabilize governments that support them and over-indebted governments can push banks holding their bonds over the precipice. The widely touted solution is the European Banking Union, which the European Commission wants completed by 2018. New rules introduced European bank supervision, a new resolution framework that limits sovereign support and a pan-EU deposit insurance scheme as a means of breaking the interdependence between banks and sovereigns. The first problem with this approach is that it’s actually not possible to break the doom loop. The second is that trying to do so through the banking union may actually increase risks in the European Union.

Euro zone banks, who are legally required to hold safe and liquid assets, often buy disproportionately large chunks of their home country sovereign debt because these are often the most familiar safe assets, and the sovereign yield curve is used as a baseline for pricing most credit. However, if the price of these bonds plummets – or, worse, if these bonds have to be restructured – banks get into trouble, as Greek banks found. The doom loop works in other ways too. Rating agencies have a separate methodology for rating banks wherein the possibility of state support raises bank ratings between one and six notches above what these would be on a standalone basis. A weak government means that investors discount the ability of the sovereign to support a bank in times of trouble, so a bank’s rating will also fall.

That explains why, during the euro zone crisis, badly run German landesbanken (a group of state-owned banks) had a better credit rating compared to Santander, one of Europe’s best-run banks, headquartered in Spain. Sometimes the bill for bailing out banks is so large that an otherwise healthy sovereign itself needs to be bailed out, as Ireland found out. Finally, the doom loop can kick in if depositors doubt that governments can honor their guarantees. Rumors of a bank being in trouble can be self-fulfilling, leading to the withdrawal of short-term funding and deposits. It was a fear of such a run on deposits in Spanish banks that prompted ECB President Mario Draghi to say the ECB would do “whatever it takes” to stem the crisis. Deposit guarantee schemes are important in reducing the risks of such a run on the bank. But these guarantees are only as good as a government’s ability to pay.

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He’s probably right.

Jim Chanos: We Think Tesla Is Worth Zero (CNBC)

Famed short seller Jim Chanos took another shot at Tesla on Thursday, saying the company’s equity is worth nothing. “Let’s just say Tesla and Mr. Musk have a broad interpretation of the truth,” Chanos, founder of Kynikos Associates, told CNBC’s Kelly Evans. “There have been all kinds of announcements that this company has made … that turned out not to be true.” Chanos mentioned the unveiling of Tesla’s electric Semi truck and roadster last month as examples. The short seller noted that Tesla CEO Elon Musk said “the Semi would be available in 2019 and the roadster in 2020. Where is he producing those? Those production lines have to be up and approved years before we get into production.”

Chanos has been short Tesla for a long time. On Nov. 14, he said he added to his short position against the electric vehicle maker throughout the year. However, Tesla shares are up sharply this year, advancing nearly 60%. “To me, where the stock is now is not the story,” Chanos said. “I don’t care that it came from $30 or $200 or $300. That’s just meaningless.” “We think the equity is worthless,” he said in the interview on “Closing Bell.”

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Politics will trump the legal system, wanna bet?!

WikiLeaks Recognised As A ‘Media Organisation’ By UK Tribunal (G.)

A British tribunal has recognised Julian Assange’s WikiLeaks as a “media organisation”, a point of contention with the United States, which is seeking to prosecute him and disputes his journalistic credentials. The issue of whether Assange is a journalist and publisher would almost certainly be one of the main battlegrounds in the event of the US seeking his extradition from the UK. The definition of WikiLeaks by the information tribunal, which is roughly equivalent to a court, could help Assange’s defence against extradition on press freedom grounds. The US has been considering prosecution of Assange since 2010 when WikiLeaks published hundreds of thousands of confidential US defence and diplomatic documents. US attorney general Jeff Sessions said in April this year that the arrest of Assange is a priority for the US.

