Dec 182018
 


Titian The rape of Europe 1560-62

 

It took me a while to decide which word(s) best define the past year and the next one, but I think this is pretty much it. 2018 was chaotic more than anything else, and that chaos will give rise to mayhem in 2019.

What I think is striking is that this is true across the board, in all walks of life so to speak. In finance, in politics, in energy markets, in ecological matters, and perhaps most of all in the ways all these topics are being covered by what once were trusted media.

I’m going to have to come back to all these topics separately, so it’s promising to be a very busy holiday season, but it’s also good to try and put them together in one place, if only to show how interconnected everything is. And how futile it is to look at the economy without seeing its connection to energy flows and ecosystems. And vice versa.

 

In finance and economics, we’ve seen an avalanche of falling numbers recently, in stock prices, bond prices, housing, across the globe, and obviously that evokes a lot of comments in the financial press. But that press, and bankers investors on their own, still talk about markets.

However, as I wrote in April 2018, if there is no price discovery, and there isn’t, there ARE NO markets, and it would be good and beneficial if many more people absorb that simple reality. Many more so-called traders and investors would be a start, but by no means enough. Lots more people who have nothing to do with the ‘markets’ should understand why there is no such thing anymore.

As long as you limit it to stock and bond markets, it may appear fine that people don’t understand. But as soon as you acknowledge there are no housing markets either for the exact same reasons, the story changes considerably. Because then it becomes clear that all -former- markets, bar none, have been eviscerated by central bank policies that sought to prop up banks, often highly successfully so, which they knew could only happen at the expense of communities and societies.

We’ve ended up with scores of mom and pop ‘investors’ who own hugely overpriced stocks and homes, while their pensions funds hold zillions ‘worth’ of bonds and also increasingly stocks. The link between pensions and AAA-rate assets was pulverized in the process. That looks set to continue, and worsen, in 2019. But that may be just the look of things. Because there really are no markets, there is no price discovery.

What is still there is a lot of talk about whether the Fed -and other central banks- will raise rates further or not, or will stop or continue their asset buying schemes. Central banks are the only game in town, there are no markets, nobody knows what anything is really worth because the Fed etc. took the discovery process beyond their reach.

And now all those financial ‘subjects’ are sitting on all this stuff that only appears to have value, and that value hinges exclusively on what Draghi, Kuroda, Yellen and now Jay Powell have decided things are worth. And yes, it does make matters appear okay, but because they can’t do QE forever, all of those values will need to be re-assessed by actual markets once Powell et al. are either thrown out or decide for themselves to leave the arena.

It won’t be pretty, it will be devastating. It’s impossible to say if it will come to a head in 2019, because the Fed can lower rates a bit again after its recent rate hikes and prop up the zombie for longer. Then again Draghi can’t do that anymore since he’s already in negative rate territory, and while the euro could fall to parity with the USD as a consequence, there’s a limit to that too.

Anyway, more on that later.

 

Energy and ecology seem to become more intertwined as we go along, though that may well be a trompe oeil, trick of the eye. Still, if you see and read what people have to say about things like the big COP24 event in Katowice last week, it’s obvious that the 2nd law of Thermodynamics is a hard one to internalize. Because that law seems to say that the use of energy, period, produces waste, while all these mostly well-meaning folk are merely focusing on shifting between energy sources.

There is surprisingly little attention for not using energy in the first place, which the 2nd Law appears to stipulate is the only way to stop the rot. And it’s entirely feasible to build homes that use 70-80% less power to heat and cool, or to design a transport system in a city that saves that much energy.

But the ‘leaders’, politicians and business people, prefer to address solar panels and wind turbines that allow for the amount of energy used to fall only moderately, which when combined with the economic growth that nobody questions, will lead to the use of ever more energy.

And I get that, you need to shrink your present economies, and the models they’re based on, in order to save the planet. I’m not so much talking about climate change, since the earth is a system so complex we should really be very cautious about deriving any conclusions about it from simplified models, but the species extinction reported in 2018 is another, and more immediately convincing, story.

Still, conferences like COP24, or its predecessor COP21 which I wrote about 3 years ago in CON21, are not just entirely useless, they move everything backward that all the worried boys and girls are so worried about.

The movers and shakers of the world all owe their positions to the economies, and therefore the levels of energy use, that the worried people now want to move away from. And then they turn to the same movers and shakers to make that happen. Sorry, no can do. All you’ll get is lip service from people looking for money and power, who are not interested in being proved wrong if they are.

Today’s climate discussion is a road to nowhere where down the line there’ll be nobody left to talk to and no birds singing. You yourself probably won’t be there either. There is not one politician who will volunteer to give up their power if that could save the world their children will have to live in. They’ll come up with a story where their position is save and so is that world, and they’re more than likely to believe it.

 

As for the media, the tale gets darker fast. It didn’t start in 2018, but it did become a lot more outspoken. As I’ve said before, there are three targets for the former trusted sources of impartial news, even as those sources rapidly become more partial as we move forward. And that of course has to do with their new business model I wrote about a lot: writing negative stories about Donald Trump became an obvious source of revenue well before he was president.

Once he was elected, the media doubled down. They wrote against Trump at first thinking he would be beaten in the GOP primaries, then some more when he faced Hillary, then because they didn’t like him in the White House, and finally because he turned out to be the business proposition that quite literally kept them alive. What was it, over 100,000 new subscribers for the NYT a MONTH at a certain point?! Would CNN and Rachel Maddow even exist anymore without the Donald?

But that also means that the MSM cannot report anything positive about the man, with the exception of a bombing campaign in a faraway sandbox, and that is pretty crazy. No matter where you stand politically, not even Trump can do everything wrong, but CNN, MSNBC, WaPo,NYT et al can’t say it out loud, because their new readers and viewers want negative stories.

I’m not at all a Trump fan, I find it insane that America can’t find a single person among its 320 million inhabitants who could better represent it, but I also saw well over two years ago that the reporting on Trump was so biased someone had to restore at least some balance. And if that was to be me, so be it.

It’s like the entire US -and UK- press has become the National Enquirer, where the questions of truth or accuracy have become, and/or always was, a complete afterthought, irrelevant to whatever is actually published. And the readers and viewers caught inside the echo chamber will never know any better than that that is what the world really looks like.

It’s the ‘old’ media’s response to the threat of social media, a fight they cannot possibly win in the end, but not one they will relinquish easily; it will be the end of them. So there’s Trump, and then there’s Russia and Julian Assange. And there’s a live shooting practice going on in which all three are fair game.

According to two reports published just yesterday in the NY Times and the BBC, African Americans and French Yellow Vests were targeted by Russian bots, trolls, give them a name. What these once trusted media no longer understand, or don’t care about, is that they are effectively saying that African Americans and Yellow Vests are all so stupid and so unconvinced and unconvincing in their political convictions that a bunch of poorly defined Russians made them throw their votes away from Hillary Clinton and towards Trump.

Like African Americans have no opinions and therefore in the end no functioning brains. Like their f*king robots, some inferior lifeform. Is there anything you can say that is more racist than that? I come up empty. And I understand Kanye.

And that the ‘Russians’ caused tens of thousands of Frenchmen and -women to put on a yellow vest and protest Macron’s dismantling of -very- long-standing labor rights and taxation ‘reforms’ that benefit the rich French elite. You cannot insult two such vast yet diverse groups of people, who seem to have little if anything in common, African Americans and Yellow Vests, you cannot insult them more or worse than such reports do.

And they simply don’t see it. In their view, and which they -rightly by now- trust their public will eat up like hot cakes, their 24/7 anti-Trump and anti-Russia campaigns have been so convincing that they can basically say anything at all by now. If Trump or the Russians deny, that’s just what they would do if they were guilty. Assange can’t deny anything at all, they’ve totally silenced him. They being the US deep state in liaison with the MSM.

 

That’s how we’re about to enter 2019, how we’re about to move from chaos to mayhem. It is scary not just because of what we see happening today, but even more because we’ve never seen anything remotely like it. Sure, US media, any country’s media, have always supported government strategic lies in times of warfare or other tensions.

But an overall campaign against a sitting president, comprised of dozens of articles a day consisting of mere allegations and rumors, let alone the same against a state nuclear power arguably mightier than the US itself, and a journalist who’s the only one in his profession who’s actually done what journalists should do, not the well-paid follow the party line thing going on at the MSM, all this is unprecedented.

And given what we’ve seen in 2018 in the realm of banned social media accounts, in a wider sense of the word, we can only wonder how much worse the censorship can get in the mayhem year of 2019.

Can the Automatic Earth, and for instance our friends at Zero Hedge, only continue to exist next year if we agree to increasingly become the poodles of the ruling political classes, intelligence services, and their press masters and lackeys?

It’s starting to look that way. So in closing, I want to call on you to support us by donating a Christmas gift, and preferably a recurring one all through the 2019 mayhem year, so we know we can continue to present you with an alternative to the ‘appropriate’ information you’re ‘supposed’ to be receiving.

It’s later than you think.

 

 

Dec 182018
 
 December 18, 2018  Posted by at 10:09 am Finance Tagged with: , , , , , , , , , , ,  


Caravaggio St. John the Baptist in the wilderness 1604

 

S&P 500 Drops More Than 2% To New Low For 2018, Dow Dives 500 Points (CNBC)
The Latest Key Death Cross Is Poised To Engulf The Stock Market (MW)
Stock Market On Pace For Worst December Since Great Depression (CNBC)
How The Federal Reserve Could Spark A ‘Santa Claus’ Stock Rally (Yahoo!)
You Have A “Trading” Problem (Roberts)
China Politics Getting In The Way Of Reforms (G.)
China To Mark Economic Miracle That Pulled 700 Million People Out Of Poverty (RT)
Australia’s Central Bank Sees Risks From High Debt As House Prices Fall (R.)
‘No Existing Countermeasures’ To Russian Hypersonic Weapons – US Gov’t (RT)
The Bigotry Behind NY Times’ ‘Russians Targeted African-Americans’ (GJ)
Racist ‘Russians’ Targeted African-Americans In 2016 Election – Reports (RT)
Russia! The Gift That Keeps Giving For The BBC, Even In France (Bridge)
Fatal Over-Reach (Kunstler)
Coal Demand Will Remain Steady Through 2023 -IEA (CNBC)

 

 

Can’t wait for Christmas amd some days off. Close it down and it can’t fall further. Either that or give Jay Powell a call.

S&P 500 Drops More Than 2% To New Low For 2018, Dow Dives 500 Points (CNBC)

Stocks tanked on Monday, pushing the S&P 500 to a new low for the year amid growing concerns that the Federal Reserve’s plan to raise interest rates could be too much for the economy and stock market to handle. The S&P 500 fell as much as 2.5% to 2,530.54, surpassing its February intraday low of 2,532.69. The broad market index finished the session down 2% at 2,545.94, its lowest close for the year. The Dow Jones Industrial Average lost 507.53 points to close at 23,592.98, bringing its two-day losses to more than 1,000 points. Shares of Amazon and Goldman Sachs led the declines.

The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 7% so far for the month. The S&P 500 is now in the red for 2018 by 4%. The tech-heavy Nasdaq Composite dropped 2.2% to finish the day at 6,753.73 as Microsoft dropped 2.9%. The Russell 2000 — which tracks the performance of smaller companies — entered a bear market, down 20% from its 52-week high. DoubleLine Capital CEO Jeffrey Gundlach said Monday that he “absolutely” believes the S&P 500 will go below the lows that the index hit early in 2018. “I’m pretty sure this is a bear market,” Gundlach told Scott Wapner on CNBC’s “Halftime Report. The major averages fell to session lows following his comments.

Read more …

There are so many death croses lately, the term loses meaning.

The Latest Key Death Cross Is Poised To Engulf The Stock Market (MW)

Ominous-sounding death crosses have been emerging in the stock market like weeds, with the latest — and arguably, the last important such cross — about to take hold in the Dow. The Dow Jones Industrial Average is on the verge of joining other major equity benchmarks in a so-called death cross, where the 50-day — a short-term trend tracker — crosses below the 200-day, used to determine a long-term trend in an asset. Chart watchers believe that such a cross marks the point where a shorter-term decline graduates to a longer-term downtrend.

Currently, the Dow’s 50-day moving average stands at 25,173.14, compared against its 200-day average at 25,083.23, according to FactSet data, as of Friday’s close of trading. That puts the 50-day less than 90 points shy of breaching the long-term average, which could occur by the end of this week or next, based on the current pace of decline. The Dow has suffered a series of punishing drops on nagging fears of slowing global growth, unresolved trade worries and the pace of the Federal Reserve’s rate increases, with Monday’s action placing the Dow at its lowest close since March 23, 2018.

Read more …

Thank the Fed.

Stock Market On Pace For Worst December Since Great Depression (CNBC)

Two benchmark U.S. stock indexes are careening toward a historically bad December. Both the Dow Jones Industrial Average and the S&P 500 are on pace for their worst December performance since 1931, when stocks were battered during the Great Depression. The Dow and S&P 500 are down 7.8% and 7.6% this month, respectively. December is typically a very positive month for markets. The Dow has only fallen during 25 Decembers going back to 1931. The S&P 500 averages a 1.6% gain for December, making it typically the best month for the market, according to the Stock Trader’s Almanac. While the S&P 500 began dissemination in 1950, the performance data was backtested through 1928. It’s worth noting that historically, the second half of December tends to see gains.

Read more …

The Fed has absolute control. I don’t see nearly enough people being afraid of that.

How The Federal Reserve Could Spark A ‘Santa Claus’ Stock Rally (Yahoo!)

After a bruising few months for stocks, investors are banking on a ‘Santa Claus’ rally to close out 2018. Even with just a handful of trading sessions left in 2018, there is still one remaining catalyst that could spark a stock rally: the Federal Reserve. The market is pricing in a 78% chance the Fed announces a rate hike Wednesday, when it wraps up its two-day policy meeting, according to CME futures data. The rate hike itself wouldn’t spark the rally. In fact, rate hikes make stocks less attractive. But this rate hike is so priced in, that not going forward with it could signal that the Fed is worried about the economy. This would be the Fed’s fourth interest rate hike of 2018. It was in June that the Fed telegraphed this fourth rate hike.

Instead, the stock rally could be sparked by the Fed’s guidance about monetary policy in 2019. “For U.S. stocks to drift higher this week, the Fed will have to strike an easier tone about future rate hikes without signaling undue concerns about U.S. economic growth,” wrote Nick Colas, co-founder of DataTrek Research, in a note to clients Monday. But doing so may force them to downgrade U.S. economic growth forecasts for 2019, Colas said. “Changing course on rates without that air cover will make it look like the Fed is targeting asset price volatility (a.k.a. the “Fed Put”) or – worse – that the central bank is taking orders from the White House,” Colas noted, referring to President Trump’s months-long criticism — which occurred as recently as Monday — of the Fed’s monetary tightening.

[..] the Fed’s statement on Wednesday, roughly 200 words in length, will be scrutinized by investors. “The Fed could delete the words ‘gradual increases’ — meaning a hike every quarter is no longer a working assumption,” said Danielle DiMartino Booth, a former Fed advisor and CEO of Quill Intelligence. “That would take March off the table in theory and could spark a rally, even if based only on technicals, that could run into year-end.” The Fed has started to use the phrase “gradual increases” when referring to interest rate hikes in its statements starting in June. Prior to that, many of the statements included the phrase “gradual adjustments.” “Investors are hungry for even a morsel of dovishness, and what they do not say could be even more powerful than what they do say,” Booth noted.

Read more …

I don’t think the problem is where Lance sees it.

You Have A “Trading” Problem (Roberts)

As Sy Harding says in his excellent book “Riding The Bear:” “No such creature as a ‘buy and hold’ investor ever emerged from the other side of the subsequent bear market.” Statistics compiled by Ned Davis Research back up Harding’s assertion. Every time the market declines more than 10%, (and “real” bear markets don’t even officially begin until the decline is 20%), mutual funds experience net outflows of investor money. To wit: “Lipper also found the largest outflows on record from stocks ($46BN), the largest outflows since December 2015 from taxable bond ($13.4BN) and Investment Grade bond ($3.7BN) funds, and the 4th consecutive week of outflows from high yield bonds ($2.1BN), offset by a panic rush into cash as money market funds attracted over $81BN in inflows, the largest inflow on record.”

Most bear markets last for months (the norm), or even years (both the 1929 and 1966 bear markets), and one can see how the torture of losing money week after week, month after month, would wear down even the most determined “buy and hold” investor. But the average investor’s pain threshold is a lot lower than that. The research shows that it doesn’t matter if the bear market lasts less than 3 months (like the 1990 bear) or less than 3 days (like the 1987 bear). People will still sell out, usually at the very bottom, and almost always at a loss. So THAT is how it happens. And the only way to avoid it – is to avoid owning stocks during bear markets. If you try to ride them out, odds are you’ll fail. And if you believe that we are in a “New Era,” and that bear markets are a thing of the past, your next of kin will have our sympathies.

Read more …

Xi is not reforming, he’s trying to keep China above water.

China Politics Getting In The Way Of Reforms (G.)

Xi’s speech comes as the Chinese leadership is facing criticism over slowing growth and confrontation with the US. Observers hoped his speech would lay out new directions or reforms needed to help the Chinese economy, weighed down by debt and lagging consumption, and an overly dominant state sector. Instead, Xi stressed that the Party’s leadership and strategy up to now have been “absolutely correct.” He promised to support the state sector while continuing reforms in appropriate areas. His remarks lacked any detail about new policies and failed to inspire confidence in Asian markets. Hong Kong and Shanghai both dropped sharply during the speech. They are now off 1% for the day while losses have deepened to 1.8% in Tokyo and more than 1% in Sydney.

“President Xi was perhaps unsurprisingly long on rhetoric and short on details,” said Tom Rafferty, regional manager for China at the Economist Intelligence Unit. “There will be a sense of disappointment, among both local and international investors, that Xi did not give clearer signals about the direction of future economic reform at a time when the Chinese government’s commitment to market liberalisation is seen to have waned.” Critics say politics are getting in the way of needed reforms – a rare challenge to Xi, who has amassed power more quickly than any of his predecessors.

Read more …

Central question is how much of it was borrowed. How much is based on unproductive investments and sheer waste?

China To Mark Economic Miracle That Pulled 700 Million People Out Of Poverty (RT)

China has pledged more economic reforms to push growth higher and help offset any impact from the US trade conflict. It comes as the world’s second-largest economy marks the 40th anniversary of “reform and opening up” this week. Statistics show that more than 700 million Chinese people have shaken off poverty since Beijing started its program of economic reforms four decades ago. The figure accounts for over 70% of global poverty reduction during that period. The first wave of reform, which lasted from 1978 to 1989, was characterized by agricultural reform and revival of the private sector. The second wave of reform (from 1992 to 2012) resulted in the legalization of the market economy, China’s accession to the WTO, and a booming private sector.

China’s record in poverty reduction since reform and opening up is without parallel in human history, according to Wang Yiwei, professor of the School of International Studies at Renmin University. “Between 1978 and 2017, China’s economy expanded at an annual average 9.5% growth rate, increasing in size almost 35 times,” he told Xinhua News. The total expansion of China’s economy over a 39 year period was almost three times as much as Japan’s, Ross noted, adding that “No other economy commencing sustained rapid economic growth even remotely approaches the 22.3% of the world’s population as China had in 1978 at the beginning of reform and opening up.”

Read more …

Australia hasn’t gone down in 2 decades. That takes a lot of debt.

Australia’s Central Bank Sees Risks From High Debt As House Prices Fall (R.)

A combination of falling home prices, stratospheric household debt and low wage growth posed downside risks to the Australian economy, the country’s central bank warned on Tuesday, even as it predicted the next move in interest rates would likely be up. Minutes of the Reserve Bank of Australia’s (RBA) December policy meeting showed members spent a considerable time discussing the recent slowdown in global growth momentum, partly caused by a bitter tariff dispute between the United States and China. Australia is heavily leveraged to global trade with China its No.1 trading partner so any deceleration in momentum overseas will likely be negative for the A$1.8 trillion economy.

Indeed, Australia’s gross domestic product expanded at a weaker-than-expected 2.8% pace last quarter, when policy makers were hoping for “above-trend” 3%-plus growth. Dismal private consumption was a major factor hurting economic activity, even though there were some early signs of a small uptick in wages growth. “The outlook for household consumption continued to be a source of uncertainty because growth in household income remained low, debt levels were high and housing prices had declined. Members noted that this combination of factors posed downside risks,” the RBA said.

Read more …

The key to why Russia is seen as a problem. And that in turn leads to all the articles following this one.

‘No Existing Countermeasures’ To Russian Hypersonic Weapons – US Gov’t (RT)

The US is currently unable to repel an attack from the hypersonic weapons that are being developed by Russia and China, as they can pierce most missile defense systems, a recent US government report has revealed.
“China and Russia are pursuing hypersonic weapons because their speed, altitude, and maneuverability may defeat most missile defense systems, and they may be used to improve long-range conventional and nuclear strike capabilities,” the report by the Government Accountability Office (GAO) reads. The report also highlights the challenges to American security posed by Chinese and Russian anti-satellite weapons and stealth aircraft that “could fly faster, carry advanced weapons, and achieve further distances.”

The rapid development of the cutting-edge technology “could force US aircraft to operate at father distances and put more US targets at risk,” the report notes. Speaking at a Valdai Club session in October, Russian President Vladimir Putin said that Russia surpassed its rivals in terms of hypersonic weapons, calling Russia’s prevalence in the field “an obvious fact.” “Nobody has precise hypersonic weapons. Some plan to test theirs in 18 to 24 months. We have them in service already,” Putin said. In March Putin unveiled several advanced weapons systems, including the Avangard hypersonic glider warheads and the Kinzhal –or Dagger– hypersonic cruise missile. The Kinzhal can fly at Mach-10 speed and has a reported range of 2,000 km (1243 miles).

