Jul 252019
 
 July 25, 2019  Posted by at 1:43 pm Finance Tagged with: , , , , , , , , ,  4 Responses »


Salvador Dali The knight of death 1934

 

 

Another article from Alexander Aston, from whom I published among other things the series Quantum, Dada and Jazz this past November.

 

 

“Dulce et Decorum est” is a poem written by Wilfred Owen during World War I, and published posthumously in 1920. The Latin title is taken from Ode 3.2 of the Roman poet Horace and means “it is sweet and fitting …”. It is followed there by “pro patria mori”, which means “to die for one’s country”.

 

 

“The muffled tongue of Big Ben tolled nine by the clock as the cortege left the palace, but on history’s clock it was sunset, and the sun of the old world was setting in a dying blaze of splendour never to be seen again.”

– Barbara W. Tuchman, The Guns of August

 

Alexander Aston: If you have not read Barbara Tuchman’s The Guns of August you should do so, it is one of the great, accessible works of history. Tuchman details with great clarity the diplomatic failures, miscalculations and political logics that ensnared the imperial powers of Europe into the cataclysm of the Great War. It was the book that Kennedy drew upon when navigating the Cuban missile crisis. Just over a century since the guns fell silent in Europe, and nearly fifty years since nuclear holocaust was averted, the world is teetering on what might very well be the largest regional, potentially global, conflict since the second world war.

The United States is a warfare economy, its primary export is violence and it is through violence that it creates the demand for its products. The markets of the Empire are the failed states, grinding civil conflicts, escalating regional tensions and human immiseration created by gun-boat diplomacy. In true entrepreneurial spirit, the United States has repeatedly overestimated its abilities to control the course of events and underestimated the complexities of a market predicated on violence. However, since the beginning of the twenty-first century the American Imperium has proven itself as incompetent as it is vicious. After nearly two decades of intensifying conflicts, a fundamentally broken global economy and a dysfunctional political system, Washington has turned feral, lashing out against decline.

The points of instability in the global system are various and growing, and the only geo-political logics that the Imperium appears to be operating under are threats, coercion, and violence. It is at this moment, with the most erratic president in the country’s history, surrounded by some of the most extreme neo-conservative voices, that the United States has been belligerently stumbling across the globe. In the past few months we have witnessed a surrealistic reimagining of the Latin American coup, the medieval melodrama of Canadian vassals taking a royal hostage from the Middle Kingdom and British buccaneers’ privateering off the coast of Gibraltar. The Imperial system is in a paroxysm of incoherent but sustained aggression.

 

It has long been clear that if another Great War were to emerge, it would likely begin in the Middle East. Just over a century later, we have found ourselves amidst another July crisis of escalating military and diplomatic confrontations. European modernity immolated itself in the Balkans though miscalculation, overconfidence and the prisoners dilemma of national prestige. The conditions of the contemporary Middle East are no less volatile than those of Europe when the Austro-Hungarian Empire decided to attack Serbia. If anything, conditions are far more complex in a region entangled with allegiances and enmities that transgress and supersede the national borders imposed in the wake of the first world war.

The United States’ withdrawal from the JCPOA and the stated aim of reducing Iranian oil exports to zero has enforced a zero-sum logic between the American Imperium and Persia. With each move and counter move the two countries are further entangled into the dynamics of a conflict. Much like the run up to July 28th 1914, tanker seizures, drone shoot downs, sanctions, military deployments and general bellicosity reinforce the rational of the opposing sides and make it harder to back down without losing face and appearing weak.

Due to the asymmetry of the two powers the Iranians have the fewest options for de-escalation while the American establishment perceives the least incentive. This dynamic is further exacerbated by major regional powers agitating for a conflict they believe they will benefit from. Indeed, the slide to war might be inexorable at this point, the momentum of historical causality may have already exceeded the abilities of those in power to control. Czar Nicholas and Kaiser Wilhelm were cousins that desperately wanted to avoid war and were nonetheless impotent to avert disaster. There is nowhere near such intimacy, communication and motivation in our current context.

If war with Iran erupts, the Pax Americana will come to an end and humanity will fully enter a new historical epoch. The most unlikely scenario is an easy victory for the United States, yet even this outcome will only exacerbate the decline of the Empire. The other great powers would expedite their exit from the dollar system and drastically increase investment into the means to counter American hegemony. Likewise, victory would further reinforce Washington’s hubris, generating more serious challenges to the Imperial order and making the US prone to take on even bigger fights. Ironically, easy military success would almost assure the outbreak of a third world war in the long-term.

 

War with Iran would likely ignite violence in Israel-Palestine, Lebanon and Iraq, re-energise and expand the ongoing wars in Syria and Yemen as well as generate sectarian violence and domestic insurgencies across the Middle East. Under such conditions regional actors would likely utilise a dramatically intensifying conflict as cover for their own agendas, for example with a renewed Turkish assault on the Syrian Kurds. The conditions for rapid escalation are extremely high in which non-linear dynamics could easily take hold and quickly outstrip any attempts to maintain control of the situation.

Pyrrhic victory for either side is the most likely outcome, making the parallels to the Great War all the more salient. Global conflagration is a possibility, but with “luck” the fighting could be contained to the region. Nonetheless, amplified refugee crises, supply chain disruptions and immense geopolitical realignments will cascade out of such an event. Undoubtedly, there would be concerted efforts to abandon the dollar system as quickly as possible. Furthermore, rapid increases in the price of oil would all but grind the global economy to a halt within a matter of months, tipping citizenries already saturated with private debt into financial crises.

Furthermore, the entanglement of the military-industrial complex, the petrodollar reserve currency system and the omni-bubble generated by quantitative easing has left the Empire systemically fragile. Particularly, the bubble in non-conventional fuels precipitated by QE, depressed oil prices with scaled down exploration, R&D and maintenance makes the possibility of a self-reinforcing collapse in the American energy and financial systems extremely plausible. It is a Gordian knot which war with Persia would leave in fetters.

The most likely long-term outcome of a war with Iran would be the economic isolation and political fragmentation of the United States. What is assured is that whatever world results it will not look anything like the world since 1945. The first world war collapsed the European world system, dynasties that had persisted for centuries were left in ruins and the surviving great powers crippled by the overwhelming expenditures of blood and treasure. We are on the precipice of another such moment. The American world system is fundamentally dependent upon the relationship between warfare, energy dominance and debt.

 

Conflict is required to maintain control of the energy markets which prop up a financialised economy. A dynamic that puts the nation deeper in hock while amplifying resistance to financial vassalage. Losing energy dominance undermines the country’s reserve currency status and weakens the Empires ability to generate the debt necessary to sustain the warfare economy. Likewise, the system of national and international debt peonage parasitizes global populations to work against their own best interests. This fuels resentment and resistance which further drives the warfare economy. It is, in the inimitably American expression, a “self-licking ice cream cone.”

On August 3rd 1914, one week into the war, the British Foreign Secretary Edward Grey famously remarked that “the lamps are going out across Europe and we shall not see them relit in our lifetime.” At the beginning of the twenty-first century, we face similar, terrifying prospects. Indeed, we could witness the collapse of democratic societies for a very long time to come. If we have any hope of averting calamity we need to generate loud opposition to imperialist warfare.

