Jan 082019
 


Pablo Picasso Bather on the beach 1920

 

German Industrial Production Unexpectedly Slumps (WSJ)
China’s Current GDP Growth Likely Less Than 6% (CNBC)
Samsung Warns Of 29% Profit Drop (BBC)
UK Not Looking To Extend Article 50, Brexit Minister Says (R.)
UK MPs Raise Safety Fears With Police (G.)
Yanis Varoufakis Says France’s Macron Is a ‘Spent Force’ (BBG)
A Farewell to “Bargain Shopping” (Kunstler)
Rival Fiefdoms Emerge In Scramble Over Trump’s Syria Withdrawal (AlM)
Turkey To Ask US To Hand Over Military Bases In Syria (R.)
China Approves Five GMO Crops For Import (R.)
India’s Top Court Backs Monsanto On GMO Cotton Patents (R.)
Ecuador To Audit Julian Assange’s Asylum & Citizenship (PBR)
WikiLeaks Tells Reporters 140 Things Not To Say About Julian Assange (R.)
140 “False And Defamatory” Statements About Julian Assange (ZH)
Warming Of Oceans Equivalent To An Atomic Bomb Per Second For 150 Years (G.)

 

 

Just what Europe needs: a recession in Germany.

German Industrial Production Unexpectedly Slumps (WSJ)

German industrial production unexpectedly slumped in November, adding to recent evidence that a nine-year recovery in Europe’s largest economy is foundering. The data underscore how trade tensions and weaknesses in emerging markets are putting a brake on Germany’s longrunning economic upswing, and could delay any move by the ECB to lift short-term interest rates. Production in Germany’s key industrial sector, adjusted for inflation and seasonal swings, fell 1.9% in November from the previous month, the country’s statistics agency said Tuesday. Economists polled by The Wall Street Journal had expected a 0.3% gain. It was the second consecutive monthly fall in German industrial output and comes after data Monday showed an ongoing decline in new manufacturing orders.

Read more …

Has been for years.

China’s Current GDP Growth Likely Less Than 6% (CNBC)

China’s current economic growth is likely below the 6 percent level amid faltering domestic demand, an economist said Tuesday. Recent signals about the world’s second-largest economy point to weaker growth, including tech giant Apple recently lowering revenue guidance for the first quarter as it blamed a variety of factors including Chinese demand. And, on Monday, Hong Kong-listed automaker Geely said it missed its sales target in 2018 and was forecasting flat sales in 2019. “It’s intriguing that the domestic demand part is the weak part — the external demand is not that bad,” said Taimur Baig, chief economist at DBS Group Research.

“Particularly weak” domestic demand was possibly signaling structural changes in the Chinese economy, Baig told CNBC’s “Capital Connection.” For its part, DBS forecasts China’s GDP growth to be “sub-6 percent” currently, Baig said. Last year, China reported economic growth of 6.5 percent in the third quarter — marking its weakest pace since the global financial crisis. Still, the country’s official growth target for 2018 was around 6.5 percent.

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Everyone has a phone who wants one.

Samsung Warns Of 29% Profit Drop (BBC)

Samsung Electronics expects to post a 29% drop in quarterly operating profit as demand for smartphones and memory chips slows. The firm forecasts operating earnings of 10.8 trillion Korean won ($9.7bn; £7.6bn) for the last three months of 2018. It marks the first quarterly profit drop in two years as strong demand for chips had boosted earnings at the firm. Samsung also faces fierce competition from Apple and Chinese rivals. In a statement on Tuesday, the firm cited lacklustre demand and rising competition for its darkening outlook. “We expect earnings to remain subdued in the first quarter of 2019 due to difficult conditions for the memory business,” the South Korean tech giant said in a statement. It forecasts revenue will decline 11% to 59 trillion won.

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But I betcha they’re talking about it.

UK Not Looking To Extend Article 50, Brexit Minister Says (R.)

The United Kingdom will leave the European Union on March 29 and is not looking to extend the Article 50 exit process, Brexit Secretary Stephen Barclay said on Tuesday. The Daily Telegraph reported that British and European officials are discussing the possibility of extending Britain’s formal notice to withdraw from the EU amid fears a Brexit deal will not be approved by March 29. “The government’s policy is clear on this, the prime minister has said it on many an occasion: We are leaving the European Union on the 29th of March. We are not looking to extend,” Barclay told Sky News. When asked if any lawmakers in the Conservative Party had changed their minds on opposing May’s deal, Barclay said: “Some have said they are much more open to but it is obviously challenging.”

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The lunatics have long ruled the asylum.

UK MPs Raise Safety Fears With Police (G.)