It was reported that Russia’s advanced Sukhoi Su-57 jet might soon be armed with a missile similar to the Kinzhal. While the Avangard is about to enter military service, the Kinzhal has already been deployed with the force. Faced with the unmatched hypersonic capabilities, the Pentagon has launched about a dozen programs to protect the US from hypersonic weapons. A project named ‘Glide Breaker’ to develop an interceptor capable of neutralizing incoming hypersonic gliders has been in the works with The Defense Advanced Research Projects Agency (DARPA).

Read more …

If you were African-American and you’re told all the time that you would have voted Hillary if not for the Russians co-opting you with $5,000 in ads, you would get mad too.

The Bigotry Behind NY Times’ ‘Russians Targeted African-Americans’ (GJ)

This morning, the New York Times decided to stop insulting our intelligence and instead chose to insult decency. In an article written by Scott Shane and Sheera Frenkel, Russians allegedly unleashed an intricate plot to targeted African-Americans in order to foment discontent and dupe “black people” to vote against their self-interest. According to the corporate recorders at the NY Times, the reason that African-Americans did not uniformly vote for Hillary Clinton and the Democrats is because they were too dimwitted to think for themselves and were subsequently manipulated by foreign agents. [..] Let me dispel some myths here about people who refused to vote for Hillary since I happen to be one of them.

I chose to withhold my support not because Russians conditioned me to think that way but because I refused to support a warmongering sociopath otherwise known as John McCain in pantsuits. I’ve followed Hillary’s career long enough to know that she is a corporate courtesan who can’t get enough of destabilizing nations and enriching herself by trading access for cash. Eight years of Obama catering to Wall Street and furthering George Bush’s war first policies was enough for me to tap out. [..] In other words, just because my skin color is “black” does not mean I owe my vote and loyalty to Democrats. True enough, there was a time where I was an unflinching supporter of team blue, but after seeing how Democrats are no different than Republicans, I chose to wake up.

[..] The level of duplicity on display by establishment voices is truly astounding. If leading Democrats and media personalities want to know who is responsible for the rise of Trump, they should look in the mirror. After all, it was Hillary Clinton’s “pied piper” strategy—heeded by her sycophants in the press—that elevated a reality show clown into a serious contender. Hillary Clinton and her cronies rigged the primaries, spent more than $1.2 billion and Trump was given more than a billion dollars in free media by CNN, MSNBC and their ilk, yet we are supposed to believe that $5,000 in Google ads and $50,000 on Facebook was enough to tilt the outcome of the 2016 elections.

Read more …

Who exactly here operates a troll factory?

Racist ‘Russians’ Targeted African-Americans In 2016 Election – Reports (RT)

Low voter turnout among African-Americans is usually blamed on purged voter rolls or decades of socioeconomic stasis – but in 2016, ‘evil’ Russia was the main culprit, according to two controversial reports for the US Senate. Though described as “Senate reports” by mainstream US media outlets, the two documents were actually compiled by third parties. The first was produced by a consultancy called New Knowledge, with the help of two other researchers, while the second was done by a group at Oxford University and the UK research firm Graphika. By the social media giants’ own admission, the criteria for labeling posts as “Russian” is so broad as to be practically meaningless.

That hasn’t stopped the authors of the two reports, though, who saw President Vladimir Putin’s fingerprints on every keyboard and under every bed. In particular, they argued, the “Russians” sought to depress the 2016 turnout by targeting Black Americans. Both groups relied on posts provided to the US government by Twitter, Facebook and Google and identified as coming from the St. Petersburg-based Internet Research Agency (IRA), also known as the “troll factory.” “These campaigns pushed a message that the best way to advance the cause of the African-American community was to boycott the election and focus on other issues instead,” said the Oxford report.

“The most prolific IRA efforts on Facebook and Instagram specifically targeted black American communities and appear to have been focused on developing black audiences and recruiting black Americans as assets,” says the New Knowledge report. While some African-American activists saw the reports as recognition of their community’s influence in US politics, others pointed out that blaming the “Russians” downplayed very real and long-standing racism in American society.

Read more …

African-Americans have no opinions of their own, and neither do Yellow Vests. They’re all like Putin’s zombie armies. Next up is Orban blaming Putin for Hungary’s protests.

Russia! The Gift That Keeps Giving For The BBC, Even In France (Bridge)

Given the rash of conspiracy theories leveled against Russia of late, it is no surprise that the BBC is deep-sea fishing for a Kremlin angle to explain the protests against the government of French President Emmanuel Macron. This new and improved beast of burden to explain every uprising, lost election, accident and wart, popularly known as ‘Russia’ – a strategy rebuked by none other than President Putin as “the new anti-Semitism” – provides craven political leaders with a ready-made alibi when the proverbial poo hits the fan. Yes! It can even rescue Emmanuel Macron, who just experienced his fifth consecutive weekend of protests in the French capital and beyond.

Here is the real beauty of this new media product, which promises to outsell Chanel No.5 this holiday season. Reporting on ‘Russia’ does not require any modicum of journalistic ethics, standards or even proof to peddle it like snake oil to an unsuspecting public. Simply uttering the name ‘Russia’ is usually all it takes for the fairytale to grow wings, spreading its destructive lies around the world. ‘Russia’ is truly the gift that keeps on giving! Allow me to demonstrate how easy it is to apply. Just this weekend, BBC journalist Olga Ivshina was engaged in correspondence with a stringer in France. In an effort to explain what has sparked the French protests, Ivshina gratuitously tossed out some live ‘blame Russia’ bait.

“And maybe some Russian business is making big bucks on it,” the BBC journalist solicited in an effort to conjure up fake news out of thin air. “Maybe they are eating cutlets out there en masse, for example. Or maybe the far-right are the main troublemakers?” When the question only managed to elicit an uncomfortable laugh from the stringer, the nonplussed BBC journalist exposed more trade secrets than was probably advisable. In fact, what followed seems to have been the only nugget of truth to emerge from the discussion. Ivshina confided that she was “looking for various angles” since the broadcaster, like a modern day Dracula flick, was “out for blood.”

Read more …

The next scheduled chapter in the story is Gen. Flynn’s sentencing this Tuesday. It would be a surprise if the Judge does not observe that Mr. Mueller has acted in contempt of court. Ditto if the charge against Gen. Flynn is not thrown out.

Fatal Over-Reach (Kunstler)

Last Friday morning, we adjourned the blog in anticipation of Special Counsel Robert Mueller handing over certain FBI documents in the General Flynn matter demanded by DC District Federal Judge Emmett G. Sullivan no later than 3:00 p.m. that day. Guess what. Mr. Mueller’s errand boys did not hand over the required documents — original FBI 302 interrogation reports. Instead, they proffered a half-assed “interview” with one of the two agents who conducted the Flynn interrogation, Peter Strzok, attempting to recollect the 302 half a year after it was written. Of course, Mr. Strzok was notoriously fired from the Bureau in August for bouts of wild political fury on-the-job as FBI counter-intel chief during and after the 2016 election. (This was the second time he was fired; the first was when Robert Mueller discarded him from the SC team in 2017 as a legal liability.)

So, 3:00 p.m. Friday has come and gone. It appears that the FBI 302 docs have come and gone, too. Actually, we have reason to believe that nothing ever created on a computer connected to the internet can actually disappear entirely. Rather, the data gets sucked into the bottomless well of the NSA server-farm out in Utah. Most likely, the original 302s exist and Mr. Mueller is pretending he can’t find them. In effect, it appears that Mr. Mueller has responded by gently whispering “fuck you” to Judge Sullivan.

Interestingly, The New York Times didn’t even report the story (nor The WashPo, nor CNN, nor MSNBC). Since their “Russia Collusion” narrative is foundering, they can’t tolerate any suggestion that their Avenging Angel of Impeachment, Mr. Mueller, is less than the sanctified plain dealer he affects to be. Judge Sullivan kept his own counsel all weekend. The next scheduled chapter in the story is Gen. Flynn’s sentencing this Tuesday. It would be a surprise if the Judge does not observe that Mr. Mueller has acted in contempt of court. Ditto if the charge against Gen. Flynn is not thrown out. After all, the main articles of evidence against him apparently don’t exist.

And if it turns out that Mr. Mueller and his team are disgraced by their apparent bad faith behavior in the Flynn case, what then of all the other cases connected to Mueller one way or another: Manafort, Cohen, Papadopoulos? And the other matters still in question, such as the Trump Tower meeting with the Russian “Magnitsky” lawyer and Golden Golem Junior, the porn star payoffs… really everything he has touched. What if it all falls apart?

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This is it. Given recent claims that emissions must be cut five times more than is now recognized, and there are just 2 years left to do anything meaningful concerning climate change, this is it.

Coal Demand Will Remain Steady Through 2023 -IEA (CNBC)

Coal consumption is expanding after two years of decline, but miners should brace for another period of sluggish growth, according to the International Energy Agency. In its latest annual report, the IEA forecasts global coal demand will remain essentially stable over the next five years, inching up by just over 1% between 2017 and 2023. The reason for coal’s stagnation remains unchanged from recent years: Developed nations are ditching the fossil fuel, while India and other emerging economies are turning to coal to quickly scale up electric power generation.

“In a growing number of countries, the elimination of coal-fired generation is a key climate policy goal. In others, coal remains the preferred source of electricity and is seen as abundant and affordable,” said the IEA, a Paris-based agency that advises developed nations on energy policy. The IEA’s forecast comes on the heels of a series of reports that the world is falling short of commitments to prevent catastrophic impacts from climate change and running out of time to take action. Burning coal for electric power and industrial purposes such as steelmaking is a major contributor to global warming.

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Dec 152018
 
 December 15, 2018  Posted by at 11:09 am Finance Tagged with: , , , , , , , , , , ,  


Vincent van Gogh Road menders at Saint-Remy 1889

 

US Banks See Biggest Unrealized Losses On Securities Since Q1 2009 (WS)
European Banks’ €300 Billion Race To The Bottom (BBG)
Global Debt Hits All-Time High Of $184,000,000,000,000 (RT)
Act V: Yellow Vests Prepare For Massive ‘Macron Resign’ Protest (RT)
Senior Tories Tell May To Work With Corbyn To Save Her Brexit Deal (Ind.)
Theresa May’s Brexit Strategy Left Brutally Exposed By Brussels Failure (G.)
Affordable Care Act Is Ruled Unconstitutional By A Federal Judge (CNBC)
Clinton Foundation Oversight Panel Hears Explosive Testimony (RT)
The War Against Globalism (Giraldi)
Yanis Varoufakis’s Internationalist Odyssey (Nation)

 

 

EU banks are disasters. US banks are too.

US Banks See Biggest Unrealized Losses On Securities Since Q1 2009 (WS)

The FDIC just released the aggregated third-quarter performance metrics of the 5,477 banks and thrifts it insures. The amount of their combined assets ticked up to $17.7 trillion. These assets – mostly loans but also investments of all kinds – include $3.6 trillion in securities (not including the securities in their trading accounts). And banks got hit by the biggest quarterly losses on those securities since the first quarter of 2009. Banks designate these securities either as “held-to-maturity” securities (valued at “amortized cost” or book value) and “available-for-sale” securities (valued at “fair value,” such as market value). For Q3, these were their unrealized losses – meaning, banks have not yet sold the securities:

• Available-for-sale securities: $51.5 billion in unrealized losses, or 2% of their amortized cost, as the FDIC said, “the highest loss level since first quarter 2009.” • Held-to-maturity securities: $32.8 billion in unrealized losses. • Both combined: $84.3 billion in unrealized losses. Note the damage done in 2018, after years of big gains: $83.4 billion in Q3; $66.4 billion in Q2; and about $55 billion in Q1; for a total so far this year about $200 billion in unrealized losses.

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And Draghi went for negative rates. One for the history books.

European Banks’ €300 Billion Race To The Bottom (BBG)

As we approach the end of a dismal year for European stocks, the question is: which sector had the worst year of them all? With a few trading sessions left before the end of 2018, banks and autos are in a tight race to the bottom. As of Thursday’s close, lenders are the biggest losers, with a quarter of their market value down the drain, a wipeout of roughly 300 billion euros in shareholders’ money. Banks haven’t seen such a bad year since the heat of the euro-zone sovereign debt crisis in 2011. As the final ECB meeting of the year confirmed, the central bank will keep rates unchanged at least until next summer and the grim outlook for the sector highlighted in one of our earlier Taking Stock columns remains valid.

Any attempt by the sector to break out from its downward trend in 2018 has so far failed. Perhaps it’s not a surprise as banks face a wall of worry from investors and nothing seems to be able to help them move forward. Repeated calls from some analysts that the sector is cheap hasn’t triggered any significant buying. A good example is Credit Suisse’s buyback and dividend announcement on Wednesday. That didn’t even raise investors’ interest with the stock hovering near its low. While any return of capital to shareholders is welcome, the dark clouds over its investment banking outlook seemed to weigh more.

Here’s the grim silver lining: …it doesn’t matter much to the rest of the market: Since the financial crisis a decade ago, the influence of banks over the broader European gauge has fallen dramatically, to a point where they now barely move the Stoxx 600. So what could help the shares regain their vigor? Although merger talk seems to find fruitful (speculative) ground, large cross-border deals remain a fantasy. But domestic love stories might be one theme to keep an eye on next year. Most prominent is the ongoing chatter about Deutsche Bank and Commerzbank, the worst and third-worst performing stocks in the Stoxx 600 Banks index. While any merger is far from certain, market reaction shows that investors, or at least algos and punters, are betting on any consolidation as the last resort to improve bottom-lines.

And if you are gloating at the “fortress balance sheet” US banks, as BMO’s Brad Wishak notes, price and time are playing a familair hand in US bank stocks… Finally, BofAML strategists summed it all up very succinctly this week: “What we learned in 2018: That central banks trump everything, when global liquidity peaked in Q1, markets peaked; that we remain in a deflationary world which cannot handle a 10-year Treasury yield above 3%; That investors have no satisfactory answers to the existential questions of ‘If not stocks, what?’, ‘If not tech, what?’ ‘If not the U.S. dollar, what?'”…

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Sometimes you wonder if even a grand jubilee could change this.

Global Debt Hits All-Time High Of $184,000,000,000,000 (RT)

The world’s debt currently exceeds $86,000 per person on average, according to the IMF. The US, China, and Japan are the top three global borrowers, accounting for more than half of the global debt. The IMF has calculated that their share of debt exceeds that of output. It stated that the emergence of China among the top ranking is, however, a relatively new development. Since the beginning of the millennium, China’s share in global debt surged from less than three percent to over 15 percent, underscoring the rapid credit surge in the aftermath of the global financial crisis. According to the IMF, global debt has reached a record high of $184 trillion in nominal terms.

That’s the equivalent of 225 percent of the world GDP in 2017. The debt figure is $2 trillion higher than the estimated number released by the fund in October, because it includes the debts of several countries who had not previously reported their updated data. “By including both the sovereign and private sides of borrowing for the entire world, the GDD (Global Debt Database) offers an unprecedented picture of global debt in the post-World War II era,” said the IMF. GDD is a comprehensive dataset covering public and private debt for 190 countries dating back to the 1950s.

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As I write this, things seem to be quiet still.

Act V: Yellow Vests Prepare For Massive ‘Macron Resign’ Protest (RT)

Paris is bracing for yet another round of Yellow Vest protests, with demonstrators planning to take to the streets on Saturday. More than 10,000 people have already RSVP’d on Facebook to the ‘Acte 5: Macron Démission’ march. The demonstration is scheduled to take place in the French capital on the Champs-Élysées. The organizers, consisting of some 15 groups, have outlined their list of demands on Facebook, saying they will continue their action against Macron until all their demands are met. “Our organizations support the demands of tax and social justice brought by the movement of yellow vests.

They call for demonstrations Saturday, December 15, for social justice and tax, for a real democracy, for equal rights, for a true ecological transition…” the planners said in a statement, as quoted by Le Parisien. Similar demonstrations are also expected to take place in other cities across the country. Security officials are gearing up for the protests, with Paris Police Chief Michel Delpuech stating that tens of thousands of cops will be deployed across France, and some 8,000 in Paris. “We need to be prepared for worst-case scenarios,” he said. Delpuech told RTL that authorities are aiming to be in “better control” of the situation than they were last weekend, when more than 125,000 people hit the streets of France, 10,000 of whom protested in Paris.

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But why should he?

Senior Tories Tell May To Work With Corbyn To Save Her Brexit Deal (Ind.)

Senior Tories have told Theresa May to open talks with Labour as her only hope of salvaging a Brexit deal, after the EU’s outright refusal to renegotiate left her strategy in tatters. A badly bruised prime minister was urged to stop trying to “go it alone”, accept her proposed agreement is dead and that she needs the help of other parties to push through softer exit terms. Nicky Morgan, the former education secretary, told The Independent that “cross-party support and proper discussions” were now essential, while Nick Boles, another former minister, said Ms May “must open cross-party discussions”.

The calls came after EU leaders dealt a devastating blow by scrapping written commitments, designed to help Ms May pass her deal through parliament, after disastrous talks failed to achieve a breakthrough. Brussels’ frustration at the prime minister’s inability to set out clearly what she wanted was laid bare when Jean-Claude Juncker, the European Commission president, branded the UK approach “nebulous”. At a press conference, Ms May put a brave face on, insisting her Brexit deal remained on track and that talks in the next few days would achieve “further clarification”.

[..] Jeremy Corbyn said the prime minister had “utterly failed in her attempts to deliver any meaningful changes to her botched deal”, calling for a Commons vote to kill it off without delay “Rather than ploughing ahead and dangerously running down the clock, the prime minister needs to put her deal to a vote next week so parliament can take back control,” he said. Nevertheless, Mr Boles said the route to success for Ms May was cross-party talks to “deliver their support for the deal”.

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She fled to Europe because she could, not to get anything done. The result is no Commons vote until after Christmas.

Theresa May’s Brexit Strategy Left Brutally Exposed By Brussels Failure (G.)

Theresa May has come home from Brussels empty-handed and without hope of further negotiations over the Irish backstop, with the failure to achieve any kind of breakthrough leaving her brutally exposed. Plans to work over Christmas on a legal guarantee over the temporary nature of the backstop had run into a brick wall, EU officials said, despite May’s claim that she would be holding further talks “in the coming days”. Brussels sources claimed May was just keeping up a pretence that the legal guarantee she had promised rebellious Tory MPs during this week’s leadership challenge was still on the cards.

Without clear evidence that she has made progress, May faces mounting jeopardy in Westminster, with Labour seriously considering tabling a vote of no confidence before Christmas, if it believes the prime minister’s DUP partners might support it. Jeremy Corbyn accused May on Friday of “dangerously running down the clock”. “The last 24 hours have confirmed that Theresa May’s Brexit deal is dead in the water. The prime minister has utterly failed in her attempts to deliver any meaningful changes to her botched deal,” he said. One shadow cabinet member said the moment at which Labour would table a no-confidence vote was getting “much, much closer”, but said it would depend on the stance of the DUP. “We are watching like hawks,” he added.

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Set up a bipartisan commission and get this solved. The US is a tragic laughing stock.

Affordable Care Act Is Ruled Unconstitutional By A Federal Judge (CNBC)

A federal judge in Texas ruled on Friday the Affordable Care Act unconstitutional, potentially threatening health-care coverage for millions of Americans and setting up a new legal showdown over former President Barack Obama’s signature policy initiative. U.S. District Court Judge Reed O’Connor of Texas issued the decision, declaring that key portions of the legislation were inconsistent with the Constitution. O’Connor’s ruling argued that the health-care law can not stand on its own since Congress last December repealed the individual mandate, which imposed a tax penalty on consumers who went uninsured. The mandate, which remains in effect for 2018, was a key part of ACA legislation, otherwise known as Obamacare. The mandate is the greater of $695 person per adult, or 2.5% of household income.

The lawsuit was backed by the Trump administration, and is likely to be appealed — which could mean the legislation will heard anew by the Supreme Court, which upheld Obamacare in a narrowly divided 2012 ruling. Medicare & Medicaid Services Administrator Seema Verma told reporters earlier this month that CMS has a plan to protect pre-existing conditions if the law is struck down. A CMS spokesperson late Friday told CNBC, “The recent federal court decision is still moving through the courts, and the exchanges are still open for business and we will continue with open enrollment. There is no impact to current coverage or coverage in a 2019 plan.”

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Government investigators who refuse to share documents with the House. Not just insane, but by now years of insanity.

Clinton Foundation Oversight Panel Hears Explosive Testimony (RT)

Fraud investigators have exposed the Clinton Foundation’s alleged misdeeds in a Congressional hearing, describing it as a de facto “foreign agent” devoted not to charity but to “advancing the personal interests of its principals.” The Clinton Foundation acted as an agent of foreign governments “early in its life and throughout its existence,” according to testimony by former government forensic investigator John Moynihan, which, if true, would not only render it in violation of the Foreign Agents Registration Act but also would violate its nonprofit charter, putting it on the hook for a massive quantity of unpaid taxes. Moynihan and fellow ex-government investigator Lawrence Doyle shared 6,000 pages of evidence with the IRS over 18 months ago, only to be met with silence.