This does not mean some hackneyed anti-war movement based on past glories and the parochialism of domestic politics, but earnest effort to find common cause in resisting the insanity of those that seek profit in our collective suffering. This means working with people that we have very deep disagreements with by respecting our mutual opposition to the masters of war. It also means serious commitment to strategies such as tax and debt strikes as expressions of non-consent as well as other peaceful means of direct action. Indeed, it is from a place of agreement that we can potentially rebuild civil discourse and renew our trust in the ability of democratic institutions to mediate our quarrels. Perhaps it is too late to change course, but how sweet and fitting it is to face madness with dignity.

 

“What is the cause of historical events? Power. What is power? …power is a word the meaning of which we do not understand. ”

“Kings are the slaves of history.”

– Tolstoy, War and Peace

 

 

Just a thought from Beau of the Fifth Column:

 

 

Dulce et Decorum Est

by Wilfred Owen

Bent double, like old beggars under sacks,
Knock-kneed, coughing like hags, we cursed through sludge,
Till on the haunting flares we turned our backs,
And towards our distant rest began to trudge.
Men marched asleep. Many had lost their boots,
But limped on, blood-shod. All went lame; all blind;
Drunk with fatigue; deaf even to the hoots
Of gas-shells dropping softly behind.

Gas! GAS! Quick, boys!—An ecstasy of fumbling
Fitting the clumsy helmets just in time,
But someone still was yelling out and stumbling
And flound’ring like a man in fire or lime.—
Dim through the misty panes and thick green light,
As under a green sea, I saw him drowning.

In all my dreams before my helpless sight,
He plunges at me, guttering, choking, drowning.

If in some smothering dreams, you too could pace
Behind the wagon that we flung him in,
And watch the white eyes writhing in his face,
His hanging face, like a devil’s sick of sin;
If you could hear, at every jolt, the blood
Come gargling from the froth-corrupted lungs,
Obscene as cancer, bitter as the cud
Of vile, incurable sores on innocent tongues,—
My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old Lie: Dulce et decorum est
Pro patria mori.

 

 

Alexander Aston is a doctoral candidate in archaeology at the University of Oxford and is on the board of directors with the Centre for Cognitive Archaeology at the University of Colorado in Colorado Springs. He has prior degrees in philosophy and history. His work lays at the intersection of Cognitive Archaeology, Deep History and Natural Philosophy, examining the relationship between ecology, material culture and social cognition. Alexander grew up between Zimbabwe, Greece and the United States.

 

 

 

 

Jul 102019
 


Pablo Picasso Guernica [Study] V 1937

 

Jeffrey Epstein Shipped Himself A 53-Pound Shredder (Grim)
Doubts Over Deutsche Bank Turnaround Plan Dent Shaky Shares (R.)
Trump’s Twitter Blocking Violates Constitution – Appeals Court (CNN)
Ocasio-Cortez Sued Over Twitter Blocks (Hill)
Facebook’s New Policy Says It’s OK to Post Death Threats Against Me (PJW)
EU Subsidy Loss ‘Could Wipe Out UK Farms’ Like The Coal Industry (BBC)
UK, France To Send Forces To Syria … But Americans Will Pay (RT)
U.S Wants Military Coalition To Safeguard Waters Off Iran, Yemen (R.)
US Urges Turkey To Halt Drilling Operations Off Cyprus Coast (R.)
EU To Cut Contacts, Aid To Turkey Over Cyprus Drilling Violations (K.)
Turkey Rejects Greek, EU Claims That Drilling Off Cyprus Illegitimate (R.)
Holland Covers Hundreds Of Bus Stops With Plants As Gift To Honeybees (Ind.)
David Attenborough: Polluting Planet May Become As Reviled As Slavery (G.)
Glacial Melting In Antarctica May Become Irreversible (G.)

 

 

The news will be all over Epstein for a long time to come. This overview from Ryan Grim is as good as the next one. We must wait till details start leaking out. Trump Labor Sec. Acosta will be gone, but who else pops up?

Jeffrey Epstein Shipped Himself A 53-Pound Shredder (Grim)

Jeffrey Epstein shipped a shredder from the U.S. Virgin Islands to his Palm Beach home in July 2008, shortly after reaching a non-prosecution agreement with then-U.S. Attorney Alex Acosta, maritime records show. Then, in March of this year, shortly after a Florida federal judge invalidated that agreement, Epstein shipped a tile and carpet extractor from the Virgin Islands to his Manhattan townhouse, the records show. Epstein, a billionaire financier, was arrested in New Jersey last Saturday on charges of running a sex trafficking ring that involved luring underage girls to his New York and Florida residences, and taking them on global flights on his airplane, dubbed the “Lolita Express.”

Epstein was first accused of abusing underage girls, some of them as young as 14, more than a decade ago, and he evaded prosecution potentially due to his high-profile connections. A key challenge investigators faced when first targeting Epstein in the mid-2000s was an inability to obtain evidence through subpoena. A 2005 search of Epstein’s Palm Beach home came up empty in its quest for computers that investigators suspected contained critical evidence connected to his alleged sexual abuse of young girls. In 2007, a federal grand jury subpoenaed the computers. That August, Acosta, who is now Donald Trump’s labor secretary, entered into plea agreement discussions with Epstein.

Because of those talks, a motion to compel production of Epstein’s computers was delayed, according to the Miami Herald. Epstein held out, however, resisting the deal because it would require him to register as a sex offender. The FBI continued investigating and in March 2008, according to the Miami Herald, preparations were being made to take the case to a new federal grand jury. That would prove unnecessary, as Epstein agreed to a deal with Acosta. Without notifying the 32 identified victims, the federal government reached a non-prosecution agreement with Epstein in exchange for his guilty plea in state court to a minor offense. He pleaded guilty on June 30.

On July 7, 2008, federal prosecutors told Epstein’s attorneys via email that they intended to notify the 32 victims about the agreement. Epstein’s lawyers and the prosecutors debated how much of the agreement to reveal, settling on a less than full accounting. A week later, on July 15, Epstein received a shipment at his Palm Beach home from the port in the U.S. Virgin Islands closest to his home there, according to maritime shipping records compiled by ImportGenius and provided to The Intercept. The shipment was a 53-pound shredder.

For the next decade, Epstein’s legal troubles appeared to be behind him. Then, in November 2018, the Miami Herald published a new investigation into Epstein’s alleged child sex trafficking ring, which prompted federal investigators to take a new look at the case. However, the agreement not to prosecute first had to be invalidated. That came on February 21, when a Florida federal judge ruled that Acosta’s office had violated the Crime Victims’ Rights Act by keeping the women in the dark.

Read more …

They’re on “on a week-long roadshow to explain the restructuring”?! What century is this?

Doubts Over Deutsche Bank Turnaround Plan Dent Shaky Shares (R.)