The director of the CIA, Mike Pompeo, after leaks of emails from the US Democratic party and from Hillary Clinton, described WikiLeaks as “a non-state hostile intelligence service often abetted by state actors like Russia”. He added Assange is not covered by the US constitution, which protects journalists. But the UK’s information tribunal, headed by judge Andrew Bartlett QC, in a summary and ruling published on Thursday on a freedom of information case, says explicitly: “WikiLeaks is a media organisation which publishes and comments upon censored or restricted official materials involving war, surveillance or corruption, which are leaked to it in a variety of different circumstances.” The comment is made under a heading that says simply: “Facts”.

The tribunal’s definition of WikiLeaks comes in the 21-page summary into a freedom of information case heard in London in November. An Italian journalist, Stefania Maurizi, is seeking the release of documents relating to Assange, mainly in regard to extradition, and had lodged an appeal with the tribunal. While the tribunal dismissed her appeal, it acknowledged there issues weighing in favour of public disclosure in relation to Assange. But it added these were outweighed by a need for confidentiality on the matter of extradition.

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A long cold lonely winter.

EU Leaders Clash Over Refugees (R.)

Two years after the Mediterranean migrant crisis blew a hole in the European Union, a tentative effort to patch up differences over what to do with refugees underlined continuing rifts among the bloc’s leaders. A free-wheeling discussion over a Brussels summit dinner that began on Thursday night and spilled into the wee hours of Friday was intended to clear the air and see if there was a way to reconcile opposing views on how to reform defunct asylum rules. But leaders emerging from nearly three hours of talks made clear that while there was little of the angry passion of 2015, when a million people flooded into Greece and headed for Germany, the “frank and sober” discussion failed to blunt sharp rifts pitting some eastern states against many of the rest.

“We have a lot of work to do,” German Chancellor Angela Merkel told reporters. “The positions have not changed.” Divisions over how to share out relatively small numbers of refugees have poisoned relations in the EU, complicating efforts to present a united front in talks with London on Brexit and to agree an EU budget out to 2028. New Polish and Czech leaders stuck to lines shared with Hungary and Slovakia that their ex-communist societies cannot accept significant immigration, especially of Muslims. Czech Prime Minister Andrej Babis called the debate “quite stormy” and told reporters that Greek Prime Minister Alexis Tsipras had been “quite aggressive.” But, he said, the eastern allies would not let the majority impose obligatory refugee quotas on them.

Merkel and Italian Prime Minister Paolo Gentiloni were among those who demanded that all countries take in a mandatory share of people requiring asylum, who have been concentrated on the Mediterranean coast, or after chaotic movements across Europe, in the richer northwest of the bloc.

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Only viable in countries that provide the good example.

Palau Makes All Visitors Sign Pledge To Respect Environment (G.)

The tiny Pacific island nation of Palau has introduced a new law requiring visitors to sign a pledge not to harm the environment before entering the country. The pledge will be stamped into the passports of international arrivals from this month. Visitors will be required to sign before proceeding through immigration, making a formal promise to the children of Palau to “preserve and protect your beautiful and unique island home”, and to “tread lightly, act kindly and explore lightly”. Almost 6,000 people signed in the first two weeks. It’s the first time such a pledge has been written into a country’s immigration policies, but Palau has long been vocal about the environment. The country has already reported larger tides and an increase in severe tropical storms. The sea level around its 700 islands has risen by about 9mm a year since 1993, almost three times the global average rate.

President Tommy Remengesau is a vocal environmental campaigner. He told a United Nations climate forum in 2014 that if the world failed to act to curb its carbon emissions, “our global warming doomsday is already set in stone”. In 2015 Palau created the world’s sixth-largest marine sanctuary, protecting 80% of its maritime territory, an area of tuna-rich ocean the size of California, from both fishing and oil drilling. Remengesau said he hoped that requiring visitors to sign a pledge to protect the environment would create a cultural shift among tourists and make them aware of the fragility of the environment. “While Palau may be a small-island nation, we are a large ocean-state and conservation is at the heart of our culture,” he said. “We rely on our environment to survive and if our beautiful country is lost to environmental degradation, we will be the last generation to enjoy both its beauty and life-sustaining biodiversity.”

