Nov 302020
 


Jackson Pollock Greyed Rainbow 1953

 

Nearly One-Third Of NY, NJ Small Businesses Reportedly Closed In 2020 (NYP)
Almost 700,000 Driven Into Poverty By COVID Crisis In UK (G.)
UK Shops To Be Allowed To Open 24 Hours A Day In December And January (G.)
Covid Infections In England Fall By 30% Over Lockdown (BBC)
Over 100,000 US Nursing Home Residents, Staff Killed by Pandemic (CD)
The ‘Smartest Man In The Room’ Has Joined Sidney Powell’s Team (AT)
Republicans Plan to Occupy Georgia State House (GP)
The 2020 Presidential Election Is Deeply Puzzling (Basham)
Biden To Tap Career Russiagater For Top Budgeting Post (RT)
One Of America’s Great Wildernesses Being Destroyed In A Silent Massacre (LAT)
The Next Decade Could Be Even Worse (Wood)

 

 

 

 

 

Nearly One-Third Of NY, NJ Small Businesses Reportedly Closed In 2020 (NYP)

It has been a bad year for ma and pa. Nearly one-third of small businesses in New York and New Jersey remain closed since January amid the coronavirus pandemic, according to a watchdog. In the Empire State, 27.8 percent of small businesses have not reopened their doors, while Jersey has lost 31.2 percent as of Nov. 16, according to TrackTheRecovery.org, a Harvard-run database that keeps tabs on the economic impact of the virus. The figures are in line with estimates from the New Jersey Business & Industry Association, which says 28 percent of the Garden State’s small businesses had shut up shop by the end of October, according to the Star Ledger newspaper. And with the region now seeing a resurgence of the virus, business leaders are worried the number could go even higher.


“It’s really bad,” Eileen Kean, New Jersey state director of the National Federation of Independent Businesses told the Star-Ledger. “And without federal dollars coming into New Jersey, the Main Street stores and other establishments are not gonna make it through the winter.” More than half of small businesses in both states were forced to shut their doors in the spring at the height of the pandemic, with both hitting highs in mid-April — 52.5 percent of New York businesses and 53.9 percent in the Garden States, the stats show. “It’s devastating how many restaurants have shuttered and jobs have been lost,” said Andrew Rigie, executive director of NYC Hospitality Alliances, which represents bars, restaurants, and clubs in the Big Apple.

Read more …

And it happens everywhere. So much of this will never come back. Are we prepared for that?

Almost 700,000 Driven Into Poverty By COVID Crisis In UK (G.)

Almost 700,000 people in the UK, including 120,000 children, have been plunged into poverty as a result of the Covid economic crisis, according to a thinktank analysis. The Legatum Institute also said an additional 700,000 people had been prevented from falling below the breadline by the chancellor’s temporary £20-a-week boost to universal credit, introduced in April to help claimants cope with the extra costs of the pandemic. Overall, the pandemic has pushed the total number of people in the UK living in poverty to more than 15 million – 23% of the population – according to the institute, which uses poverty measures developed by the independent Social Metrics Commission. The Conservative peer Philippa Stroud, the institute’s chief executive, said the findings showed a “clear need for a comprehensive anti-poverty strategy to be placed at the heart of the UK’s Covid recovery response”.


Lady Stroud, in common with many other anti-poverty campaigners, has called for the government to retain the 12-month uplift to universal credit after it is due to end in April 2021. Ministers last week said they would decide in January. The new analysis relies on “nowcasting” techniques using employment, earnings data and the impact of government policy to enable up-to-date and robust poverty estimates, because official figures for the first year of Covid are not due until 2022. Those hardest hit by the economic crisis were young workers, those in relatively low-paying employment and those working in sectors such as hospitality and retail. Elderly people were financially least badly hit, the analysis found. Of the 700,000 people newly in poverty, just over half had incomes up to 25% below the poverty line, 160,000 were between 35% and 50% below, and 270,000 had slipped more than 50% below, known as “deep poverty”.

Read more …

Oh wait, there’s our comeback. Shop till you drop at 4 am.

UK Shops To Be Allowed To Open 24 Hours A Day In December And January (G.)

Shops will be given permission to trade around the clock as the high street tries to recoup some of the losses it has suffered during the pandemic, a cabinet minister has said. Retailers normally have to go through a lengthy process to apply to local authorities under the Town and Country Planning Act if they wish to extend hours outside the window of 9am to 7pm. But the communities secretary, Robert Jenrick, said he wanted to remove the bureaucracy to encourage greater trade – allowing shops to open for up to 24 hours a day in December and January. Writing in the Daily Telegraph, he said: “With these changes local shops can open longer, ensuring more pleasant and safer shopping with less pressure on public transport.


How long will be a matter of choice for the shopkeepers and at the discretion of the council, but I suggest we offer these hard-pressed entrepreneurs and businesses the greatest possible flexibility this festive season. “As local government secretary I am relaxing planning restrictions and issuing an unambiguous request to councils to allow businesses to welcome us into their glowing stores late into the evening and beyond.” It comes after Jenrick suggested some areas could be moved into a lower tier when the first 14-day review of the latest system of tiered local controls takes place in mid-December. A record number of shops closed during the first half of 2020 due to the coronavirus lockdown, according to research from the Local Data Company and PwC.

Read more …

Sounds nice, but if the virus is endemic, and it sure looks that way, what will happen when those stores open 24/7?

Covid Infections In England Fall By 30% Over Lockdown (BBC)

Coronavirus infections in England have fallen by about a third over lockdown, according to a major study. Some of the worst-hit areas saw the biggest improvements – but, despite this progress, cases remained high across England. Health Secretary Matt Hancock said the data showed the country could not “take our foot off the pedal just yet”. The findings by Imperial College London were based on swabbing more than 100,000 people between 13-24 November. The React-1 study is highly respected and gives us the most up-to-date picture of Covid-19 in the country. Its researchers estimated the virus’s reproduction (R) rate had fallen to 0.88. That means on average every infection translated to less than one other new infection, so the epidemic is shrinking.


Run alongside pollster Ipsos MORI, the Imperial study involved testing a random sample of people for coronavirus, whether or not they had symptoms. The results of these tests suggested a 30% fall in infections between the last study and the period of 13-24 November. Before that, cases were accelerating – doubling every nine days when the study last reported at the end of October. Now cases are coming down, but more slowly than they shot up – halving roughly every 37 days. In the North West and North East, though – regions with some of the highest numbers of cases – infections fell by more than half. The findings suggest cases are now highest in the East Midlands and West Midlands.

Read more …

11 months into the mess, “Testing is a struggle, PPE and staff are daily challenges.” Sweet lord.

Kaiser says 40% of US COVID deaths are in long term care homes. I was corrected recently about a Canada graph I posted which said it 98% in Ontario, but even then it was two-thirds of all deaths there.

With such concentrations, anything you can do to decrease the numbers in these homes can change the entire picture of the disease countrywide. Why is that not happening?

NOTE: the graph may be a little misleading; not oly do the numbers of deaths rise, the numbers of states reporting also do.

Over 100,000 US Nursing Home Residents, Staff Killed by Pandemic (CD)

As of the last week of November, Covid-19 has claimed the lives of more than 100,000 people who live and work in long-term care facilities in the United States, according to the Kaiser Family Foundation’s latest analysis of state-reported data. The following chart depicts the growth in Covid-19 deaths among nursing home residents and staff in the U.S. since April. According to the Kaiser Family Foundation (KFF), 40% of the nation’s Covid-19 deaths have occurred in long-term care facilities. “While early action to prevent the spread of coronavirus in long-term care facilities led to strict protocols related to testing, personal protective equipment, and visitor restrictions,” KFF pointed out that “several of these measures have been reversed in recent months, and some long-term care facilities continue to report shortages of PPE and staff.”

According to physician and public health expert Michael Barnett, 7.7% of the nation’s nursing home residents, or one in 13, have now died as a result of Covid-19. “Things have never really gotten better,” he tweeted. “Testing is a struggle, PPE and staff are daily challenges.” Soon after reaching the “bleak milestone” of 100,000 pandemic deaths in long-term care facilities, which happened on Tuesday, the U.S. on Thursday experienced a new record-high number of coronavirus-related hospitalizations, as Common Dreams reported earlier Friday.


Millions of Americans have passed through airports in the past week, despite the Centers for Disease Control and Prevention’s recommendation against traveling for Thanksgiving. Dr. Anthony Fauci, the nation’s top infectious disease expert, does not expect conditions to improve by Christmas and the New Year. As KFF explained, the predicted “surge in cases after holiday gatherings and increased time indoors due to winter weather… will have ripple effects on hospitals and nursing homes, given the close relationship between community spread and cases in congregate care settings.”

Read more …

It’s still not done yet.

The ‘Smartest Man In The Room’ Has Joined Sidney Powell’s Team (AT)

In her Georgia complaint, Sidney Powell included the declaration of Navid Keshavarz-Nia, an expert witness who stated under oath that there was massive computer fraud in the 2020 election, all of it intended to secure a victory for Joe Biden. Dr. Kershavarz-Nia’s name may not mean a lot to you, but it’s one of the weightiest names in the world when it comes to sniffing out cyber-security problems. We know how important Dr. Kershavarz-Nia is because, just two and a half months ago, the New York Times ran one of its Sunday long-form articles about a massive, multi-million-dollar fraud that a talented grifter ran against the American intelligence and military communities. Dr. Kershavarz-Nia is one of the few people who comes off looking good:

“Navid Keshavarz-Nia, those who worked with him said, “was always the smartest person in the room.” In doing cybersecurity and technical counterintelligence work for the C.I.A., N.S.A. and F.B.I., he had spent decades connecting top-secret dots. After several months of working with Mr. Courtney, he began connecting those dots too. He did not like where they led.” Not only does Dr. Kershavarz-Nia have an innate intelligence, but he’s also got extraordinary academic and practical skills in cyber-fraud detection and analysis. The reason we know about his qualifications is that it takes seven paragraphs for him to list them in the declaration he signed to support the Georgia complaint.