Deutsche Bank shares extended losses on Tuesday on investor doubts that its chief executive can revive the lender by shrinking the investment bank and returning to its roots as banker to corporate Germany. Christian Sewing, CEO for just over a year, and his finance chief are on a week-long roadshow to explain the restructuring. To underline his commitment, Sewing plans to invest a quarter of his fixed salary — around 820,000 euros — in Deutsche shares, a person with knowledge of the matter said. Deutsche’s stock price has fallen 10 percent since Sunday’s restructuring announcement to cut 18,000 jobs in a 7.4 billion euro ($8.3 billion) “reinvention”. It is the biggest two-day decline in almost three years.


By 1312 GMT, shares were down 3.8% on the day, after sliding as much as 6.5% earlier. The bank’s bonds also fell. Analysts and investors say Sewing, who joined Deutsche Bank in 1989, is right to cut back its trading desks but question if he can make his plan work when interest rates are still low and U.S. banks have expanded their share of the German market. “There seems to be some concerns around the plan details, particularly the ability for the bank to retain revenues while cutting costs,” one of the bank’s top 25 shareholders told Reuters, citing worries the bank would need fresh equity to execute Sewing’s plan.

Read more …

But if this applies to Trump, who’s next?

Trump’s Twitter Blocking Violates Constitution – Appeals Court (CNN)

An appeals court said Tuesday that President Donald Trump violated the First Amendment by blocking users on Twitter. The 2nd US Circuit Court of Appeals upheld a New York judge’s ruling and found that Trump “engaged in unconstitutional viewpoint discrimination by utilizing Twitter’s ‘blocking’ function to limit certain users’ access to his social media account, which is otherwise open to the public at large, because he disagrees with their speech.” “We hold that he engaged in such discrimination,” the ruling adds. The judges on the appeals court concluded that “the First Amendment does not permit a public official who utilizes a social media account for all manner of official purposes to exclude persons from an otherwise-open online dialogue because they expressed views with which the official disagrees.”


The challenge to Trump’s unprecedented use of Twitter in office came from seven individuals he blocked, as well as the Knight First Amendment Institute, which argued that the President’s personal account is an extension of his office. The Justice Department argued in March that the President wasn’t “wielding the power” of the federal government when he blocked certain individuals from his personal Twitter account, @realDonaldTrump, because while the President sends tweets in his official capacity, he blocks users as a personal matter. But the appeals court disagreed with that view.

Read more …

The goose and the gander.

Ocasio-Cortez Sued Over Twitter Blocks (Hill)

One former Democratic state lawmaker and one Republican congressional hopeful announced this week that they are suing Rep. Alexandria Ocasio-Cortez (D-N.Y.) over being blocked from her personal Twitter account. Former state assemblyman Dov Hikind (D) and congressional candidate Joseph Saladino, who is running in a Republican primary for the chance to battle Rep. Max Rose (D-N.Y.), announced lawsuits this week against the freshman Democratic congresswoman, seeking injunctive relief in the form of a court order demanding they be unblocked. Saladino announced in a press release that he had filed suit in the Southern District of New York, while Hikind told Fox News that he had filed his claim in the state’s Eastern District.

“I have officially filed my lawsuit against AOC for blocking me on twitter,” Saladino tweeted. “Trump is not allowed to block people, will the standards apply equally? Stay tuned to find out!” “If we can’t talk to one another, the whole system breaks down,” Saladino added in his press release. “Look what is happening in my district when entrenched NeverTrumpers are confronted by America First ideas. Like it or not we live in the same city and we need to be professional.” In an interview with Fox News, Hikind pointed to a recent court ruling declaring that President Trump is not allowed to block critics from his official Twitter account because of his status as a public official as legal precedent for his claim.

“Just today the 2nd Circuit Court of Appeals affirmed a ruling that elected officials cannot block individuals from their Twitter accounts, thereby setting a precedent that Ocasio-Cortez must follow,” Hikind told the network. “Twitter is a public space, and all should have access to the government officials on it.”

Read more …

Think of Paul Joseph Watson what you like, but this is insane. Time to tackle Zuck.

Facebook’s New Policy Says It’s OK to Post Death Threats Against Me (PJW)

Facebook has issued a new policy update saying it’s acceptable to post death threats and incite violence against me, despite this being a crime in the United Kingdom. No, I’m not joking. A Community Standards update published by Facebook states (emphasis mine); “Do not post: Threats that could lead to death (and other forms of high-severity violence) of any target(s) where threat is defined as any of the following: “Statements of intent to commit high-severity violence; or Calls for high-severity violence (unless the target is an organization or individual covered in the Dangerous Individuals and Organizations policy)….”

Back in May, Facebook and Instagram banned me under the justification that I was a “dangerous individual”. They provided no evidence whatsoever that I had behaved in a “dangerous” manner or violated any of their policies. Facebook has designated me a “dangerous individual” and now says it’s acceptable for its users to issue death threats against me. This is a crime in the United Kingdom under the 1988 Malicious Communications Act which states, “Any person who sends to another person a letter, electronic communication or article of any description which conveys….a threat….is guilty of an offence.” The largest social media company in the world with over 2 billion users literally says its fine to incite violence against me, despite this being illegal. They are painting a target on my back.

[..] Two months ago, via my lawyers, I filed a Subject Access Request demanding Facebook turn over all information relating to me. Facebook has yet to respond to this request, despite it being a legal requirement to respond within 30 days. If and when Facebook ever responds to this legal demand, the next step will be to begin litigation proceedings. The fact that Facebook has literally said it’s OK to incite violence against me is going to be a very interesting potential addition to those proceedings.

Read more …

Maybe the coal industry is not the best example in the time of climate crisis.

EU Subsidy Loss ‘Could Wipe Out UK Farms’ Like The Coal Industry (BBC)

With three months to go before the UK could leave the European Union (EU), farmers say they still face uncertainty about future subsidy levels. Last year farmers received £3.5bn in financial support through the EU’s Common Agricultural Policy (CAP). One farmer from York said he feared farms could soon be “wiped out like the coal industry”. The government said farmers had been told subsidy levels would be maintained until the next general election. But the National Audit Office said farmers had been left unable to plan for the future and the main farming union called for “cast-iron commitments” from the government. CAP funding is one of the EU’s biggest policies with a Europe-wide budget worth more than £50bn a year.


The subsidies are designed to support the farming industry and help farmers and landowners maintain their land. Some farmers have said without long-term guarantees about future subsidy levels, farms could disappear from the landscape. “We could be wiped out like the coal industry,” said Roger Hobson, whose 4,500-acre farm near York qualifies for a subsidy worth £100,000 a year. “This is not just about growing food, these subsidies help us improve the landscape and protect endangered species. “What we fear is that in the future the farm industry will have to go to the government and compete for funding alongside the NHS and other public services. “In that situation the government is always going to pick the NHS over farmers.”

Read more …

Don’t.

UK, France To Send Forces To Syria … But Americans Will Pay (RT)

With US President Donald Trump hungry for a withdrawal from Syria, a new report claims Britain and France will send their own forces to pick up the slack, along with other allies. But the swap will cost Washington. Between 1,000 and 2,000 American troops are presently stationed in northeastern Syria, supporting anti-government Kurdish fighters. However, as the US looks to wind down its presence in Syria, the Trump administration has looked to its allies to pick up the slack. Germany rebuffed a request for ground troops on Monday, citing “well known” German policy. Britain and France, on the other hand, are willing to heed Washignton’s call, according to a new report from Foreign Policy.