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Not surprising.

Arctic Warming So Rapid That Computer Measuring It Rejected The Results (Ind.)

Climate change in the Arctic has “outrun” a computer designed to measure it. So rapid was the temperature change at a weather station in Alaska, the computer analysing the data detected an error and stopped recording the correct temperature. In a blog post, US National Oceanic and Atmospheric Administration (NOAA) climate scientist Dr Deke Arndt explained the recent incident, referring to it as “an ironic exclamation point to swift regional climate change in and near the Arctic”. The weather station is located in Utqiagvik, the most northerly town in the US. Low levels of sea ice in the region caused the air temperatures to rise quickly. The computers NOAA use to automatically record climate data have in-built algorithms that ensure the information they record is accurate.

This algorithm is meant to be triggered if the instruments measuring temperatures are damaged, or if there is an artificial change in the environment surrounding them. In this case, the temperature change was such a shock to the system that the computer “disqualified itself” from the Alaskan temperature analysis. This left northern Alaska “analysed a little cooler than it really was”, wrote Dr Arndt. The data from the station was missing for all of 2017, and the last few months of 2016. “In this case, instead of a station move, or urban sprawl, or an equipment change, it was actually very real climate change that changed the environment, by erasing a lot of the sea ice that used to hang out nearby,” wrote Dr Arndt. The Arctic is warming at twice the rate of the global average, meaning the effects of climate change are felt particularly keenly in polar regions.

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Apr 212017
 
 April 21, 2017  Posted by at 8:47 am Finance Tagged with: , , , , , , , , ,  


Fred Stein Nadinola 1944

 

Trump Signals Provide Comfort to Central Bankers, Finance Ministers (WSJ)
Protectionism Is More Than a Political Statement (Grant)
Fed Intensifies Balance-Sheet Discussions With Market Players (BBG)
Paul Tudor Jones Says U.S. Stocks Should ‘Terrify’ Janet Yellen (BBG)
China’s Stocks Refuse to Drop More Than 1% (BBG)
Toronto To Impose 15% Tax On Foreign Home Buyers (G.)
Why Not a Probe of ‘Israel-gate’? (Robert Parry)
Arresting Julian Assange Is A Priority, Says US Attorney General (G.)
German Chancellery Investigated In Probe Into WikiLeaks Sources (R.)
Coffee and Thin Liquidity on Traders’ Menus for French Vote (BBG)
EU leader: UK Would Be Welcomed Back If Voters Overturn Brexit (G.)
Britain Must Pay EU Divorce Bill In Euros (AFP)
Austria Calls For Closure Of Mediterranean Migrant Route (Pol.)

 

 

The system closes ranks.

Trump Signals Provide Comfort to Central Bankers, Finance Ministers (WSJ)

The Trump administration appears unlikely to upend seven decades of global financial cooperation by scorning the IMF and World Bank, a source of comfort to central bankers and finance ministers gathering this week in Washington. In recent days, the new administration has shown signs the U.S. is taking a more traditional approach to economic diplomacy and the use of “soft power” than early administration rhetoric suggested. President Donald Trump, after meeting with NATO’s chief earlier this month, praised the alliance and reaffirmed Washington’s commitment to it. Nikki Haley, U.S. ambassador to the United Nations, has been leveraging the institution to advance Mr. Trump’s foreign-policy agenda. Other signals of the shift that are being seen by some officials at the meetings included the administration’s relatively modest proposed changes to NAFTA and its about-face last week on censuring China for its currency policy.

Meantime, Treasury Secretary Steven Mnuchin has reaffirmed the role of the IMF in promoting global economic growth and stability, saying at a gathering of global-finance chiefs last month that multilateral institutions can be “very important” to projecting U.S. interests abroad. Indeed, the U.S. signed off on an official communiqué by the Group of 20 largest economies that reaffirmed commitment to an international financial system “with a strong…and adequately resourced IMF at its center.” “There’re a number of things that global institutions can do to help strengthen global growth for all,” a senior Treasury official said ahead of the semiannual meetings in Washington this week of the World Bank and IMF’s member countries.