His qualifications include a B.A., M.A., and Ph.D. in various areas of electrical and computer engineering. In addition, “I have advanced trained from the Defense Intelligence Agency (DIA), Central Intelligence Agency (CIA), National Security Agency (NSA), DHS office of Intelligence & Analysis (I&A) and Massachusetts Institution of Technology (MIT).” Professionally, Dr. Kershavarz-Nia has spent his career as a cyber-security engineer. “My experience,” he attests,” spans 35 years performing technical assessment, mathematical modeling, cyber-attack pattern analysis, and security intelligence[.]” I will not belabor the point. Take it as given that Dr. Kershavarz-Nia may know more about cyber-security than anyone else in America.

So what does the brilliant Dr. Kershavarz-Nia have to say? This: 1. Hammer and Scorecard is real, not a hoax (as Democrats allege), and both are used to manipulate election outcomes. 2. Dominion, ES&S, Scytl, and Smartmatic are all vulnerable to fraud and vote manipulation — and the mainstream media reported on these vulnerabilities in the past. 3. Dominion has been used in other countries to “forge election results.” 4. Dominion’s corporate structure is deliberately confusing to hide relationships with Venezuela, China, and Cuba. 5. Dominion machines are easily hackable. 6. Dominion memory cards with cryptographic key access to the systems were stolen in 2019.

Read more …

The strangest case of all so far?! People protest in court against Dominion machines being wiped clean on order of Sec of State, judge orders wiping stopped (it was already in progress), then reverses order because plaintiffs don’t have the machines, then reverses that order again. Buy why would you wipe election machines to begin with, especially before the election has been decided?

Republicans Plan to Occupy Georgia State House (GP)

A coalition of Republican groups are calling for an occupation of the Georgia State House in response to Secretary of State Brad Raffensperger ordering the Dominion voting machines in the state to be wiped. The groups are also calling for a protest at Raffensperger’s home on Monday evening. Raffensperger claims that he was ordering them to be reset ahead of the senate runoff election, but a reset would wipe all votes from the general election — the results of which are still being hotly contested by the Trump campaign. The deletion had been temporarily stopped on Sunday, when Judge Timothy C. Batten, Sr. issued an order to freeze ALL Dominion voting machines in the state of Georgia, but he reversed course within hours.


Currently, there is a major fight going on and it appears that a short time later, a federal judge ordered officials not to reset the machines. The volatile and unknown situation has lead to Republican activists and organizers to call for a full on occupation of the Georgia State House on Monday — as well as protest at the Secretary of State’s house. “After the Secretary of State ordered the voting machines to be wiped in a blatant destruction of evidence, coalition groups plan to OCCUPY THE STATE CAPITOL in Georgia on Monday November 30 at 12pm. They also plan to protest outside the Sec. of States house at 6pm,” Republican activist, influencer, and entrepreneur Mike Coudrey tweeted.


“Defendants are hereby ENJOINED & RESTRAINED from altering, destroying, or erasing, or allowing the alteration, destruction, or erasure of, any software or data on any DOMINION VOTING MACHINE…”

Read more …

When you look at these numbers, yes, it’s strange.

The 2020 Presidential Election Is Deeply Puzzling (Basham)

I am a pollster and I find this election to be deeply puzzling. I also think that the Trump campaign is still well within its rights to contest the tabulations. Something very strange happened in America’s democracy in the early hours of Wednesday November 4 and the days that followed. It’s reasonable for a lot of Americans to want to find out exactly what. First, consider some facts. President Trump received more votes than any previous incumbent seeking reelection. He got 11 million more votes than in 2016, the third largest rise in support ever for an incumbent. By way of comparison, President Obama was comfortably reelected in 2012 with 3.5 million fewer votes than he received in 2008. Trump’s vote increased so much because, according to exit polls, he performed far better with many key demographic groups.

Ninety-five percent of Republicans voted for him. He did extraordinarily well with rural male working-class whites. He earned the highest share of all minority votes for a Republican since 1960. Trump grew his support among black voters by 50 percent over 2016. Nationally, Joe Biden’s black support fell well below 90 percent, the level below which Democratic presidential candidates usually lose. Trump increased his share of the national Hispanic vote to 35 percent. With 60 percent or less of the national Hispanic vote, it is arithmetically impossible for a Democratic presidential candidate to win Florida, Arizona, Nevada, and New Mexico. Bellwether states swung further in Trump’s direction than in 2016. Florida, Ohio and Iowa each defied America’s media polls with huge wins for Trump.

Since 1852, only Richard Nixon has lost the electoral college after winning this trio, and that 1960 defeat to John F. Kennedy is still the subject of great suspicion. Midwestern states Michigan, Pennsylvania, and Wisconsin always swing in the same direction as Ohio and Iowa, their regional peers. Ohio likewise swings with Florida. Current tallies show that, outside of a few cities, the Rust Belt swung in Trump’s direction. Yet, Biden leads in Michigan, Pennsylvania, and Wisconsin because of an apparent avalanche of black votes in Detroit, Philadelphia, and Milwaukee. Biden’s ‘winning’ margin was derived almost entirely from such voters in these cities, as coincidentally his black vote spiked only in exactly the locations necessary to secure victory. He did not receive comparable levels of support among comparable demographic groups in comparable states, which is highly unusual for the presidential victor.

We are told that Biden won more votes nationally than any presidential candidate in history. But he won a record low of 17 percent of counties; he only won 524 counties, as opposed to the 873 counties Obama won in 2008. Yet, Biden somehow outdid Obama in total votes. Victorious presidential candidates, especially challengers, usually have down-ballot coattails; Biden did not. The Republicans held the Senate and enjoyed a ‘red wave’ in the House, where they gained a large number of seats while winning all 27 toss-up contests. Trump’s party did not lose a single state legislature and actually made gains at the state level. Another anomaly is found in the comparison between the polls and non-polling metrics.

The latter include: party registrations trends; the candidates’ respective primary votes; candidate enthusiasm; social media followings; broadcast and digital media ratings; online searches; the number of (especially small) donors; and the number of individuals betting on each candidate. Despite poor recent performances, media and academic polls have an impressive 80 percent record predicting the winner during the modern era. But, when the polls err, non-polling metrics do not; the latter have a 100 percent record. Every non-polling metric forecast Trump’s reelection. For Trump to lose this election, the mainstream polls needed to be correct, which they were not. Furthermore, for Trump to lose, not only did one or more of these metrics have to be wrong for the first time ever, but every single one had to be wrong, and at the very same time; not an impossible outcome, but extremely unlikely nonetheless.

Read more …

@KateAronoff: “Historic times, ladies: a woman is going to collect surveillance data leading to a targeted drone strikes. Another woman will tell the press that 14 dead civilians is the price of freedom, and yet another woman will say there’s no money left for healthcare”

Biden To Tap Career Russiagater For Top Budgeting Post (RT)

An Obamacare architect, former Hillary Clinton adviser and career Russiagater, Neera Tanden, has been tapped as potential budget office director under Biden, setting Twitter on fire with recollections of her toxic track record. Tanden was a healthcare adviser under the Barack Obama administration and helped draft his brainchild the Affordable Care Act. A close ally of Hillary Clinton during her unsuccessful 2016 presidential run, she currently heads the pro-Clinton think tank Center for American Progress. Although born and raised in the United States, Tanden’s parents are immigrants from India. The mainstream media have praised her potentially becoming “the first woman of color and the first South Asian American to lead the Office of Management and Budget.”

Known for her combative tweeting, Tanden seems to have a habit of clashing with anyone who questions the wisdom of the Democratic Party’s political machine. Journalist Vincent Bevins joked that her potential nomination should be seen as an inspiration which “shows that a lifetime of posting cringe is not a barrier to higher office.” Grayzone writer and assistant editor Ben Norton labelled Tanden a “neoliberal troll” who “hates the left with a burning passion and spends all her time on here attacking leftists.” In fact, Tanden was openly hostile towards supporters of Vermont senator and two-time presidential hopeful Bernie Sanders. The left-leaning lawmaker accused Tanden last year of “maligning my staff & supporters and belittling progressive ideas.”

Her hostility towards those critical of Clinton reportedly even led to physical scuffles. In 2008, Tanden is said to have assaulted a staffer after he asked Clinton a critical question about the Iraq war. Conservative pundit Mike Cernovich described Tanden as a “garden variety resistance troll,” although this description arguably doesn’t do justice to her impressive output of Russiagate-related outbursts. She was a militant disciple of the debunked theory that Donald Trump’s presidential campaign was in cahoots with Moscow, floating countless bizarre allegations, including, but certainly not limited to, the proposition that Russian hackers had infiltrated Florida’s voting system with Trump’s full knowledge during the 2016 election.

Tanden provocatively alleged that WikiLeaks co-founder Julian Assange engaged in “fascist behavior” by publishing leaked State Department emails and other US documents. Her foreign policy views have also raised eyebrows. She (in)famously suggested Libya should provide compensation, in the form of oil, to the US as a means of repayment for its “liberation.” A US-led NATO intervention in 2011 turned the North African nation into a safe haven for warlords, terrorists and human traffickers. “Given tonight’s news, I hope oil-rich countries around the world are increasing the security on their rigs and drilling sites,” journalist Glenn Greenwald quipped, citing an email of Tanden’s that was leaked to the Intercept.

Read more …

A decades-long development.