Both countries have a limited number of special forces on the ground in Syria, and will commit to a troop increase of between 10 and 15 percent to allow the US to withdraw. President Trump is no fan of outsourcing American jobs to foreigners, so why have Britain and France to do America’s dirty work? Well, for one thing, it’ll silence saber-rattlers like John Bolton. Trump announced the US’ complete withdrawal from Syria in December, a country that he said at the time was “sand and death.” The move was seen as a return to the non-interventionist platform he touted during his election campaign, when he mused “why aren’t we letting ISIS go and fight Assad and then we pick up the remnants?”

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Yeah, we really need Europeans involved in the Saudi war on Yemen.

U.S Wants Military Coalition To Safeguard Waters Off Iran, Yemen (R.)

The United States hopes to enlist allies over the next two weeks or so in a military coalition to safeguard strategic waters off Iran and Yemen, where Washington blames Iran and Iran-aligned fighters for attacks, the top U.S. general said on Tuesday. Under the plan, which has only been finalized in recent days, the United States would provide command ships and lead surveillance efforts for the military coalition. Allies would patrol waters near those U.S. command ships and escort commercial vessels with their nation’s flags. Marine General Joseph Dunford, the chairman of the Joint Chiefs of Staff, articulated those details to reporters following meetings on Tuesday about it with acting U.S. Defense Secretary Mark Esper and Secretary of State Mike Pompeo.


“We’re engaging now with a number of countries to see if we can put together a coalition that would ensure freedom of navigation both in the Straits of Hormuz and the Bab al-Mandab,” Dunford said. “And so I think probably over the next couple of weeks we’ll identify which nations have the political will to support that initiative and then we’ll work directly with the militaries to identify the specific capabilities that’ll support that.” Iran has long threatened to close the Strait of Hormuz, through which almost a fifth of the world’s oil passes, if it was unable to export its oil, something U.S. President Donald Trump’s administration has sought as a way to pressure Tehran to renegotiate a deal on its nuclear program.

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Or what? Sanctions? Erdogan is a wounded animal, beware.

US Urges Turkey To Halt Drilling Operations Off Cyprus Coast (R.)

The US State Department on Tuesday urged Turkish authorities to halt energy drilling operations off the Cypriot coast in the Mediterranean, a day after Cyprus protested a Turkish ship dropping anchor there. “This provocative step raises tensions in the region. We urge Turkish authorities to halt these operations and encourage all parties to act with restraint and refrain from actions that increase tensions in the region,” a US State Department spokeswoman said in a statement. Turkey and the internationally recognized government of Cyprus have overlapping claims in that part of the Mediterranean, an area thought to be rich in natural gas.


Cyprus, a member of the European Union, has discovered natural gas in areas off the southern coast of the disputed island, though nothing has been extracted. Turkey contests the rights of Cyprus to explore for gas, sending its own drilling ships to stake claims around the island. Refinitiv Eikon shipping data showed a Turkish ship arrived off the east coast of Cyprus earlier this week. Another Turkish vessel has been spotted off the west of Cyprus since early May. The Cypriot presidency on Monday accused Turkey of a “grave violation,” and an EU statement also rebuked the Turkish action.

Read more …

“Such action could target companies, individuals, and Turkey’s deep-sea hydrocarbon exploration and production sectors..”

EU To Cut Contacts, Aid To Turkey Over Cyprus Drilling Violations (K.)

The European Union is considering suspending most high-level contacts with Turkey and cut the flow of funds in protest of the Turkish drilling activities in the Cyprus EEZ, Bloomberg reports. A range of measures will reportedly be discussed by EU ministers on Wednesday in Brussels. One measure could limit the European Investment Bank’s sovereign-backed lending in Turkey and confirm a cut of some 146 million euros ($163 million) in aid for next year. The options proposed by the European Commission also include suspending all ministerial and leaders’ meetings, as well as ongoing talks between the two sides on an aviation agreement.


The European External Action Service would also advise member states to refrain from high-level contacts with Turkey. Bloomberg reports that EU leaders have sided with Cyprus in the dispute, declaring last month that they are ready to consider sanctions if Turkey continues drilling. Such action could target companies, individuals, and Turkey’s deep-sea hydrocarbon exploration and production sectors, though they aren’t currently on the menu of the commission’s proposals. The measures will likely be agreed Wednesday and approved by EU foreign ministers when they meet in Brussels next week.

Read more …

Turkey claims northern Cyprus is Turkish land.

Turkey Rejects Greek, EU Claims That Drilling Off Cyprus Illegitimate (R.)

Turkey’s foreign ministry said on Wednesday it rejected statements by Greek and European Union officials that Turkish drilling for gas and oil off Cyprus was illegitimate and said the EU could not be an impartial mediator on the Cyprus problem. The ministry said in a statement that Turkey’s Fatih ship had started drilling activities to the west of the Mediterranean island at the start of May and its Yavuz ship had recently arrived to the east of Cyprus and would conduct drilling activities.

Read more …

Sometimes it’s the simplest things. But when they start blabbing about “completely clean public transport”, you know they don’t really have a clue. A long struggle lies ahead.

Holland Covers Hundreds Of Bus Stops With Plants As Gift To Honeybees (Ind.)

The roofs of hundreds of bus stops have been covered in plants as a gift to honeybee, by a city in the Netherlands. Mainly made up of sedum plants, a total of 316 have been covered in greenery in Utrecht. The shelters not only support the city’s biodiversity, such as honey bees and bumblebees, but they also help capture fine dust and store rainwater. The roofs are looked after by workers who drive around in electric vehicles, and the bus stops have all been fitted with energy-efficient LED lights and bamboo benches.

The city aims to introduce 55 new electric buses by the end of the year and have “completely clean public transport” by 2028. The electricity used to power the buses will come directly from Dutch windmills. Utrecht also runs a scheme which allows residents to apply for funding to transform their own roofs into green roofs.

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He woke up late, but he did.

David Attenborough: Polluting Planet May Become As Reviled As Slavery (G.)

The attitude of young people towards tackling the environmental crisis is “a source of great hope”, David Attenborough has told MPs, as he predicted that polluting the planet would soon provoke as much abhorrence as slavery. Giving evidence to the business, energy and industrial strategy committee on how to tackle the climate emergency, the naturalist and TV presenter said radical action was required. Asked by the Tory MP Patrick McLoughlin, a committee member, whether the government’s new commitment of net zero carbon emissions for the UK by 2050 was rapid enough, Attenborough said such targets were not necessarily the best approach. “In a way I would think that is not the way of focusing on the problem,” he said.

“We cannot be radical enough in dealing with the issues that face us at the moment. The question is: what is practically possible? How can we take the electorate with us in dealing with these things?” He said: “The most encouraging thing that I see, of course, is that the electors of tomorrow are already making themselves and their voices very, very clear. And that is a source of great comfort in a way, but also the justification, the reality, that these young people are recognising that their world is the future. “I’m OK, and all of us here are OK, because we don’t face the problems that are coming. But the problems in the next 30 years are really major problems that are going to cause social unrest, and great changes in the way that we live, and what we eat. It’s going to happen.”