[..] The IMF has been criticized in the past for being too lax on China, especially when its exchange rate was estimated to have been up to 40% undervalued and its trade surplus topping 10% of GDP. The IMF has since stepped up its public censure of some Beijing policies, such as a bank lending boom that could endanger financial stability in the world’s second largest economy. The IMF is also planning to ramp up its warnings toward another Washington target—Germany—which maintains the world’s largest trade surplus. In particular. “Germany, with its aging population, should have, and can legitimately aim to have, a degree of surplus,” Ms. Lagarde said this week in a briefing with European press. “But not to the extent we see at the moment: 4% would perhaps be justified, but 8% is not.”

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France, Italy and Greece: Europe’s risk spots. US Treasuries and the dollar look inviting.

Protectionism Is More Than a Political Statement (Grant)

Yet again, Greece is another crisis in progress, as the nation has a $7 billion debt payment to make in July and nowhere near the cash on hand to pay it. The official debt-to-GDP figure is 183%, according to EU data, but it is a nonsensical number. The ECB lends money to the Greek banks and the banks lend money to the country. This is the epicenter of the rigged scheme. If you take the total public debt and add in the debt of Greek banks, then the total debt to GDP ratio is 302%, based on my calculations. One more time bomb ticking as the International Monetary Fund will not lend any new money to Greece, in my opinion, with the U.S. representatives on the IMF now reporting to the Trump administration.

It is not the size of the country that matters but the size of the debt, and a $560 billion public and bank debt load is no small figure. Since it is virtually impossible in many European countries to forgive the debt, given their political constraints, the “breakpoint” may finally be arriving. This means Greece will be leaving the EU, one way or another, and defaulting on its debts. Now, you can hold whatever view you like on these situations. You can ascribe to the “muddle through” theory or the “kick the can” theory. But what you cannot do is pretend that there are not significant risks facing the EU. We have these three “risk situations” in progress, and then we have Brexit under way, and it is my opinion that the EU is coming apart at the seams.

Many large financial institutions are looking aghast at the U.S. Treasury market. Virtually every leading bank has been predicting a return to a 3.00% yield for the benchmark 10-year note, and they have all been wrong – again. In fact, this is probably the biggest “pain trade” so far this year. Many people blame a “short squeeze” for the recent drop in yields on Treasuries. That is only part of the reason. The other has been the flow of capital, which is headed out of Europe and into the United States. “Protectionism” is more than a political statement. Asian money managers are exiting Europe, and the European money managers are exiting Europe, and the relative safety of the U.S. bond markets is providing a haven from European risk. This is a sound strategy, in my opinion. “Buy American, Sell American and Trade American” is where I want to be at the present time.

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The same market players who live off, and are propped up by, Fed largesse. Insane.

Fed Intensifies Balance-Sheet Discussions With Market Players (BBG)

Federal Reserve staff, widening their outreach to investors in anticipation of a critical turning point in monetary policy, are seeking bond fund manager feedback on how the central bank should tailor and communicate its exit from record holdings of Treasuries and mortgage-backed securities. Fed officials are intent on shrinking their crisis-era $4.48 trillion balance sheet in a way that isn’t disruptive and doesn’t usurp the federal funds rate as the main policy tool. To do that, they need to find the right communication and assess market expectations on the size of shrinkage, which is why conversations with fund managers have picked up recently. “All indications suggest that conversations around the balance sheet have accelerated,” said Carl Tannenbaum at Northern Trust Company. “The consideration of everything from design of the program to communication seems to have intensified.”

Most U.S. central bankers agreed that they would begin phasing out their reinvestment of maturing Treasury and MBS securities in their portfolio “later this year,” according to minutes of the March meeting. They also agreed the strategy should be “gradual and predictable,” according to the minutes.Fed staff routinely seek feedback from investors and bond dealers to get a fix on sentiment and expectations. The New York Fed confirmed the discussions and said it is part of regular market monitoring. The Fed is getting closer to disclosing its plan, and conversations have become more intense. “They are gauging what’s the extent of weak hands in the market that will dump these assets,” said Ed Al-Hussainy, a senior analyst on the Columbia Threadneedle Investment’s global rates and currency team. “They are calling all the asset managers. It is not part of the regular survey.”