One Of America’s Great Wildernesses Being Destroyed In A Silent Massacre (LAT)

Hidden away in the heart of the Deep South, one of the nation’s greatest wildernesses is being destroyed, bit by bit, in a silent massacre. You won’t find people chaining themselves to trees to protect this place, or national environmental groups using pictures of it to sign up new members, because few know it exists. And yet, here it is — the Mobile River Basin, one of the richest in the world in terms of the sheer number of species and types of habitat. The major rivers and thousands of creeks feeding into this basin together form the largest inland delta system in the United States, second only to the Mississippi in how much water it dumps into the Gulf of Mexico.

The river system, the fourth-largest in the country in terms of water flow, stretches from the northern edge of Alabama to the Gulf, draining parts of four states, and encompassing hundreds of thousands of acres of forest, from Appalachian hardwood stands to haunted cypress swamps. A dedicated band of locals know it for the incredible hunting and fishing it affords. But few know it for its greatest distinction. That’s a shame, for this is America’s Amazon, far and away the most biodiverse river network in North America. There are more species of oaks on a single hillside on the banks of the Alabama River than you can find anywhere else in the world. The Mobile River Basin makes Alabama home to more species of freshwater fish, mussels, snails, turtles and crawfish than any other state. The contest isn’t even close.

For instance, Alabama is home to 97 crawfish species, while California, three times the size of Alabama, has but nine. There are 450 species of freshwater fish in the state, or about one-third of all species known in the entire nation. The system’s turtle population is even more singular. The Mobile-Tensaw Delta estuary system has 18 turtle species, more than any other river delta system in the world — more than the Amazon and more than the Mekong, both extraordinarily biodiverse ecosystems. Unlike most of the nation’s great river systems, the Mobile Basin — along with its wetlands, floodplain forests and estuary — has survived with its biological community mostly intact. That is due in large measure to an odd combination of benign neglect and the mixed blessing of being located in the heart of Alabama.

Tragically, it now sits on the cusp of decline, facing death by a thousand cuts, just as the scientific community has begun to appreciate its riches. Habitat destruction, development and lax enforcement of environmental regulations conspire to take an increasing toll, making the area a global hot spot for extinctions, particularly of aquatic creatures. In fact, nearly half of all extinctions in the continental United States since the 1800s have occurred among creatures that lived in the Mobile River Basin, according to records maintained by Endangered Species International and the U.S. Fish and Wildlife Service.

Read more …

“The problems are deep and structural – not the type that the tedious process of democratic change can fix in time to forestall mayhem.”

The Next Decade Could Be Even Worse (Wood)

Peter Turchin, one of the world’s experts on pine beetles and possibly also on human beings, met me reluctantly this summer on the campus of the University of Connecticut at Storrs, where he teaches. Like many people during the pandemic, he preferred to limit his human contact. He also doubted whether human contact would have much value anyway, when his mathematical models could already tell me everything I needed to know. [..] The year 2020 has been kind to Turchin, for many of the same reasons it has been hell for the rest of us. Cities on fire, elected leaders endorsing violence, homicides surging – to a normal American, these are apocalyptic signs. To Turchin, they indicate that his models, which incorporate thousands of years of data about human history, are working. (“Not all of human history,” he corrected me once. “Just the last 10,000 years.”)

He has been warning for a decade that a few key social and political trends portend an “age of discord,” civil unrest and carnage worse than most Americans have experienced. In 2010, he predicted that the unrest would get serious around 2020, and that it wouldn’t let up until those social and political trends reversed. Havoc at the level of the late 1960s and early ’70s is the best-case scenario; all-out civil war is the worst. The fundamental problems, he says, are a dark triad of social maladies: a bloated elite class, with too few elite jobs to go around; declining living standards among the general population; and a government that can’t cover its financial positions. His models, which track these factors in other societies across history, are too complicated to explain in a nontechnical publication.

But they’ve succeeded in impressing writers for nontechnical publications, and have won him comparisons to other authors of “megahistories,” such as Jared Diamond and Yuval Noah Harari. [..] The fate of our own society, he says, is not going to be pretty, at least in the near term. “It’s too late,” he told me as we passed Mirror Lake, which UConn’s website describes as a favorite place for students to “read, relax, or ride on the wooden swing.” The problems are deep and structural – not the type that the tedious process of democratic change can fix in time to forestall mayhem. Turchin likens America to a huge ship headed directly for an iceberg: “If you have a discussion among the crew about which way to turn, you will not turn in time, and you hit the iceberg directly.”

Read more …

 

 

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Nov 012018
 
 November 1, 2018  Posted by at 8:38 am Finance Tagged with: , , , , , , , , , , ,  12 Responses »


Francisco Goya Witches’ Sabbath 1797-98

 

US Wages And Salaries Jump By 3.1%, Highest Level In A Decade (CNBC)
Chinese Yuan Tumbles To New Cycle Low Amid Signs Of Capital Outflows (ZH)
Southern California Suffers Its Worst Housing Slump In Over A Decade (CNBC)
Rise In ‘Zombie Firms’ Is Fueling Fears For The Global Labor Market (CNBC)
UK, EU Agree Tentative Brexit Deal On Financial Services (R.)
GOP Senators Want Trump To Halt Nuclear Technology Talks With Saudis (CNBC)
New Zealand Is Best Place To Do Business – World Bank (G.)
Europe Torn Over Islamic State Children In Syria (R.)
Tim Berners-Lee Says Tech Giants May Have To Be Split Up (R.)
Oceans ‘Soaking Up 60% More Heat Than Estimated’ (BBC)
70% Of World’s Last Remaining Wilderness In Just Five Countries (Ind.)

 

 

This means two things: 1) more fed rate hikes, and 2) ever slimmer chance of a blue wave in the midterms.

US Wages And Salaries Jump By 3.1%, Highest Level In A Decade (CNBC)

Employment costs rose more than expected in the third quarter in a sign that more inflation could be brewing in the U.S. economy. The Labor Department’s employment cost index rose 0.8 percent for the period, ahead of the estimate of 0.7 percent from economists surveyed by Refinitiv. Wages and salaries rose 0.9 percent, well ahead of expectations for 0.5 percent. Benefit costs were up 0.4 percent. On a yearly basis, wages and salaries jumped 3.1 percent, the biggest increase in 10 years. Wage increases have been the missing link in the economy since the recovery began in mid-2008. Average hourly earnings have been rising steadily but have stayed below the 3 percent level as slack has remained in the labor market.

However the unemployment rate is now at 3.7 percent, the lowest since 1969, and wage pressures have begun to build. The Federal Reserve has been raising interest rates in an effort to stave off future inflationary pressures, though the central bank’s preferred gauge of inflation rose just 2.5 percent in the third quarter, including a 1.9 percent increase for health benefits. “The employment cost index data adds to the broader evidence that wage growth has continued to trend gradually higher over recent quarters,” Michael Pearce, senior U.S. economist at Capital Economics, said in a note. “And with labor market conditions still tightening, we expect wage growth will accelerate further from here.”

Read more …

“2019 big year for China. centenary of founding of CCP [..] Being seen to succumb to Trump’s WH is just not on. Expect both sides to dig in further..”

Chinese Yuan Tumbles To New Cycle Low Amid Signs Of Capital Outflows (ZH)

As Chinese markets began to wake, yuan just broke below 6.98/USD for the first time in this downswing, despite PBOC liquidity withdrawals sending money market rates spiking (to squeeze yuan shorts). [..] if former UBS Chief Economist George Magnus is right, any hopes for the G20 meeting between Trump and Xi should be extinguished. In a series of tweets, Magnus warned… “Trump and Xi are supposed to meet at the G20 in Buenos Aires at end month. Will they talk trade? They need to cos Trump has already threatened to subject the other of 50% of imports from China to punitive tariffs. This is how he prepares the ground, telling Fox News: “I think that we will make a great deal with China and it has to be great, because they’ve drained our country,”.

Designed to turn XJP frostier, be even less inclined to bring something to the table, and more anxious not to be seen to be succumbing to foreign pressure. So I think, barring something going on in the background, these talks are set up to fail, assuming they happen. The 10% tariff rate is due to go to 25% on 200bn $ of goods on 1 Jan anyway, and we shd probably expect WHY to go for the remaining 250bn $ of imports in new year… 2019 big year for China. centenary of founding of CCP. and rivals Soviet CP’s 72 years in power. Xi’s Chinese Dream of Rejuvenation of Chinese Ppl isn’t just a slogan. Being seen to succumb to Trump’s WH is just not on. Expect both sides to dig in further

Begs question as what China will do next. Xant tit for tat any more, as they have run out of room. @davidjlynch in @washingtonpost reminds us that tourism cd be a target. Targeting US firms also could be cranked up. Yuan depreciation also poss tho v risky at home too … Much longer discussion and background written up in Red Flags, just out in the US this month….the details change with the news and announcements, but the substance is sadly all too clear.

Read more …

Should we pity the fools who bought the overpriced crap? The entire westernworld is filled with people who grossly overpaid on the back of ultra-low rates. They’re all going to claim they’re victims, and there’s so many of them they may actually be bailed out, at the cost of those who haven’t been so stupid.

Southern California Suffers Its Worst Housing Slump In Over A Decade (CNBC)

Higher mortgage rates and overheated home prices hit Southern California home sales hard in September. The number of new and existing houses and condominiums sold during the month plummeted nearly 18 percent compared with September 2017, according to CoreLogic. That was the slowest September pace since 2007, when the national housing and mortgage crisis was hitting. Sales have been falling on an annual basis for much of this year, but this was the biggest annual drop for any month in almost eight years. It was also more than twice the annual drop seen in August. “The double whammy of higher prices and rising mortgage rates has priced out some would-be buyers and prompted others to take a wait-and-see stance,” said Andrew LePage, a CoreLogic analyst, in the release.