Dozens of MPs have written to the UK’s most senior police officer to raise concerns about safety outside parliament after the Conservative MP Anna Soubry faced chants from protesters on Monday calling her a “Nazi”. At least 55 parliamentarians signed the letter to the Metropolitan police commissioner, Cressida Dick, after the Commons Speaker, John Bercow, urged officers to do more to protect MPs and Soubry criticised the lack of police response to the abuse. Scotland Yard later confirmed it had opened an investigation into whether any offences had been committed when chants of “Soubry is a Nazi” could clearly be heard while the pro-remain MP was being interviewed by BBC News on Abingdon Green, a grassed area outside parliament used by broadcasters.

It is the second time in recent weeks that Soubry has been targeted by a small group of pro-Brexit protesters wearing yellow vests, some of whom have links to the far right. On the earlier occasion, she was surrounded by shouting men calling her a traitor. The MPs’ letter to Dick reads: “After months of peaceful and calm protests by groups representing a range of political views on Brexit, an ugly element of individuals with strong far-right and extreme-right connections, which your officers are well aware of, have increasingly engaged in intimidatory and potentially criminal acts targeting members of parliament, journalists, activists and members of the public.

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No doubt there.

Yanis Varoufakis Says France’s Macron Is a ‘Spent Force’ (BBG)

Yanis Varoufakis, former Greek Finance Minister and founder of the Democracy in Europe Movement 2025, discusses political risks in Europe and his view that French President Emmanuel Macron is a “spent force.” He speaks on “Bloomberg Surveillance.”

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Remember when stores employed half the town? You see much progress since then? First boxstores, then Amazon. Have they made people happier?

A Farewell to “Bargain Shopping” (Kunstler)

What’s up is the international implosion of the bad debt, and the fading illusion that it doesn’t matter. It has any number of ways to express itself, from store closings, to dissolving pensions, to stock market instability, to divorce, homelessness, and war. It’s what you get from a hyper-financialized economy that doesn’t really produce wealth but only steals it from somewhere else. It’s not the fault of “capitalism,” which, in theory just stands for the management of a society’s savings. America doesn’t save, it borrows. Zero interest rates made savings a mug’s game, and zero interest rates were necessary to extend the borrowing far beyond the credible boundaries of repayment.

Debt isn’t capital, it just pretends to be for a period of time. Wall Street made its trillions off the time-value of that pretense and now time is up. Even in the hardship economy we’re sailing into, people will need to buy and sell things and it is very hard to see how that fundamental process of exchange might be reorganized going forward. Back in the 1990s I attended many a town meeting (in many towns) where chain stores applied for permits to set-up operations. It was often contentious. There was always a contingent of locals — organized by the chains themselves — waving placards that said “We Want Bargain Shopping.” And there were the short-sighted town officials drooling over the real estate tax “ratables” that chain stores represented.

Their adversaries feared that their locally-owned Main Street businesses would be killed, and that was exactly what happened, in very short order. You could see it coming from a thousand miles away. Now the Big Boxes are going down. Boo Hoo…. What will emerge out of the current disorder? Perhaps Generations X-Y-and-Z will recognize an opportunity to go into business — as an alternative to purchasing a degree in gender studies for $200,000 (at 6 percent interest). There will be lots of opportunities, even in a world with generally less shopping. But it may require a deeper collapse to sweep away the impediments, both practical and mental, before that awareness turns to action.

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Trying to frustrate the withdrawal.

Rival Fiefdoms Emerge In Scramble Over Trump’s Syria Withdrawal (AlM)

Even after Secretary of Defense Jim Mattis resigned over the decision, two of President Donald Trump’s top advisers have offered different messages about his intentions for a Syria withdrawal. Secretary of State Mike Pompeo has asserted, in both internal briefings and public interviews, that Trump’s instructions are clear and the troops are coming out, while saying the administration’s overall goals for the region have not changed. Meanwhile, national security adviser John Bolton, currently traveling in Israel and Turkey with a press pool in tow, has said any US withdrawal from Syria will be conditions-based, and won’t occur until the so-called Islamic State in Syria (IS or ISIS) is fully defeated and unless Turkey guarantees protection for Syrian Kurdish fighters that Ankara considers terrorists.

“There are objectives that we want to accomplish that condition the withdrawal,” Bolton told journalists traveling with him in Israel on Sunday. “The timing of the withdrawal occurs as a result of the fulfillment of the conditions and the establishment of the circumstances that we want to see. And once that’s done, then you talk about a timetable.” Pompeo offered a different emphasis in an internal briefing to State Department Syria watchers last week, sources said: We are leaving. Pompeo, in a Jan. 3 briefing to State Department personnel who work on Syria, “made clear we are leaving. Period,” a former US official, speaking not for attribution, told Al-Monitor. “He did not mention Iran. Or [Syrian President Bashar al-]Assad. He said we are leaving. That was it. Then he left.”

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Trump better watch out that there isn’t an all-out bloody war between Turkey and the Kurds coming.

Turkey To Ask US To Hand Over Military Bases In Syria (R.)