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“..years of low interest rates have bloated stock valuations to a level not seen since 2000..”

Paul Tudor Jones Says U.S. Stocks Should ‘Terrify’ Janet Yellen (BBG)

Billionaire investor Paul Tudor Jones has a message for Janet Yellen and investors: Be very afraid. The legendary macro trader says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the Nasdaq tumbled 75% over two-plus years. That measure – the value of the stock market relative to the size of the economy – should be “terrifying” to a central banker, Jones said earlier this month at a closed-door Goldman Sachs Asset Management conference, according to people who heard him. Jones is voicing what many hedge fund and other money managers are privately warning investors: Stocks are trading at unsustainable levels. A few traders are more explicit, predicting a sizable market tumble by the end of the year.

Last week, Guggenheim Partner’s Scott Minerd said he expected a “significant correction” this summer or early fall. Philip Yang, a macro manager who has run Willowbridge Associates since 1988, sees a stock plunge of between 20 and 40%, according to people familiar with his thinking. Even Larry Fink, whose BlackRock oversees $5.4 trillion mostly betting on rising markets, acknowledged this week that stocks could fall between 5 and 10% if corporate earnings disappoint. Their views aren’t widespread. They’ve seen the carnage suffered by a few money managers who have been waving caution flags for awhile now, as the eight-year equity rally marched on.

But the nervousness feels a bit more urgent now. U.S. stocks sit about 2% below the all-time high set on March 1. The S&P 500 index is trading at about 22 times earnings, the highest multiple in almost a decade, goosed by a post-election surge. Managers expecting the worst each have a pet harbinger of doom. Seth Klarman, who runs the $30 billion Baupost Group, told investors in a letter last week that corporate insiders have been heavy sellers of their company shares. To him, that’s “a sign that those who know their companies the best believe valuations have become full or excessive.”

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Market vs government.

China’s Stocks Refuse to Drop More Than 1% (BBG)

In a Chinese stock market where superstition and government intervention often count for more than economic fundamentals, unusual trading patterns are par for the course. But even by China’s standards, the latest market anomaly to grab the attention of local investors stands out. The Shanghai Composite Index, notorious for its wild swings over the past two years, has gone 85 trading days without a loss of more than 1% on a closing basis, the longest stretch since the market’s infancy in 1992. On 13 days during the streak, the index recovered from intraday declines exceeding 1% to close above that threshold. The phenomenon has been especially stark recently, with the gauge erasing about half of its 1.6% drop in the final 90 minutes of trading on Wednesday.

For some investors, it’s a sign that state-directed funds are putting a floor under daily market swings – a development that presents short-term buying opportunities when the Shanghai Composite dips more than 1% during intraday trading. The theory may have merit: China’s securities regulator has this year sought to stabilize the stock market by limiting the extent of declines in the Shanghai Composite, according to people familiar with the strategy, who asked not to be identified discussing a matter that hasn’t been disclosed publicly. “There is room for arbitrage in the short term,” said Zhang Haidong, a money manager at Jinkuang Investment Management in Shanghai. The Shanghai Composite rose less than 0.1% on Thursday, rebounding from an intraday loss of as much as 0.7%.

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And no imagination either. Just copying others.

Toronto To Impose 15% Tax On Foreign Home Buyers (G.)