“There was one caveat to last month’s sharp annual sales decline — this September had one less business day for recording transactions. Adjusting for that, the year-over-year decline would be about 13 percent, still the largest in four years.” On a monthly basis, sales fell 22 percent in September compared with August. Sales usually fall about 10 percent from August to September. Sales of newly built homes are suffering more than sales of existing homes, likely because fewer are being built compared with historical production levels. Newly built homes also come at a price premium. Sales of newly built homes were 47 percent below the September average dating back to 1988, while sales of existing homes were 22 percent below their long-term average.

The median price of Southern California homes sold in September, $505,000, was still 3.6 percent higher than it was a year ago. That was the lowest annual gain for any month in more than three years. “Price growth is moderating amid slower sales and more listings in many markets,” LePage said. “This is welcome news for potential homebuyers, but many still face a daunting hurdle – the monthly mortgage payment, which has been pushed up sharply by rising mortgage rates.”

Read more …

They’re everywhere that debt is cheap.

Rise In ‘Zombie Firms’ Is Fueling Fears For The Global Labor Market (CNBC)

A rise in so-called “zombie firms,” alongside higher interest rates, has led several experts to warn of the impact it could have on employment in developed nations. Zombie firms, as they are often called, are companies that would have defaulted in a normal economic cycle but continue to function due to an ultra-low interest rate environment. “Like the characters after which they are named, zombie firms are creatures that really should have shuffled off to the next realm some time ago. Instead of embracing death, they soldier on, usually wreaking havoc on the rest of society,” Eoin Murray, head of investment at Hermes Investment Management, said in a research note Wednesday.

Economists define a zombie firm as one which is at least 10 years old but is unable to cover its costs with its profits. Murray described collapsed facilities management and construction services company Carillion as one. Ever since the financial crisis, these firms have taken on huge pile of debts as borrowing became so cheap on the back of low interest rates. The numbers of such firms are currently on the rise, according to a report from the Bank of International Settlements (BIS) released last month. Decades of falling interest rates have led to a sharp increase in the number of zombie firms that are potentially threatening economic growth and preventing interest rates from rising, the report stated.

“Our analysis suggests that this increase is linked to reduced financial pressure, which in turn seems to reflect in part the effects of lower interest rates,” the research said, adding that these “zombies” weigh on economic performance because they are “less productive and because their presence lowers investment in and employment at more productive firms.”

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What’s the use without an Irish border deal?

UK, EU Agree Tentative Brexit Deal On Financial Services (R.)

British Prime Minister Theresa May has struck a tentative deal with the European Union that would give UK financial services companies continued access to European markets after Brexit, the Times reported on Thursday. British and European negotiators have reached tentative agreement on all aspects of a future partnership on services, as well as the exchange of data, the British newspaper reported, citing government sources. The services deal would give UK companies access to European markets as long as British financial regulation remained broadly aligned with the EU’s, the Times reported. The British pound jumped as much as 0.5 percent against the dollar following the report.

Global banks operating in the UK have had to reorganize their operations around Britain’s departure from the European Union, due to take place in March next year. Many have set up new European hubs and begun to move operations, senior executives and staff to ensure they can continue to serve their continental clients if Britain leaves the bloc without a deal. According to the Times’ report, EU will accept that the UK has “equivalent” regulations to Brussels, and UK financial services companies will be allowed to operate as they now do in Europe. EU officials have said that the EU’s financial market access system, known as “equivalence,” under which Brussels grants access to foreign banks and insurers if their home rules converge with the bloc’s, is probably Britain’s best bet.

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Yeah, let’s hand MbS some nukes.

GOP Senators Want Trump To Halt Nuclear Technology Talks With Saudis (CNBC)

Five Republican senators have asked the Trump administration to suspend talks to transfer U.S. nuclear technology to Saudi Arabia following the killing of journalist Jamal Khashoggi at the kingdom’s consulate in Turkey. The lawmakers, led by Senator Marco Rubio, threatened to block any agreement to export civilian nuclear technology to Saudi Arabia, potentially setting up a showdown with the White House. The Trump administration has courted the Saudis as they seek to build 16 nuclear power reactors over the next 25 years, an endeavor that would generate tens of billions of dollars in economic activity.

In a letter to President Donald Trump, the senators say the slaying of Khashoggi, as well as other foreign policy issues, raise questions about whether the Saudi leadership should be entrusted with U.S. nuclear technology and know-how. “The ongoing revelations about the murder of Saudi journalist Jamal Khashoggi, as well as certain Saudi actions related to Yemen and Lebanon, have raised further serious concerns about the transparency, accountability, and judgment of current decisionmakers in Saudi Arabia,” the lawmakers wrote in a letter to Trump. “We therefore request that you suspend any related negotiations for a U.S.-Saudi civil nuclear agreement for the foreseeable future.”

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Number 1 in a list that includes UAE and Georgia. Nobody should want that. Nice going, Jacinda.

New Zealand Is Best Place To Do Business – World Bank (G.)

New Zealand has topped the World Bank’s ranking of the best countries to start and run a business in 2018, ahead of Singapore, Denmark and Hong Kong. The World Bank said New Zealand had retained its position in its Doing Business report ahead of 190 other countries, despite not implementing any reforms in the last year. The UK slipped to ninth place while Norway climbed to seventh in a year when the World Bank said governments pressed ahead with a record number of reforms to business regulations and tax rules to support private businesses. Georgia, the former Soviet satellite state, retained its position at number six in the rankings, despite persistent criticism from aid agencies that the World Bank was rewarding a country with high levels of inequality, showing that a business-friendly environment is not in and of itself a means of alleviating poverty.

Macedonia, the United Arab Emirates, Malaysia and Mauritius are also among the business-friendly countries in the World Bank’s top 20 that rank among the highest in Oxfam’s list of unequal nations. The Organisation for Economic Cooperation and Development criticised Mauritius last year for acting as a tax haven and leaching tax revenues from mainland African nations. Singapore, often held up as a model for post-Brexit Britain, recently topped Oxfam’s list of unequal nations. The World Bank Group’s president, Jim Yong Kim, said the private sector played an important role in “creating sustainable economic growth and ending poverty around the world”.

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Even the US is ahead of Europe on this.

Europe Torn Over Islamic State Children In Syria (R.)

For years, they heard little from daughters who went to join Islamic State. Now dozens of families across Europe have received messages from those same women, desperate to return home from detention in Syria. They are among 650 Europeans, many of them infants, held by U.S.-backed Kurdish militias in three camps since IS was routed last year, according to Kurdish sources. Unwanted by their Kurdish guards, they are also a headache for officials in Europe. In letters sent via the Red Cross and in phone messages, the women plead for their children to be allowed home to be raised in the countries they left behind. In one message played by a woman at a cafe in Antwerp, the chatter of her young grandchildren underscores their mother’s pleas.

Another woman in Paris wants to care for three grandchildren she has never met, born after her daughter left for Syria in 2014, at the age 18. “They are innocent,” she said. “They had no part in any of this.” Like other relatives of those held in Syria, the two mothers asked to remain anonymous – afraid of being linked to IS and worried their daughters may face reprisals. The United States has taken custody of some citizens, as have Russia and Indonesia, and wants Europe to do the same – fearing the camps may breed a new generation of militants. “We are telling European governments: ‘Take your people back, prosecute them. … They are more of a threat to you here than back home,’” a senior U.S. counterterrorism official said.

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“If you put a drop of love into Twitter it seems to decay but if you put in a drop of hatred you feel it actually propagates much more strongly.”

Tim Berners-Lee Says Tech Giants May Have To Be Split Up (R.)

Silicon Valley technology giants such as Facebook and Google have grown so dominant they may need to be broken up, unless challengers or changes in taste reduce their clout, the inventor of the World Wide Web told Reuters. The digital revolution has spawned a handful of U.S.-based technology companies since the 1990s that now have a combined financial and cultural power greater than most sovereign states. Tim Berners-Lee, a London-born computer scientist who invented the Web in 1989, said he was disappointed with the current state of the internet, following scandals over the abuse of personal data and the use of social media to spread hate.

“What naturally happens is you end up with one company dominating the field so through history there is no alternative to really coming in and breaking things up,” Berners-Lee, 63, said in an interview. “There is a danger of concentration.” But he urged caution too, saying the speed of innovation in both technology and tastes could ultimately cut some of the biggest technology companies down to size. “Before breaking them up, we should see whether they are not just disrupted by a small player beating them out of the market, but by the market shifting, by the interest going somewhere else,” Berners-Lee said.

“I am disappointed with the current state of the Web,” he said. “We have lost the feeling of individual empowerment and to a certain extent also I think the optimism has cracked.” Facebook CEO Mark Zuckerberg apologized after the Cambridge Analytica scandal and pledged to do more to protect users’ data. But social media, Berners-Lee said, was still being used to propagate hate. “If you put a drop of love into Twitter it seems to decay but if you put in a drop of hatred you feel it actually propagates much more strongly. And you wonder: ‘Well is that because of the way that Twitter as a medium has been built?’”

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Not at all surprised, but I have some trouble with this sentence: “..we have put about 150 times the amount of energy used to generate electricity globally into the seas..”

Oceans ‘Soaking Up 60% More Heat Than Estimated’ (BBC)

The world has seriously underestimated the amount of heat soaked up by our oceans over the past 25 years, researchers say. Their study suggests that the seas have absorbed 60% more than previously thought. They say it means the Earth is more sensitive to fossil fuel emissions than estimated. This could make it much more difficult to to keep global warming within safe levels this century. According to the last major assessment by the Intergovernmental Panel on Climate Change (IPCC), the world’s oceans have taken up over 90% of the excess heat trapped by greenhouse gases.