They shared them with the FBI multiple times – ditto. Yet when the pair testified before the House Oversight and Government Reform Committee, they refused to turn over the documents, stating they did not want to interfere with any ongoing investigations. The committee chairman Rep. Mark Meadows (R-NC) said witnesses’ reluctance to share all the documents was hardly a “good foundation for truth and transparency,” while Rep. Jody Hice (R-GA) said he felt the duo was “using” the panel for their own benefit. “These are not our facts. They are not your facts. They are the facts of the Clinton Foundation,” said Moynihan, maintaining his interest in the case is purely financial – not political.

Testifying on their findings, Doyle highlighted the Foundation’s alleged “misuse of donated public funds,” explaining that it “falsely attested that it received funds and used them for charitable purposes which was, in fact, not the case. Rather the foundation pursued in an array of activities both domestically and abroad,” which included activities “properly characterized as profit-oriented and taxable undertakings of private enterprise, again failing the operational tests of philanthropy referenced above,” referring to the equally non-charitable pursuit of funding the Clinton Presidential Library. John Huber, appointed by former Attorney General Jeff Sessions to investigate the Clinton Foundation after Sessions recused himself from doing so, was conspicuously absent from the hearing, even though his job is to probe Clinton’s approval of the sale of US uranium assets to Russia.

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Globalism has been extremely destructive. Hard to defend.

The War Against Globalism (Giraldi)

The idea that republican or democratic government will eventually deteriorate into some form of tyranny is not exactly new. Thomas Jefferson advocated a new revolution every generation to keep the spirit of government accountable to the people alive. Call it what you will – neoliberalism, neoconservatism or globalism – the new world order, as recently deceased President George H.W. Bush once labeled it, characteristically embraces a world community in which there is free trade, free movement of workers and democracy. They all sound like good things but they are authoritarian in nature, destructive of existing communities and social systems while at the same time enriching those who promote the changes.

They have also been the root cause of most of the wars fought since the Second World War, wars to “liberate” people who never asked to be invaded or bombed as part of the process. And there are, of course, major differences between neoliberals and neoconservatives in terms of how one brings about the universal nirvana, with the liberals embracing some kind of process whereby the transformation takes place because it represents what they see, perhaps cynically, as the moral high ground and is recognized as being the right thing to do. The neocons, however, seek to enforce what they define as international standards because the United States has the power to do so in a process that makes it and its allies impossible to challenge.

The latter view is promoted under the phony slogan that “Democracies do not fight other democracies.” The fact that globalists of every type consider nationalism a threat to their broader ambitions has meant that parochial or domestic interests are often disregarded or even rejected. With that in mind, and focusing on two issues – wholesale unwelcome immigration and corrupt government run by oligarchs – one might reasonably argue that large numbers of ordinary citizens now believe themselves to be both effectively disenfranchised and demonstrably poorer as rewarding work becomes harder to find and communities are destroyed through waves of both legal and illegal immigration.

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I can still hope he succeeds, but it’s getting hard to see how.

Yanis Varoufakis’s Internationalist Odyssey (Nation)

Flanked by a dozen members of DiEM25, the pan-European movement launched in 2016 to “democratize” the continent’s institutions, Varoufakis announced that he would run for a seat representing Germany in the European Parliament. He would make his bid as a Greek, a European, and, you might even say, a Berliner—all to drive home a larger point about the necessity of thinking beyond borders. “No European people can be prosperous and free when other European countries are condemned to the permanent depression that eternal austerity creates,” he said. Persistent unemployment, cuts to welfare, and other suffocating economic policies across the continent help explain why Varoufakis chose Germany—a country he’s best known for antagonizing, precisely over its leaders’ support for austerity, in the fraught negotiations over Greece’s debt in 2015.

These circumstances are also the motivating force behind the Progressive International, an initiative that Varoufakis launched five days later in Burlington, Vermont, with DiEM25 and the Sanders Institute. Building broad-based coalitions takes time, and for now, the Progressive International is just a website with some inspiring language and a video. Its membership is also very Eurocentric. But Varoufakis hopes it will blossom into a global movement that helps leftists create coherent platforms, policies, and parties to defeat the “nationalist international” masterminded by Donald Trump’s former chief strategist, Steve Bannon. The logic is simple. Financiers have long had global networks; now, right-wing authoritarians do too, with coordinated social-media strategies and deep pools of dark money funding campaigns and disrupting elections around the globe.

It’s time for the left to go on the offensive and reclaim its tradition of internationalism: in Varoufakis’s words, to “mobilize workers, women, and the disenfranchised around the world” to prevent outright fascism from taking hold. This means local action, but it also means dreaming big. It’s a fuzzy plan, of course, and one that Varoufakis’s critics deem implausible. Aren’t ideas like “democratizing” the European Union and making global finance more “progressive” oxymorons? How will a ragtag group of leftists dream up a new monetary system and an ecological New Deal for the whole world when Goldman Sachs and ExxonMobil call the shots?

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Dec 112018
 
 December 11, 2018  Posted by at 10:44 am Finance Tagged with: , , , , , , , , , , , , ,  


Arnold Böcklin The Isle of the Dead III 1883

 

Jerome Powell Is Between A Rock And A Hard Place (Nomi Prins)
Macron Bows To Protesters’ Demands: “I Know I Have Hurt Some Of You” (G.)
‘Yellow Vests’ Denounce Macron Speech As ‘Charade’ (AFP)
Let’s Call The Whole Thing Off (Ind.)
Sturgeon Offers To Unite With Corbyn To Topple ‘Shambles’ Government (Ind.)
Pound Falls To Lowest In Almost Two Years Amid Brexit Uncertainty (G.)
Hedge Funds Make Big Bets Against Post-Brexit UK Economy (G.)
Mueller’s Investigation is Missing One Thing: A Crime (AC)
Jerome Corsi Sues Robert Mueller, DOJ, FBI, NSA, CIA For $350 Million (CNBC)
Not So Fast (Jim Kunstler)

 

 

I don’t know, Nomi. The whole thing just spells out to me how ridiculous things have become because of the powers the Fed has been given. The only sensible thing anyone can do, including Powell, is to retreat and let the market be reborn. Until then, any talk about ‘the market(s)’ has no meaning.

Jerome Powell Is Between A Rock And A Hard Place (Nomi Prins)

One of the major drags on the market, besides trade wars, has been uncertainty about whether the Fed will raise rates this month. Despite the verbal bravado of Federal Reserve Chairman, Jerome Powell, over how strong the U.S. economy is, he doesn’t live in a vacuum. Powell’s borne the brunt of President Trump’s recent accusations that the Fed’s hikes are what’s hurting the stock market and threatening the economy. That lead to a media debate over whether Powell would “cave” to Trump or demonstrate that the Fed is the independent body that it’s legally designed to be, and continue with planned hikes anyway. Powell’s recently indicated again that he planned to go ahead with another 0.25 rate hike when the Fed meets Dec. 19, which would be the fourth increase this year.

But on Nov. 28, he revealed something in his speech at the Economic Club of New York that I’ve been predicting. He dialed back talk about rate hikes. He said that rates were “just below” neutral. That contrasted sharply with his comments from Oct. 3rd when he said “We are a long way from neutral at this point.” In other words, he’s turned dovish. That’s a major shift in less than two months’ time. But why the change? It likely had much less to do with pressure from Trump than deteriorating economic and market conditions. Heavy market volatility was just starting to return when he his Oct. 3 comment. It’s only gotten worse since then. At some point, the wobbling in the financial markets must have gotten to him. As the Daily Reckoning’s, Brian Maher said, single-day losses of 300, 500, 700 — 800 points — seem almost commonplace now. “The stock market is a wreck of nerves these days,” he said, “like a man walking point in a dark enemy jungle.”

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After long deliberation with his spin doctors, lawyers and PR guys, Macron has decided to gamble on the protests being all about money. If handing out the billions he announced yesterday calms things down, even if it takes France out of the EU budget comfort zone, the protests were never about anything real. But if the yellow vests’ Act V next Saturday is anything like the first 4, he’s in deep doodoo.

Also: he was MIA for 10 days or so. And then his speech yesterday was pre-recorded. He still hasn’t communicated live with the French people.

Macron Bows To Protesters’ Demands: “I Know I Have Hurt Some Of You” (G.)

Emmanuel Macron has bowed to pressure from the street to announce a catalogue of emergency measures aimed at pacifying the gilets jaunes after weeks of civil unrest in France. In a long-awaited address on primetime television, the president tried to talk the protesters out of further action, promising a rise in the minimum wage and tax concessions. In a mea culpa, Macron said he had heard and understood protesters’ anger and indignation, which he said was “deep and in many ways legitimate”. He admitted he had not been able to provide solutions quickly enough since his election. “I may have given you the impression that this was not my concern, that I had other priorities. I take my share of responsibility. I know I have hurt some of you with my words,” he said.

The president began his pre-recorded 13-minute declaration saying the past few weeks of protests had “profoundly troubled the nation”, and that legitimate demands had led to “a series unacceptable violence”. He said the anger went back 40 years, but he added: “No anger justifies attacking a police officer, a gendarme, or damaging a shop or public building. When violence is unleashed, freedom ends.” Macron, elected on a centrist reforming programme 18 months ago, said he understood the anger and “distress” of those struggling to make ends meet at the end of the month who felt ignored and economically squeezed: “It is as if they have been forgotten, erased. This is 40 years of malaise that has risen to the surface. It goes back a long way, but it is here now.”

To help struggling workers, he said the government had been ordered to introduce “concrete measures” from 1 January, including increasing the minimum wage by €100 (£90) a month. Overtime would be exempt from tax and social charges, and a planned tax on pensions under €2,000 a month would be cancelled. All employers “who can” were asked to give workers a tax-free bonus at the end of the year. Macron said there would be greater public consultation on issues, but he would not go back on his wealth tax reforms. However, things would not “go back to normal … as if nothing has changed,” he said.. He concluded: “We are at a historic moment in our country. With dialogue, respect, and engagement, we will succeed. My only concern is you, my only combat is for you – our only battle is for France.”

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It may just make them madder.

‘Yellow Vests’ Denounce Macron Speech As ‘Charade’ (AFP)

Groups of “yellow vest” protesters across France responded scathingly to the “crumbs” offered by President Emmanuel Macron in a speech intended to defuse their revolt, but others acknowledged his efforts. “Nonsense,” “a charade”, “a bluff” and “a drop in the ocean,” were among the immediate reactions that greeted the head of state’s televised speech Monday evening announcing an increase in the minimum wage and a range of other financial measures. At a roundabout in the southern town of Le Boulou, some 150 “yellow vests” gathered around a loudspeaker listened carefully to the president’s words before starting to shout in chorus. “He is trying to do a pirouette to land back on his feet but we can see that he isn’t sincere, that it’s all smoke and mirrors,” said Jean-Marc, a car mechanic.

“It’s just window dressing, for the media, some trivial measures, it almost seems like a provocation,” said Thierry, 55, a bicycle mechanic who donned the yellow vest a fortnight ago. “All this is cinema, it doesn’t tackle the problems of substance,” he told AFP before taking part in blocking the Boulou turnpike on the French-Spanish border. “We’re really wound up, we’re going back to battle,” he said. Less than an hour after the presidential address, the A9 toll booth from Spain was completely paralysed, an AFP photographer said. “Maybe if Macron had made this speech three weeks ago, it would have calmed the movement, but now it’s too late,” said Gaetan, 34, one of the “Rennes Lapins Jaunes” (Yellow Rabbits of Rennes). “For us, this speech is nonsense.”

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Theresa May is as out of touch with her people as Macron is.

The main event yesterday in the Commons was a guy picking up the ceremonial mace, a 17th century piece of metal. Just to show how out of touch the politicians, and their entire nation, are.

Well, that and May annoucing she was going to flee the country. But why would the EU change its stance, or the deal May signed, just to save her career?

Let’s Call The Whole Thing Off (Ind.)

Theresa May has sparked anger across the Commons by refusing to say when MPs will vote on her Brexit deal, as she prepared to head to Brussels to plead with EU leaders for further concessions. The showdown was dramatically delayed, almost certainly until the new year, after the prime minister admitted a Tory revolt meant she was heading for a crushing defeat “by a significant margin”. But condemnation of Ms May for pulling back rose when Downing Street failed to set a new timetable for the vote, arguing it depended on when she could “get the assurances” from the EU to pass the deal. Government sources admitted a quick breakthrough was unlikely, suggesting the vote would be shelved until the new year and refusing to say it would even be held next month.

In extraordinary scenes, Labour MP Lloyd Russell-Moyle was ejected from the House of Commons for seizing the ceremonial mace in protest at the formal deferral of the vote by the government whips. Mr Russell-Moyle swung the antique symbol of parliamentary authority from its holder as Tory MPs screamed “expel him”. He was promptly asked to leave the chamber by John Bercow, the speaker. His intervention came moments after Labour leader Jeremy Corbyn secured an emergency debate on the delay on Tuesday.

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If May had had any actual opposition, this farce would have been long over.

Sturgeon Offers To Unite With Corbyn To Topple ‘Shambles’ Government (Ind.)

Nicola Sturgeon has appealed to Jeremy Corbyn “work together” to topple Theresa May’s government after a crucial vote on the prime minister’s Brexit deal was abandoned, promising the SNP will support a motion of no confidence if it is tabled by Labour. The Scottish first minister said delaying the vote was “pathetic cowardice” and vowed that her party would stand with Labour if it follows through with its plan to bring down the government with a confidence vote on Tuesday. It comes amid chaotic scenes in Westminster, where reports that the meaningful vote was being shelved broke just moments after a Downing Street spokeswoman told reporters it would go ahead.

Ms Sturgeon posted on Twitter: “So @jeremycorbyn – if Labour, as official opposition, lodges motion of no confidence in this incompetent government tomorrow, @theSNP will support & we can then work together to give people the chance to stop Brexit in another vote. “This shambles can’t go on – so how about it?” The Labour leader has not responded to her offer but the first minister’s comments will ramp up the pressure on the beleaguered prime minister, as she faces one of the biggest challenges of her premiership.

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Parity with the USD in early 2019?!

Pound Falls To Lowest In Almost Two Years Amid Brexit Uncertainty (G.)

The pound has dropped to its lowest level for almost two years amid the growing risks to the British economy from political paralysis over Brexit and on a no-deal scenario. Theresa May’s decision to delay the parliamentary vote on her Brexit plan to avoid an embarrassing defeat for the government sent sterling tumbling by more than 1.3% against the dollar and by almost 1% against the euro on the foreign exchanges. The pound slumped below $1.26 to the lowest level since April 2017 after the prime minister said her Brexit plan would have been rejected by a “significant margin” in a Commons vote pencilled in for Tuesday. Sterling was worth $1.2563 against the dollar late on Monday and €1.1062 against the euro.

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They now have a solid reason to push for a no-deal Brexit.

Hedge Funds Make Big Bets Against Post-Brexit UK Economy (G.)

A pair of hedge funds owned by prominent Brexit supporters have made significant bets against companies exposed to the British consumer including big high street names. Odey Asset Management, part-owned by Crispin Odey, and Marshall Wace, part-owned by Sir Paul Marshall, have declared short positions against consumer-exposed companies, including retailers, estate agents and banks, equivalent to £149m and £572m respectively – as rising political uncertainty threatens the economy. The retail sector is facing particular scrutiny from short sellers, who in effect wager significant sums on certain shares falling in value. Uncertainty among consumers, with the Brexit process reaching a crunch point, comes at a time when retailers are already struggling to adjust to the move from physical shops to online.

The hedge fund run by Odey, one of the most outspoken of the Brexit-backing hedge fund managers, holds a short position in Intu – the owner of shopping malls including the Trafford Centre in Greater Manchester – that represented £33m worth of shares in the company at the end of last week. He also holds a position against struggling department store Debenhams that is worth £5.3m. The firm also appears to be betting that Britons’ appetite for cars will fall, in line with surveys showing hesitation over big-ticket purchases. The firm has short positions against Lookers, a large dealership chain, and Auto Trader, the online used-car directory.

Read more …

Watergate started with a crime. Russiagate did not. It started with a dodgy dossier.

Mueller’s Investigation is Missing One Thing: A Crime (AC)

The primordial ooze for all things Russiagate is less-than-complete intelligence alleging that hackers, linked to the Russian government, stole emails from the Democratic National Committee (DNC) in 2016. The details have never been released, no U.S. law enforcement agency has ever seen the server or scene of the crime, and Mueller’s dramatic indictments of said hackers, released as Trump met with Putin in Helsinki, will never be heard of again, or challenged in court, as none of his defendants will ever leave Russia. Meanwhile, despite contemporaneous denials of the same, is it somehow now accepted knowledge that the emails (and Facebook ads!) had some unproven major effect on the election.

The origin story for everything else, that Trump is beholden to Putin for favors granted or via blackmail, is opposition research purchased by the Democrats and carried out by an MI6 operative with complex connections into American intelligence, the salacious Steele Dossier. The FBI, under a Democratic-controlled Justice Department, then sought warrants to spy on the nominated GOP candidate for president based on evidence paid for by his opponent. Yet the real spark was the media, inflamed by Democrats, searching for why Trump won (because it can’t be anything to do with Hillary, and “all white people and the Electoral College are racists” just doesn’t hold up).

Their position was and is that Trump must have done something wrong, and Robert Mueller, despite helping squash a Bush-era money-laundering probe, lying about the Iraq War, and flubbing the post-9/11 anthrax investigation, has been resurrected with Jedi superpowers to find it. It might be collusion with Russia or Wikileaks, or a pee tape, or taxes, packaged as hard news but reading like Game of Thrones plot speculation. None of this is journalism to be proud of, and it underlies everything Mueller is supposedly trying to achieve. [..] The core problem—at least that we know of—is that Mueller hasn’t found a crime connected with Russiagate that someone working for Trump might have committed. His investigation to date hasn’t been a search for the guilty party —Colonel Mustard in the library— so much as a search for an actual crime, some crime, any crime.

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Even if he’s legally right, what are his odds of winning?

Jerome Corsi Sues Robert Mueller, DOJ, FBI, NSA, CIA For $350 Million (CNBC)

Jerome Corsi, a conspiracy theorist and Roger Stone associate, has filed a federal lawsuit accusing special counsel Robert Mueller of illegally searching his phone records and leaking grand jury information. Corsi, an avid supporter of President Donald Trump, recently claimed he faces indictment by Mueller. Attorneys for Corsi, 72, filed the lawsuit Sunday night in U.S. District Court in Washington. In addition to Mueller, it targets the Justice Department, the National Security Agency, the FBI and the CIA. The attorneys are demanding $100 million in “general and compensatory damages” and $250 million in “punitive damages” from the agencies.

In the complaint, Corsi’s lawyers argue that their client’s Fourth Amendment right against unreasonable or unwarranted government searches and seizures was violated when “each and every one” of the defendants looked through his digital records without a warrant and probable cause. The complaint also accuses Mueller of directing his staff to leak information from his grand jury about Corsi to the media. Special counsel spokesman Peter Carr declined CNBC’s request for comment on the court filing. Mueller’s team has reportedly investigated for months whether Corsi learned in advance that WikiLeaks had received Hillary Clinton campaign chairman John Podesta’s emails, which U.S. intelligence services have concluded were stolen by Russian intelligence officers.

[..] Corsi also accuses the special counsel of trying to make him lie under oath that he was a liaison between Stone and WikiLeaks founder Julian Assange in the publication of stolen Democrats’ emails.

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Flynn’s revenge on Mueller?

Not So Fast (Jim Kunstler)

Gen. Flynn may actually have the goods on the fraud behind his own prosecution — namely, proof of exactly how he was set up by Mr. Obama, in particular his own tapes of conversations with Russian Ambassador Sergey Kislyak that would show something different than the transcripts Mr. Mueller used to entrap him on Lying-to-Federal-Prosecutors rap. That theory raises the question: why did he not use it in his own defense. The answer may simply be that he didn’t want to rack up $2.5 million in billable hours for defense attorneys and chose instead to tough it out for nearly two years until he could use the information he has. And that means he must wait until final sentencing when his case is complete.

That appears in the offing, perhaps even before Mr. Mueller releases his much panted-over final report. Of course, Mr. Mueller may have absolutely no idea what Gen. Flynn has got on him — hence the speculation about why the charging memo was so lenient. But that line of reasoning suggests that Gen. Flynn will just forget about the disgrace Mr. Mueller put him through and let bygones be bygones. That’s not how warriors roll. More likely, Gen. Flynn has something more severe in mind. For all of his horse-faced gravitas in the photos of his fleeting sightings, Mr. Mueller does not look to me like a man in a comfortable situation.

Read more …

Dec 092018
 
 December 9, 2018  Posted by at 10:31 am Finance Tagged with: , , , , , , , , , , , ,  


Edouard Manet Berthe Morisot with a bouquet of violets 1872

 

Incoming House Judiciary Chair Planning To End Probe Into FBI, DOJ (ZH)
France Is The New Tax Hell In Europe And Beyond (RT)
Paris Under Siege As Gilets Jaunes Open ‘Act IV’ – 4th Weekend Of Protest (O.)
No Hope Of Success And No Plan B – But Theresa May Won’t Blink (O.)
UK Cabinet Splits Over Second Referendum On Brexit Deal (G.)
Majority Of UK Now Wants To Remain In The EU – Poll (Ind.)
Theresa May Warns Of ‘Uncharted Waters’ Ahead Of Key Vote (BBC)
EU Will Negotiate If May Loses Commons Brexit Vote – Prodi (G.)
China Threatens Canada With ‘Grave Consequences’ If Huawei CFO Not Freed (R.)
Putin Doesn’t Rule Out Extending Turkish Stream Pipeline Into Greece (RT)
COP24 Fails To Adopt Key Climated Change Report (BBC)

 

 

But of course. Let’s invite more chaos in.