Foreigners who buy homes in Toronto and its surrounding area now face an additional 15% tax – echoing a recent measure adopted in Vancouver – as part of a slew of measures aimed at tempering a heated housing market that ranks as one of Canada’s most expensive. The tax – part of proposed legislation unveiled on Thursday by the Ontario provincial government – will be levied on houses purchased in the Golden Horseshoe, an area that stretches from the Niagara region and the Greater Toronto Area to Peterborough. It will apply to all residential purchases made by those who are not citizens or permanent residents of Canada, as well as foreign corporations. Once the legislation passes, the tax would be applied retroactively to purchases made as of 21 April. “When young people can’t afford their own apartment or can’t imagine ever owning their own home, we know we have a problem,” said Kathleen Wynne, the Ontario premier.

“And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act.” Amid two years of double-digit gains and mounting fears of a housing bubble, her government has consistently fended off calls to intervene. The pressure ramped up earlier this month, after figures showed the average price of homes in the Greater Toronto Area soared 33% in the past year, pushing the cost of a detached home to an average of C$1.21m. “There is a need for interventions right now in order to calm what’s going on,” said Wynne. The tax would be revenue neutral, she added, aimed squarely at tempering demand. “In some ways, we have to realise this is a good problem to have … [It] is the unwanted consequences of a strong economy with a promising future.”

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“..many U.S. pols grovel before the Israeli government seeking a sign of favor from Prime Minister Netanyahu, almost like Medieval kings courting the blessings of the Pope at the Vatican.”

Why Not a Probe of ‘Israel-gate’? (Robert Parry)

The other day, I asked a longtime Democratic Party insider who is working on the Russia-gate investigation which country interfered more in U.S. politics, Russia or Israel. Without a moment’s hesitation, he replied, “Israel, of course.” Which underscores my concern about the hysteria raging across Official Washington about “Russian meddling” in the 2016 presidential campaign: There is no proportionality applied to the question of foreign interference in U.S. politics. If there were, we would have a far more substantive investigation of Israel-gate. The problem is that if anyone mentions the truth about Israel’s clout, the person is immediately smeared as “anti-Semitic” and targeted by Israel’s extraordinarily sophisticated lobby and its many media/political allies for vilification and marginalization.

So, the open secret of Israeli influence is studiously ignored, even as presidential candidates prostrate themselves before the annual conference of the American Israel Public Affairs Committee. Hillary Clinton and Donald Trump both appeared before AIPAC in 2016, with Clinton promising to take the U.S.-Israeli relationship “to the next level” – whatever that meant – and Trump vowing not to “pander” and then pandering like crazy. Congress is no different. It has given Israel’s controversial Prime Minister Benjamin Netanyahu a record-tying three invitations to address joint sessions of Congress (matching the number of times British Prime Minister Winston Churchill appeared). We then witnessed the Republicans and Democrats competing to see how often their members could bounce up and down and who could cheer Netanyahu the loudest, even when the Israeli prime minister was instructing the Congress to follow his position on Iran rather than President Obama’s.

Israeli officials and AIPAC also coordinate their strategies to maximize political influence, which is derived in large part by who gets the lobby’s largesse and who doesn’t. On the rare occasion when members of Congress step out of line – and take a stand that offends Israeli leaders – they can expect a well-funded opponent in their next race, a tactic that dates back decades. [..] .. there have been fewer and fewer members of Congress or other American politicians who have dared to speak out, judging that – when it comes to the Israeli lobby – discretion is the better part of valor. Today, many U.S. pols grovel before the Israeli government seeking a sign of favor from Prime Minister Netanyahu, almost like Medieval kings courting the blessings of the Pope at the Vatican.

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This comes two days after the Intercept published an interview with Assange, who among other things said:“In fact, the reason Pompeo is launching this attack is because he understands we are exposing in this series all sorts of illegal actions by the CIA, so he’s trying to get ahead of the publicity curve and create a pre-emptive defense..”

Arresting Julian Assange Is A Priority, Says US Attorney General (G.)