Turkey will ask U.S. officials in talks on Tuesday to hand over its military bases in Syria to Ankara or destroy them, the Hurriyet newspaper reported, a request that could further complicate discussions over the U.S. withdrawal from Syria. U.S. National Security Adviser John Bolton was meeting with his Turkish counterpart Ibrahim Kalin on Tuesday, days after Bolton added a condition to the U.S. withdrawal, saying Turkey must agree to protect the United States’ Kurdish ally, the YPG militia, which Ankara views as a terrorist group. President Donald Trump said last month he was bringing home the some U.S. 2,000 troops in Syria, saying they had succeeded in their mission to defeat Islamic State.

His abrupt move sparked concern among officials in Washington and allies abroad and prompted Defense Secretary Jim Mattis to resign. The YPG has been the key U.S. ally in its fight against Islamic State, support that has long caused tension between Washington and Ankara. Turkey views the YPG as an extension of the outlawed Kurdistan Workers Party (PKK), which has waged a three-decade insurgency in Turkey’s mainly Kurdish south east. “Give them or destroy them,” a Hurriyet newspaper headline said, referring to what it said were 22 U.S. military bases in Syria. It cited unspecified sources as saying Turkey would not accept Washington handing them over to the YPG.

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Monsanto profits from the trade talks.

China Approves Five GMO Crops For Import (R.)

China approved five genetically modified (GM) crops for import on Tuesday, the first in about 18 months in a move that could boost its overseas grains purchases and ease pressure from the United States to open its markets to more farm goods. The United States is the world’s biggest producer of GM crops, while China is the top importer of GM soybeans and canola. U.S. farmers and global seed companies have long complained about Beijing’s slow and unpredictable process for approving GM crops for import, stoking trade tensions between the world’s two largest economies. The approvals, announced on the agriculture ministry’s website, were granted while a U.S. trade delegation is meeting with its counterparts in the Chinese capital this week.

“It’s a goodwill gesture towards the resolution of the trade issue,” said a China representative of a U.S. agricultural industry association. “It’s been in the system for a long time but they chose today to release this good news,” he added, declining to be identified due to the sensitivity of the matter. Two of the newly approved products – BASF’s RF3 canola and Bayer-owned Monsanto’s glyphosate-tolerant MON 88302 canola – had been waiting six years for permission. The other approved products were DowDuPont’s DP4114 corn and DAS-44406-6 soybean, as well as the SYHT0H2 soybean developed by Bayer CropScience and Syngenta but now held by BASF.

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Devastating.

India’s Top Court Backs Monsanto On GMO Cotton Patents (R.)

India’s Supreme Court ruled on Tuesday that U.S. seed maker Monsanto can claim patents on its genetically modified (GM) cotton seeds in the world’s biggest producer of the fibre. The decision on appeal overturns an earlier ruling by the Delhi High Court that Monsanto – which has been bought by German drug and crop chemical maker Bayer AG – was unable to claim patents on GM cotton seeds. The outcome is positive for foreign agricultural companies such as Monsanto, Bayer, Dupont Pioneer and Syngenta which have been concerned that they could lose patents on GM crops in India.

“This is a very good move as most international companies have stopped releasing new technology in the Indian market due to the uncertainty over patent rule,” said Ajit Narde, a leader of the Shetkari Sanghatana, a farmers’ body, which has been demanding access to new technologies. Access to advanced technology was important to help Indian farmers to compete with rivals overseas, Narde said.

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Trying to find a way out, so the IMF loan can come in.

Ecuador To Audit Julian Assange’s Asylum & Citizenship (PBR)

Ecuador has begun a “Special Examination” of Julian Assange’s asylum and citizenship as it looks to the IMF for a bailout, the whistleblowing site reports, with conditions including handing over the WikiLeaks founder. Former Ecuadorian President Rafael Correa tweeted an image of the letter he received from the State Comptroller General on December 19, which outlines the upcoming examination by the Direction National de Auditoria. The audit will “determine whether the procedures for granting asylum and naturalization to Julian Assange were carried out in accordance with national and international law,” and will cover the period between January 1, 2012 and September 20, 2018. Assange has been in the Ecuadorian Embassy in London since he sought asylum there in 2012.

He was granted Ecuadorian citizenship last December in a bid to protect him from being extradited to the US where he fears he faces secret charges for publishing US government cables and documents. “Because of their hatred and persecution, we are the laughing stock of the world,” Correa said of the audit. WikiLeaks tweeted the news on Wednesday, joining the dots between the audit and Ecuador’s consideration of an International Monetary Fund bailout. The country owes China more than $6.5 billion in debt and falling oil prices have affected its repayment abilities. According to WikiLeaks, Ecuador is considering a $10 billion bailout which would allegedly come with conditions such as “the US government demanded handing over Assange and dropping environmental claims against Chevron,” for its role in polluting the Amazon rainforest.

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Not sure such an extensive format is the way to go. The Guardian gets away with stonewalling its fake Assange news.