Asked by the Labour MP Vernon Coaker to expand on how public attitudes were shifting, Attenborough replied: “There was a time in the 19th century when it was perfectly acceptable for civilised human beings to think that it was morally acceptable to actually own another human being for a slave. And somehow or other, in the space of 20 or 30 years, the public perception of that totally transformed.” He said: “I suspect that we are right now in the beginning of a big change. Young people in particular are the stimulus that’s bringing it about.

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Not surte that talking about things that MIGHT happen in 600 years is very useful…

Glacial Melting In Antarctica May Become Irreversible (G.)

Antarctica faces a tipping point where glacial melting will accelerate and become irreversible even if global heating eases, research suggests. A Nasa-funded study found instability in the Thwaites glacier meant there would probably come a point when it was impossible to stop it flowing into the sea and triggering a 50cm sea level rise. Other Antarctic glaciers were likely to be similarly unstable. Recent research found the rate of ice loss from five Antarctic glaciers had doubled in six years and was five times faster than in the 1990s. Ice loss is spreading from the coast into the continent’s interior, with a reduction of more than 100 metres in thickness at some sites.

The Thwaites glacier, part of the West Antarctic ice sheet, is believed to pose the greatest risk for rapid future sea level rise. Research recently published in the Proceedings of the National Academy of Sciences journal found it was likely to succumb to instability linked to the retreat of its grounding line on the seabed that would lead to it shedding ice faster than previously expected. Alex Robel, an assistant professor at the US Georgia Institute of Technology and the study’s leader, said if instability was triggered, the ice sheet could be lost in the space of 150 years, even if temperatures stopped rising. “It will keep going by itself and that’s the worry,” he said.

Modelling simulations suggested extensive ice loss would start in 600 years but the researchers said it could occur sooner depending on the pace of global heating and nature of the instability. Hélène Seroussi, a jet propulsion laboratory scientist at Nasa, said: “It could happen in the next 200 to 600 years. It depends on the bedrock topography under the ice, and we don’t know it in great detail yet.”

Read more …

 

 

 

 

Nov 202018
 


Henri Rousseau The waterfall 1910

 

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Another Volatility Spike May Be Ahead (Colombo)
FANGMAN Stocks Plunge 4.4%, Down $905 Billion, or 20%, since Aug. 31 (WS)
Nissan-Renault-Mitsubishi Chief Ghosn Arrested Over Financial Misconduct (AFP)
Dozens In Saudi Royal Family Turn Against Crown Prince (R.)
Germany Bans 18 Saudis Linked To Khashoggi Murder From Schengen Zone (AP)
France Says To Decide Soon On Sanctions Over Khashoggi Killing (R.)
Saudis, Houthis Agree To Yemen Peace Talks (ZH)
A Revote Is Necessary After Brenda Snipes Resigns (Vos)
White House Restores Acosta’s Press Pass, Issues News Conference Rules (MW)
Britain’s Enemy Is Not Russia But Its Own Ruling Class (Wight)
Surge In Marine Refuges Brings World Close To Protected Areas Goal (G.)
Fishing Nations Fail In Bid To Cut Quotas For Depleted Bigeye Tuna (AFP)

 

 

Simple and direct swindle. I’ll guarantee your debt if you guarantee mine, it doesn’t matter if we’re both broke. Beijing has known about this for years, but like with the shadow banks, decided to let it flourish because that meets its goals. Both are examples of how China can ‘grow’ its debt, without this showing up in its books. Don’t let the PBOC do it, people can see that.

China’s Next Crisis: Companies Guaranteeing Each Other’s Debt (ZH)

[..] the province of Shandong has emerged as the potential epicenter for the next debt crisis: here, at least 20 private firms provide guarantees that account for at least 10% of their total net assets – a ratio surpassing all other regions, according to Lv Pin, an analyst from CITIC Securities. “Private firms in Shandong have been exposed to more risks as they are caught up in the cross-guarantee trap, with bonds being dumped on the secondary market,” said Chen Su, bond portfolio manager at Qingdao Rural Commercial Bank Co. And, as noted above, local companies started suffering more financing difficulties as banks cut lending to this region earlier this year, Su said.

What makes this particular problem especially vexing is that, like a loose thread, once one company with cross-guarantees finds itself unable to fund its debt obligations, a cross-guarantee cascade is sprung, and dozens of other firms may end up unable to either satisfy their “guaranteed” commitments to the original debtor, until – ultimately – they are unable repay their own creditors. Bloomberg notes that cross-guarantee troubles have been cropping up for a while: “When a disclosure last year showed that Shandong Yuhuang Chemical Co. had guaranteed 1.35 billion yuan of obligations tied to Hongye Chemical Group, yields on Yuhuang’s 2020 dollar note shot up more than 2.30 percentage points in a week.”

For now, there hasn’t been a default serious enough to drag down numerous firms at the same time, although that may soon change. However, to make sure it doesn’t, China is engaging in what it does best to avoid a credit crisis: government funded bailouts. Sure enough, the province of Shandong is making efforts to avert any credit collapse. Its state assets regulator said a government-backed 10 billion yuan fund will be set up to address liquidity risks at listed companies, the China Securities Journal reported on Friday. More broadly, as we reported two weeks ago, China’s central bank has launched initiatives to aid credit to small and medium enterprises, and support bond issuance.

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The spike is guaranteed, it’s only the timing that’s not.

Another Volatility Spike May Be Ahead (Colombo)

The chart below shows the VIX Volatility Index, which appears to be forming a triangle pattern that may indicate that another big move is ahead. If the VIX breaks out of this pattern in a convincing manner, it would likely lead to even higher volatility and fear (which would correspond with another leg down in the stock market). On the other hand, if the VIX breaks down from this pattern, it could be the sign of a more extended market bounce or Santa Claus rally ahead.

In my early-October volatility warning, one of the charts I showed was the inverted 10-year/2-year Treasury spread and how it leads the VIX by approximately three years. According to this logic, the January and October volatility spikes were only the beginning of a much larger bullish volatility cycle (ie., one that accompanies a full-blown bear market).

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Easy money, easy losses.

FANGMAN Stocks Plunge 4.4%, Down $905 Billion, or 20%, since Aug. 31 (WS)

Folks who went through the wholesale Nasdaq destruction of 2000-2002 will just smile mildly because that’s when the Nasdaq, as the dotcom bubble imploded, lost 78%. Given our Everything Bubble is even bigger and crazier, the Nasdaq’s current sell-off barely registers on my own Richter scale, so to speak. The Dow fell 1.6%, is down just 7.2% from its peak, and for the year is clinging to a 1.2% gain. And the S&P 500 dropped 1.7% today and is down 8.5% from the peak. It too remains, if by the thinnest margin, in the green for the year. Nevertheless, real sums have started to evaporate. And much of it happened with the biggest stocks in so-called tech.