Incoming House Judiciary Chair Planning To End Probe Into FBI, DOJ (ZH)

During a break during former FBI Director James Comey’s heated closed-door testimony on Capitol Hill on Friday, incoming House Judiciary Chairman Jerry Nadler confirmed to reporters what many had already suspected: That Nadler (and probably his fellow Democratic leaders) would put the kibosh on the House’s investigation into alleged political bias at the highest levels of the FBI and DOJ as they launched an investigation into the Trump campaign – an investigation that eventually morphed into the Mueller probe. While Democrats prepare to ramp up investigations into everything from Trump’s “war on the media” to his involvement in his family business, Nadler told a group of reporters that he intends to end the House Judiciary Committee’s involvement in the Congressional probe as soon as he takes the reins next year.

Asked why he intends to end the committee’s involvement in the probe, Nadler responded that “it was a waste of time to begin with” and a “distraction” from the real-wrong doing here – that is, lawbreaking committed by Republicans, according to the Hill. “Yes, because it is a waste of time to start with,” Nadler said in response to a question about whether he would end the probe. Nadler characterized the Republican investigation as a political sideshow that aims to distract from special counsel Robert Mueller’s investigation into possible ties between the Trump campaign and Russia. “The entire purpose of this investigation is to be a diversion of the real investigation, which is Mueller. There is no evidence of bias at the FBI and this other nonsense they are talking about,” he continued.

If the House investigation into suspected FBI malfeasance is just a “sideshow”, as Nadler claims, how would he explain the fact that the FBI knew the allegations contained in the Steele dossier – the linchpin of the FBI’s FISA warrant application that kicked off the Russia probe in earnest – were bogus before applying for surveillance? Or the many conflicts of interest between senior FBI officials involved with the probe (Andrew McCabe, Bruce Ohr, Peter Strzok, and, yes, Comey himself) – or the fact that McCabe was fired following after the DOJ’s inspector general confirmed that McCabe had lied under oath to try and conceal the fact that he told an FBI spokesman to leak a story about the FBI’s investigation into the Clinton Foundation just days before the election. McCabe could still face criminal charges from his lies. But Congress’s attempt to hold the FBI accountable is just a “distraction?”

Read more …

Not unimportant when it comes to the yellow vests.

France Is The New Tax Hell In Europe And Beyond (RT)

While the dust has not yet settled in the streets of Paris, after sweeping protests against fuel tax hikes, it just so happens that France has taken the crown from Denmark as the most taxed country in 2017, the OECD found. Among the 34 developed members of the Organization for Economic Cooperation and Development (OECD), Emmanuel Macron leads the nation with the highest tax-to-GDP ratio, the organization reported. France leads with 46.2% of GDP against the average of 34.2% of other members, thus dropping the long-standing leader in the rating, Denmark.

The Scandinavian country’s numbers, meanwhile, shrank to 46%, down by 0.2 since last year. Sweden, Italy, and Greece round out the top five, while Mexico is the last on the list at 16.2%. Notably, tax revenues for OECD member states, on average, reached historically high levels in 2017, rising to 34.2% of GDP. It is up only slightly from 34%, the previous peak recorded by the organization in 2016.

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Quite the series of demands. But hard to gauge how much support they have; there are not leaders or anything.

Paris Under Siege As Gilets Jaunes Open ‘Act IV’ – 4th Weekend Of Protest (O.)

A charter of gilets jaunes’ “suggestions to end this crisis” has been circulating on Facebook. While far from “official” – the movement has no agreed representatives – it does illustrate the diverse, and sometimes contradictory, nature of their demands:

Economy/work A full review of taxation, with no citizen to be taxed at more than 25% of income; an immediate 40% increase in the minimum wage, pensions and benefits; “mass hirings” in the state sector to restore quality of services in hospitals, schools, etc; 5m new homes; make banks “smaller”.

Politics France’s constitution to be rewritten “by the people and for the interests of the people”; lobbying to be banned; France should leave the EU; recover €80bn lost to tax evasion each year; halt and/or reverse all privatisations; removal of “useless” speed cameras; reform of education system, removal of all “ideologies”; quadruple budget of judicial system, which must be simplified, free and accessible for all; break up media monopolies and end cosy relationship between media and the political class; open media up to the people.

Health/environment 10-year guarantee on products to end planned obsolescence; ban plastic bottles; limit power of pharmaceutical companies; ban GM foods, carcinogenic pesticides, monoculture; reindustrialise France to reduce imports and therefore pollution.

Geopolitics Pull France out of Nato and foreign wars; end the plunder of French-speaking Africa; prevent migration flows that cannot be welcomed or integrated given current “civilisational crisis”; scrupulous respect for international law and engagements.

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Tuesday is the big vote in the Commons. May looks certain to lose big. So, chaos in France AND the UK. Where are Britain’s yellow vests anyway?

No Hope Of Success And No Plan B – But Theresa May Won’t Blink (O.)

For several weeks Theresa May has been holding private meetings in Downing Street and the Commons with MPs [..] She has used all her powers of persuasion to try to win them around ahead of Tuesday’s historic “meaningful vote” on her deal. Tory whips have tried to cajole their wavering backbenchers day and night, arguing the case for the May deal and reminding the more ambitious among them where their best career interests lie. Two weeks ago May made the campaign a national one – writing directly to the people of Britain and asking them to put more pressure on their MPs to support her. A special Tory website called Back the Brexit Deal was launched by the party to rally grassroots Tories behind the cause, with limited success.

Constituency chairmen were lobbied heavily, too. Ominously for the prime minister, however, the ultra-hard sell has achieved almost nothing. Some Tories even think it has had the reverse effect to that intended – making people focus in more detail on her deal than they would have done, only for them to conclude they could never back it. One senior Conservative said the party machine had deployed every resource it could muster but had failed totally. “Whether it is our backbenchers, or the party faithful, or the public, it is the same. If anything, I think the whole ‘going to the country thing’ has made things worse.”

[..] By this weekend more than 100 backbench Tory MPs had declared themselves ready to vote against May’s deal. Surveys of Tory members show they are against, too, by a big majority. After a dreadful week in which May’s government was found to be in contempt of parliament for refusing to publish the full legal advice on Brexit, the chief whip, Julian Smith, has been telling No 10 that it is on course for a huge defeat. [..] More junior members of the government are rumoured to be ready to quit before Tuesday because they can’t live with the deal as it is. With two days to go, there is no sign May is ready to delay, change course or blink at all. One senior Tory said: “If she has a plan B, no one knows what it could be. It looks like a crisis with no solution. She seems ready to march on into the gunfire.”

Labour is keen to make out that Tuesday’s vote will be tighter than everyone expects. It is desperate to promote this view in case May limits a defeat to far less than 100. [..] But with all but a handful of the 257 Labour MPs, the entire block of 35 SNP members, all but one of the 11 Liberal Democrats, and the 10 DUP members set to vote against it – and more than 100 Tories on record as being opposed – the arithmetic points to a far worse outcome for the prime minister.

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Divisions everywhere. And opportunism. If you’re in the Cabinet, and May loses real bad, what’s your political future?

UK Cabinet Splits Over Second Referendum On Brexit Deal (G.)

A deep cabinet split has opened up over whether Theresa May should back a second referendum in a final attempt to end the political deadlock over Brexit, as senior Conservatives predicted on Saturday night that her blueprint for leaving the EU was heading for a crushing House of Commons defeat. Adding to a mounting sense of constitutional crisis ahead of Tuesday’s crucial parliamentary vote, No 10 is braced for more resignations of ministers and aides who want another referendum, or who believe May’s deal fails to deliver on Brexit. Will Quince, the Colchester MP and aide to the defence secretary Gavin Williamson, quit his post on Saturday night in protest at the Brexit deal.

Cabinet ministers have told the Observer that attempts to convince May to delay the vote to avoid one of the largest and most humiliating defeats in recent parliamentary history had not been heeded. This was despite what they saw as a clear danger that such a result could provoke a leadership challenge and split the party irrevocably. Some cabinet ministers now believe that May is so wedded to her Brexit deal that her only method of gaining approval will be through another referendum – and that the arguments for a second vote are emerging as stronger than those for a soft Brexit. The prime minister has so far refused to entertain any idea of a second public vote.

One cabinet source said it might prove to be the only way of saving May’s deal and her reputation. “She is so committed to her deal, and a second referendum could now be the only way of getting it. The polls have been remarkably stable for a while, but there does seem to be some kind of movement [to Remain], and that could well develop in the coming days and weeks.”

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1,500 people is not a large enough poll.

Majority Of UK Now Wants To Remain In The EU – Poll (Ind.)

A majority of the country now think Britain should remain inside the European Union, according to a new poll released days before the critical Brexit vote in parliament. The exclusive research for The Independent shows that, as of this month, 52% favour staying in the trading bloc. The data from pollsters BMG Research reveals support for remaining has grown month by month since the summer, and broke past 50% in December as the complex realities of Brexit were brought home to the country. The poll also revealed that almost half of people think the withdrawal agreement settled by Theresa May is a “bad deal” for Britain, with around as many saying MPs should reject the deal outright when they take the critical decision on Tuesday.

The BMG Research study lays waste to any hope that a concerted publicity drive, which has seen Ms May and her ministers tour the country to persuade people of its merits, has been a success. Instead it shines a light on the deep divisions that still exist, with none of the immediate alternative paths beyond Ms May’s plan – a second referendum, a Norway-style relationship or no deal – enjoying majority support. [..] In a further development ex-European Commission president Romano Prodi said Brussels could renegotiate the deal if MPs vote against it, creating the opportunity for Ms May to seek further concessions.

[..] When BMG asked some 1,500 respondents, “should the United Kingdom remain a member of the European Union, or leave the European Union”, 52% said “remain”, 40% said “leave”, six% said they did not know and one% refused to say. The remain option has been in the high 40s most of this year, but from September to October it rose one point and then another point to 49% in November, meaning it rose three points in December to its current level. When respondents were asked whether they believed the withdrawal agreement and political declaration on the future relations secured by Ms May are a “good deal” or a “bad deal”, 49% chose the latter. Just over one in ten, 13%, said it was a good deal,

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As in something to fear. Whereas her party strangling the poorer is not.

Theresa May Warns Of ‘Uncharted Waters’ Ahead Of Key Vote (BBC)

With two days to go until the crucial Brexit vote, the prime minister has warned MPs they face “uncharted waters” if they reject her deal. Speaking to the Mail on Sunday, the PM said a rejection of her proposals would mean “grave uncertainty” for the UK. She warned MPs their actions could lead to a general election, and there was a “very real risk of no Brexit”. Downing Street has also denied newspaper suggestions that Theresa May could postpone Tuesday’s vote. “The vote is going ahead,” a spokesman said. Last month, the UK agreed a Brexit deal with the EU – but it still needs to be approved by Parliament. Labour, the Liberal Democrats, the DUP, and dozens of Conservative MPs have said they cannot support the deal, meaning it is unlikely to pass.

If the deal is rejected, it is unclear what happens next – with Mrs May insisting her deal was best for the country. “When I say if this deal does not pass we would truly be in uncharted waters, I hope people understand this is what I genuinely believe and fear could happen,” Mrs May said. “It would mean grave uncertainty for the nation with a very real risk of no Brexit or leaving the European Union with no deal. “We have a leader of the opposition who thinks of nothing but attempting to bring about a general election, no matter what the cost to the country. “As someone who cares passionately about my country and my party, I believe Jeremy Corbyn getting his hands on power is a risk we cannot afford to take.”

Read more …

Who asked Prodi?

EU Will Negotiate If May Loses Commons Brexit Vote – Prodi (G.)

The EU will come back to the negotiating table if parliament votes down Theresa May’s deal with Brussels, according to Romano Prodi, a former European commission president. Prodi, who twice served as Italian prime minister and had Jean-Claude Juncker’s job until 2004, said that the EU needed to do everything it could to avoid the “economic catastrophe” of a no-deal Brexit. On signing an agreement with the British prime minister last month, Juncker described the draft withdrawal treaty and accompanying political declaration on the future relationship as “the deal – the only deal possible”.

May has also said there is no scope for any further negotiation in Brussels if her deal is rejected when it comes to a vote in the Commons on Tuesday, and that the consequence of it being rejected would be “no deal or no Brexit”. The chancellor, Philip Hammond, described those who believed there could be a renegotiation as “delusional”. But in an interview with the Observer, Prodi suggested it would still be possible to find a negotiated settlement in the increasingly likely event May suffers a heavy defeat in the Commons.

Asked how he expected the commission to respond after the vote, Prodi said: “Negotiate. We must keep free trade between us because it is in the British interests and European interest. The UK has no alternative – the EU is a large part of its trade. Always the problem of Northern Ireland, but it is possible. Common sense helps.” On the EU’s insistence there could be no more negotiations, Prodi added: “Look, when the British parliament has still to vote you are obliged to be in this position. But then of course the day after you start dealing. This is politics.”

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And Canada will seek to blame the US.

China Threatens Canada With ‘Grave Consequences’ If Huawei CFO Not Freed (R.)

China has warned Canada there would be severe consequences if it did not immediately release Huawei’s chief financial officer, calling the case “extremely nasty”. Meng Wanzhou was arrested in Canada on 1 December and faces extradition to the United States, which alleges that she covered up her company’s links to a firm that tried to sell equipment to Iran despite sanctions. The executive is the daughter of Huawei’s founder. If extradited to the US, Meng would face charges of conspiracy to defraud multiple financial institutions, a Canadian court heard on Friday, with a maximum sentence of 30 years for each charge. No decision was reached at the extradition hearing after nearly six hours of arguments and counter-arguments, and the hearing was adjourned until Monday.

In a statement on Saturday, China’s foreign ministry said the vice-foreign minister, Le Yucheng, had issued the warning to release Meng to Canada’s ambassador in Beijing, summoning him to lodge a “strong protest”. China’s official news agency Xinhua reported Le summoned the Canadian ambassador, John McCallum, in protest and urged Ottawa to release Meng immediately or face “grave consequences that the Canadian side should be held accountable for”. Adam Austen, a spokesman for the Canadian foreign minister, Chrystia Freeland, said on Saturday there was “nothing to add beyond what the minister said yesterday”. Freeland told reporters on Friday the relationship with China was important and valued, and Canada’s ambassador in Beijing has assured the Chinese that Meng would receive consular access.

Read more …

Greece wants to be everyone’s friend.

Putin Doesn’t Rule Out Extending Turkish Stream Pipeline Into Greece (RT)

Russia is ready to cooperate with Athens in the energy sector, President Vladimir Putin has said, not ruling out the prospect of extending the Turkish Stream gas pipeline into Greece. “We are ready to carry out large infrastructural energy projects together with Greece. It includes the possibility to link Southern Europe through Greece to the Turkish Stream,” Putin said on Friday during a joint conference with Greek Prime Minister Alexis Tsipras in Moscow. “A pipeline from Greece to Italy has been nearly completed. The pipe is built, yet there’s no gas there. Yet we’ll think together on how to fill this line with some real product,” Putin added.

“It’s certainly possible, I don’t rule it out, moreover I believe it to be quite realistic.” Such a project increases the significance of Greece as the “regional energy hub,” Tsipras said on his part, complaining, however, over “double standards” the EU bureaucrats have been showing over the Turkish Stream and other projects involving Russia. Greece used to be one of the countries to host a section of the now-deprecated South Stream gas pipeline. The project, however, met stiff resistance in Brussels, which pressed participating countries – namely Bulgaria – to stop working on it. The project was scrapped late in 2014, ultimately giving way to the Turkish Stream

The Turkish Stream was agreed by Russia and Turkey in October 2016. The first branch will deliver gas to Turkish consumers, while the second one will bring it to countries in southern and south-eastern Europe. In November, Putin and his Turkish counterpart, Recep Tayyip Erdogan, unveiled the offshore section of the pipeline, which is expected to be fully completed late in 2019. So far, there are plans to extend it into Bulgaria, Hungary and Serbia.

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Useless reports anyway. These conferences will not solve a thing. Our political systems don’t allow for that.

COP24 Fails To Adopt Key Climated Change Report (BBC)

Attempts to incorporate a key scientific study into global climate talks in Poland have failed. The IPCC report on the impacts of a temperature rise of 1.5C, had a significant impact when it was launched last October. Scientists and many delegates in Poland were shocked as the US, Saudi Arabia, Russia and Kuwait objected to this meeting “welcoming” the report. It was the 2015 climate conference that had commissioned the landmark study. The report said that the world is now completely off track, heading more towards 3C this century rather than 1.5C. Keeping to the preferred target would need “rapid, far-reaching and unprecedented changes in all aspects of society”. If warming was to be kept to 1.5C this century, then emissions of carbon dioxide would have to be reduced by 45% by 2030.

The report, launched in Incheon in South Korea, had an immediate impact winning praise from politicians all over the world. But negotiators here ran into serious trouble when Saudi Arabia, the US, Russia and Kuwait objected to the conference “welcoming” the document. Instead they wanted to support a much more lukewarm phrase, that the conference would “take note” of the report. Saudi Arabia had fought until the last minute in Korea to limit the conclusions of the document. Eventually they gave in. But it now seems that they have brought their objections to Poland. The dispute dragged on as huddles of negotiators met in corners of the plenary session here, trying to agree a compromise wording. None was forthcoming. With no consensus, under UN rules the passage of text had to be dropped.

Read more …

Dec 082018
 
 December 8, 2018  Posted by at 10:34 am Finance Tagged with: , , , , , , , , , , , ,  


Getty Vigil in front of White House on the evening after Pearl Harbor attack Dec. 7 1941

 

France Braced For ‘Ultra-Violent’ Protests (BBC)
S&P 500 Closes In An Official ‘Death Cross’ (CNBC)
A Death Cross For The S&P 500 Highlights A Stock Market In Tatters (MW)
Dow Down Over 500 Points, Wipes Out 2018 Gains In Wild Week On Wall Street (CNBC)
George H. W. Bush, Wimp (Matt Taibbi)
Five Eyes Against Huawei (Voltaire)
Russia Ready To Switch Off Visa & Mastercard Ahead Of Tougher Sanctions (RT)
UK Ministers Warn No-Deal Brexit Chaos May Last Six Months (Ind.)
EU Support For Austerity Opens Door To Far Right – Corbyn (G.)
Capture the Flag (Kunstler)
Uber Files Confidential IPO Paperwork (R.)
The Column I Didn’t Want To Write About Julian Assange (SMH)
Media Is Giving The US Cover To Extradite Assange (Hrafnsson)
97% Decline In Monarch Butterflies (G.)

 

 

The French government goes about this so wrong you’d think they want the violence. Macron hasn’t been seen in many days, he left public displays up to his PM and left his country alone. Now they say there will be only 10,000 protesters, a ridiculously low number, and solemnly proclaim “10,000 is not the people, it’s not France.”

In fact, a large majority of people support the protests. Not the violence, but that’s not the core of this. Moreover, the students, who were not taking part last week, have now joined the yellow vests. And the government’s suggesting they -and the other protesters- are not really French.

Tear gas is being employed already on Saturday morning. Paris is under siege. And not from the protesters.

France Braced For ‘Ultra-Violent’ Protests (BBC)

France is braced for renewed anti-government protests, with nearly 90,000 security personnel on the streets. Some 8,000 officers and 12 armoured vehicles will be deployed in Paris alone, where shops have been boarded up and sites like the Eiffel Tower closed. The “yellow vest” movement began three weeks ago in opposition to a rise in fuel tax but ministers say it has been hijacked by “ultra-violent” protesters. Last week saw hundreds arrested and scores injured in violence in Paris. They were some of the worst street clashes seen in the capital for decades. The authorities are certainly not underestimating the threat. There were 65,000 security officers across the country last weekend and that has been increased to 89,000, even though Interior Minister Christophe Castaner said he expected fewer protesters than last weekend, perhaps about 10,000 nationwide. He said: “10,000 is not the people, it’s not France.”

The security forces will want to prevent a repeat in the capital, where the Arc de Triomphe was vandalised, police were attacked and cars overturned and burned last weekend. Mr Castaner has vowed “zero tolerance” towards violence. He said: “According to the information we have, some radicalised and rebellious people will try to get mobilised. Some ultra-violent people want to take part.” The barricade-smashing armoured vehicles have not been seen in the Paris area since riots erupted in poor suburbs in 2005. Mr Castaner added: “These past three weeks have seen the birth of a monster that has escaped its creators.”

[..] The government has said it is scrapping the unpopular fuel tax increases in its budget and has frozen electricity and gas prices for 2019. The problem is that protests have erupted over other issues. Granting concessions in some areas may not placate all the protesters, some of whom are calling for higher wages, lower taxes, better pensions, easier university requirements and even the resignation of the president. He has been called by some “the president of the rich”.

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“It’s almost confirming what could be a change in trend to the downside.”

S&P 500 Closes In An Official ‘Death Cross’ (CNBC)

The chart of the S&P 500 Index is flashing a warning of more selling ahead. A pattern, called the ‘death cross,’ appeared on the chart on Friday as stocks plunged. The S&P 500’s average price of the last 50 days, dropped below the 200-day moving average, a sign of negative momentum and possible change in trend, according to technical analysts. “It just means you’re lower for longer, meaning there’s no real bounce, which is a sign of real selling.” said Scott Redler, partner with T3Live.com. “Sometimes you break moving averages and you get some kind of quick fast recovery…but when you stay down longer, all of a sudden it’s showing real selling. That’s why people don’t like the death cross. It’s almost confirming what could be a change in trend to the downside.”