WikiLeaks Tells Reporters 140 Things Not To Say About Julian Assange (R.)

WikiLeaks on Sunday advised journalists not to report 140 different “false and defamatory” statements about its founder Julian Assange, who has been holed up in the Ecuadorean embassy in London since June 2012. It was not immediately clear what prompted the advice to media organizations, but WikiLeaks singled out Britain’s Guardian newspaper for publishing what it said was a false report about Assange. The Guardian did not immediately respond late on Sunday to a Reuters request for comment. The Australian set up WikiLeaks as a channel for publishing confidential information from anonymous sources. He is a hero to some for exposing what supporters cast as government abuse of power and for championing free speech, but to others he is a rebel who has undermined the security of the United States.

WikiLeaks angered Washington by publishing hundreds of thousands of secret U.S. diplomatic cables that laid bare often highly critical U.S. appraisals of world leaders from Russian President Vladimir Putin to members of the Saudi royal family. “There is a pervasive climate of inaccurate claims about WikiLeaks and Julian Assange, including purposeful fabrications planted in large and otherwise ‘reputable’ media outlets,” Wikileaks said an email sent to media organizations and marked “Confidential legal communication. Not for publication.” “Consequently journalists and publishers have a clear responsibility to carefully fact-check from primary sources and to consult the following list to ensure they are not spreading, and have not spread, defamatory falsehoods about WikiLeaks or Julian Assange.”

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Tyler has the entire list.

140 “False And Defamatory” Statements About Julian Assange (ZH)

WikiLeaks is sick and tired of mainstream media outlets publishing inaccurate and at times defamatory claims about its founder, Julian Assange. So in a recent email to journalists who regularly cover the organization, Wikileaks described 140 “false and defamatory” claims about its founder, who has been living inside the Ecuadorian embassy in London since June 2012. According to Reuters, WikiLeaks accused the Guardian of publishing a false report about Assange, though it was not immediately clear what specific report prompted the warning. The Guardian has refused to comment on the allegations.

The 5,000 word email claimed it was defamatory to suggest that Assange had ever been an “agent or officer of any intelligence service,” or that he had ever been employed by the Russian government, or that he is – or has been – closely connected with the Russian state. Some of the claims were more bizarre, like claiming that Assange was a pedophile, rapist, murder or a member of the Muslim Brotherhood. Others pertained to personal hygiene, like that Assange bleaches his hair, or has poor grooming habits. They also said it was defamatory to claim that Assange is a hacker or that he is not an Australian citizen.

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How many people can understand this?

Warming Of Oceans Equivalent To An Atomic Bomb Per Second For 150 Years (G.)

Global warming has heated the oceans by the equivalent of one atomic bomb explosion per second for the past 150 years, according to analysis of new research. More than 90% of the heat trapped by humanity’s greenhouse gas emissions has been absorbed by the seas, with just a few per cent heating the air, land and ice caps respectively. The vast amount of energy being added to the oceans drives sea-level rise and enables hurricanes and typhoons to become more intense. Much of the heat has been stored in the ocean depths but measurements here only began in recent decades and existing estimates of the total heat the oceans have absorbed stretch back only to about 1950. The new work extends that back to 1871. Scientists have said that understanding past changes in ocean heat was critical for predicting the future impact of climate change.

A Guardian calculation found the average heating across that 150-year period was equivalent to about 1.5 Hiroshima-size atomic bombs per second. But the heating has accelerated over that time as carbon emissions have risen, and was now the equivalent of between three and six atomic bombs per second. “I try not to make this type of calculation, simply because I find it worrisome,” said Prof Laure Zanna, at the University of Oxford, who led the new research. “We usually try to compare the heating to [human] energy use, to make it less scary.” She added: “But obviously, we are putting a lot of excess energy into the climate system and a lot of that ends up in the ocean,. There is no doubt.” The total heat taken up by the oceans over the past 150 years was about 1,000 times the annual energy use of the entire global population.

Read more …

Jul 082018
 


Jean-Léon Gérôme Truth Coming Out of Her Well to Shame Mankind 1896

 

Here’s the lowdown: the EU’s single market mechanism dictates freedom of movement for labor, capital, services and goods. These are not divisible; you cannot have one without the other. Still, that’s precisely what Theresa May, again, is proposing. She basically wants to keep the UK in the single market for goods, and make other arrangements for the rest. The EU will not accept that because it could have 27 other countries coming with their own versions of single market à la carte.

So why does she come with version 826 of what she already knows will not be accepted? And why did her cabinet comply? There are a few possibilities. Perhaps May has finally understood that there is no manner of leaving the EU left to her that will not lead to utter disaster. Maybe she just wants the whole thing to stop. Or maybe Boris Johnson et al, sensing failure for May, see a chance to dethrone her and take over power. Then again, maybe they all look for a way to blame the EU for their own failures.