But this new study says that every year, for the past 25 years, we have put about 150 times the amount of energy used to generate electricity globally into the seas – 60% more than previous estimates. That’s a big problem. Scientists base their predictions about how much the Earth is warming by adding up all the excess heat that is produced by the known amount of greenhouse gases that have been emitted by human activities. This new calculation shows that far more heat than we thought has been going into oceans. But it also means that far more heat than we thought has been generated by the warming gases we have emitted. Therefore more heat from the same amount of gas means the Earth is more sensitive to CO2.


More heat means less oxygen in the water which could have implications for many species. Photo Victor Huang

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Well, and seas. “..more than 77 per cent of land – excluding Antarctica – and 87 per cent of the ocean has been modified by the direct effects of human activities..”

70% Of World’s Last Remaining Wilderness In Just Five Countries (Ind.)

More than 70 per cent of our planet’s remaining areas of wilderness are contained in just five countries and are at the mercy of political decisions regarding their future, new research has warned. Urgent international action is required to ensure the preservation of these last pockets of intact ecosystems, the study says, which calls for mandated conservation targets. The places where the greatest remaining tracts of wilderness containing mixes of species at near-natural levels of abundance were identified as being in Russia, Canada, Australia, the US and Brazil.

Produced by the University of Queensland (UQ) and the Wildlife Conservation Society (WCS), the study published in the journal Nature, says these areas are “increasingly important buffers against changing conditions… Yet they aren’t an explicit target in international policy frameworks.” The study also examines the huge future value these areas are likely to have for our planet. “They are also the only areas supporting the ecological processes that sustain biodiversity over evolutionary timescales,” it says. “As such, they are important reservoirs of genetic information, and act as reference areas for efforts to re-wild degraded land and seascapes.”

Professor James Watson, from UQ’s School of Earth and Environmental Sciences, said the work provides the first full global picture of how little wilderness remains, and he was alarmed at the results. “A century ago, only 15 per cent of the Earth’s surface was used by humans to grow crops and raise livestock,” he said. “Today, more than 77 per cent of land – excluding Antarctica – and 87 per cent of the ocean has been modified by the direct effects of human activities. It might be hard to believe, but between 1993 and 2009, an area of terrestrial wilderness larger than India – a staggering 3.3 million square kilometres – was lost to human settlement, farming, mining and other pressures.”

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Jul 272018
 


Pablo Picasso The three dancers 1925

 

The Mirage That Will Be Q2-GDP (Roberts)
Household Debt In UK ‘Worse Than At Any Time On Record’ (G.)
BRICS Nations Pledge Unity As Trade War Threatens (AFP)
Facebook’s $120 Billion Rout Biggest Loss In Stock Market History (CNBC)
Trade Deal With EU Greater In Scope Than Expected – US Official (R.)
Macron ‘Not In Favour’ Of Vast New US-EU Trade Deal (AFP)
EU’s Barnier Kills Off Theresa May’s Brexit Customs Proposals (G.)
Trump Threatens Turkey Sanctions Over Detained Pastor (AP)
US Government Misses Judge’s Midnight Deadline For Reunifying Families (Ind.)
Taxation Strangles Greece’s Growth Prospects (WSJ)
Death Toll From Greek Wildfires Rises To 85, Scores Stll Missing (K.)
Only 13% Of World’s Oceans Are Still Untouched Wilderness (Ind.)

 

 

Another great piece by Lance Roberts. Here’s the part on debt. It now takes $3.71 of debt to create $1 of economic growth. That won’t last.

The Mirage That Will Be Q2-GDP (Roberts)

With wage growth stagnant, corporations struggling to pass through rising commodity and tariff related costs and debt service requirements on the rise as the Fed continues to hike rates, the drag from the consumption side of the economic equation will likely dwarf the current boosts in the next two quarters. Furthermore, as I noted previously, tax cuts and reform, tariffs and other fiscal remedies promoted by the current administration fail to address the main drag to economic growth over time. The debt. “It now requires $3.71 of debt to create $1 of economic growth which will only worsen as the debt continues to expand at the expense of stronger rates of growth.”

In fact, as recently noted by our friends at the Committee for a Responsible Federal Budget, the U.S. deficit is set to surge. To wit: “The White House Office of Management and Budget recently released its annual mid-session review which updated deficit projections in its fiscal year 2019 budget request. The report projected deficits will reach $1.085 trillion in FY 2019 under their budget, which is double the $526 billion called for in the FY 2018 budget.” The report specifically addresses the biggest point of concern:

“The last time the nation experienced trillion-dollar deficits was during a serious economic downturn, no less – lawmakers took the issue seriouly. PAYGO laws were established, a fiscal commission was formed, new discretionary spending caps were implemented and policymakers entered a multi-year debate on how best to bring down long-term debt levels. This time around, with the emergence of trillion-dollar deficits during a period of economic strength – when we should be saving for future downturns – few seem to even take notice. On our current course, debt will overtake the size of the entire economy in about a decade, and interest will be the largest government program in three decades or less. This will weaken both our economy and our role in the world.”

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And more debt. And then some more.

Household Debt In UK ‘Worse Than At Any Time On Record’ (G.)

British households spent around £900 more on average than they received in income during 2017, pushing their finances into deficit for the first time since the credit boom of the 1980s. The Office for National Statistics said the shortfall amounted to nearly £25bn – equal to almost a quarter of the NHS budget – and the overspend was mostly paid for with borrowed money, though households also ran down savings. The figures pose a challenge to the government, which was warned last year that Britain’s consumer credit bubble of more than £200 billion was unsustainable. A dramatic rise in debt-fuelled spending since 2016 has also taken place against the backdrop of the Brexit vote, which triggered a rise in inflation at a time of weak wage growth. .

Analysts warned that a squeeze on household incomes from benefit cuts, lacklustre wages and high inflation would continue to force poorer households to borrow more to pay basic bills. Tom Selby, a research analyst at financial adviser AJ Bell, said the figures presented ministers with a significant challenge as they sought “to build financial resilience in the UK”. Researchers at the ONS said the situation was worse than at any time on record after the £25bn deficit last year surpassed the £300m deficit recorded in 1988. British household finances also slumped from being among the most solvent in the 1990s to being among the most indebted compared with households in other major western countries.

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42% of global GDP.

BRICS Nations Pledge Unity As Trade War Threatens (AFP)

Five of the biggest emerging economies on Thursday stood by the multilateral system and vowed to strengthen economic cooperation in the face of US tariff threats and unilateralism. The heads of the BRICS group – Brazil, Russia, India, China and South Africa – met in Johannesburg for an annual summit dominated by the risk of a US-led trade war, although leaders did not publicly mention President Donald Trump by name. “We express concern at the spill-over effects of macro-economic policy measures in some major advanced economies,” they said in joint statement. “We recognise that the multilateral trading system is facing unprecedented challenges. We underscore the importance of an open world economy.”

Trump has said he is ready to impose tariffs on all $500 billion of Chinese imports, complaining that China’s trade surplus with the US is due to unfair currency manipulation. Trump has already slapped levies on goods from China worth tens of billions of dollars, as well as tariffs on steel and aluminium from the EU, Canada and Mexico. “We should stay committed to multilateralism,” Chinese President Xi Jinping said on the second day of the talks. “Closer economic cooperation for shared prosperity is the original purpose and priority of BRICS.” Russian President Vladimir Putin, who held a controversial meeting with Trump last week, echoed the calls for closer ties among BRICS members and for stronger trade within group. “BRICS has a unique place in the global economy — this is the largest market in the world, the joint GDP is 42% of the global GDP and it keeps growing,” Putin said.

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For what it’s worth.

Facebook’s $120 Billion Rout Biggest Loss In Stock Market History (CNBC)

Facebook on Thursday posted the largest one-day loss in market value by any company in U.S. stock market history after releasing a disastrous quarterly report. The social media giant’s market capitalization plummeted by $119 billion to $510 billion as its stock price plummeted by 19 percent. At Wednesday’s close, Facebook’s market cap had totaled nearly $630 billion, according to FactSet. No company in the history of the U.S. stock market has ever lost $100 billion in market value in just one day, but two came close. On Sept. 22, 2000, Intel shed $90.74 billion in market value as the dot-com bubble burst. Earlier that year, Microsoft lost $80 billion from its market cap in one day.

Other companies that have experienced similar one-day losses in dollar amount include Apple in 2013, when it lost $59.6 billion, and Exxon Mobil in 2008, when it lost $52.5 billion. Facebook’s enormous loss in value came a day after the company reported weaker-than-expected revenue for the second quarter as well as disappointing global daily active users, a key metric for Facebook. The company also said it expects its revenue growth rate to slow in the second half of this year. Several analysts downgraded Facebook’s stock, including Nomura Instinet’s Mark Kelley. “With stagnating core user growth, we think there is too much near- to mid-term uncertainty to recommend shares at this point,” Kelley, who downgraded the stock to neutral from buy, said in a note.

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But who’s winning?

Trade Deal With EU Greater In Scope Than Expected – US Official (R.)

The U.S. administration got more out of a trade deal with the European Union than it had expected and the two will work together to deal with China’s market abuses, a top White House official told Reuters on Thursday. President Donald Trump and Jean-Claude Juncker, president of the European Commission, the EU’s executive body, struck a surprise deal on Wednesday that ended the risk of an immediate trade war between the two powers. “The EU came into the conversation and they were open to the proposals we had made about getting rid of tariffs, non-tariff barriers and subsidies,” said the official, who spoke on condition of anonymity.

Trump agreed on Wednesday to refrain from imposing car tariffs while the two sides launch negotiations to cut other trade barriers. Europe agreed to increase purchases of U.S. liquefied natural gas and lower trade barriers to American soybeans. The official stressed on Thursday that Trump retained the power to implement tariffs on cars if needed and said there was no deadline for the completion of talks. He said Trump was committed to getting zero tariffs from the European Union.= As part of the deal, the United States and Europe will work together on China. The two powers in the past have cooperated on measures to deal with theft of company secrets by Chinese entities.