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It highlights a stock market that doesn’t exist.

A Death Cross For The S&P 500 Highlights A Stock Market In Tatters (MW)

The S&P 500 index on Friday has joined the ranks of market benchmarks forming that dreaded Wall Street chart pattern: the death cross. A death cross has materialized in the S&P 500 with the 50-day moving average at 2,759.28.02, below the 200-day moving average of 2,762.02, according to FactSet data. A death cross is what chart watchers refer to as the point where the 50-day — a short-term trend tracker — crosses below the 200-day, which is used to define the longer-term trend. Many believe the cross marks the point where a shorter-term decline graduates to a longer-term downtrend.

S&P 500’s Thursday action— falling in tandem with the Dow Jones Industrial Average (and briefly with the Nasdaq Composite)— helped deliver a breach for the large-cap index’s short-term trend line beneath the 200-day. The formation marks the first time the 50-day MA was below the 200-day for the S&P 500 since April 22, 2016, according to Dow Jones Market Data. However, the last time that a death cross formed was in January of 2016. The move for the benchmark comes amid a series of bearish patterns that have cropped up in equities and fixed-income markets, highlighting growing concerns about the durability of a bull run in stocks that has lasted about a decade as the economy’s vital signs have also been strong, in a long-running, if measured, rebound from the 2007-09 financial crisis.

[..] the ominous formation also is a sign of how viciously equity markets have unraveled in the past several weeks. More than half of the S&P 500’s 11 sectors have seen death crosses, and a chunk of the index’s constituents are in bear markets, having declined at least 20% from a recent peak. Both the S&P 500 and the Nasdaq are in correction, usually defined as a 10% drop from a peak, while the Russell 2000 is 15% beneath its recent peak.

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Without functioning markets, wild swings are guaranteed.

Dow Down Over 500 Points, Wipes Out 2018 Gains In Wild Week On Wall Street (CNBC)

Stocks dropped sharply on Friday, concluding what has been a wild week for Wall Street. A weaker-than-expected jobs report and China-U.S. trade tensions sent the Dow Jones Industrial Average lower by 558.72 points to 24,388.95 and erased its gains for the year. At one point, the Dow was up more than 8 percent for 2018. The S&P 500 pulled back 2.3 percent to 2,633.08 and also turned negative for the year. The Nasdaq Composite dropped 3.05 percent to close at 6,969.25. Shares of large-cap tech companies led the way lower. Facebook, Amazon, Netflix and Google-parent Alphabet all traded lower. Apple’s stock also fell 3.6 percent — erasing its gains for the year — after Morgan Stanley cut its price target on the tech giant’s shares, citing weakening iPhone sales.

For the week, the major indexes all dropped more than 4 percent. Thursday’s session included a violent drop of nearly 800 points, followed by a strong rebound from those levels. This week was also the worst for the indexes since March. Indexes fell to their lows of the day after the Wall Street Journal reported federal prosecutors are expected to bring charges against Chinese hackers allegedly trying to break into technology service providers in the U.S., another negative headline amid tense trade talks between the two countries. [..] “You’ve gone from a period of zero sensitivity to headlines to a period of hypersensitivity,” said James Athey, senior investment manager at Aberdeen Standard Investments. “We’re now in a world where no one knows which way is up and which way is down.”

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Delightful from Taibbi on among other things the years-long feud between HW and Doonesbury’s Garry Trudeau. Do read¡

I’ve left the HW story alone, overkill. But I was thinking all the time: if there’s one thing HW was not, it was a leader. I’m not the only one.

George H. W. Bush, Wimp (Matt Taibbi)

For most of his political life, George Herbert Walker Bush was basically the unimaginative proxy for other powerful interests. He was always the front man for the fellas at the club, be it Skull and Bones or the CIA (he retains the dubious distinction of being the only spy head to become president). He excelled in this brute-behind-the-scenes role. But once fashioning himself as something other than Ronald Reagan’s wingman, politics demanded he offer the national public glimpses of his personality. Sadly, he was president before he found out he didn’t really have one. This would have been fine, if he’d been a more confident person.

But Bush was not satisfied to be remembered as a dull imperial steward, and his flailing efforts to carve out a macho personal myth on par with Reagan or Kennedy marred both his presidency and large swaths of the planet. Unable to let insults stand, he dreamed up stunt after stunt in an attempt to counter Heathers-style media taunts that grew out of inside jokes circulated in Washington during the Reagan years. His presidency turned into an endless cycle: Bush would do something goofy/out of touch, the press would bash his brains in for it and he’d overreact, often by having someone bombed or jailed.

[..] In December 1989, Bush invaded Panama, ostensibly to capture former American client/human rights monster Manuel Noriega. The New York Times cheered Bush for going through the “rite of passage” of the presidency, which involved “a need to demonstrate the willingness to shed blood.” The paper was one of many to describe the invasion as a triumph over both Newsweek and Doonesbury: “For President Bush… a man still portrayed in the Doonesbury comic strip as the invisible President – showing his steel had a particular significance.”

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Encryption. Wonder how many people will get a Huawei phone now, and be safe from spying.

Five Eyes Against Huawei (Voltaire)

Washington has asked Ottawa to arrest Meng Wanzhou and to extradite her. This young woman is the financial director and daughter of the founder of Huawei, the Chinese Telecom Giant. She was arrested on 6 December in Canada. The motive for the war undertaken by Washington against Huawei is deep-rooted and spurious are the justifications. The heart of the problem is that the Chinese firm uses a system of encryption that prevents the NSA from intercepting its communications. A number of governments and secret services in the non-Western world have begun to equip themselves exclusively with Huawei materials, and are doing so to protect the confidentiality of their communications.

The covers/excuses for this war are theft of intellectual property or in the alternative, trade with Iran and North Korea, and violating rules of competition by benefitting from national subsidies. The Five Eyes is a system of electronic espionage by Australia, Canada, the United States, New Zealand and the United Kingdom. They have begun to exclude Huawei from their auctions.

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Sure, it’s uncomfortable, but Russia is well prepared.

Russia Ready To Switch Off Visa & Mastercard Ahead Of Tougher Sanctions (RT)

Moscow faces prospects of harsher sanctions this coming January as the US Congress is set to discuss a new package of anti-Russian penalties. The Russian central bank has warned the country’s lenders over potential risks.
The regulator has recommended that Russian financial institutions take the necessary preventive steps in case their partner-banks are forced to stop providing connection to services by the world’s two most used payment systems – Visa and Mastercard, reports Russian business daily Vedomosti. The list of Russia’s banking majors that are currently working as an intermediary include Credit Union “Payment Center,” one of Russia’s largest private lenders Uralsib, Rosbank that operates as a Russian subsidiary of the international financial group Societe Generale, Russia’s second biggest bank VTB and privately owned Promsvyazbank.

VTB and Promsvyazbank have already been included in the Countering America’s Adversaries Through Sanctions Act (CAATSA), approved by US Congress last summer. The legislation allows Washington to introduce penalties against enterprises and individuals that are seen as hostile towards the US or loyal to regimes that are hostile to the US. The Central Bank of Russia advises that Russian banks should look for an alternative sponsor that will be able substitute a current provider of Visa and MasterCard services, seal a maintenance service contract and test an opportunity of integrating.

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May’s cabinet now warns of chaos unless her Brexit plan is executed. Ignoring that if such chaos erupts, it’s their own fault; the government must prepare. So essentially they’re saying: we haven’t prepared the country, so you must support us.

UK Ministers Warn No-Deal Brexit Chaos May Last Six Months (Ind.)

Emergency plans to fly in medical supplies have been laid to ensure hospitals remain stocked amid six months of expected chaos at Britain’s channel ports after a no-deal Brexit. Critical supplies could also be diverted away from channel routes and some drugs may even be rationed to ensure stocks do not run out. The plans were published as a government assessment suggested a no-deal departure from the EU could mean severe disruption until the end of September 2019 to shipping between Dover and Calais and traffic using the Channel Tunnel.

Ministers continued to put up a defiant front on Friday, saying they were determined to push ahead with the House of Commons vote on Theresa May’s Brexit deal, though Downing Street insiders indicated it could still be pulled if efforts to turn rebels fall flat at the weekend. While MPs secured measures this week that make a no-deal scenario less likely, it is still possible if Ms May’s deal is rejected and parliament fails to opt for any alternative course before 29 March. Ministers had already told drug manufacturers to build six-week stockpiles in anticipation of Brexit customs disruption, but after the new assessment indicated Brexit disorder could last six months, further measures were deemed necessary.

In a letter to pharmaceutical firms, health secretary Matt Hancock said: “The revised cross-government planning assumptions show that there will be significantly reduced access across the short straits, for up to six months. “This is very much a worst-case scenario; however, as a responsible government, we have a duty to plan for all scenarios. “Whilst the six-week medicines stockpiling activities remain a critical part of our UK-wide contingency plan, it is clear that in light of the changed border assumptions described above this will now need to be supplemented with additional action.”

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True enough, but declaring yourself ‘internationalist’ and ‘socialist’ may not be the smartest meassage at this point.

EU Support For Austerity Opens Door To Far Right – Corbyn (G.)

Jeremy Corbyn has told an audience of European socialists that EU support for austerity has caused hardship for ordinary people, and that unless something changes there is a risk that “the fake populists of the far right will fill the vacuum”. Speaking at the Congress of European Socialists in Lisbon, the Labour leader also said his party respected the result of the Brexit referendum and it was the duty of the left in the UK to “shape what comes next”. Corbyn argued that Labour would be internationalist whether the UK was inside or outside the EU, and promised that the party would “work together to help build a real social Europe” by protecting workers’ and consumers’ rights. He said: “EU support for austerity and failed neoliberal policies have caused serious hardship for working people across Europe.”

It had “damaged the credibility of European social democratic parties and played a significant role in the vote for Brexit”. However, he promised that under his leadership Labour would take a different approach, and he added a stark warning: “If the European political establishment carries on with business as usual, the fake populists of the far right will fill the vacuum. European socialists have to fight for a different kind of Europe.” In a speech on the first day of the two-day event attended by Labour’s sister parties around Europe, Corbyn said of Brexit: “In a country where a million families are using food banks, over 4 million children are living in poverty, and real wages are lower today than they were in 2010, the British people voted to leave the EU. We respect that decision; it’s our job to shape what comes next.”

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What’s the difference between analysis and propaganda? It’s very unclear in America these days.

Capture the Flag (Kunstler)

It’s obvious that the Obama White House, along with CIA director John Brennan, and Director of National intel James Clapper, used the FBI and the DOJ (with support from the nation’s two leading newspapers), and help from Britain’s MI6 intel shop, to run illegal operations against Mr. Trump during the 2016 election, and then persisted in acts to delegitimize him after Jan 20, 2017. All this, of course, is apart from whether you like Mr. Trump or approve of his policies. It’s well documented elsewhere that Robert Mueller’s mission to detect election “collusion” between Russia and Mr. Trump was a bust, and that all he has to show for it is a roll of contrived convictions for lying to federal prosecutors and the FBI.

The case of General Flynn lies at the center because he served as Mr. Obama’s Director of the Defense Intelligence Agency (DIA) and he knew too much about US shenanigans around the notorious Iran nuclear deal and other shady doings. They were alarmed when he went over to Mr. Trump’s campaign, and determined to disable him. Once Mr. Trump appointed Gen. Flynn Director of National Security, Mr. Obama engineered an “incident” in late December of 2016 (confiscating Russian properties in Maryland over alleged election meddling and laying down new sanctions), that prompted Russian ambassador Sergey Kislyak to phone Gen. Flynn, the incoming DNS. US Intel was prepared for that set-up and recorded the call, which required the illegal “unmasking” of Flynn, a nicety of spycraft.

Thus, the FBI had a transcript of the phone call and were easily able to entrap Flynn in mis-remembering the particulars of the call. Where is that transcript? The predicate for this operation was completely dishonest: that incoming senior government officials are forbidden to speak to foreign ambassadors. In fact it is their duty to consult with foreign officials, especially in Mr. Flynn’s job, and a long-established tradition of every presidential transition. The coup cadres of the Deep State used The New York Times and The Washington Post to persuade the public that Gen. Flynn had done something treasonous, when it was nothing more than routine transition business.

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The IPO to end all IPO’s?!

Uber Files Confidential IPO Paperwork (R.)

Uber Technologies Inc has filed paperwork for an initial public offering, according to three people with knowledge of the matter, taking a step closer to a key milestone for one of the most closely watched and controversial companies in Silicon Valley. The ride-hailing company filed the confidential paperwork on Thursday, in lock-step with its smaller U.S. rival, Lyft Inc, which also announced on Thursday it had filed for an IPO, setting the stage for one of the biggest technology listings ever. The simultaneous filings extend the protracted battle between Uber and Lyft, which as fierce competitors have often rolled out identical services and matched each other’s prices.

Uber’s most recent valuation was $76 billion, and could be worth $120 billion in an IPO. Its listing next year would be the largest in what is expected to be a string of public debuts by highly valued Silicon Valley companies, including apartment-renting company Airbnb and workplace messaging firm Slack. Uber’s debut will be a test of investor tolerance for legal and workplace controversies, which embroiled Uber for most of last year..

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For some reason, people think it’s very normal to hate Assange. They don’t explain why, though, it’s presented as a given.

The Column I Didn’t Want To Write About Julian Assange (SMH)

We don’t like Julian Assange. That much is clear. Back in 2010, after the original Iraq leak, he seemed a reasonable imitation of a public-spirited whistleblower. By the time I met him in 2012 he was already obsessed by how the leftist media had abandoned him, blaming a conspiracy among Oxbridge PPE (Politics, Philosophy, Economics) graduates. That struck me as narcissistic paranoia although it is, I suppose, remotely possible that such a cabal existed. Now, the question of why the left “hates” Assange occupies his few remaining supporters almost exclusively. Personally I think hate is too strong. Most people just consider Assange a spoilt-brat egomaniac with murky motives, a limelight habit and some profoundly questionable political affiliations.

As further allegations emerge (from Robert Mueller’s ongoing investigations) as to his working with Russia to destabilise Clinton, perhaps in return for being rescued from London (allegations which Assange denies), many hold Assange responsible for Trump. So yes, the dislike is legit. But if egomania and dumb politics were a crime half the population would be in porridge. You don’t abandon someone to a system of revenge indictments, secret trials and solitary confinement because they’re arrogant, or even arrogant and wrong. So it’s not the emotion we need to analyse but the leap from “I’m no longer sympathetic” to “throw away the key”.

[..] Back in 2011 a grand jury was convened in Virginia to determine whether Assange was indictable. Grand jury proceedings are inherently secret. Involving neither judge nor jury they are prosecutor-led, with no defendant right to a defence, attendance or even knowledge. Their findings too are secret. Thus, despite years of enduring rumours of a “sealed indictment” against Assange we know only that last month, US prosecutors inadvertently revealed that secret charges had been laid against Assange. Put it together. An old arrest warrant for skipping bail on a charge that was always feeble and has since been dropped, a refusal to deny extradition intentions, secret charges emerging from a secret court over an act that may not even be illegal and for which the principal culprit has already been pardoned. Does anyone really think such a system could produce a fair trial?

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The Guardian piece is way overexposed, but okay, here’s WikiLeaks new editor-in-chief, Kristinn Hrafnsson.

Media Is Giving The US Cover To Extradite Assange (Hrafnsson)

The Guardian’s attack on Assange came only days after it was confirmed that he has been indicted some time ago, under seal, and that the U.S. will seek his extradition from the U.K. The story was published just hours before a hearing brought by media groups trying to stop the U.S. government from keeping its attempts to extradite Assange secret. The story went viral, repeated uncritically by many media outlets around the world, including Newsweek. This falsely cast Assange into the center of a conspiracy between Putin and Trump. The Guardian even had the gall to post a call to its readers to donate to protect “independent journalism when factual, trustworthy reporting is under threat.”

[..] This is part of a series of stories from The Guardian, such as its recent claim of a “Russia escape plot” to enable Assange to flee the embassy, which is not true. What do these stories have in common? They all give the U.K. and Ecuador political cover to arrest Assange and for the U.S. to extradite him. Any journalists worth their salt should be investigating who is involved in these plots.

[..] Numerous commentators have criticized The Guardian for its coverage of Assange. Glenn Greenwald, former columnist for The Guardian, writes that the paper has “…such a pervasive and unprofessionally personal hatred for Julian Assange that it has frequently dispensed with all journalistic standards in order to malign him.” Another former Guardian journalist, Jonathan Cook, writes: “The propaganda function of the piece is patent. It is intended to provide evidence for long-standing allegations that Assange conspired with Trump, and Trump’s supposed backers in the Kremlin, to damage Hillary Clinton during the 2016 presidential race.”

Hours before The Guardian published its article, WikiLeaks received knowledge of the story and “outed” it, with a denial, to its 5.4 million Twitter followers. The story then made the front page, and The Guardian asserted they had not received a denial prior to publication—as they had failed to contact the correct person. A simple retraction and apology will not be enough. This persecution of Assange is one of the most serious attacks on journalism in recent times.

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Really, guys? Blame it all on climate change? I wouldn’t.

97% Decline In Monarch Butterflies (G.)

In the 1980s, roughly 4.5 million monarchs wintered in California, but at last count, there may be as few as 30,000. The hillside groves of eucalyptus trees that tower over the Santa Cruz shoreline would, not so long ago, be teeming with monarch butterflies at this time of year. Boughs would be bent under the weight of black and orange clusters, as hundreds of thousands of the magical invertebrates nestled into the leaves, waiting out the frost on the California coast before returning north. Now, on a sunny December afternoon the boardwalk that weaves through the monarch preserve, at Natural Bridges State Beach, is filled with school children craning necks and straining eyes to catch a glimpse. The monarchs are there – but they are harder to spot.

Just two years ago, 8,000 overwintered here, but these days, just more than a thousand are fluttering amidst the Santa Cruz trees. It’s part of a troubling trend: over the last two decades monarch numbers in the West have declined by roughly 97%. “It is a sad reality of climate change,” said Anthony Dutierrez, a volunteer guide at the park and biology student at the University of California, Santa Cruz, as he takes a break from guiding school children through a tour. “For every little thing that changes there’s not just one consequence – it’s a whole chain reaction.” According to the Xerces Society, a conservation organization, in the 1980s between 10 million and 4.5 million monarchs spent the winter in California. The last count, conducted annually by volunteers each November, showed that in 2018 there may be as few as 30,000 across the state – a number that’s 87% lower than just the year before.

“We had a lot of reason to suspect that it was going to be a bad year, but we were shocked at just how bad,” said Xerces Society Conservation biologist Emma Pelton. She said that year-to-year fluctuations can be expected, but this kind of continuous drop-off is cause for concern. “It is in the context that the population has already declined 97%. So, it’s OK if you have millions of butterflies and they drop down a little bit – that’s not a huge deal. But if you have 200,000 butterflies to begin with and you have a bad year? Now we only have 30,000 left.”


Photograph: Michael Yang / Rex Features

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Dec 072018
 
 December 7, 2018  Posted by at 8:05 pm Finance, Primers Tagged with: , , , , , , , , , ,  


Paul Almasy Paris 1950

 

The concept of the EU might have worked, but still only might have, if a neverending economic boom could have been manufactured to guide it on its way. But there was never going to be such a boom. Or perhaps if the spoils that were available in boom times and bust had been spread out among nations rich and poor and citizens rich and poor a little more equally, that concept might still have carried the days.

Then again, its demise was obvious from well before the Union was ever signed into existence, in the philosophies, deliberations and meetings that paved its way in the era after a second world war in two score years fought largely on the European continent.

In hindsight, it is hard to comprehend how it’s possible that those who met and deliberated to found the Union, in and of itself a beneficial task at least on the surface in the wake of the blood of so many millions shed, were not wiser, smarter, less greedy, less driven by sociopath design and methods. It was never the goal that missed its own target or went awry, it was the execution.

Still, no matter how much we may dream, how much some of the well-meaning ‘founding fathers’ of the Union may have dreamt, without that everlasting economic boom it never stood a chance. The Union was only ever going to be tolerated, accepted, embraced by its citizens if they could feel and see tangible benefits in their daily lives of surrendering parts of their own decision making powers, and the sovereignty of their nations.

There are 28 countries in the Union at this point, and one of them is already preparing to leave. There are 28 different cultures too, and almost as many languages. It was always going to be an uphill struggle, a hill far too steep for mere greed to master and conquer. History soaked Europe in far too much diversity through the ages for that. To unify all the thousands of years of beauty and darkness, of creativity and annihilation, of love and hatred, passed on through the generations, a lot more than a naked and bland lust for wealth, power and shiny objects was needed.

And sure, maybe it just happened on the way, in the moments when everyone was making new friends and not watching their backs for a moment. But they all still should have seen it coming, because of those same thousands of years that culminated in where they found themselves. The European Union is like a wedding and marriage without a prenup, where partners are too afraid to offend each other to do what would make them not regret the ceremony later.

 

Today, there are far too few of the 28 EU countries that have been lifted out of their poverty and other conditions that made them want to join the Union. And within many of the countries, there are way too many people who are, and feel, left behind. While Brussels has become a bastion of power that none of the disadvantaged feel they can properly address with their grievances.

The main fault of the EU is that the biggest party at the table always in the end, when things get serious, gets its way. The 80 million or so people of Germany de facto rule the 500 million of the Union, or you know, the three handfuls that rule Germany. No important decision can or will ever be taken that Berlin does not agree with. Angela Merkel has been the CEO of Europe Inc. since November 22 2005, gathering more power as time went by. That was never going to work unless she made everyone richer. Ask the Greeks about that one.