It’s hard to say, really. What’s obvious, through the comments of industries like Airbus and Jaguar Land Rover, is that 100,000s of jobs are at stake, along with 100s of billions of investments in Britain. Large enterprises are often branched out all through the EU, and they need to comply with EU rules; separate rules for their business with the UK would be a nightmare.

And even smaller companies, to varying degrees, face those same problems. For all you may think of the EU, it has arranged the single market strictly and successfully. There are enormous advantages for companies in that. Take those away and they will look at relocating towards the continent, where they would regain those advantages.

There appear to be three options (and May’s plan is not one of them): a hard Brexit, new elections, or no Brexit at all.

A hard Brexit would be an unmitigated disaster, because everything in Britain runs according to EU rules and regulations. Changing that to British rules is a Herculean task, and one for which the UK is not at all prepared (and they just lost 2 years). An example: thousands of new border officials will be needed, something for which preparations reportedly haven’t even started in earnest. And that’s just one obvious example. A hard Brexit would ruin the country. Not because Britain couldn’t function as a country, but because it’s so utterly unprepared to do so.

New elections wouldn’t solve the issues, they probably would even necessitate an extension of the March 29 2019 date by which the UK is set to leave the EU. But they would open the way to have another look at what’s actually at stake. Do Britons really want to lose all those jobs, and see their standard of living deteriorate accordingly? Because from what I’m reading all the time, the Tories’ austerity has already hit hard, and infrastructure – roads, schools, hospitals, NHS etc.- is being dismantled. A hard Brexit on top of that would be very painful.

No Brexit at all : that’s the most interesting option. Quite a few of the protagonists involved must realize by now how bad things are. Not just May. And that’s where the jockeying for position starts. On the one hand the sociopaths want the power, on the other they want to deflect the blame if things go awry.

A nice angle is emerging for Labour leader Jeremy Corbyn, who has so far insisted his party must protect the people’s Brexit voice: he can now make the case that since the Tories wasted two years, that vote has lost validity, because a ‘decent split’ is no longer possible. It would even be against national security (no joke).

A stronger case could perhaps be found in the campaign financing of the Leave campaign. It seems clear that there have been irregularities, it’s just a matter of how much. If it was too much, the entire referendum could be declared null and void. But what do the media focus on?

Yes, the Russians, who allegedly furnished capital for the campaign. At the very time that the May government comes out with a Novichok 2.0 tale, which has even less credibility than its older sibling (which led to 324 diplomats being expelled). Britain has a Russia problem. Or, its government does. The English football team and its supporters do not.

Cut out the Russia stuff. Focus on Arron Banks and the money flows around him. It may be the way for everyone involved, except for those close to Leave.EU, to get out of this mess unscathed. The path is clear, says lawyer Jessica Simor:

Why It’s Not Too Late To Step Back From The Brexit Brink

[..] the government does not deny that reversal is legally possible. Its position accords with advice, which I am told from two good sources the prime minister has received, namely that the article 50 notification can be withdrawn by the UK at any time before 29 March 2019, resulting in the UK remaining in the EU on its current favourable terms. [..] As a lawyer, I agree with them. Article 50 provides for the notification – not of withdrawal but of an “intention” to withdraw. In law, an “intention” is not a binding commitment; it can be changed or withdrawn.

Article 50(5) is, moreover, clear that it is only after a member state has left that it has to reapply to join. Had the drafters intended that once a notification had taken place, a member state would have to request readmission (or seek the consent of the other member states to stay), then article 50(5) would have referred not just to the position following withdrawal, but also following notification. Such an interpretation is in line with the object and purpose of article 50.

I’d say this has turned into a story not of political preferences or ideology, but into one of sheer incompetence. Britain risks being thrown back into the age of Marx and Dickens. I’m all for independence and sovereignty, and I fully agree the EU is a massive threat to both, but this is not the way to go about these things. Get in, stay in, while you can.

Oh, and as for incompetence, that’s something you’ll see everywhere as economies dwindle, it’s not a British trait. They’re just among the first to face the challenges. The vast majority of politicians in the west will be exposed as grossly incompetent once the markets start to really go down. It’s easy to make the impression that you know what you’re doing in times of growth, but the litmus test is trying to deal with crisis. Most ‘leaders’ will fail.

 

 

Mar 302018
 
 March 30, 2018  Posted by at 9:46 am Finance Tagged with: , , , , , , , , , , ,  8 Responses »


James McNeill Whistler Nocturne in Blue and Silver, The Lagoon, Venice 1880

 

The Donald’s Blind Squirrel Nails An Acorn (David Stockman)
Russia To Expel 150 Diplomats And Close US Consulate In St Petersburg (Ind.)
Yulia Skripal No Longer In Critical Condition (G.)
UK Household Spending Hit Six-Year Low In 2017 Amid Brexit Inflation (PA)
Bitcoin Drops Below $7,000, Down 50% in 2018 (BBG)
Tesla Recalls 123,000 Early Model S Cars (BBG)
Volkswagen Stores 300,000 Diesels Across US (R.)
Trump Says US Withdrawing From Syria ‘Very Soon’ (AFP)
Sessions Rejects Calls for Second Special Counsel, Appoints Investigator (BBG)

 

 

“Amazon is a monstrous predator enabled by the state..” Are we seeing the Big Tech Backlash of 2018?