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France doesn’t want to include agriculture. It gets 100s of billions in subsidies. So Macron talks about steel instead.

Macron ‘Not In Favour’ Of Vast New US-EU Trade Deal (AFP)

French President Emmanuel Macron said Thursday he viewed talks between US President Donald Trump and EU Commission chief Jean-Claude Juncker as “useful”, but he was “not in favour” of a “vast new trade deal” between the European Union and the United States. “European and France never wanted a trade war and the talks yesterday were therefore useful in as far as they helped scale back any unnecessary tension, and working to bring about an appeasement is useful,” the French leader said after a meeting with Spanish Prime Minister Pedro Sanchez in Madrid. “But a good trade discussion… can only be done on a balanced, reciprocal basis, and in no case under any sort of threat,” Macron said. “In this regard, we have a number of questions and concerns that we will clarify”.

Macron said he was “not in favour of us launching a vast trade agreement, along the lines of the TTIP, because the current context does now allow for that,” referring to a transatlantic free-trade deal which stalled two years ago. And he reaffirmed his opposition to including agriculture in any such deal. “I believe that no European standard should be suppressed or lowered in the areas of the environment, health or food, for example.” Macron went on to insist that “clear gestures are needed from the US, signs of de-escalation on steel and aluminium, on which the United States have imposed illegal taxes. That, for me, would constitute a prelude to making further concrete headway” on trade.

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Rinse and repeat.

EU’s Barnier Kills Off Theresa May’s Brexit Customs Proposals (G.)

Michel Barnier has warned that attempts to appeal to EU leaders over his head were a waste of time as he rejected Theresa May’s proposals on customs after Brexit, in effect killing off the Chequers plan. On Friday Theresa May travels to Austria to meet Chancellor Sebastian Kurz and the Czech prime minister Andrej Babis, before heading off on her summer holiday. May’s trip follows the EU chief Brexit negotiator insisting there was no difference of opinion in European capitals to exploit. “Anyone who wants to find a sliver of difference between my mandate and what the heads of government say they want are wasting their time, quite frankly,” he told reporters at a joint press conference with the new Brexit secretary, Dominic Raab, in Brussels.

The British negotiators have become increasingly frustrated with the EU’s attitude to the white paper thrashed out at the prime minister’s country retreat. They feel that it will take an intervention by leaders, most likely at a summit in Salzburg in September, to move the dial in favour of a deal. A number of cabinet ministers have been despatched around EU capitals to make their case for greater flexibility. The impasse in the negotiations was laid bare in the press conference in the European commission’s Berlaymont headquarters as a thunderstorm broke outside. While Raab insisted that with “political will” a deal on trade and on avoiding a border on the island of Ireland was achievable by a crunch summit in October, Barnier offered a damning verdict on a major element of the UK’s vision of the future.

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And the lira plunges some more…

Trump Threatens Turkey Sanctions Over Detained Pastor (AP)

President Donald Trump says the U.S. will hit Turkey with “large sanctions” over a American pastor detained on terror and espionage charges, and he called for the pastor’s immediate release. Tweeting from aboard Air Force One, Trump said: “The United States will impose large sanctions on Turkey for their long time detainment of Pastor Andrew Brunson, a great Christian, family man and wonderful human being.” Trump said Brunson “is suffering greatly. This innocent man of faith should be released immediately!”

Just hours earlier, Vice President Mike Pence said that if Turkey does not take immediate action to free Brunson, “the United States of America will impose significant sanctions on Turkey.” Pence spoke at the close of a three-day conference in Washington on religious freedom. Brunson, 50, an evangelical Christian pastor originally from North Carolina, was let out of jail Wednesday, after 1 1/2 years, to serve house arrest because of “health problems,” according to Turkey’s official Anadolu news agency.

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Hope Judge Sabraw comes down hard on them. When he set the deadlines a month ago, he said: “These are firm deadlines; they’re not aspirational goals.”

US Government Misses Judge’s Midnight Deadline For Reunifying Families (Ind.)

US lawyers and activists have described “chaos and confusion” at immigrant detention facilities as the Trump administration scrambles to reunify the more than 2,500 migrant children it separated from their parents at the border in recent months. The government is rushing to meet a Thursday night deadline set by US District Court Judge Dana Sabraw, who ordered all of the families reunified as part of a lawsuit brought by the American Civil Liberties Union last month. As of Tuesday, officials said they had identified 1,634 parents possibly eligible for reunification with their children, and successfully reunified some 1,012 of them. The government was scheduled to provide an updated count to Judge Sabraw on Friday morning.

But the government also said more than 900 parents may not be eligible for reunification because they had waived their right to reunification, had criminal backgrounds, or were otherwise deemed unfit. Some 462 of those parents had already left the country, the administration said, though it was unclear whether they had volunteered to leave or had been deported against their will. Lee Gelernt, the lead attorney on the case, took issue with this number, saying the Trump administration was “unilaterally picking and choosing who is eligible for reunification”. “We will continue to hold the government accountable and get these families back together,” he said in a statement.

Immigrants’ rights groups warned that many of the parents who had left the country already may have done so under duress or coercion, or armed with bad information. Advocates described parents being pressured by Immigration and Customs Enforcement (ICE) to sign paperwork they didn’t understand, or being told that they would not be reunified with their children unless they agreed to be deported.

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The Wall Street Journal forgets to mention that consumers have nothing left to spend. Growth prospects?

Taxation Strangles Greece’s Growth Prospects (WSJ)

Greece is scheduled to exit its marathon bailout this summer after hitting the tough fiscal targets set by its creditors. But the country has done so by raising taxes so high that they are strangling the small businesses that form the backbone of its economy. At the Dandy restaurant in downtown Athens, owner Charalampos Bonatsos said rising taxes have forced him to lay off half his staff and cut his remaining workers’ wages. He said he still struggles to cope with the last three years’ increases in corporate income tax, property tax and sales tax. “All that matters is reaching the bailout goals. No one cares whether doing business is possible with this policy,” Mr. Bonatsos said.

The tax increases have left Greece with some of Europe’s highest tax rates across several categories, including 29% on corporate income, 15% on dividends, and 24% on value-added tax (a rough equivalent of U.S. sales tax). Individuals pay as much as 45% income tax, plus an extra “solidarity levy” of up to 10%. Furthermore, workers and employers pay social-security levies of up to 27% of their salaries. The elevated taxes under Greece’s bailout program have fallen most heavily on small and midsize businesses and self-employed people. Lawyers and engineers, most of whom are self-employed, are fighting the government in court over having to pay what they say is up to 80% of their average monthly takings in taxes and levies.

Some also have to pay retroactive social-security contributions, to the point where professional associations say some of their members are having to pay more to the state than they make. The painfully high taxes reflect the tough demands of Greece’s main creditors: other eurozone countries led by Germany, and the IMF. Since Greece’s finances spun out of control, its bailout lenders have forced the country to cut its budget deficit from over 15% of GDP in 2009 to a surplus of around 1% in 2017. [..] The tax burden creates a serious disincentive for economic activity. It mainly hits the most productive part of the Greek society,” said George Pagoulatos, professor of economics at the Athens University of Economics and Business. “Greece resembles Scandinavian-style taxation, but its welfare state has nothing to compare to theirs: You don’t get anything in return.”

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Words fail. Yesterday, heavy rains flooded areas 25km from Mati.

Death Toll From Greek Wildfires Rises To 85, Scores Stll Missing (K.)

The death toll from the deadly blaze that ravaged the coastal town of Mati in east Attica on Monday rose to 85 on Thursday, after a 73-year-old man who was in intensive care in Athens’ Evangelismos hospital died and two more bodies were discovered by rescue crews. Earlier in the day, a fire service spokesperson told journalists the number had risen to 82. Stavroula Malliri said rescuers are looking for missing people but have not yet entered closed houses in affected areas. About 300 firemen and volunteers combed through the area looking for dozens reported missing, among them two 9-year old sisters.

“Understanding the agony of the relatives of those missing, we inform you that the search to find them will not stop until all buildings and areas affected by the blaze have been checked,” she told journalists. Malliri called on the relatives of those missing to visit the forensics department of the University of Athens in Goudi until Friday (8 a.m. to 8 p.m.) where they will be briefed about the procedure followed to identify the victims. The Infrastructure Ministry announced earlier on Thursday that 1,218 buildings (48.93 pct) out of the 2,489 assessed by its engineers since Tuesday were deemed uninhabitable.

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Don’t worry, we’ll get to that yet.

Only 13% Of World’s Oceans Are Still Untouched Wilderness (Ind.)

The area of the ocean that remains undamaged by humans is tiny, according to the first ever comprehensive analysis of “marine wilderness”. Global shipping, fishing operations and pollution running into the sea from land have all taken their toll on the world’s seas, including some of the most remote areas. Areas of true wilderness are vital as they are some of the most diverse parts of the ocean and the last places on Earth still inhabited by sizeable numbers of large predators like sharks. Even the few fragments that remain are threatened as advanced fishing technologies and melting sea ice expose them to human activity. Most of the remaining wilderness, which covers no more than 13% of the world’s oceans, can be found in the polar regions and around remote Pacific Island nations.

The scientists behind the study have called for international agreements to recognise the unique value of these zones. Kendall Jones of the University of Queensland, who led the research, said they were “astonished by just how little marine wilderness remains”. “The ocean is immense, covering over 70% of our planet, but we’ve managed to significantly impact almost all of this vast ecosystem,” he said. Crucially, less than 5% of the remaining wilderness is officially protected. “This means the vast majority of marine wilderness could be lost at any time, as improvements in technology allow us to fish deeper and ship farther than ever before,” explained Mr Jones. “Thanks to a warming climate, even some places that were once safe due to year-round ice cover can now be fished.”