Merkel was the leader of both Germany and of Europe, and when things got precarious, she chose to let German interests prevail above Italian or Greek ones. That’s the fundamental flaw and failure of the Union in a nutshell. All other things, the Greek crisis, Salvini, Macron, Brexit, are mere consequences of that flaw. In absence of a forever economic boom, there is nothing left to fall back on.

 

Traditional right/left parties have been destroyed all across Europe in recent national elections. And it’s those traditional parties that still largely hold power in Brussels. As much as anyone except Germany and perhaps the European Commission hold any power at all. The shifts that happened in the political spectrum of many countries is not yet reflected in the European Parliament. But there are European elections in less than 6 months, May 23-26 2019.

About a quarter of the votes in the last such election, in 2014, went to euroskeptic parties. It’s not a terrible stretch of the imagination to presume that they’ll get half of the votes this time. Then we’ll have half or more of representatives speaking for people who don’t have faith in what they represent.

And on the other hand you have the Brussels elite, who continue to propagate the notion that Europe’s problems can best, nay only, be solved with more Europe. Of that elite Emmanuel Macron is the most recent, and arguable most enthusiastic from the get-go, high priest. Which can’t be seen apart from his domestic nose-diving approval rating, and most certainly not from the yellow vest protests and riots.

Macron won his presidency last year solely because he ran against Marine Le Pen in the second round of the elections, and a vast majority on the French will never vote for her; they’ll literally vote for anyone else instead. In the first round, when it wasn’t one on one, Macron got less than 25% of the votes. And now France wants him to leave. That is the essence of the protests. His presidency appears already over.

 

Among the 28 EU countries, the UK is a very clear euroskeptic example. It’s supposed to leave on March 2019, but that’s by no means a given. Then there’s Italy, where the last election put a strongly euroskeptic government in charge. There are the four Visegrad countries, Poland, Hungary, Czech Republic and Slovakia. No love lost for Brussels there. In Belgium yesterday, PM Michel’s government ally New Flemish Alliance voted against the UN Global Compact on Migration.

Spain’s Mariana Rajoy was supported by the EU against Catalonia, and subsequently voted out. The next government is left-wing and pro EU, but given the recent right wing victory in Andalusia it’s clear there’s nothing stable there. Austria has a rightwing anti-immigration PM. Germany’s CDU party today elected a successor for Merkel (in the first such vote since 1971!), but they’ve lost bigly in last year’s elections, and their CSU partner has too, pushing both towards the right wing anti-immigrant AfD.

And with Macron gone or going, France can’t be counted on to support Brussels either. So what is left, quo vadis Europa? Well, there’s the European elections. In which national parties, often as members of a ‘voting alliance’, pick their prospective candidates for the European Parliament, then become part of a larger European alliance, and finally often of an even larger alliance. You guessed right, turnout numbers for European elections are very very low.

 

Of course Brussels is deaf to all the issues besieging it. The largest alliances of parties, the EPP (people’s party) and the “socialists”, have chosen their crown prince ‘spitzenkandidat’ to succeed Jean-Claude Juncker as head of the European Commission, and they expect for things to continue more or less as usual. The two main contenders are Manfred Weber and Frans Timmermans, convinced eurocrats. How that will work out with 50% or more of parliamentarians being euroskeptic, you tell me. How about they form their own alliance?

The Union appears fatally wounded, and that’s even before the next financial crisis has materialized. Speaking of which, the Fed has been hiking rates and can lower them again a little if it wants, but much of Europe ‘works’ on negative rates already. That next crisis could be a doozy.

But we’re getting ahead of ourselves. First thing on the menu is Macron tomorrow, and the yellow vests in the streets of Paris and many other French cities -and rural areas. He has called for 90,000 policemen on the streets, but they’ll come face to face with their peers who are firemen, ambulance personnel, you name it, lots of folks who also work for the government. Will they open fire?

Can Macron allow for French people to be killed in the streets? Almost certainly not. There’ll be pitchforks and guillotines. The only way out for him, the only way to calm things down, may be to announce his resignation. The French don’t fool around when they protest. And who’s going to be left to drive the reform of Europe then? Not Merkel, she’s gone, even if she wants to be German Chancellor for three more years. But then who? I’m trying to think of someone, honest, but I can’t.

It’ll be quite the day Saturday in Paris.

 

 

Dec 072018
 
 December 7, 2018  Posted by at 10:10 am Finance Tagged with: , , , , , , , , , , , , ,  


Claude Monet Camille on the Beach at Trouville 1870

 

Russia Seeks To ‘Feed The Whole Planet’ – PM (RT)
Markets Are Going Haywire, Sudden Moves Are Here To Stay (CNBC)
Did The Market Miss Powell’s Real Message? (Roberts)
Fed’s QE Unwind Reaches $374 Billion (WS)
The Fed Finally Broke Something (Muir)
Oil Drops As OPEC Makes Supply Cut Dependent On Russia (CNBC)
Bitcoin Plunges 10% As December Rout Continues (CNBC)
France To Deploy 90,000 Police Over Weekend Riot Fears (Ind.)
Chinese Giant Huawei Faces Catastrophe (G.)
White House, Trudeau Seek To Distance Themselves From Huawei Move (R.)
Lyft Races To Leave Uber Behind In IPO Chase (R.)
Mueller To Give Details On Russia Probe With Filings On Former Trump Aides (R.)
Mueller’s Gift to Obama (Kim Strassel)
Julian Assange Rejects UK-Ecuador Deal For Him To Leave The Embassy (Tel.)

 

 

Medvedev is funny, with a serious twist. Note that this has all happened because of US sanctions. Russian grain exports have surged more than 54% this year. Funny that Ukraine fed much of Europe not that long ago (100 years?!) because of its highly fertile back earth.

Russia Seeks To ‘Feed The Whole Planet’ – PM (RT)

Russia seeks to expand its agricultural exports, ultimately seeking to feed the whole planet, Prime Minister Dmitry Medvedev said. The PM’s statement comes as the country enjoys a record surge in grain exports. “Our country is, as they say, destined by the heavens to feed the whole planet. And we’ll try and do that,” Medvedev told journalists of Russian TV channels in a major interview aired on Thursday. Apart from being the country’s “destiny,” the foods plainly make “nice export goods,” the prime minister added. Russia’s agriculture has expanded greatly over the past few years, becoming a solid and profitable industry, unlike the way it was a couple decades ago.

“Back in 1990s, the agriculture was called a ‘black hole’, where one should not invest, we were told we should not feed ourselves since we can purchase everything elsewhere,” Medvedev said. “Now, it feeds our whole country. We’ve reached the main goals regarding food security and we’re exporting grains, other goods to the world market.” This year, Russia has enjoyed vast growth of its agricultural exports, becoming the world’s top exporter of wheat. From January through September of 2018, exports of Russia’s wheat and meslin flour expanded by 54.3% compared to the previous year. The amount of food which the county imports, in its turn, continued to shrink. Imports of grains to Russia dropped by 11.1% during the same period. Imports of barley have suffered an enormous decline, dropping a whopping 94%.

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The logical consequences of central banks strangling price discovery.

Markets Are Going Haywire, Sudden Moves Are Here To Stay (CNBC)

Wherever Mark Connors looks at markets, from stocks to currencies to oil, he sees signs of the unknown. Equity investors got whipsawed this week during two rough and volatile sessions, but Connors, global head of risk advisory at Credit Suisse, had seen worrying signs long before that. A key technical measure he tracks, the correlation between the price of stocks and currencies, had broken down starting in April. That, along with sharp drops in the price of oil, point to one thing, he says: Uncertainty about the future as central banks around the world unwind programs that bought trillions of dollars of assets.

“We’re seeing two of the biggest asset classes, stocks and currencies, exhibit a degree of uncertainty in their relationship in 2018 that we’ve never seen before,” Connors said. “Crude just exhibited something very unusual in the context of the last 40 years.” The unwinding of central banks’ programs a decade after the financial crisis brought economies to the brink is known as quantitative tightening. J.P. Morgan Chase CEO Jamie Dimon said in July that one of his biggest fears is around how markets would behave as central banks removed their unprecedented stimulus. “If quantitative tightening continues, guess what’s going to happen? More of this,” Connor said, referring to unusually violent moves across markets.

Another factor in the speed of recent declines is the result of several important changes that have happened since the last financial crisis. Automated trading strategies from quant hedge funds and the massive shift to passive investing have helped to remove liquidity from the system in times of panic, according to Marko Kolanovic, J.P. Morgan’s global head of macro quantitative and derivatives research. He said in a September note that index and quant funds made up two-thirds of assets under management globally and the majority of daily trading. So when investors begin to sell, as they did on Tuesday amid concerns over the state of U.S. trade talks with China, the moves were probably amplified by computerized trading strategies.

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You’d have to have a -functioning- market for it to miss anything.

Did The Market Miss Powell’s Real Message? (Roberts)

[..] With the Fed Funds rate running at near 2%, if the Fed now believes such is close to a ‘neutral rate,’ it would suggest that expectations of economic growth will slow in the quarters ahead from nearly 6.0% in Q2 of 2018 to roughly 2.5% in 2019.” [..] the bond market has picked up on that realization as the yield has flattened considerably over the last few days as the 10-year interest rate broke back below the 3% mark. The chart below shows the difference between the 2-year and the 10-year interest rate.

Now, there are many who continue to suggest “this time is different” and an inverted yield curve is not signaling a recession, and Jerome Powell’s recent comments are “in line” with a “Goldilocks economy.” Maybe. But historically speaking, while an inversion of the yield curve may not “immediately” coincide with a recessionary onset, given its relationship to economic activity it is likely a “foolish bet” to suggest it won’t. A quick trip though the Fed’s rate hiking history and “soft landing” scenarios give you some clue as to their success.

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Useful to remember that this is -mostly- an irreversible process.

Fed’s QE Unwind Reaches $374 Billion (WS)

The Federal Reserve shed $54 billion in assets over the five weekly balance sheet periods that encompass the calendar month of November. This reduced the assets on its balance sheet to $4,086 billion, the lowest since January 15, 2014, according to the Fed’s balance sheet for the week ended December 5, released this afternoon. Since the beginning of the QE unwind — or “balance sheet normalization,” as the Fed calls it — in October 2017, the Fed has now shed $374 billion. The Fed holds a variety of assets, including the Treasury securities and mortgage-backed securities (MBS) that it had acquired as part of QE. Between the end of QE in late 2014 and the beginning of the QE unwind in October 2017, the Fed replaced maturing securities with new securities to keep their levels roughly the same. Starting in October 2017, the Fed has been shedding Treasury securities and MBS.

[..] Treasury Securities Until October, the QE unwind had been in ramp-up mode. In October, it reached cruising speed, according to the Fed’s plan. In the cruising-speed phase, the Fed is scheduled to shed “up to” $30 billion in Treasuries and “up to” $20 billion in MBS a month, for a total of “up to” $50 billion a month. So how did it go in November? From November 1 through December 5, the Fed’s holdings of Treasury Securities fell by $30 billion to $2,241 billion, the lowest since January 22, 2014. Since the beginning of the QE-Unwind, the Fed has shed $225 billion in Treasuries:

Mortgage-Backed Securities (MBS) Under QE, the Fed also acquired residential MBS that were issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Holders of residential MBS receive principal payments as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off. To keep the balance of MBS from declining after QE ended, the New York Fed’s Open Market Operations kept buying MBS in the market. The Fed books the trades at settlement, which lags the trade by two to three months. Due to this lag, the amount of MBS on today’s balance sheet reflects trades in August and September when the cap for shedding MBS was $16 billion a month. And this is how it panned out. From November 1 through today’s balance sheet, the balance of MBS fell by $16 billion, to $1,653 billion, the lowest since May 7, 2014.

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There’s a lot of -often contradictory- talk about yield conversion. Kevin Muir picks out a nice detail: “..we will not see the same degree of yield curve inversion that we have in past cycles. There is simply too much debt out there..

The Fed Finally Broke Something (Muir)

[..] an inversion of the yield curve has traditionally been one of the best indicators presaging a recession. There has been tons of studies and even more conclusions drawn from the data, so you probably don’t need me to rehash them all. Yet I think it’s amusing to hear all the yield-curve-apologists (a term coined by my colourful pal, Janney’s Guy LeBas in this article) once again claiming that yield curve inversions don’t matter. Whether it’s the fact that we need to wait for the 3-month / 5-year to invert, or whether it is the long lead time between the 2-10-year spread inverting and the actual recession, there are plenty of excuses being offered up about why the yield curve inversion doesn’t matter.

Yeah, let me get this straight. The largest, most liquid market in the world is sending a signal that has consistently been one of the most reliable indicators that a recession is near and somehow it makes sense to fade it? As a trader who cut his eye-teeth in the equity market, I can tell you unequivocally, bond traders are smarter. They just are. Denying it is like trying to argue that people in Malibu are no better looking than any other big U.S. suburb. So when the yield curve starts inverting, you better believe I am paying attention. However, as usual, there is a catch. Market cycles are similar, but never exactly the same.

In the post-GFC era we will not see the same degree of yield curve inversion that we have in past cycles. There is simply too much debt out there. The global economy cannot handle the same amount of tightening as in past cycles. I know the crowd who believes that “Powell is different than all the other Fed Chairs” will cry out in anguish at this proclamation, but last week’s dovish shift shows his stomach to handle any sort of market disruption is way lower than previously believed. Powell will be no different than all the other Fed Chairs. At the end of the day, he will be loose.

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How about US shale? Won’t they cut production to help MbS?

Oil Drops As OPEC Makes Supply Cut Dependent On Russia (CNBC)

Oil prices fell on Friday, pulled down by OPEC’s decision to delay a final decision on output cuts, awaiting support from non-OPEC heavyweight Russia. International Brent crude oil futures fell below $60 per barrel early in the session, trading at $59.50 per barrel at 0144 GMT, down 56 cents, or 0.9% from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $51.24 per barrel, down 25 cents, or 0.5%. The declines came after crude slumped by almost 3% the previous day, with OPEC ending a meeting at its headquarters in Vienna, Austria, on Thursday without announcing a decision to cut crude supply, instead preparing to debate the matter on Friday.

“OPEC has decided to meet Friday again…(as) Russia remains the sticking point,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore. Analysts still expect some form of supply reduction to be decided. “We are beginning to witness the outline of the next iteration of production cuts, with OPEC conforming to cut its own production by around 1 million barrels per day, with the cartel lobbying non-OPEC members to contribute more,” Japanese bank MUFG said in a note.

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Relentless.

Bitcoin Plunges 10% As December Rout Continues (CNBC)

As of Asia’s Friday afternoon trade, bitcoin had fallen nearly 10% against the U.S. dollar in 24 hours, marking another recent plunge for the world’s largest cryptocurrency. It’s been a rough December for the digital token: Its price dropped 8% on the first day of the month. Bitcoin traded at $3,337.32 as of 12:28 p.m. HK/SIN (11:28 p.m. ET on Thursday), falling 9.88% over the last 24 hours, according to data from industry site Coindesk. Meanwhile, prices for the second and third largest cryptocurrencies by market value, XRP and Ether, also saw sharp declines in the 24 hour period. XRP fell by 10.62% and Ether dropped 15.90%, according to Coindesk.

This calendar year has generally been unkind to cryptocurrency prices, with the industry seeing its entire market cap falling almost 87.09% from its highs in January, according to data from Coinmarketcap. 24-hour trading volumes have also plunged about 61.65% since then. In recent industry related news, the U.S. Securities and Exchange Commission (SEC) posted an update on Thursday regarding the approval process for a rule change proposal for the allowance of a bitcoin exchange traded fund (ETF).

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The worst thing Macron could have done: “In a move questioned by both critics and supporters, the president has recently disappeared from public view.” And now his police are going to fire on protesters tomorrow?

France To Deploy 90,000 Police Over Weekend Riot Fears (Ind.)

French authorities are bracing for the possibility of more riots and violence at planned anti-government protests this weekend. The government is deploying tens of thousands of police and security forces across the country, while in Paris, museums, theatres and shops announced they would close on Saturday as a precaution – including the iconic Eiffel Tower. Police unions and city authorities held emergency meetings to decide how to handle the protests, which are being held despite Emmanuel Macron’s surrender to marchers demanding the scrapping of a planned fuel tax hike. Prime minister Edouard Philippe told senators on Thursday the government would deploy “exceptional” security measures for the protests in Paris and elsewhere.

Speaking on TF1 television, Mr Philippe said 89,000 police officers will be deployed on Saturday across France – up from 65,000 last weekend. In Paris alone, 8,000 police officers will be mobilised. They will be equipped with a dozen armoured vehicles – a first in a French urban area since 2005. Some “yellow vest” protesters, French union officials and prominent politicians across the political spectrum called for calm on Thursday after the worst rioting in Paris in decades last weekend. Mr Macron agreed to abandon the fuel tax hike, part of his plans to combat global warming, but protesters’ demands have now expanded to other issues hurting French workers, retirees and students. In a move questioned by both critics and supporters, the president has recently disappeared from public view.

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If this is true, US Big Tech will face the same.

Chinese Giant Huawei Faces Catastrophe (G.)

The arrest in Canada of the chief financial officer of the Chinese mobile network and handset tech firm Huawei marks a new stage in a technological cold war between western spy agencies and Beijing. This development could be catastrophic for Huawei: according to reports, the US suspects it broke sanctions by selling telecoms equipment to Iran. If that is proven, the response could exclude Huawei from many of the world’s most valuable markets. That quiet war of words had already begun to ramp up this week when first the head of the UK’s secret service, Alex Younger, said in a speech that “we need to have a conversation” about Huawei’s involvement in the UK’s telecoms network.

Then on Wednesday, BT revealed it is stripping out Huawei’s networking kit from parts of the EE mobile network. Huawei has been the world’s largest telecoms network equipment company since 2015, ahead of European rivals Ericsson and Nokia, and far above domestic competitor ZTE and South Korea’s Samsung. But the company has for years struggled against suspicions that it has bowed to pressure from the Chinese government to tap or disrupt telecoms systems in foreign countries. That has seen it banned from selling its profitable network equipment to the US, Australia and New Zealand – three of the “Five Eyes” group of intelligence-sharing countries (the other two being the UK and Canada).

But Meng Wanzhou’s arrest on a federal warrant in Canada is a dramatic escalation. As well as being the CFO and deputy chairwoman of one of the world’s largest makers of telecoms networking equipment that is essential to phone, smartphone and internet traffic, she is also the daughter of Huawei’s 74-year-old founder Ren Zhengfei. Ren attracted suspicion from western agencies because of his role working in IT for the Red Army before he set up the firm in 1987.

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Even Bolton has -belatedly- denied involvement.

White House, Trudeau Seek To Distance Themselves From Huawei Move (R.)

President Donald Trump did not know about plans to arrest a top executive at Chinese telecoms giant Huawei in Canada, two U.S. officials said on Thursday, in an apparent attempt to stop the incident from impeding crucial trade talks with Beijing. Huawei’s CFO, Meng Wanzhou, the 46-year-old daughter of the company’s founder, was detained in Canada on Dec. 1, the same day Trump and Chinese President Xi Jinping dined together at the G20 summit in Buenos Aires. A White House official told Reuters Trump did not know about a U.S. request for her extradition from Canada before he met Xi and agreed to a 90-day truce in the brewing trade war.

Meng’s arrest during a stopover in Vancouver, announced by the Canadian authorities on Wednesday, pummeled stock markets already nervous about tensions between the world’s two largest economies on fears the move could derail the planned trade talks. [..] Meng’s detention also raised concerns about potential retaliation from Beijing in Canada, where Prime Minister Justin Trudeau sought to distance himself from the arrest. “The appropriate authorities took the decisions in this case without any political involvement or interference … we were advised by them with a few days’ notice that this was in the works,” Trudeau told reporters in Montreal in televised remarks.

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Top of the Bubble to you!

Lyft Races To Leave Uber Behind In IPO Chase (R.)

Ride-hailing company Lyft Inc beat bigger rival Uber Technologies Inc in filing for an initial public offering (IPO) on Thursday, defying the recent market jitters and taking the lead on a string of billion-dollar-plus tech companies expected to join Wall Street next year. Lyft’s IPO will test investors’ appetite for the most highly valued Silicon Valley companies and for the ride-hailing business, which has become a wildly popular service but remains unprofitable and has an uncertain future with the advance of self-driving cars. San Francisco-based Lyft, last valued at about $15 billion in a private fundraising round, did not specify the number of shares it was selling or the price range in a confidential filing with the SEC.

Lyft could go public as early as the first quarter of 2019, based on how quickly the SEC reviews its filing, people familiar with the matter said. Lyft’s valuation is likely to end up between $20 billion and $30 billion, one source added. The ride service was set up in 2012 by entrepreneurs John Zimmer and Logan Green and has raised close to $5 billion from investors. While it continues to grow faster than its larger competitor, Uber, it is also losing money. Lyft would follow a string of high-profile IPOs of technology companies valued at more than $1 billion this year, such as Dropbox and Spotify.

However, market turmoil fueled by the escalating trade tensions between the United States and China could dampen enthusiasm for the debuts of other 2019 hopefuls like apartment-rental service Airbnb, analytics firm Palantir. and Stripe Inc, a digital payment company. Including Lyft, these round out four of the top-10 most highly valued, venture-backed tech companies. “Market declines mean that the offer price will be lower than otherwise. But there’s a danger of waiting to go public as well. Markets could go even lower, and the companies could raise less money if they waited longer,” said Jay Ritter, an IPO expert and professor at the University of Florida.