The Donald’s Blind Squirrel Nails An Acorn (David Stockman)

It is said that even a blind squirrel occasionally finds an acorn, and so it goes with the Donald. Banging on his Twitter keyboard in the morning darkness, he drilled Jeff Bezos a new one – or at least that’s what most people would call having their net worth lightened by about $2 billion: “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” You can’t get more accurate than that. Amazon is a monstrous predator enabled by the state, but Amazon’s outrageous postal subsidy – a $1.46 gift card from the USPS stabled on each box – isn’t the half of it.

The real crime here is that Amazon has been exempted from making a profit, and the culprit is the Federal Reserve’s malignant regime of Bubble Finance. The latter has destroyed financial discipline entirely and turned the stock market into the greatest den of speculation in human history. That’s why Bezos can kill established businesses with impunity. The casino allows him to run a pernicious business model based on “price to destroy”, rather than price for profit and a return on capital. Needless to say, under a regime of sound money and honest capital markets Amazon would be a far more benign economic creature. That’s because no real investors would value AMZN’s money-loosing e-Commerce business at $540 billion – nor even a small fraction of that after 25-years of profitless growth.

[..] At the end of the mini-correction in February 2016 Amazon’s market cap was $230 billion, but just 25 months later it was worth $775 billion at its March 12 peak. That staggering $545 billion gain in market cap had absolutely nothing to do with financial performance, of course. Operating free cash flow was a meager $6.4 billion during 2017 and had been $6.6 billion two years earlier. That is to say, AMZN was valued at a frisky 35X free cash flow in early 2016 and a completely insane 121X a few weeks ago. The fact that Bezos’ net worth exploded by $100 billion during that same 25 month interval perhaps explains why even the Donald found his acorn.

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By all means, let’s stop talking.

Russia To Expel 150 Diplomats And Close US Consulate In St Petersburg (Ind.)

Russia has said it will expel around 150 diplomats and close the US consulate in St Petersburg in retaliation to the coordinated international response over the poisoning of a former Russian spy in Britain. More than two dozen countries, including the US and many EU nations – as well as Nato – have ordered more than 150 Russian diplomats out this week in a show of solidarity with Britain over the poisoning of Sergei Skripal and his daughter Yulia in Salisbury earlier this month. The UK has accused Russia of responsibility for the attack, during which it claims the Skripals were exposed to a class of nerve agent called novichok. Russia has denied being involved and its foreign minister Sergei Lavrov made clear that all expulsions will be responded to in kind.

Mr Lavrov said that US Ambassador Jon Huntsman was summoned to the Foreign Ministry where he was given notice that Russia is replicating the US decision to order 60 Russian diplomats out. Mr Lavrov added that Moscow will also retaliate to the decision by Washington to shut the Russian consulate in Seattle by closing the US consulate in St Petersburg. The tit-for-tat expulsions come as no surprise. But the shuttering of the American consulate in Russia’s second city is an escalation. The Seattle consulate is Russia’s smallest diplomatic outpost in the US. Fifty-eight of the US officials are based in Moscow, with another two general consulate officials in the eastern city of Yekateringburg. They have been declared persona non grata and have been told to leave Russia by 5 April.

The US Consulate in St Petersburg has two days to suspend operations, according to Russian media. During the briefing Mr Lavrov accused Britain of “forcing everyone to follow an anti-Russian course” and that they were “making mockery of international law”. Russia has called for a meeting with the executive council of the Organisation for the Prohibition of Chemical Weapons (OPCW) to ask questions to “establish the truth”, he said. “The measures would be reciprocal … They include expulsion of the equivalent number of diplomats and they include our decision to withdraw our agreement to allow the United States’ general consulate to operate in St Petersburg,” Mr Lavrov said.

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How does one recover from being infected with one of the most lethal nerve agents ever?

The photo, dated 3 days after the ‘attack’, shows a policeman standing by the front door to the Skripal home, the very door through which father and daughter were allegedly poisoned. He wears no protection.

Yulia Skripal No Longer In Critical Condition (G.)

The condition of Yulia Skripal, who was poisoned with a nerve agent in Salisbury along with her father, is improving rapidly, doctors have said. Salisbury NHS foundation trust said on Thursday the 33-year-old was no longer in a critical condition, describing her medical state as stable. Christine Blanshard, the medical director for Salisbury district hospital, said: “I’m pleased to be able to report an improvement in the condition of Yulia Skripal. She has responded well to treatment but continues to receive expert clinical care 24 hours a day. “I want to take this opportunity to once again thank the staff of Salisbury district hospital for delivering such high-quality care to these patients over the last few weeks. I am very proud both of our frontline staff and all those who support them.”