The arrest of WikiLeaks founder Julian Assange is now a “priority” for the US, attorney general Jeff Sessions has said. Hours later it was reported by CNN that authorities have prepared charges against Assange, who is currently holed up at the Ecuadorian embassy in London. Donald Trump lavished praise on the anti-secrecy website during the presidential election campaign – “I love WikiLeaks,” he once told a rally – but his administration has struck a different tone. Asked whether it was a priority for the justice department to arrest Assange “once and for all”, Sessions told a press conference in El Paso, Texas on Thursday: “We are going to step up our effort and already are stepping up our efforts on all leaks. This is a matter that’s gone beyond anything I’m aware of. We have professionals that have been in the security business of the United States for many years that are shocked by the number of leaks and some of them are quite serious.”

He added: “So yes, it is a priority. We’ve already begun to step up our efforts and whenever a case can be made, we will seek to put some people in jail.” Citing unnamed officials, CNN reported that prosecutors have struggled with whether the Australian is protected from prosecution from the first amendment, but now believe they have found a path forward. A spokesman for the justice department declined to comment. Barry Pollack, Assange’s lawyer, denied any knowledge of imminent prosecution. “We’ve had no communication with the Department of Justice and they have not indicated to me that they have brought any charges against Mr Assange,” he told CNN. “They’ve been unwilling to have any discussion at all, despite our repeated requests, that they let us know what Mr Assange’s status is in any pending investigations. There’s no reason why Wikileaks should be treated differently from any other publisher.”

US authorities has been investigating Assange and WikiLeaks since at least 2010 when it released, in cooperation with publications including the Guardian, more than a quarter of a million classified cables from US embassies leaked by US army whistleblower Chelsea Manning.

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And no protest from Berlin?

German Chancellery Investigated In Probe Into WikiLeaks Sources (R.)

Berlin’s chief public prosecutor has extended an investigation into the release of a trove of documents by WikiLeaks to include the chancellery as well as the Bundestag lower house of parliament, broadcaster NDR said on Thursday. Last December, WikiLeaks released the confidential documents, which German security agencies had submitted to a parliamentary committee investigating the extent to which German spies helped the U.S. National Security Agency (NSA) to spy in Europe. The extension of the investigation to include the chancellery did not necessarily mean the Berlin public prosecutor had firm suspicions that individuals at Chancellor Angela Merkel’s office were involved in the leak, NDR said.

Government sources told Reuters that the chancellery had agreed several weeks ago to the investigation “against unknown” persons, to allow the inquiry to proceed. There were no firm suspicions against chancellery officials, the sources added. Surveillance is a sensitive issue in Germany where East Germany’s Stasi secret police and the Nazi era Gestapo kept a close watch on the population. Merkel told the parliamentary committee in February that she did not know how closely Germany’s spies cooperated with their U.S. counterparts until 2015, well after an uproar over reports of U.S. bugging of her cellphone.

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Plenty nerves on Monday morning. And that’s just for round 1.

Coffee and Thin Liquidity on Traders’ Menus for French Vote (BBG)

It may not be cafe au lait, but traders are likely to need plenty of coffee to sustain them through the first round of the French election. Ten thousand miles away in Melbourne, IG’s trading crew are due at their desks before dawn on Monday to deal with any fallout, while back in Europe, Societe Generale will be staffed overnight, according to a person familiar with their plans who asked not to be named because they aren’t authorized to speak publicly. Staff at HSBC will work extended hours, a spokeswoman said, Tradition is asking more voice brokers to come in on Sunday, while London-based Caxton FX is providing its night owls with pizzas. Other analysts and investors will be nervously watching from home, ready to dash to the office should French voters spring a surprise.

With the first predictions from France due at 8 p.m. Sunday in Paris, currency markets – which open one hour later – will give traders an early chance to react. At IG in Australia a “fully-manned” team will be on deck as the results roll in, according to Chris Weston, the firm’s chief market strategist. “Political events have a significant ability to alter volatility, more than any other event,” he said. Shifts in opinion polls have bolstered the focus on Sunday’s first round, which decides which of the top candidates progress to the run-off vote. The campaign has turned into a four-way race, with anti-euro candidate Marine Le Pen and independent Emmanuel Macron running just ahead of Republican Francois Fillon and the Communist-backed Jean-Luc Melenchon.