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Later today. But forget about collusion. Not going to happen.

Mueller To Give Details On Russia Probe With Filings On Former Trump Aides (R.)

U.S. Special Counsel Robert Mueller will provide new details on Friday on how two of President Donald Trump’s closest former aides have helped or hindered his investigation into possible collusion between Russia and Trump’s 2016 election campaign. Mueller last month accused Trump’s former campaign chairman Paul Manafort of breaching a plea bargain deal by lying to prosecutors, and he will submit information on those alleged lies in a filing to a federal court in Washington. That could include shedding new light on Manafort’s business dealings or his consulting for pro-Kremlin interests in Ukraine.

Manafort, who maintains he has been truthful with Mueller, managed Trump’s campaign for three months in 2016. Also on Friday, Mueller’s office and the Southern District of New York are to file sentencing memos on Michael Cohen, Trump’s former private lawyer. Cohen pleaded guilty to financial crimes in a New York court in August, and last week to lying to Congress in a Mueller case. Sentencing for both of those cases will be handled by one judge. Attention will focus on whether Mueller discloses new information to supplement Cohen’s admission last week that he sought help from the Kremlin for a Trump skyscraper in Moscow late into the 2016 campaign.

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Kimberley Strassel is still a lone(ly) in the US mainstream.

Mueller’s Gift to Obama (Kim Strassel)

[..] what about the potential crimes that put Mr. Flynn in Mr. Mueller’s crosshairs to begin with? On Jan. 2, 2017, the Obama White House learned about Mr. Flynn’s conversations with Mr. Kislyak. The U.S. monitors phone calls of foreign officials, but under law they are supposed to “minimize” the names of any Americans caught up in such eavesdropping. In the Flynn case, someone in the prior administration either failed to minimize or purposely “unmasked” Mr. Flynn. The latter could itself be a felony. Ten days later someone in that administration leaked to the Washington Post that Mr. Flynn had called Mr. Kislyak on Dec. 29, 2016. On Feb. 9, 2017, someone leaked to the Post and the New York Times highly detailed and classified information about the Flynn-Kislyak conversation.

House Intelligence Committee Chairman Devin Nunes has called this leak the most destructive to national security that he seen in his time in Washington. Disclosing classified information is a felony punishable by up to 10 years in federal prison. The Post has bragged that its story was sourced by nine separate officials. The Mueller team has justified its legal wanderings into money laundering (Paul Manafort) and campaign contributions (Michael Cohen) on grounds that it has an obligation to follow up on any evidence of crimes, no matter how disconnected from its Russia mandate. Mr. Flynn’s being caught up in the probe is related to a glaring potential crime of disclosing classified material, yet Mr. Mueller appears to have undertaken no investigation of that. Is this selective justice, or something worse?

Don’t forget Mr. Mueller stacked his team with Democrats, some of whom worked at the highest levels of the Obama administration, including at the time of the possible Flynn unmasking and the first leak. The Flynn sentencing document, meanwhile, contained yet another outrageous gift to Obama alumni. In laying out the “serious” nature of Mr. Flynn’s crimes, the document asserts that one of the questions about the Flynn-Kislyak discussion was whether “the defendant’s actions violated the Logan Act,” a 1799 statute that criminalizes negotiation by unauthorized persons with foreign governments that are in dispute with the U.S. Only two defendants have ever been charged under the Logan Act, the more recent one in 1852, and neither was convicted.

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We have to turn to the Telegraph of all sources, since we -obviously- can’t trust info from the Guardian, which does run a piece on this. That piece was written by Dan Collyns in Quito. Thought for all those who’ve been feeding on the Guardian smear piece for well over a week: investigate instead the link between the paper and the Ecuador government., especially how it changes and intensified around teh time Moreno became president. But don’t forget that the Guardian already had people in the country in at least 2014.

Julian Assange Rejects UK-Ecuador Deal For Him To Leave The Embassy (Tel.)

Julian Assange’s lawyer has rejected an agreement announced by Ecuador’s president to see him leave the Ecuadorean embassy in London, after six years inside. Lenin Moreno, the president of Ecuador, has made no secret of his wish to be rid of the WikiLeaks founder, who sought asylum inside the embassy in June 2012 and has not left since. On Thursday Mr Moreno announced that a deal had been reached between London and Quito to allow Mr Assange, 47, to be released. “The way has been cleared for Mr Assange to take the decision to leave in near-liberty,” said Mr Moreno. He did not specify what “near liberty” meant.

[..] Mr Moreno added that Britain had guaranteed that the Australian would not be extradited to any country where his life is in danger. But Mr Assange’s lawyer, Barry Pollack, told The Telegraph that the deal was not acceptable. The legal team have long argued that they will not accept any agreement which risks his being extradited to the United States. In November a filing error revealed that Mr Assange faced charges in the US – although it was not clear what those charges were. Many speculate they would be connected to the release of classified information, and Mr Assange fears a long prison sentence in the US for what his supporters say is publishing information in the public interest.

“The suggestion that as long as the death penalty is off the table, Mr Assange need not fear persecution is obviously wrong,” said Mr Pollack. “No one should have to face criminal charges for publishing truthful information. “Since such charges appear to have been brought against Mr Assange in the United States, Ecuador should continue to provide him asylum.”

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Dec 062018
 
 December 6, 2018  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , , , ,  


Louis Anquetin Avenue de Clichy, Five O’Clock in the Evening 1887

 

Sell-Offs Caused By Machines That Control 80% Of US Stock Market (CNBC)
Arrest of Huawei CFO Shows ‘The Gloves Are Now Fully Off’ – Eurasia Group (CNBC)
China May Target Us Tech Executives After Arrest Of Huawei CFO (MW)
British Telecom Removes Huawei Equipment From Parts Of 4G Network (PA)
Macron Scraps French Fuel Tax Rise Amid Nationwide Protests And Rioting (Ind.)
France’s Yellow Vest movement Strikes A Victory For Working People Across The EU (RT)
Leave ‘Very Likely’ Won EU Referendum Due To Illegal Overspending (Ind.)
Facebook Offered Secret User Data To Netflix And Airbnb (Ind.)
World ‘On Track’ For Devastating 3ºC Warming (Ind.)
War With Russia? (Stephen Cohen)
Is This It?: A Trump-Hater’s Guide To Mueller Skepticism (Frank)

 

 

Time for the whole thing to blow up?! Because: cui bono?

Sell-Offs Caused By Machines That Control 80% Of US Stock Market (CNBC)

80 percent of the daily moves in U.S. stocks are machine-led, a fund manager told CNBC on Wednesday. The phenomenon, also called algorithm or algo trading, refers to market transactions that use advanced mathematical models to make high-speed trading decisions. Many believe that the different sell-off episodes seen throughout 2018 were caused by these machines, as they act on immediate data releases, without taking the time to digest them as humans would. “80 percent of daily volume in the U.S. is done by machines, so what you get is a lack of focus on earnings, a lack of focus on outlooks and you just get short-term movements based on very specific data that is released every day and that creates noise,” Guy De Blonay, fund manager at Jupiter Asset Management, told CNBC’s “Squawk Box Europe.”

The daily volume of algo trading can change according to volatility. But over the last few years its impact has become more visible. In 2017, J.P. Morgan said that “fundamental discretionary traders” accounted for only 10 percent of trading volume in stocks. This is when traders look at companies’ performance and outlook before deciding whether to buy or sell the shares. [..] Salman Ahmed, chief investment strategist at Lombard Odier, said: “The rise of algorithm-based trading means that there are in these algorithms some levels which trigger sell-off, i.e. sell orders. “Yes, I can argue that we needed some kind of correction, given what has happened over the last few months. But the ferociousness of the intra-day sell-off is driven by these pre-set sell orders, which come programed in these algorithms automatically.”

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Not sure about that. Certainly an odd move though.

Arrest of Huawei CFO Shows ‘The Gloves Are Now Fully Off’ – Eurasia Group (CNBC)

The arrest of Huawei’s global chief financial officer in Canada, reportedly related to a violation of U.S. sanctions, will corrode trade negotiations between Washington and Beijing, risk consultancy Eurasia Group said Thursday. “Beijing is likely to react angrily to this latest arrest of a Chinese citizen in a third country for violating U.S. law,” Eurasia analysts wrote. In fact, Global Times — a hyper-nationalistic tabloid tied to the Chinese Communist Party — responded to the arrest by posting on Twitter a statement about trade war escalation it attributed to an expert “close to the Chinese Ministry of Commerce.”

“China should be fully prepared for an escalation in the #tradewar with the US, as the US will not ease its stance on China, and the recent arrest of the senior executive of #Huawei is a vivid example,” said the statement, paired with a photo of opposing fists with Chinese and American flags superimposed upon them. Canada’s Department of Justice said on Wednesday the country arrested Meng Wanzhou in Vancouver, where she is facing extradition to the U.S. The arrest is related to violations of U.S. sanctions, a person familiar with the matter told Reuters. U.S. authorities have been probing Huawei, one of the world’s largest makers of telecommunications network equipment, since at least 2016 for allegedly shipping U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws, sources told Reuters in April.

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“If I was an American tech executive, I wouldn’t travel to China this week…”

China May Target Us Tech Executives After Arrest Of Huawei CFO (MW)

“If I was an American tech executive, I wouldn’t travel to China this week.” That’s what James Lewis, a former Commerce Department official and current director of technology policy at the think tank Center for Strategic and International Studies, told Axios on Wednesday after Canada arrested a top executive for China’s Huawai on behalf of the U.S. government. Lewis told Axios that “Huawei is one of the Chinese government’s pet companies,” and warned “They will retaliate and China will take hostages.” Earlier Thursday, Huawei CFO Meng Wanzhou — the daughter of the telecom giant’s founder — was arrested in Vancouver and was being prepared for extradition to the U.S. to face charges of violating sanctions against Iran.

China immediately protested the arrest, and demanded Canada and the U.S. “rectify wrongdoings” and release her from custody. The incident may raise tensions between the U.S. and China, just days after it appeared progress had been made to ease the ongoing trade war. U.S. stock futures and Asian stock markets fell after reports of the arrest. The U.S. government has long worried about cybersecurity risks from Huawei equipment, and has pressed allies to stop using the company’s products. The U.S. has restricted Huawei’s business in the U.S., and earlier this year, Australia barred Huawei from its 5G mobile network, citing a security risk. In October, a Silicon Valley semiconductor startup accused Huawei of conspiring to steal its technology. Huawei is the world’s biggest maker of telecom equipment, and the No. 2 smartphone maker in the world, surpassing Apple during the second quarter of 2018.

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The Five Eyes coordinate.

British Telecom Removes Huawei Equipment From Parts Of 4G Network (PA)

BT has confirmed it is removing Huawei equipment from key areas of its 4G network as concerns are raised about the Chinese firm’s presence in critical telecoms infrastructure. Governments in the US, New Zealand and Australia have already moved to block the use of Huawei’s equipment as part of the future rollout of 5G networks. Earlier this week the head of MI6 also suggested the UK needed to decide if it was “comfortable” with Chinese ownership of the technology being used. [..] In a statement, the UK telecoms group has confirmed it is in the process of removing Huawei equipment from the key parts of its 3G and 4G networks to meet an existing internal policy not to have the Chinese firm at the centre of its infrastructure.

“In 2016, following the acquisition of EE, we began a process to remove Huawei equipment from the core of our 3G and 4G mobile networks, as part of network architecture principles in place since 2006,” BT said. “We’re applying these same principles to our current RFP (request for proposal) for 5G core infrastructure. As a result, Huawei have not been included in vendor selection for our 5G core. Huawei remains an important equipment provider outside the core network and a valued innovation partner.” The news comes in the wake of the head of MI6, Alex Younger, questioning whether Chinese firms such as Huawei should be involved in UK communications infrastructure.

He said that the UK would have to make “some decisions” about such firms after other governments had taken steps to block the firm. “We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken a very definite position,” he said.

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He didn’t have the guts to go on TV himself, but let his PM do it. Who said that it was his own decision.

Macron Scraps French Fuel Tax Rise Amid Nationwide Protests And Rioting (Ind.)

Emmanuel Macron has scrapped a fuel tax rise following weeks of nationwide protests in France and the worst rioting in Paris in decades. Protesters celebrated the victory on Wednesday, but critics said Mr Macron’s surrender came too late and is unlikely to quell mounting anger at the president, whom demonstrators consider out of touch with ordinary people. Amid fears of new violence, Mr Macron decided to “get rid” of the tax planned for next year, an official in the president’s office said. Prime minister Edouard Philippe told lawmakers the tax is no longer included in the 2019 budget. But the decision has ramifications beyond France, since the fuel tax rise was part of Mr Macron’s efforts to wean France off fossil fuels in order to reduce greenhouse gases and help slow climate change.

[..] Mr Macron’s popularity has slumped to a new low since the demonstrations began. The former investment banker, who has pushed pro-business economic reforms to make France more competitive globally, is accused of being the “president of the rich” and of being estranged from the working classes. On Wednesday, France’s largest farmers union said it will launch anti-government protests next week, after trucking unions called for a rolling strike. Trade unions so far have not played a role in the yellow vest protest movement but are now trying to capitalise on growing public anger. A joint statement from the CGT and the FO trucking unions called for action on Sunday night to protest a cut in overtime rates. The FNSEA farmers union said it would fight to help French farmers earn a better income but would not officially be joining forces with the “yellow vests”..

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You really think that working class or working people are terms that still have relevance?

France’s Yellow Vest movement Strikes A Victory For Working People Across The EU (RT)

Straddling the world stage like a colossus in his own mind, but a low rent Napoleon in everyone else’s, with his talk of a European army, Macron is the epitome of the confected politician to which neoliberalism has given birth over the years. Even before the current crisis his approval rating was so low it was drilling its way through the floor; yet as with other leaders who are cut from the same expensive cloth, being impervious to the real world is deemed compatible with strong leadership. It really does beg the question of when, if ever, those who inhabit this cloistered Western neoliberal establishment will finally wake up to the consequences of their ruinous economic dictatorship?

In the UK we have the unedifying sight of Tony Blair being wheeled out as the de facto leader of the ‘reverse Brexit’ movement. That there is anyone who actually believes that the man who took petrol and matches to the Middle East, and who carries about as much weight in the country’s Brexit heartlands as a fly’s wing, is capable of directing anything except his chauffeur from one of his gilded mansions to a TV studio and back again, is remarkable. Meanwhile, on the other side of the Atlantic, the lid of Hillary Clinton’s political coffin has been prised open by an out of touch Washington liberal establishment – one that left planet earth after Trump’s election in 2016 and has been floating around somewhere in outer space since.

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Wouldn’t it be fun if this would make the whole enchilada invalid?

Leave ‘Very Likely’ Won EU Referendum Due To Illegal Overspending (Ind.)

It is “very likely” that the UK voted for Brexit because of illegal overspending by the Vote Leave campaign, according to an Oxford professor’s evidence to the High Court. An exhaustive analysis of the campaign’s digital strategy concludes it reached “tens of millions of people” in its last crucial days, after its spending limit had been breached – enough to change the outcome. The evidence will be put to the High Court on Friday, in a landmark case that is poised to rule within weeks whether the referendum result should be declared void because the law was broken. Professor Philip Howard, director of the Oxford Internet Institute, at the university, said: “My professional opinion is that it is very likely that the excessive spending by Vote Leave altered the result of the referendum.

“A swing of just 634,751 people would have been enough to secure victory for Remain. “Given the scale of the online advertising achieved with the excess spending, combined with conservative estimates on voter modelling, I estimate that Vote Leave converted the voting intentions of over 800,000 voters in the final days of the campaign as a result of the overspend.” [..] Professor Howard’s report is based on separate research which found that 20-30 per cent of people decided how to vote within a week of polling day, with half of these doing so on election day itself. If, as he has concluded, Vote Leave’s Facebook adverts reached tens of millions of people after they had should have stopped, they influenced huge numbers of voting decisions.

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Shameless.

Facebook Offered Secret User Data To Netflix And Airbnb (Ind.)

Facebook offered companies, including Netflix and Airbnb, access to data about users’ friends that it did not make available to other apps, according to documents released by parliament. The 223 pages released yesterday were internal communications from 2012 to 2015 between company leaders, including chief executive Mark Zuckerberg, shedding light on allegations that Facebook has engaged in anti-competitive behaviour. The documents show that Facebook tracked growth of competitors and denied them access to key data. Zuckerberg agreed to senior executive Justin Osofsky’s request in 2013 to stop giving friends’ list access to Vine on the day that social media rival Twitter launched the video-sharing service. “We’ve prepared reactive PR,” Mr Osofsky wrote, to which Mr Zuckerberg replied: “Yup, go for it.”

The documents also raised questions about Facebook’s transparency. An exchange from 2015 shows Facebook leaders discussing how to begin collecting call logs from Android users’ smartphones without subjecting them to “scary” permissions screens. [..] In a summary of the 250-page cache, which includes internal emails involving Facebook chief executive Mark Zuckerberg and other members of staff, Damian Collins MP, chair of the Digital, Culture, Media and Sport Committee, highlighted a number of “key issues”. He claimed the documents show Facebook chose to “whitelist” selected companies, allowing them to maintain “full access” to the data of a user’s Facebook friends even after the company announced changes in 2015 to end such access.

Mr Collins suggested the cache also showed Facebook regularly discussed the value of data on the platform, and said: “The idea of linking access to friends’ data to the financial value of the developers’ relationship with Facebook is a recurring feature of the documents.”

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COP24 is as much CON24 as COP21 was CON21. ‘World leaders’ won’t solve this.

World ‘On Track’ For Devastating 3ºC Warming (Ind.)

Global carbon pollution is on track to reach unprecedented levels in 2018, smashing hopes that the world had reached peak emissions. Growing energy demands combined with an unwillingness by many nations to let go of coal and oil are expected to result in a 2 per cent boost for emissions. Released at the major COP24 summit in Poland, the news marks the end of a year in which climate change has made itself felt, driving heatwaves, droughts and wildfires across the planet. It comes after a UN report warned that as emissions continue to creep upwards, nations must increase their commitments to tackling global warming by five times to avoid its worst effects.

CO2 pollution shot up in 2017 after a three-year decline that led many to speculate the world had hit peak carbon. With the data suggesting this trend has continued into 2018, experts have redoubled their desperate warnings to phase out fossil fuels as quickly as possible to avoid climate disaster. “With this year’s growth in emissions, it looks like the peak is not yet in sight,” said Professor Corinne Le Quere, from the University of East Anglia, who led the analysis. “To limit global warming to the Paris agreement goal of 1.5C, CO2 emissions would need to decline by 50 per cent by 2030 and reach net zero by around 2050. “We are a long way from this and much more needs to be done because if countries stick to the commitments they have already made, we are on track to see 3C of global warming.”

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Solid and long from America’s no. 1 Russia expert.

War With Russia? (Stephen Cohen)

Russiagate’s core allegations—US-Russian collusion, treason—all remain unproven. Yet they have become a central part of the new Cold War. If nothing else, they severely constrain President Donald Trump’s capacity to conduct crisis negotiations with Moscow while they further vilify Russian President Vladimir Putin for having, it is widely asserted, personally ordered “an attack on America” during the 2016 presidential campaign. Some Hollywood liberals had earlier omitted the question mark, declaring, “We are at war.” In October 2018, the would-be titular head of the Democratic Party, Hillary Clinton, added her voice to this reckless allegation, flatly stating that the United States was “attacked by a foreign power” and equating it with “the September 11, 2001, terrorist attacks.”

Clinton may have been prompted by another outburst of malpractice by The New York Times and The Washington Post. On September 20 and 23, respectively, those exceptionally influential papers devoted thousands of words, illustrated with sinister prosecutorial graphics, to special retellings of the Russiagate narrative they had assiduously promoted for nearly two years, along with the narrative’s serial fallacies, selective and questionable history, and factual errors. Again, for example, the now-infamous Paul Manafort, who was Trump’s campaign chairman for several months in 2016, was said to have been “pro-Kremlin” during his time as a lobbyist for Ukraine under then-President Viktor Yanukovych, when in fact he was pro–European Union.

Again, Trump’s disgraced national-security adviser, Gen. Michael Flynn, was accused of “troubling” contacts when he did nothing wrong or unprecedented in having conversations with a Kremlin representative on behalf of President-elect Trump. Again, the two papers criminalized the idea, as the Times put it, that “the United States and Russia should look for areas of mutual interest,” once the premise of détente. And again, the Times, while assuring readers that its “Special Report” is “what we now know with certainty,” buried a related acknowledgment deep in its some 10,000 words: “No public evidence has emerged showing that [Trump’s] campaign conspired with Russia.”

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Let’s keep it going for another 2 years or so. It sells papers and airtime.

Is This It?: A Trump-Hater’s Guide To Mueller Skepticism (Frank)

For many Robert Mueller watchers, the air these days is electric. People sense the big shoes are about to drop. Donald Trump has submitted his written answers to Mueller’s questions. Paul Manafort has entered a plea agreement, but then continued to lie—at least according to Mueller. Jerome Corsi, fringe-right author and personality, is vowing to go to jail for life rather than sign on to Mueller’s version of events. Roger Stone is expecting to be indicted for something. So is Donald Trump Jr. And, most significant of all to those looking for a big payoff, Michael Cohen has pleaded guilty to lying to Congress about the timeline of a deal he was trying to make to construct a 100-story Trump-branded tower in Moscow.