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Sep 092016
 
 September 9, 2016  Posted by at 8:57 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle September 9 2016


NPC Daredevil John “Jammie” Reynolds, Washington DC 1917

ECB’s Mario Draghi Has Run Out Of Magic As Deflation Closes In (AEP)
ECB Stands Pat on Stimulus as Draghi Defends Policy (WSJ)
German July Exports, Imports Plunge (Street)
Goldman Calculates True Growth Rate Of China’s Debt: 40% of GDP Per Year (ZH)
China’s Reviving the American Heartland – One Low Wage at a Time (BBG)
Bank of Japan Risk: Running Out of Bonds to Buy (WSJ)
Australia, New Zealand Housing Booms Set Currencies On Course For Parity (BBG)
Coal Rises From the Grave to Become One of Hottest Commodities
Historic Tax Fraud Rocks Denmark As Loss Estimates Keep Growing (BBG)
Goldman Sachs Just Launched Project Fear in Italy (DQ)
Humans Have Destroyed A Tenth Of Earth’s Wilderness In 25 Years (G.)

 

 

Why does it seem so normal to use the word ‘magic’ in this context? When did that start?

ECB’s Mario Draghi Has Run Out Of Magic As Deflation Closes In (AEP)

Large parts of the eurozone are slipping deeper into a deflationary trap despite negative interest rates and €1 trillion of quantitative easing by the ECB, leaving the currency bloc with no safety buffer when the next global recession hits. The ECB is close to exhausting its ammunition and appears increasingly powerless to do more under the legal constraints of its mandate. It has downgraded its growth forecast for the next two years, citing the uncertainties of Brexit, and admitted that it has little chance of meeting its 2pc inflation target this decade, insisting that it is now up to governments to break out of the vicious circle. Mario Draghi, the ECB’s president, said there are limits to monetary policy and called on the rest of the eurozone to act “much more decisively” to lift growth, with targeted spending on infrastructure.

“It is abundantly clear that Draghi is played out and we’re in the terminal phase of QE. The eurozone needs a quantum leap in the nature of policy and it has to come from fiscal policy,” said sovereign bond strategist Nicholas Spiro. Mr Draghi dashed hopes for an expansion of the ECB’s monthly €80bn programme of bond purchases, and offered no guidance on whether the scheme would be extended after it expires in March 2017. There was not a discussion on the subject. “The bar to further ECB action is higher than widely assumed,” said Ben May from Oxford Economics. The March deadline threatens to become a neuralgic issue for markets given the experience of the US Federal Reserve, which suggests that an abrupt stop in QE stimulus amounts to monetary tightening and can be highly disruptive.

The ECB has pulled out all the stops to reflate the economy yet core inflation has been stuck at or below 1pc for three years. Officials are even more worried about the underlying trends. Data collected by Marchel Alexandrovich at Jefferies shows that the percentage of goods and services in the inflation basket currently rising at less than 1pc has crept up to 58pc. This is a classic precursor to deflation and suggests that the eurozone is acutely vulnerable to any external shock. The figure has spiked to 67pc in Italy, and is now significantly higher that it was when the ECB launched QE last year. The eurozone should have reached economic “escape velocity” by now after a potent brew of stimulus starting last year: cheap energy, a cheaper euro, €80bn a month of QE, and the end of fiscal austerity. [..] “The euro is far stronger than they want, and stronger than the economy deserves, but they don’t know how to weaken it. This is exactly what happened to the Japanese,” said Hans Redeker, currency chief at Morgan Stanley.

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Draghi’s starting to come down on Germany, but it’s too late: their exports just fell 10%.

ECB Stands Pat on Stimulus as Draghi Defends Policy (WSJ)

The ECB left its €1.7 trillion stimulus unchanged at a policy meeting Thursday, brushing off concerns over economic shock waves from Britain’s vote to leave the EU and disappointing investors expecting the ECB to act again soon. The decision to stand pat, even as new forecasts showed the ECB missing its inflation target for years, underlines how central banks are approaching the limits of what they can achieve without support from other policy areas, notably governments. In China earlier this month, Group of 20 leaders warned that monetary policy alone can’t fix the world’s economic ills, and pledged to boost spending and adopt overhauls aimed at boosting growth.

At a news conference here, ECB President Mario Draghi said he was concerned about persistently low eurozone inflation, which has fallen short of the ECB’s near-2% target for more than three years. Fresh ECB staff forecasts, published Thursday, showed inflation rising very gradually, to 1.2% next year and 1.6% in 2018. Despite that, Mr. Draghi said policy makers didn’t even discuss fresh stimulus, and praised the effectiveness of the bank’s existing policy measures, which include negative interest rates and €80 billion a month of bond purchases. He also aimed an unusually direct rebuke at Germany, criticizing Berlin for not boosting spending to support the economy. “Countries that have fiscal space should use it,” Mr. Draghi said. “Germany has fiscal space.”

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Germany looks a lot like Japan and China.

German July Exports, Imports in Shock Plunge (Street)

German imports and exports unexpectedly shrunk in July, with a sharp export contraction causing a surprise narrowing in Germany’s trade balance. Federal Statistical Office data showed seasonally adjusted exports fell by 2.6% – analysts had expected about 0.3% growth – whereas imports fell by 0.7%, as against expectations for a 0.8% rise. On the year exports slumped by 10% and imports shriveled by 6.5%. The foreign trade balance shrunk to €19.4 billion from €21.4 billion in June, as against expectations for a balance of €22 billion. The Federal Statistical Office said the pace of German exports to other EU countries fell by 7% in July, while imports from the region fell by 4.5%. The falls were slightly narrower for trade with other eurozone countries.

German trade outside the 28-nation EU fared worse, with exports plunging by 13.8% and imports by 10.1%. Faltering German exports amid lackluster worldwide growth and emerging-market volatility has long been a drag on German growth. But the sharper-than-expected export fall challenges expectations of a second-half pickup in German trade with the rest of the world, and the surprise – albeit small -import decline suggests domestic demand isn’t robust enough to step into the breach. The trade data come in a week that the statistics office reported weaker-than-expected industrial output and manufacturing production for July. But the euro held firm against the dollar after the figures and was recently up 0.11% at $1.1272.

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“..some time around 2019, China’s total Debt/GDP will be over 400%, an absolutely ridiculous number, and one which assures a banking, if not global, financial crisis.”

Goldman Calculates True Growth Rate Of China’s Debt: 40% of GDP Per Year (ZH)

For a long time when it came to Chinese loan creation, analysts would only look at the broadest reported aggregate: the so-called Total Social Financing. And, for a long time, it was sufficient – TSF showed that in under a decade, China had created over $20 trillion in new loans, vastly more than all the “developed market” QE, the proceeds of which were used to kickstart growth after the 2009 global depression, to fund the biggest capital misallocation bubble the world has ever seen and create trillions in nonperforming loans. However, a problem emerged about a year ago, when it was revealed that not even China’s TSF statistic was sufficient to fully capture the grand total of total new loan creation in China.

[..] according to Goldman, “a substantial amount of money was created last year, evidencing a very large supply of credit, to the tune of RMB 25tn (36% of 2015 GDP).” This massive number was 9% higher than the TSF data, which implied that “only” a quarter of China’s 2015 GDP was the result of new loans. As Goldman further noted, the “divergence from TSF has been particularly notable since Q2 last year after a major dovish shift in policy stance.” In short, in addition to everything else, China has also been fabricating its loan creation data, and the broadest official monetary aggregate was undercutting the true new loan creation by approximately a third. The reason for this is simple: China does not want the world – or its own population – to realize just how reliant it is on creating loans out of thin air (and “collateralized” by increasingly more worthless assets), as it would lead to an even faster capital outflow by the local population sensing just how unstable the local banking system is.

Here is the good news: compared to late 2015, the record credit creation has slowed down fractionally, and the gap with the TSF total has shrunk. The smaller gap seems to be in line with recent reports that listed banks’ “investment receivables” expanded less rapidly in 2016 H1, and it might partly reflect the regulators’ tougher stance against shadow lending in recent months. And now, the bad news: this “tougher stance” has not been nearly tough enough, because as the following chart shows on a 1-year moving average, nearly 40% of China’s “economic growth” is the result of new credit creation, or in other words, new loans. What this really means, is that China’s debt/GDP, estimated most recently by the IIF at 300%…

… is now growing between 30% and 40% per year, when one accounts for the unaccounted for “shadow” credit conduits. Here is how Goldman concludes this stunning observation: “The PBOC appears to have shifted to a less dovish, though still supportive, policy bias in the last few months. However, given the prospective headwinds from slower housing construction and tighter on-budget fiscal stance in the coming months, there remains a clear need to sustain a high level of infrastructure investment, which is credit intensive, to achieve the minimum 6.5% full-year growth target. This poses constraints on how much further the PBOC can keep reining in credit, in our view.”

Translating Goldman, some time around 2019, China’s total Debt/GDP will be over 400%, an absolutely ridiculous number, and one which assures a banking, if not global, financial crisis.

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The resounding success of globalization.

China’s Reviving the American Heartland – One Low Wage at a Time (BBG)

For six years, the General Motors factory that used to make Chevy Trailblazers in Moraine, Ohio, sat abandoned, a rusting monument to the decline of the American auto industry. These days, the plant is humming again, fueled by a resurgent U.S. consumer – but now under Chinese management. On the shop floor, Chinese supervisors in sky-blue uniforms that carry the logo of the new owners, Fuyao Glass, teach American employees how to assemble windshields. Drive along Interstate 75, through America’s industrial heartland, and you’ll find no shortage of Chinese-owned firms like Fuyao. They’re setting up shop in states such as Ohio and Michigan, key voter battlegrounds in November, where traditional manufacturing has been hollowed out – in many cases, by trade. With China.