The seven FANGMAN stocks – Facebook, Amazon, Netflix, Google’s parent Alphabet, Microsoft, Apple, and NVIDIA – got hosed today. Again. Their combined market cap dropped 4.4% today, giving up $170 billion without breaking into a sweat. Since their combined market-cap peak of $4.63 trillion at the end of August, $905 billion have dissolved into ambient air. Down 19.6% in ca. 11 weeks. Despite the sell-off, the FANGMAN as a whole are still green for the year, and are back where they’d first been on January 11. So, from that perspective, this $905 billion that disappeared isn’t any kind of big deal unless it’s your money that disappeared along with it:

Let’s start by blaming Apple due to its number 1 mega-cap status. Its shares dropped nearly 4% today and are down 20.4% from their peak at the beginning of October. Once upon a time, the company was worth $1.12 trillion. It ended the day at $882 billion. $238 billion gone in ca. eight weeks. Not a day goes by when we don’t hear from an Apple supplier blaming an unnamed huge customer that can only be Apple for having to slash their revenue forecasts – apparently because three iPhone models are not selling very well. Apple’s principle that it can always make up for falling sales of devices by raising prices even further on the fewer devices it sells can only succeed for so long. At some point, consumers switch to something else or just refuse to “upgrade” at an ever faster rate, as Apple has to raise prices at an ever faster rate…. You know where this is going.

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Making tens of millions a year wasn’t enough.

Nissan-Renault-Mitsubishi Chief Ghosn Arrested Over Financial Misconduct (AFP)

Nissan chairman Carlos Ghosn faces being fired this week after being arrested in Japan over allegations of financial misconduct, the firm said Monday, in a stunning fall from grace for one of the world’s best-known businessmen. Ghosn’s arrest and his likely dismissal from Nissan, as well as possibly from Mitsubishi and Renault, sent shockwaves through the auto industry, where he is a towering figure, credited with turning around several major manufacturers. Besides being chairman of Nissan, the 64-year-old is also CEO of Renault and leads the Nissan-Renault-Mitsubishi alliance.

Nissan’s board will meet Thursday to decide his fate, and Mitsubishi said it would propose he be dismissed as chairman “promptly.” Renault said its board would meet “shortly”, after Ghosn was detained over allegations including underreporting his income. At a hastily organised press conference, Nissan CEO Hiroto Saikawa expressed “despair,” but also suggested that Ghosn had accrued too much power and eluded proper oversight. “Too much authority was given to one person in terms of governance,” he told reporters at Nissan’s headquarters in Yokohama. “I have to say that this is a dark side of the Ghosn era which lasted for a long time.”

The news of Ghosn’s downfall emerged unexpectedly on Monday evening, with local media first reporting he was being questioned by prosecutors and that Nissan’s headquarters was being raided. Shortly afterwards, Nissan said in a statement that it had been investigating Ghosn and Representative Director Greg Kelly for months after a whistleblower report. “These two gentleman are arrested this evening, that’s what I understand,” Saikawa said at the press conference. He said the company had uncovered years of financial misconduct including under-reporting of income and inappropriate personal use of company assets.

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Waiting for the King to die. Then let the war games begin. Meanwhile, can Trump afford to contradict the CIA? If he follows the CIA conclusion that MbS did it, what risk is that to the petrodollar? Shouldn’t Congress speak out on this?

Dozens In Saudi Royal Family Turn Against Crown Prince (R.)

Amid international uproar over the killing of journalist Jamal Khashoggi, some members of Saudi Arabia’s ruling family are agitating to prevent Crown Prince Mohammed bin Salman from becoming king, three sources close to the royal court said. Dozens of princes and cousins from powerful branches of the Al Saud family want to see a change in the line of succession but would not act while King Salman – the crown prince’s 82-year-old father – is still alive, the sources said. They recognize that the king is unlikely to turn against his favorite son, known in the West as MbS. Rather, they are discussing the possibility with other family members that after the king’s death, Prince Ahmed bin Abdulaziz, 76, a younger full brother of King Salman and uncle of the crown prince, could take the throne, according to the sources.

Prince Ahmed, King Salman’s only surviving full brother, would have the support of family members, the security apparatus and some Western powers, one of the Saudi sources said. Prince Ahmed returned to Riyadh in October after 2-1/2 months abroad. During the trip, he appeared to criticize the Saudi leadership while responding to protesters outside a London residence chanting for the downfall of the Al Saud dynasty. He was one of only three people on the Allegiance Council, made up of the ruling family’s senior members, who opposed MbS becoming crown prince in 2017, two Saudi sources said at the time.

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Germany decides for 26 other sovereign nations who they can let in (yeah, they talked to France and UK). Can Hungary do the same? If not, that’s a really big problem for the EU. Some more equal than others.

Germany Bans 18 Saudis Linked To Khashoggi Murder From Schengen Zone (AP)

Germany’s foreign minister says Berlin has banned 18 Saudi nationals from entering Europe’s border-free Schengen zone because they are believed to be connected to the killing of journalist Jamal Khashoggi. Heiko Maas told reporters in Brussels on Monday that Germany issued the ban for the 26-country zone in close co-ordination with France, which is part of the Schengen area, and Britain, which is not. “There are more questions than answers in this case, with the crime itself and who is behind it,” he said. Turkish and Saudi authorities say that Khashoggi was killed on Oct. 2 in Istanbul by a team from the kingdom, after he went to the Saudi Consulate to get marriage documents.

Maas said the 18 Saudis are “allegedly connected to this crime” but gave no further information. His Berlin office said they can’t release the names due to German privacy protections. The move comes a day after U.S. President Donald Trump said there was no reason for him to listen to a recording of the “very violent, very vicious” killing of Khashoggi, a columnist for the Washington Post who had been critical of Saudi Crown Prince Mohammed bin Salman.

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They won’t do anything, other than banning a few people pointed out by the Saudi’s themselves: “..we don’t intend to meddle in how the Saudi authorities are going to resolve this.”

France Says To Decide Soon On Sanctions Over Khashoggi Killing (R.)

France will decide very soon to impose sanctions on individuals linked to the murder of Saudi journalist Jamal Khashoggi, Foreign Minister Jean-Yves Le Drian said on Monday. “We are working very closely with Germany at this moment … and we will decide ourselves a certain number of sanctions very quickly over what we know (about the murder),” Le Drian told Europe 1 radio when asked whether Paris would follow Germany in imposing travel bans on Saudi individuals. “But we believe that we need to go beyond that, because the whole truth needs to be known.” “We want all the truth to be established and today it’s not the case. When I say all the truth, I mean the circumstances, those responsible need to be designated and once we’ve decided ourselves on the subject then we’ll take the necessary sanctions.”

French reaction has been relatively guarded given it is keen to retain its influence with Riyadh and protect commercial relations spanning energy, finance and military weapons sales. Asked about a CIA assessment blaming Saudi Crown Prince Mohammed bin Salman (MBS) for the killing and whether he could stay in his position, Le Drian said Paris had no intention of meddling in Saudi affairs. “He took some very strong initiatives that nobody was expecting … very significant initiatives and a modernization project that everyone appreciated,” Le Drian said. “What we’re seeing today is that it’s more complicated than that, but we don’t intend to meddle in how the Saudi authorities are going to resolve this.”