While polls show that either Macron or Fillon – considered the more market-friendly candidates – would be favored against the less-centrist opponents in a run-off, it’s the outside prospect of a Le Pen-Melenchon one-two that will keep traders sweating on Sunday. That’s reflected in the options market, which reflects the first round of French elections as posing the greater risk.

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UK democracy couldn’t take a Brexit overturn.

EU leader: UK Would Be Welcomed Back If Voters Overturn Brexit (G.)

The president of the European parliament has said Britain would be welcomed back with open arms if voters changed their minds about Brexit on 8 June, challenging Theresa May’s claim that “there is no turning back” after article 50. Speaking after a meeting with the prime minister in Downing Street, Antonio Tajani insisted that her triggering of the departure process last month could be reversed easily by the remaining EU members if there was a change of UK government after the general election, and that it would not even require a court case. “If the UK, after the election, wants to withdraw [article 50], then the procedure is very clear,” he said in an interview. “If the UK wanted to stay, everybody would be in favour. I would be very happy.”

He also threatened to veto any Brexit deal if it did not guarantee in full the existing rights of EU citizens in Britain and said this protection would forever be subject to the jurisdiction of the European court of justice (ECJ). Both are potential sticking points for May, who has promised to end free movement of EU citizens and rid Britain forever of interference by the ECJ, but the European parliament must ratify any Brexit deal agreed by negotiators before it can be completed. Lawyers are divided on whether the UK can unilaterally change its mind about leaving and are bringing a test case to establish the legal reversibility of article 50, but the parliament president spelled out a process by which a simple political decision by other member states would be sufficient. “If tomorrow, the new UK government decides to change its position, it is possible to do,” said Tajani. “The final decision is for the 27 member states, but everybody will be in favour if the UK [decides to reverse article 50].”

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Says who?

Britain Must Pay EU Divorce Bill In Euros (AFP)

Britain may be leaving the EU but it will still have to settle the divorce bill in euros, not pounds, according to an EU document on the upcoming negotiations Thursday. “An orderly withdrawal of the United Kingdom from the Union requires settling the financial obligations undertaken before the withdrawal date,” said the European Commission document seen by AFP. “The agreement should define the precise way in which these obligations will be calculated … the obligations should be defined in euro,” it added. The document did not say how much the Brexit settlement might cost but EU officials have previously said it could be as much as €60 billion, sparking howls of outrage in London which puts the figure nearer €20 billion.

Titled “Non Paper on key elements likely to feature in the draft negotiating directives,” the document was drawn up for the European Commission which will conduct the Brexit negotiations with Britain. It covers in more detail the same ground outlined last month by EU president Donald Tusk in response to Prime Minister Theresa May’s official March 29 notification that Britain was leaving the bloc.

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A sea route. And a landlocked country. Nuff said.

Austria Calls For Closure Of Mediterranean Migrant Route (Pol.)

Austrian Interior Minister Wolfgang Sobotka has called for the immediate closure of the Mediterranean route used by refugees seeking asylum in Western European countries, local media reported Wednesday. Closing the route “is the only way to end the tragic and senseless dying in the Mediterranean,” Sobotka said. Asked about the potential of a barrier being erected at the Brenner Pass on the border between Italy and Austria, Sobotka said: “In the event of a sudden influx, we are equipped and able to ramp up border management within hours.” According to U.N. aid agencies, nearly 9,000 migrants were rescued in the Mediterranean over the Easter weekend.

As weather conditions improve, more migrants are expected to make their way to Europe. “A rescue in the open sea cannot be a ticket to Europe, because it gives organized crime every argument to persuade people to escape for economic reasons,” Sobotka said. Last summer, Austria advocated for the closure of the Western Balkan route used by migrants coming from the Middle East seeking their way to Western European countries. Austrian Defense Minister Hans Peter Doskozil last February said Vienna planned to increase cooperation with 15 countries along the Balkan route to keep migrants from reaching northern Europe, claiming the EU is not adequately protecting its external borders.

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