[..] Fuyao acquired roughly half the old GM plant in 2014, spending $450 million to buy and remodel it. For a company that started out as a small producer of covers for water-meters and is now the world’s second-biggest auto-glass supplier, the acquisition capped a decade-long push into U.S. markets. For the Dayton area, it meant employment: the city, hometown of the Wright brothers, was hit hard by the shutdown of the GM plant two days before Christmas in 2008. [..] “Hey, 1,700 jobs is 1,700 jobs,” said Shawn Kane, a 28-year-old chef shopping at the Kroger grocery store in Moraine last month. “At least it’s not sitting empty anymore.” They’re jobs that tend not to pay as well as factory work once did, though – and there probably aren’t as many of them.

To keep its production in the U.S. viable, Fuyao uses more automation than it does in China, said John Gauthier, president of Fuyao Glass America. “Our customers, all they care about is that their cost doesn’t increase,” he said. A line worker at Fuyao starts at $12 per hour, equivalent to an annual salary of about $25,000. GM workers at the old Moraine plant could make at least twice that, topped off by perks like defined-benefit pensions, according to union officials and former employees. “When you don’t have enough protections for American workers, and when you’ve got a globalized economy, this is what happens,” said Chris Baker, a 40-year-old sales rep based near Moraine. “This is the new normal. It’s very sad.”

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WHen will they start buying people’s homes? Cars perhaps?

Bank of Japan Risk: Running Out of Bonds to Buy (WSJ)

Japan’s central bank is facing a new problem: It could be running out of government bonds to buy. The Bank of Japan is snapping up the equivalent of more than $750 billion worth of government debt a year in an effort to spur inflation and growth. At that rate, analysts say, banks could run out of government debt to sell within the next 18 months. The looming scarcity is a powerful sign of the limits central banks face as they turn to ever-more aggressive means of stimulating their economies. The problem is mirrored in Europe, where self-imposed rules limit how many eurozone government bonds the ECB can buy from individual governments. Facing a diminishing supply of sovereign bonds, the ECB started buying corporate debt in June.

Some economists have even called for the ECB to start buying stocks. The central bank left its bond-buying program and interest-rate policy unchanged at its meeting Thursday. The Japanese central bank has fewer options if the country’s banks, which have to hold a certain amount of safe debt to use as collateral in everyday transactions, ever become unwilling to sell more of their holdings. Its most obvious alternatives—pushing rates deeper into negative territory or buying other types of assets—have practical limitations. Meanwhile, the BOJ’s economic goals remain out of reach: Inflation is stubbornly low, and the yen has strengthened about 18% this year.

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Does nobody have any common sense down under?

Australia, New Zealand Housing Booms Set Currencies On Course For Parity (BBG)

Housing booms in New Zealand and Australia could be putting the neighbors’ currencies on course to reach parity for the first time ever. Both nations have seen house prices surge in recent years, but the underlying causes are fundamentally different, according to Deutsche Bank analysis. Australia’s boom is largely home-grown, whereas New Zealand’s is being fueled by record immigration. That’s affecting the countries’ current accounts differently. While Aussies are feeling richer due to house-price gains, prompting them to spend more on imports and boosting their current account deficit, New Zealand is sucking more offshore capital into its housing market, narrowing its current account gap. Currencies are sensitive to trends in the current account – a country’s balance with the rest of the world – because they are a gauge of risk for investors.

“The nature of the real estate boom in Australia should have bearish currency implications because it leads to deterioration in the basic balance,” Robin Winkler, a London-based strategist for Deutsche Bank, said in a research note. “This is not the case in New Zealand and adds to our conviction that AUD/NZD should drop to parity.” The two currencies have never converged in the free-floating era that began in the 1980s. They came close in April last year, when the kiwi briefly reached 99.79 Australian cents or, to express it the other way, the Aussie dollar fell below NZ$1.01. The New Zealand dollar was worth 96.8 Australian cents at 12:35p.m. in Wellington Friday.

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Burn baby burn.

Coal Rises From the Grave to Become One of Hottest Commodities

For all the predictions about the death of coal, it’s now one of the hottest commodities in the world. The resurrection may have further to run. A surge in Chinese imports to compensate for lower domestic production has seen European prices jump to near an 18-month high, while Australia’s benchmark is set for the first annual gain since 2010. At the start of the year, prices languished near decade lows because of waning demand from utilities seeking to curb pollution and amid the International Energy Agency’s declaration that the fuel’s golden age in China was over. Now, traders are weighing the chances of extreme weather hitting major producers and China further boosting imports as factors that could push prices even higher.

“It’s a commodity that’s been on a slippery slide for the past four years and it’s making a remarkable recovery,” said Erik Stavseth, an analyst at Arctic Securities in Oslo, who’s tracked the market for almost a decade. “There’s a strong pulse.” What could light up the market further is the occurrence of a La Nina weather pattern later this year. Last time it happened in 2010 and 2011, heavy rains flooded mines in Australia and Indonesia, the world’s two largest exporters. While some meteorologists have toned down their predictions for the weather phenomenon forming, “another strong forecast” would cause prices to rise further, according to Fitch’s BMI Research.

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Still don’t think I know what exactly the fraud was. Though I read the piece twice.

Historic Tax Fraud Rocks Denmark As Loss Estimates Keep Growing (BBG)

About two weeks after Denmark revealed it had lost as much as $4 billion in taxes through a combination of fraud and mismanagement, the minister in charge of revenue collection says that figure may need to be revised even higher. Speaking to parliament on Thursday, Tax Minister Karsten Lauritzen said he “can’t rule out” that losses might be bigger than the most recent public estimates indicate. It would mark the latest in a string of revisions over the past year, in which Danes learned that losses initially thought to be less than $1 billion somehow ended up being about four times as big. The embarrassment caused by the tax fraud, which spans about a decade of successive administrations, has prompted Lauritzen to consider debt collection methods not usually associated with Scandinavian governments.

Denmark has long had one of the world’s highest tax burdens – government revenue as a percentage of GDP – and a well-functioning tax model is essential to maintaining its fabled welfare system. “We’re entertaining new ideas, considering more new measures,” Lauritzen told Bloomberg. Danish officials are now prepared to pay anonymous sources for evidence from the same database that generated the Panama Papers. Jim Soerensen, a director at Denmark’s Tax Authority, says the first batch of clues obtained using this method is expected by the end of the month.

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Project Fear didn’t work in Britain either.

Goldman Sachs Just Launched Project Fear in Italy (DQ)

Project Fear began two years ago in the run up to Scotland’s national referendum. It then spread to the rest of the UK in the lead up to this summer’s Brexit referendum. But it keeps on moving. Its latest destination is Italy, where the campaign to instill fear and trepidation in the hearts and souls of Italy’s voters was just inaugurated by the world’s most influential investment bank, Goldman Sachs. It just released a 14-page report warning about the potentially dire consequences of a “no” vote in Italy’s upcoming referendum on the government’s proposed constitutional reforms. The reforms seek, among other things, to streamline Italy’s government process by dramatically restricting the powers of the senate, a major source of political gridlock, while also handing more power to the executive.

The polls in Italy are currently neck and neck, though the momentum belongs to the reform bill’s opponents. If the Italian public vote against the bill, the response of the markets could be extremely negative, warns Goldman, putting in jeopardy the latest attempt to rescue Italy’s third largest and most insolvent bank, Monte dei Paschi di Siena. The rescue is being led by JP Morgan Chase and Italian lender Mediobanca, and includes the participation of a select group of global megabanks that are desperate to prevent contagion spreading from Italy’s banking system to other European markets, and beyond. In the event of a “no” vote, MPS’ planned €5 billion capital increase would have to be put on ice, while investors wait for the political uncertainty to clear before pledging further funds.

This being Italy, the wait could be interminable and the delay fatal for Monte dei Paschi and other Italian banks, Goldman warns. It also points out that Italy is the only European country where a substantial portion of its bank bonds are held in household portfolios (about 40% according to data from Moody’s, four times more than Germany and eight times more than France and Spain). In other words, things could get very ugly, very fast, if those bank bonds collapse! As for Italian government bonds and Europe’s broader debt markets, they would be insulated from any fallout by former Goldmanite Mario Draghi’s bond binge buying.

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We are unstoppable.

Humans Have Destroyed A Tenth Of Earth’s Wilderness In 25 Years (G.)

Humans have destroyed a tenth of Earth’s remaining wilderness in the last 25 years and there may be none left within a century if trends continue, according to an authoritative new study. Researchers found a vast area the size of two Alaskas – 3.3m square kilometres – had been tarnished by human activities between 1993 and today, which experts said was a “shockingly bad” and “profoundly large number”. The Amazon accounted for nearly a third of the “catastrophic” loss, showing huge tracts of pristine rainforest are still being disrupted despite the Brazilian government slowing deforestation rates in recent years. A further 14% disappeared in central Africa, home to thousands of species including forest elephants and chimpanzees.

The loss of the world’s last untouched refuges would not just be disastrous for endangered species but for climate change efforts, the authors said, because some of the forests store enormous amounts of carbon. “Without any policies to protect these areas, they are falling victim to widespread development. We probably have one to two decades to turn this around,” said lead author Dr James Watson, of the University of Queensland and Wildlife Conservation Society. The analysis defined wilderness as places that are “ecologically largely intact” and “mostly free of human disturbance”, though some have indigenous people living within them. The team counted areas as no longer wilderness if they scored on eight measures of humanity’s footprint, including roads, lights at night and agriculture.

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