Her father’s condition was described by the hospital as still critical but stable. Sergei Skripal, 66, a former Russian double agent, is believed to have been the main target of the attack. The update came as Russia said it was taking tit-for-tat measures against all the nations that have expelled Russian diplomats over attack. In a separate development, Scotland Yard said police had placed a cordon around a children’s play area near Sergei Skripal’s home as a precautionary measure. “Officers investigating the attempted murders of Sergei Skripal and his daughter Yulia Skripal are continuing to focus their enquiries around the Skripals’ home address,” a police statement revealed.

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Both spending and saving are hit.

UK Household Spending Hit Six-Year Low In 2017 Amid Brexit Inflation (PA)

Household spending slowed to its lowest annual growth for six years in 2017 amid Brexit-fuelled inflation, with borrowing surging and family savings slumping to a record low. Figures from the Office for National Statistics (ONS) confirmed economic growth slowed to 0.4% in the final three months of last year, down from 0.5% in the third quarter as weaker household spending took its toll. The ONS revised upgrowth for the year as a whole to 1.8% from the previous estimate of 1.7%, but this was still the lowest since 2012. It leaves the UK with the lowest growth among the G7 economies at the end of 2017 as it enters the final year of its membership of the European Union.

The quarterly national accounts data showed Britons turned to debt to support spending in the face of last year’s surging inflation, which outstripped paltry wage growth. The proportion of total income saved by households dropped to 4.9% in 2017, its lowest level since records began in 1963, the ONS said. Overall household spending fell last year to 1.7%, which was the lowest annual growth since 2011, according to the ONS. But there was some cheer in Thursday’s latest official data dump as figures revealed the UK’s current account deficit with the rest of the world narrowed to £82.9bn or 4.1% of GDP in 2017 – the smallest gap since 2011. This came as a growing world economy boosted the earnings on foreign investments.

In the fourth quarter, the current account deficit shrank by more than expected to £18.4bn, or 3.6% of GDP, down from £19.2bn in the previous three months. Net trade – exports less imports – made its largest contribution to full-year growth since 2011, the ONS reported.

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Shaky?!

Bitcoin Drops Below $7,000, Down 50% in 2018 (BBG)

Bitcoin’s miserable quarter isn’t over yet. The world’s biggest cryptocurrency by market value dropped below the $7,000 mark Friday morning in Asia, the first time it’s breached that level since early February, according to data compiled by Bloomberg. It fell as low as $6,912 before rebounding, trading at $7,094 as of 7:50 a.m in Hong Kong. The moves took the token’s losses in 2018 to a whopping 50%, and other digital assets, including rivals Ripple and Litecoin, slumped more. In addition, regulatory pressure is mounting in the cryptocurrency space, while major social media platforms are distancing themselves from the industry. Reddit, a community hub popular in the crypto community, no longer accepts payments made in Bitcoin, while Twitter confirmed Monday that it’s banning advertisements for initial coin offerings, joining Facebook and Google.

Looming over the market are sales of Bitcoin held by the trustee of Mt Gox, the now-defunct Japanese exchange. The trustee sold about $400 million in Bitcoin and Bitcoin Cash in the last few months to reimburse the exchange’s creditors, according to his recent report. The trustee had said that he will sell more of the cryptocurrency he holds. As of early March, he was sitting on more than $1 billion. “Bitcoin is under selling pressure again and chances of its recovery are looking slim,” Naeem Aslam at TF Global Markets said in a note. It has “slid significantly, since the tech giants’ ban on ICOs,” he noted. The slump this year is its biggest quarterly decline since 2011. Keep in mind that Bitcoin rallied 1,400% last year.

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“Classic two hours after the close before a three-day weekend news release. Unbelievable (almost)!”

Tesla Recalls 123,000 Early Model S Cars (BBG)

Tesla is recalling all Model S cars built before April 2016 to retrofit a power-steering component as the company caps its worst one-month performance in the stock market since December 2010. The issue, which the carmaker said has not led to any accidents or injuries, impacts only the flagship Model S sedan, not the Model X sport utility vehicle or more affordable Model 3. The recall affects roughly 123,000 vehicles globally. The carmaker said it’s performing the voluntary recall after observing “excessive corrosion in the power steering bolts, though only in very cold climates, particularly those that frequently use calcium or magnesium road salts,” according to an email sent to impacted customers Thursday.

“Nonetheless, Tesla plans to replace all early Model S power steering bolts in all climates worldwide to account for the possibility that the vehicle may later be used in a highly corrosive environment,” the electric-car maker said in the customer email. Tesla has been routed this month as analysts and investors have questioned the company’s ability to mass-manufacture its new Model 3 sedan. Bottlenecks at Tesla’s battery factory and assembly plant have undermined that effort, limiting the return on that investment and arousing concern that the company may need to raise more cash. Moody’s Investors Service also downgraded Tesla’s credit rating further into junk on Tuesday.