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Look like this might be what he US gets from the Khashoggi killing.

Saudis, Houthis Agree To Yemen Peace Talks (ZH)

The prospect for peace – or at least a lasting ceasefire – is advancing rapidly following a surprise weekend proposal by Yemen’s Houghis to halt all attacks on Saudi coalition forces. On Sunday the head of Yemen’s Iran-backed Houthi Supreme Revolutionary Committee Mohammed Ali al-Houthi, said “We are willing to freeze and stop military operations” — something which now appears to have taken effect, according to a breaking Reuters report. In the biggest turning point in the war which has raged since 2015, Reuters confirms: “Houthi rebels in Yemen said on Monday they were halting drone and missile attacks on Saudi Arabia, the United Arab Emirates and their Yemeni allies, responding to a demand from the United Nations.”

“We announce our initiative…to halt missile and drone strikes on the countries of aggression,” an official Houthi statement reads. Crucially, it appears this halt in fighting was precipitated by a Saudi agreement to the Houthi extension of an olive branch as according to the AFP Yemen’s internationally recognized Saudi-backed government says it has informed UN envoy Martin Griffiths it is ready to take part in proposed peace talks with Houthi rebels to be held in Sweden. “The [Saudi-backed Yemen] government has informed the UN envoy to Yemen … that it will send a government delegation to the talks with the aim of reaching a political solution,” Yemen’s pro-Saudi foreign ministry said, quoted by the official Saba news agency.

[..] On Monday Saudi King Salman told his country’s top advisory body, the Shura Council: “our support for Yemen was not an option but a duty… to help the Yemeni people confront the Iran-backed militias” — choosing to frame the ceasefire as if Riyadh has been on the side of “the people” the whole time. The King agreed there should be a “political solution” and a “comprehensive national dialogue” in Yemen, according to Reuters.

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Tech progress has bypassed the US. It can’t even organize an election.

A Revote Is Necessary After Brenda Snipes Resigns (Vos)

Recent press reports indicated that Brenda Snipes submitted her resignation from her position as Broward County Supervisor of Elections. The news does little to ameliorate the devastating corruption riddling Broward County politics. In the eyes of many observers, Snipes and her associates should rightfully be serving prison sentences for repeated election rigging that became colloquially known as the ‘Brenda Snipes Process.’ Shortly after the news was announced, Tim Canova called for the resignation of Snipes’s Director, Dozel Spencer. Likewise, many point out that Brenda Snipes is simply the public face of a deeply corrupt political system, and without real change, business will most likely continue as usual in the Southern Florida county.

In this writer’s opinion, two steps are as necessary as they are unlikely to be implemented: invalidation of the congressional race in the 23rd Congressional district, and prosecution of those involved in election rigging, including Debbie Wasserman-Schultz. As readers may recall, Brenda Snipes and former DNC Chairwoman Debbie Wasserman Schultz have been responsible for multiple instances actual election interference and actual data breaches that may have benefitted foreign interests. While the entire beltway establishment collectively lost its mind over fictitious allegations of Russian hacking and election interference, the real culprits have escaped both punishment and press scrutiny. It was Wasserman-Schultz who infamously worked to tip the scale in favor of Hillary Clinton’s campaign during the 2016 Democratic Primary.

She is the only defendant named personally in the ongoing DNC Fraud lawsuit, in which lawyers for the defense infamously argued that the DNC has the right to favor one primary candidate over another, later claiming that such practice is protected by the first amendment, despite the fact that it runs contrary to the party’s charter. Shortly before this year’s midterms, Donald Trump’s Department of Justice announced it would not prosecute the Awan scandal, in which Debbie Wasserman-Schultz was also personally embroiled. Disobedient Media’s Kenneth Whittle reported on concerns that the Awan brothers may have passed sensitive material stolen from Congress members to countries including Israel, Saudi Arabia, and China via Pakistan’s intelligence agency, the ISI.

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He gets a single question.

White House Restores Acosta’s Press Pass, Issues News Conference Rules (MW)

The White House said Monday it restored CNN reporter Jim Acosta’s press pass, as well as instituted a set of rules to govern future news conferences. Acosta’s pass had been revoked — then temporarily restored by a judge — following a testy news conference with President Donald Trump. White House press secretary Sarah Sanders said the administration notified Acosta his pass was restored, but also that he and other reporters would need to abide by four rules. The rules direct a journalist to ask a single question; permit journalists follow-up questions at the discretion of the president or other officials; require journalists to give up a microphone to other journalists; and threaten the revocation of journalists’ passes for not respecting the rules.

Sanders also hinted at the possibility more rules could be forthcoming. “It would be a great loss for all if, instead of relying on the professionalism of White House journalists, we were compelled to devise a lengthy and detailed code of conduct for White House events,” she said in a statement. Acosta and Trump sparred at a Nov. 7 news conference. Judge Timothy Kelly, a Trump appointee, later temporarily restored Acosta’s credentials. The rules and restoration of his pass come after the administration initially indicated it planned to try to keep excluding the CNN reporter from the White House.

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Not a lot of shame left there. Straight back to the days of Marx and Dickens.

Britain’s Enemy Is Not Russia But Its Own Ruling Class (Wight)

As the UK political establishment rips itself to pieces over Brexit, a far greater crisis continues to afflict millions of victims of Tory austerity. A devastating UN report into poverty in the UK provides incontrovertible evidence that the enemy of the British people is the very ruling class that has gone out of its way these past few years to convince them it is Russia. Professor Philip Alston, in his capacity as the United Nations Special Rapporteur on extreme poverty and human rights, spent two weeks touring the United Kingdom. He did so investigating the impact of eight years of one of the most extreme austerity programs among advanced G20 economies in response to the 2008 financial crash and subsequent global recession.

What he found was evidence of a systematic, wilful, concerted and brutal economic war unleashed by the country’s right-wing Tory establishment against the poorest and most vulnerable section of British society – upending the lives of millions of people who were not responsible for the aforementioned financial crash and recession but who have been forced to pay the price. From the report’s introduction: “It…seems patently unjust and contrary to British values that so many people are living in poverty. This is obvious to anyone who opens their eyes to see the immense growth in foodbanks and the queues waiting outside them, the people sleeping rough in the streets, the growth of homelessness, the sense of deep despair that leads even the Government to appoint a Minister for Suicide Prevention and civil society to report in depth on unheard of levels of loneliness and isolation.”

Though as a citizen of the UK I respectfully beg to differ with the professor’s claim that such social and economic carnage seems “contrary to British values,”(on the contrary it is entirely in keeping with the values of the country’s Tory establishment, an establishment for whom the dehumanization of the poor and working class is central to its ideology), the point he makes about it being “obvious to anyone who opens their eyes,” is well made. For it is now the case that in every town and city centre in Britain, it is impossible to walk in any direction for more than a minute before coming across homeless people begging in the street. And the fact that some 13,000 of them are former soldiers, casualties of the country’s various military adventures in recent years, undertaken in service to Washington, exposes the pious platitudes peddled by politicians and the government as reverence for the troops and their ‘sacrifice,’ as insincere garbage.