It turns out that the deal exploration continued past the time Trump had secured the Republican nomination, and Cohen and his associate Felix Sater, a real-estate promoter and one-time racketeer, had even discussed giving Vladimir Putin a $50 million penthouse in the building. “This is it,” people are saying. “This is the big one!” But, with all due reverence to the deity Ganesha, why? We see the familiar cycle of hype, and there’s no use fighting it, but, once heart rates have slowed, the same old question remains: so what? Some of the news, such as a Guardian story that Manafort met three times with Julian Assange, seems to be based on nothing at all. But even the solid news turns out to be generally non-earth-shattering.

As the journalist Aaron Maté has been pointing out, we already knew the timeline of Cohen’s Moscow efforts, because BuzzFeed had already detailed them in May, painting a picture of a bumbling duo getting high on their own supply. (As for the latest revelations, did Sater and Cohen really think a president of Russia would move into a free $50 million penthouse provided by a U.S. presidential candidate? You have to wonder if they were hitting each other on the head with bricks.) Those who hope that Mueller reveals a shambolic operation with a lot of rascals engaged in sleazy and embarrassing behavior will be happy with the fruits of his labors. But those who hope for an unveiling of indictments linking Putin and Trump in a grand conspiracy have no more reason to celebrate than they did a week or a month ago.

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Dec 052018
 
 December 5, 2018  Posted by at 10:38 am Finance Tagged with: , , , , , , , , , , , , ,  


Wassily Kandinsky Painting with Houses 1909 (click for background)

 

Don’t Blame Trump The Tariff Man, The Fed Crashed The Market Today (F.)
Dow Plunges Nearly 800 Points On Rising Fears Of An Economic Slowdown (CNBC)
FAANG Stocks Shed $140 Billion In Tuesday’s Market Rout (CNBC)
The Art of Defaulting (Jensen)
Anarchists, Butchers And Finance Workers In Court Over Paris Riots (AFP)
French History Has Never Seen A Protest Like The Yellow Vest Movement (Qz)
Theresa May Suffers Worst Day In Her Career … Until Next Week (Ind. )
UK Inches Closer To New Brexit Referendum As MPs Take Back Control (Ind.)
Mueller Says Michael Flynn Gave Details Of Trump Team Russia Contacts (CNBC)
Hey, Mr. Trump! Tear Down That Deep State Wall (Stockman)
The Ghost of Christmas Present (Kunstler)
Australia’s Economy Slows, Debt-Laden Consumers A Deadweight (R.)

 

 

New York Fed chief John Williams said the US economy can handle more rate hikes..

Don’t Blame Trump The Tariff Man, The Fed Crashed The Market Today (F.)

Don’t believe the hype: today’s reversal in equity markets has little, if anything, to do with this weekend’s trade war ceasefire. Tuesday’s drop in U.S. and European stock markets are largely thanks to the Federal Reserve. Treasury Secretary Steve Mnuchin came out immediately on Monday saying that details of the trade truce in terms of products China intended to import more of, and a new timeline for talks, would not be available to the public. The market new that immediately, but everyone still believed, and still believes today, that a trade truce is a market positive. Mnuchin told CNBC yesterday that China made trade commitments worth around $1.2 trillion, but stressed that the details still need to be negotiated and that he was taking Xi Jinping at his word. All positives.

The Hang Seng and every index on the Shanghai Stock Exchange settled higher again today. The Chinese yuan moved through its 50 and 100 day moving average to settle even stronger against the dollar today at 6.83. The blame for Tuesday’s slide in the U.S. can be laid upon New York Fed chief John Williams. He said today that the U.S. economy can handle more rate hikes. This comes just after Jerome Powell spoke at The Economic Club in New York last week saying the Fed funds rate was close to neutral. For once, a Powell speech sent the markets higher. No one really knows precisely what the neutral rate is, though it is perceived to be somewhere between 3% and 3.5%.

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Unhinged?!

Dow Plunges Nearly 800 Points On Rising Fears Of An Economic Slowdown (CNBC)

Stocks fell sharply on Tuesday in the biggest decline since the October rout as investors worried about a bond-market phenomenon signaling a possible economic slowdown. Lingering worries around U.S.-China trade also added to jitters on Wall Street. The Dow Jones Industrial Average fell 799.36 points, or 3.1%, to close at 25,027.07 and posted its worst day since Oct. 10. At its low of the day, the Dow had fallen more than 800 points. The S&P 500 declined 3.2% to close at 2,700.06. The benchmark fell below its 200-day moving average, which triggered more selling from algorithmic funds. Financials were the worst performers in the S&P 500, plunging 4.4%.

[..] The yield on the three-year Treasury note surpassed its five-year counterpart on Monday. When a so-called yield curve inversion happens — short-term yields trading above longer-term rates — a recession could follow, though it is often years away after the signal triggers. Still, many traders believe the inversion won’t be official until the 2-year yield rises above the 10-year yield, which has not happened yet. Stocks began falling to their lows of the day after Jeffrey Gundlach, CEO of Doubleline Capital, told Reuters this inversion signals that the economy “is poised to weaken.” The flattening yield curve caused investors to bail on bank stocks on concern the phenomenon may hurt their lending margins. [..] Shares of J.P. Morgan Chase, Citigroup and Bank of America all declined more than 4%. Citigroup and Morgan Stanley both reached 52-week lows ..

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Are there people left who think they will regain these losses?

FAANG Stocks Shed $140 Billion In Tuesday’s Market Rout (CNBC)

Tech stocks are back in correction territory after a painful day for public exchanges. The tech-heavy Nasdaq Composite index fell nearly 4%, with tech stocks like Apple, Amazon, Alphabet and Facebook weighing most heavily. In total, the so-called FAANG stocks — Facebook, Amazon, Apple, Netflix and Alphabet-owned Google — shed more than $140 billion in market value by the end of the trading Tuesday. The losses extend pain periods for Apple, which has seen downturn in recent weeks, and Facebook, which is suffering a down year on the heels of several scandals. Amazon and Netflix, though, are each up more than 40% year-to-date despite getting caught in the rout. With Tuesday’s losses, Alphabet is hanging onto modest year-to-date gains, up just 0.8% in 2018.

Here’s how it shook out:
• Facebook fell 2.2%, losing $7.6 billion in implied market value
• Amazon fell 5.9%, losing $50.8 billion in implied market value
• Apple fell 4.4%, losing $38.5 billion in implied market value
• Netflix fell 5.2%, losing $6.5 billion in implied market value
• Alphabet fell 4.8%, losing $37.5 billion in implied market value

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Long term makes sense. h/t Tyler.

The Art of Defaulting (Jensen)

I always distinguish between short-term debt cycles and debt super-cycles. Short-term debt cycles move more or less in parallel with the underlying economic cycles and last on average 7-8 years – in line with the average length of economic cycles. Debt super-cycles are a different kettle of fish. They typically last 50-75 years and have (unbeknown to many) existed for thousands of years. According to Ray [Dalio], they even get a mention in the Old Testament, which described the need to wipe out debt every 50 years or so. It is referred to as the Year of Jubilee in the old book. Debt super-cycles always end with a big bang. The previous debt super-cycle ended with the breakout of World War II, and a new debt super-cycle commenced its life when the canons fell silent in 1945. We are now almost 75 years into the current super-cycle; i.e. it will go down in history as one of the longer ones.

What do debt crises have in common? To begin with, I should point out that the 41 major debt crises that Ray has identified since 1980 are part of an even bigger number of debt crises that he discusses in his new book, starting with the hyperinflationary debt crisis in Germany between 1918 and 1925. I should also point out that every crisis he brings up is a mid to late stage super-cycle crisis. Not one crisis is from the 1950s, 1960s or 1970s. The logic is quite simple. In the early stages of a debt super-cycle, adding debt is actually a good thing and spurs economic growth; i.e. debt crises rarely occur in the earlier stages of debt super-cycles and almost never cause a major slump in GDP. Only later in the super-cycle does more debt actually become a problem.

Back to my question – what do all these crises have in common? All debt cycles start with a period of healthy borrowings, which is good for GDP growth (stage 1 in Exhibit 1 below). It is also worth noticing that, in the early stages of a typical debt super-cycle, a dollar of added debt leads to approx. a dollar of GDP growth. The two grow more or less in line, but that changes dramatically later in the super-cycle – more on that below. Healthy borrowing eventually turns into what Ray calls the bubble stage (stage 2). At this stage, excesses are creeping in; borrowers assume that the good times will continue forever, so they continue to borrow, even if they cannot always afford it. Three conditions are typically prevalent during the bubble stage: 1. Debt grows faster than income. 2. Equity markets rally. 3. The yield curve flattens. All three conditions have been prevalent in recent years.

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They simply don’t like Macron.

Anarchists, Butchers And Finance Workers In Court Over Paris Riots (AFP)

What started out as protests against the introduction of new fuel taxes has spiralled into a broad opposition front to Macron and his pro-business economic reforms since he took power in May 2017. Stephane, a 45-year-old butcher from the Hautes Alpes area of eastern France, said it was the first time he had joined a demonstration like the one on the Champs-Elysees on Saturday. He was accused of charging head-first into a line of riot police, known as CRS. “I would have liked the CRS to come and shake us by the hand, to put themselves on the people’s side,” he told the court. Jeremy Onselaer, a 22-year-old from the Parisian suburbs, defied any stereotyping: the master’s student earns 2,500 euros a month working part-time in the finance department of the national postal service.

He was accused of building barricades in the street, attempting to harm police officers and possessing cannabis. His lawyer urged magistrates not to impose a restraining order that would have banned him from the capital, because he had studies to pursue at the Paris School of Business. The strain on police and the justice system caused by so many cases was also evident at the recently opened new Paris city court complex, designed by star Italian architect Renzo Piano. “The conditions for the defence are completely unacceptable,” one lawyer complained, adding that she had six clients and had spent only a few minutes with each of them. Many suspects opted to have their trials deferred to prepare their defence, with hearings set to resume next year.

In most cases, magistrates ordered the suspects to report to police regularly until their trials, starting on Saturday morning when another day of protests has been announced. There were also numerous cases of instant acquittals due to the flimsiness of evidence provided by police. A 50-year-old nurse from Nice walked free saying he had been randomly arrested while walking in the Bastille area of Paris. “Violence is not part of my thinking,” he said, adding that he was a regular practitioner of yoga and meditation.

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“Even its elected representatives disagree with one another about the future of the movement.”

Eh, there are not elected representatives. That’s exactly what they don’t want. There may be a small group who pick some reps, but that’s not the same thing.

French History Has Never Seen A Protest Like The Yellow Vest Movement (Qz)

France is a country that’s no stranger to protest movements—from the massive student demonstrations of 1968 to contemporary union-led strikes. But during the “yellow vest” protests that rocked the streets of Paris this weekend, protesters reached further back in their history, to the era of the French Revolution. Protesters marching along the Champs-Elysées on Saturday (Dec. 1) could be heard chanting slogans like “We are running the revolution” and “Macron to the Bastille.” The Arc de Triomphe bore a message in spray paint: “We have chopped off heads for less than this,” a reference to the death by guillotine of king Louis XVI and his wife, Marie-Antoinette.

Are the yellow vests modern Jacobins fighting contemporary tyranny—or are they something entirely different? Quartz spoke with Danielle Tartakowsky, a history professor at Paris 8 university who recently published a book about the French state, about how to contextualize the yellow vests within France’s history of protest movements. According to Tartakowsky, the current demonstrations are unlike any other, marking an important shift in France’s political landscape. Unlike in previous large-scale protest movements in France, the yellow vests began as an organic, grassroots movement, born of the frustration of a small group of individuals who organized the protests entirely on Facebook. Tartakowsky says that’s one way in which these protests are unique.

Typically, French protests on the left have been organized or supported by major labor unions, and protests on the right (such as the marches against the legalization of gay marriage in 2012) were typically organized by Catholic groups. The lack of institutional framework is one of the things that sets the yellow vests apart from previous political movements and give them independence from any particular party, politician, or political leaning. That is one of their strengths, says Tartakowsky, since it gives the movement broader appeal (link in French). But it is also a major weakness, since the movement suffers from a lack of coherent message and leadership. Even its elected representatives disagree with one another about the future of the movement.

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No Brexit or no Deal. Anything in between is crumbling.

Theresa May Suffers Worst Day In Her Career … Until Next Week (Ind. )

The door of the flat above 10 Downing Street flat clicks shut. In the kitchen, Philip May stops rotating the tin opener around the rim of the baked bean tin and turns his head toward the hallway. “Hello darling. How was your day?” An exhalation is heard, followed by the sound of breaking glass. In the living room, the cat quietly turns to stone. “Well I lost more votes than Gordon Brown managed in three years. My own government became the first in history to be found in contempt of parliament, which means that in the morning I’ve got to publish the legal advice on just how terrible my own Attorney General reckons Brexit will be. Yes, Philip, yes, the same chap who I got to introduce me at party conference.

Yes, yes I know he said Brexit was “an eagle mewing her mighty youth” and yes, now it turns out he’d rather be imprisoned in the Tower of London than admit in public to how bad he has said it will be in private. “The TV debate where I wanted to show the people just how useless Jeremy Corbyn is isn’t happening and everyone is already saying it’s because I’m too useless to do it. My oldest friends voted against me. The EU has decided Article 50 can be revoked unilaterally, which means Brexit could be stopped altogether. No, Philip, that’s not a good thing. What do you mean why? I can’t remember why. Oh, and I’ve just opened a five day debate on my Brexit deal that’s going to end with my last two years work being chucked out, and barring a miracle that isn’t going to happen, me being chucked out after.”

On a less busy day, the Prime Minister might have had time to include the fact that the Governor of the Bank of England is now at open civil war with the previous Governor of the Bank of England. And he had to tell MPs on the Treasury Select Committee who had accused him of ratcheting up Project Fear by publishing his analysis of what might happen if the UK leaves the EU without a deal, that he had only published it because they themselves had asked him to.

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Parliament should decide these things.

UK Inches Closer To New Brexit Referendum As MPs Take Back Control (Ind.)

The push for a final say referendum has taken decisive steps forward in London and Brussels just a week before parliament is expected to reject Theresa May’s Brexit plan. On Tuesday MPs made the significant move of backing a plan to give the Commons more power to dictate what happens if the prime minister’s approach is ditched. A few hours earlier in Brussels the European Court of Justice also signalled it was set to rule that the UK could unilaterally revoke Article 50 – killing off Brexit – if it wanted to. The twin developments deliver both a means for MPs to secure a new referendum and legal clarity that they could halt the Brexit process if the public then decided to remain in the EU.

The government’s weakness was once again underlined as it lost three consecutive votes – including one unprecedented defeat which resulted in Ms May’s administration being held in “contempt of parliament” for refusing to publish legal advice on the proposed Brexit deal. At the start of the week campaigners delivered petitions carrying almost 1.5 million names to Downing Street, which demanded the British public have a Final Say on Brexit through a people’s vote. While Ms May remains adamant there will be no new referendum, MPs are already looking ahead to how parliament can impose its will if her deal is rejected in the commons vote on 11 December – something which now seems inevitable. Conservative, Labour and Liberal Democrat MPs tabled and won a vote on a motion significantly increasing the ability of parliament to steer the path of government if Ms May’s plan is defeated.

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Flynn said he admitted a lie because he couldn’t afford his own defense. If he did anything truly wrong, it’s his deals with Turkey. But that’s not what this is about.

Mueller Says Michael Flynn Gave Details Of Trump Team Russia Contacts (CNBC)

Former national security advisor Michael Flynn has given special counsel Robert Mueller “first-hand” details of contacts between President Donald Trump’s transition team and Russian government officials, a bombshell court document filed Tuesday says. Mueller in a sentencing memo said Flynn’s “substantial assistance” to his probe warrants a light criminal sentence — which could include no jail time for the retired Army lieutentant general. That assistance, which includes 19 interviews with Mueller’s team and Justice Department attorneys, related to a previsouly unknown “criminal investigation,” as well as to Mueller’s long-running probe of the Trump campaign’s and transition team’s links or coordination with the Russian government.

“The defendant provided firsthand information about the content and context of interactions between the transition team and Russian government officials,” the memo says. Mueller’s memo almost completely blacks out details of what Flynn might have said. Trump’s ex-national security advisor is due to be sentenced Dec. 18 in U.S. District Court in Washington. He pleaded guilty last December to a single count of lying to federal agents about his conversations with Russia’s ambassador to the United States during the presidential transition in late 2016. Flynn has cooperated with Mueller’s ongoing probe since pleading guilty. “Given the defendant’s substantial assistance and other considerations set forth below, a sentence at the low end of the guideline range — including a sentence that does not impose a term of incarceration — is appropriate and warranted,” Mueller’s office wrote in the memo filed Tuesday.

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Stockman is no Trump fan.

Hey, Mr. Trump! Tear Down That Deep State Wall (Stockman)

When the Donald promised to “drain the swamp” during the 2016 election campaign, it did sound vaguely like an attack on Big Government, and at least a directional desire to shrink the state and let free market capitalism breathe. After 22 months in office, however, the truth is patently obvious: The only Swamp that Donald Trump wants to drain is one filled with his political enemies and policy adversaries at any given moment in time. Even then, you have to consult his tweetstorm ledger to know exactly who the swamp creatures de jure actually are. Still, the Donald’s daily Twitter assaults on the Deep State are a wondrous thing. They surely do undermine public confidence in rogue institutions like the FBI, CIA and NSA, which profoundly threaten America’s constitutional liberties and fiscal solvency.

Likewise, his frequently unhinged tweets also lather their congressional sponsors and beltway poo-bahs with well-deserved mud and opprobrium. And the Donald’s increasingly acrimonious public feuding with Deep State criminals like James Comey and John Brennan is just what the doctor ordered. The Deep State thrives and milks the public treasury so successfully in large part because the Imperial City’s corps of permanent policy apparatchiks like Comey and Brennan (and thousands more) pretend to be performing god’s work. So doing, they preen sanctimoniously to the adoration of their sycophants in the mainstream media, claiming to be above any governance or sanction from the unwashed electorate.

Attacking this rotten perversion of democracy, therefore, is the Donald’s real calling. While he lacks both the temperament and ideas to solve the nation’s metastasizing economic and social challenges and has no hope whatsoever to make MAGA, he is more than suited for his “Great Disrupter” mission. That is, the existing order needs to be discredited and brought down first, and on that score his primitive economic populism will more than do its part. As we have previously explained, Trump’s deadly combination of Fiscal Debauchery, Protectionism and Easy Money will eventually blow the nation’s debt and bubble-ridden economy sky-high.

Likewise, his crude rendition of America First is not a blueprint for rebooting America’s national security policy, but it is an existential threat to Empire First and the Deep State’s usurpation of constitutional government. And even as the Donald lurches to and fro on Russia, Korea, the Middle East, NATO, globalism and so-called allies, the main job is getting done. That is, the War Party’s self-appointed role as global policeman and the Indispensable Nation is getting thoroughly discredited.

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“For all the deformities of the EU, France still maintains a general quality-of-life so far above what is found in the US these days that we look like some left-behind evolutionary dead end here in this wilderness of strip-malls and muffler shops…”

The Ghost of Christmas Present (Kunstler)

It’s not hard to see why US life expectancy is going down, driven by the two new leading causes of death: opiate drugs and suicide — the former often in the service of the latter. The citizens of this land have exchanged just about everything that makes life worth living for the paltry rewards of “bargain shopping” and happy motoring. But the worst sacrifice is the loss of any sense of community, of face-to-face human transactions with people you know, people who have duties and obligations to one another that can be successfully enacted and fulfilled. Instead, you get to do all your business with robots, even including the robots fronting for companies that seek to ruin you. “Your call is important to us,” says the telephone robot at the hospital billing office dunning you to fork over $7,000 for the three stitches Little Skippy got when his best friend flew the drone into his forehead. “Please hold for the next available representative.” Who wouldn’t want to shoot themselves?

Interestingly, it’s the people of France who are going apeshit at this moment in history and not the much more beaten-down Americans. For all the deformities of the EU, France still maintains a general quality-of-life so far above what is found in the US these days that we look like some left-behind evolutionary dead end here in this wilderness of strip-malls and muffler shops. They live in towns and cities that are designed to bring people together in public. They support small business in spite of the diktats of Brussels. They maintain an interest in doing things well for its own sake. The French are rioting these days not simply over the cost of diesel fuel but because they’ve had enough impingements on their traditional ways of life and seek to arrest the losses.

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The first in a long series of overborrowed nations.

Australia’s Economy Slows, Debt-Laden Consumers A Deadweight (R.)

Australia’s economy slowed more than expected last quarter as consumers reacted to tepid wage growth by shutting their wallets, a disappointing outcome that sent the local dollar sliding as investors pushed out the chance of any rate hike. The news came as fears of a possible slowdown in the U.S. economy and the Sino-U.S. tariff slugged world shares and threatened future business investment. The gloomy report provides another blow to Australia’s center-right government, which is already lagging in polls ahead of a likely election in May. Wednesday’s report on GDP showed the economy expanded 0.3% in the third quarter, half of what economists had expected.

Second-quarter growth was unrevised at 0.9%. Annual GDP rose by a still-respectable 2.8% to A$1.8 trillion ($1.32 trillion), but confounded expectations in a Reuters poll for a 3.3% increase. The figures also imply growth in the year to June was 3%, rather than the originally report 3.4%. The data will not be welcomed by the Reserve Bank of Australia (RBA), which predicts growth of around 3-1/2% this year and next. “The RBA forecasts are now looking pretty optimistic,” said Tom Kennedy, senior economist at JPMorgan.

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