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Maybe they can figure something out with Musk?

Volkswagen Stores 300,000 Diesels Across US (R.)

Volkswagen has taken parking lots to a whole new level in the US – and will not be emptying them soon. Volkswagen AG has paid more than $7.4bn to buy back about 350,000 US diesel vehicles, a recent court filing shows. The German automaker has been storing hundreds of thousands of vehicles around the US for months. Volkswagen has 37 secure storage facilities around the US housing nearly 300,000 vehicles, the filing from the program’s independent administrator said. The lots include a shuttered suburban Detroit football stadium, a former Minnesota paper mill and a desert site near Victorville, California.

VW spokeswoman Jeannine Ginivan said in a statement the storage facility in Victorville, California, is one of many “to ensure the responsible storage of vehicles that are bought back” under the terms of the Volkswagen diesel settlements. “These vehicles are being stored on an interim basis and routinely maintained in a manner to ensure their long-term operability and quality, so that they may be returned to commerce or exported once US regulators approve appropriate emissions modifications,” she said. In total VW has agreed to spend more than $25bn in the US for claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting vehicles.

The buybacks will continue through the end of 2019. The court filing said through 31 December Volkswagen bought back 335,000 diesel vehicles, resold 13,000 and destroyed about 28,000. As of the end of last year VW was storing 294,000 vehicles around the country. VW must buy back or fix 85% of the vehicles involved by June 2019 or face higher payments for emissions.

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A populist address? What does that mean?

Trump Says US Withdrawing From Syria ‘Very Soon’ (AFP)

US President Donald Trump insisted Thursday that US forces would pull out of Syria “very soon” and lamented what he said was Washington’s waste of $7 trillion in Middle East wars. In a populist address to industrial workers in Ohio, Trump said US forces were close to securing all of the territory that the Islamic State jihadist group once claimed. “We’ll be coming out of Syria, like, very soon. Let the other people take care of it now,” he promised, to applause. Trump did not say who the others were who might take care of Syria, but Russia and Iran have sizable forces in the country to support President Bashar al-Assad’s regime. “Very soon – very soon we’re coming out. We’re going to have 100% of the caliphate, as they call it – sometimes referred to as ‘land’ – taking it all back quickly, quickly,” he said.

“But we’re going to be coming out of there real soon. Going to get back to our country, where we belong, where we want to be.” State Department spokeswoman Heather Nauert was later asked at a briefing if she was aware of any decision for the US to pull out of Syria. She responded, “I am not, no. No.” The United States has more than 2,000 military personnel in eastern Syria, working with local militia groups to defeat the Islamic State group while trying to keep out of Syria’s broader civil war. Trump’s eagerness to quit the conflict flies in the face of a new US Syria strategy announced in January by then secretary of state Rex Tillerson – who has since been sacked. Tillerson argued that US forces must remain engaged in Syria to prevent IS and Al-Qaeda from returning and to deny Iran a chance “to further strengthen its position in Syria.”

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This is not over.

Sessions Rejects Calls for Second Special Counsel, Appoints Investigator (BBG)

Attorney General Jeff Sessions rejected calls from Republican lawmakers for a second special counsel to look into potential misconduct by the Justice Department and the FBI in past investigations of Hillary Clinton, saying that the issues were already under scrutiny. In a letter to three Republican committee chairmen, Sessions disclosed Thursday that he has assigned John Huber, a U.S. attorney based in Utah, to conduct an internal probe into complaints of FBI bias and wrongdoing. “I am confident that Mr. Huber’s review will include a full, complete and objective evaluation of these matters in a manner that is consistent with the law and facts,” Sessions wrote to Senate Judiciary Chairman Chuck Grassley, House Judiciary Chairman Bob Goodlatte, and House Oversight Chairman Trey Gowdy.

Sessions said he would consider the recommendations Huber might make, including “whether any matters merit the appointment of a special counsel” later. Huber has been the U.S. attorney in Utah since June 2015 and was twice confirmed unanimously by the Senate. He served for almost two years as an appointee of Democratic President Barack Obama, and was appointed by Sessions to continue his work in March 2017.| Gowdy and Goodlatte, in a joint statement released Thursday night, said that “while we continue to believe the appointment of a second special counsel is necessary, this is a step in the right direction.”

[..] Sessions reminded the chairmen in his letter that the department’s inspector general also is looking into some of the same matters. The attorney general’s letter came a day after that internal watchdog, Michael Horowitz, confirmed that he’s now examining the FBI’s actions early in its investigation into Russian campaign interference, including how it obtained a warrant to monitor Carter Page, a foreign policy adviser to the Trump campaign.

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