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Oh yeah, we’re doing just great. Paper parks don’t protect a thing.

Surge In Marine Refuges Brings World Close To Protected Areas Goal (G.)

A record surge in the creation of marine protected areas has taken the international community close to its goal of creating nature refuges on 17% of the world’s land and 10% of seas by 2020, according to a new UN report. Protected regions now cover more than five times the territory of the US, but the authors said this good news was often undermined by poor enforcement. Some reserves are little more than “paper parks” with little value to nature conservation. At least one has been turned into an industrial zone. More than 27m square kilometres of seas (7% of the total) and 20m sq km of land (15% of the total) now have protected status, according to the Protected Planet report, which was released on Sunday at the UN biodiversity conference in Sharm el-Sheikh, Egypt.

Almost all of the growth has been in marine regions, most notably with the creation last year of the world’s biggest protected area: the 2m sq km Ross Sea reserve, one-fifth of which is in the Antarctic. The no-fishing zone will be managed by New Zealand and the US. “We have seen an enormous expansion in the past two years. There is now more marine protected area than terrestrial, which nobody would have predicted,” said Kathy McKinnon of the International Union for the Conservation of Nature. “I think we’ll continue to see a substantial increase, I’d guess, to at least 10% in the near future.” The UN convention on biological diversity says it has received national commitments for an additional 4.5m sq km of land and 16m sq km of oceans to be given protected status in the next two years.

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I have an idea how this is going to end. Jellyfish sandwiches.

Fishing Nations Fail In Bid To Cut Quotas For Depleted Bigeye Tuna (AFP)

Dozens of nations on Monday failed to agree on measures to preserve one of the planet’s most valuable fish: the bigeye tuna, backbone of a billion-dollar business that is severely overfished. Some 50 countries as well as European Union member states wrapped up a meeting of the International Commission for the Conservation of Atlantic Tunas (ICCAT) in the Croatian seaside city of Dubrovnik without reaching a consensus on quotas. “It’s a setback and it’s bad news,” said Javier Garat Perez, secretary general of the Spanish fishing confederation Cepesca. Scientists shocked many in the industry last month when they warned that unless catch levels are sharply reduced, stocks of the fatty, fast-swimming predator could crash within a decade or two.

They warned that populations had fallen to less than 20 percent of historic levels. Less iconic than Atlantic bluefin but more valuable as an industry, bigeye (Thunnus obesus) – one of several so-called tropical tunas – is prized for sashimi in Japan and canned for supermarket sales worldwide. Three years ago, ICCAT introduced a 65,000-tonne catch limit for the seven largest fishers of bigeye, and a moratorium in certain areas of ocean. But other countries are not bound by the quotas, and bigeye hauls last year topped 80,000 tonnes – far too high to begin replenishing stocks.

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Nov 102018
 
 November 10, 2018  Posted by at 10:15 am Finance Tagged with: , , , , , , , , , ,  4 Responses »


Peter Stackpole SophiaLoren in a Manhattan Coffee, NYC 1958

 

Burying the Other Russia Story (WSJ Op-Ed)
No Blue Wave In 2018, But A Tsunami Of Hate (ZH)
Post Mortem (Kunstler)
‘Democrats Won The House But Trump Won The Election’ – And 2020 Is Next (G.)
Federal Court Asks How Sessions Ouster Impacts Lawsuit Challenging Mueller (R.)
Tech’s Big Five Lost A Combined $75 Billion In Market Value On Friday (CNBC)
Yelp Craters As Much As 32% As Advertisers Abandon The Site (CNBC)
Jeremy Corbyn Says Brexit ‘Can’t Be Stopped’ (Ind.)
New Blow To Theresa May As EU Leaders Demand Scrutiny Of Brexit Deal (G.)
US Crude Oil Posts Longest Losing Streak In Over 34 Years (CNBC)
There Will Be An Oil Shortage In The 2020s, Goldman Sachs Says (CNBC)
EU Version Of Budget Would Be Economic ‘Suicide’ For Italy – Tria (CNBC)
US Won’t Refuel Saudi Coalition Planes Bombing Yemen Anymore (RT)
UK Supermarket Anti-Palm Oil Ad Banned For Being Too Political (R.)

 

 

As the post-midterms wars of words escalate, the Wall Street Journal’s editors try to provide some balance.

Burying the Other Russia Story (WSJ Op-Ed)

Arguably the most important power at stake in Tuesday’s election was Congressional oversight, and the most important change may be Adam Schiff at the House Intelligence Committee. The Democrat says his top priority is re-opening the Trump-Russia collusion probe, but more important may be his intention to stop investigating how the FBI and Justice Department abused their power in 2016. So let’s walk through what we’ve learned to date. Credit for knowing anything at all goes to Intel Chairman Devin Nunes and more recently a joint investigation by Reps. Bob Goodlatte (Judiciary) and Trey Gowdy (Oversight).

Over 18 months of reviewing tens of thousands of documents and interviewing every relevant witness, no Senate or House Committee has unearthed evidence that the Trump campaign colluded with Russia to win the presidential election. If Special Counsel Robert Mueller has found more, he hasn’t made it public. But House investigators have uncovered details of a Democratic scheme to prod the FBI to investigate the Trump campaign. We now know that the Hillary Clinton campaign and the Democratic National Committee hired Fusion GPS, which hired an intelligence-gun-for-hire, Christopher Steele, to write a “dossier” on Donald Trump’s supposed links to Russia.

Mr. Steele fed that document to the FBI, even as he secretly alerted the media to the FBI probe that Team Clinton had helped to initiate. Fusion, the oppo-research firm, was also supplying its dossier info to senior Justice Department official Bruce Ohr, whose wife, Nellie, worked for Fusion. House investigators have also documented the FBI’s lack of judgment in using the dossier to obtain a Foreign Intelligence Surveillance Act (FISA) warrant against former Trump aide Carter Page. The four FISA warrants against Mr. Page show that the FBI relied almost exclusively on the unproven Clinton-financed accusations, as well as a news story that was also ginned up by Mr. Steele.

[..] All of which puts an additional onus on Mr. Trump to declassify key FBI and Justice documents sought by Mr. Nunes and other House investigators before Mr. Schiff buries the truth. A few weeks ago Mr. Trump decided to release important documents, only to renege under pressure from Deputy AG Rod Rosenstein and members of the intelligence community. Mr. Sessions resigned this week and perhaps Mr. Rosenstein will as well. Meantime, Mr. Trump should revisit his decision and help Mr. Nunes and House Republicans finish the job in the lame duck session of revealing the truth about the misuse of U.S. intelligence and the FISA court in a presidential election.

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What happened to Tucker Carlson’s wife is inexcusable.

No Blue Wave In 2018, But A Tsunami Of Hate

In the early evening following the midterm elections, Fox News host Tucker Carlson’s wife was home alone when she suddenly became startled by a loud thumping at her door. The thumping came from a group of Antifa radicals, whose desire it was to strike terror into the hearts of Carlson’s family. Susan Carlson ran upstairs as the mob that CNN refers to as “protesters” screamed disgusting threats at the Carlson residence, spray-painted the driveway and continued to try to force entry through the front door, which they broke. The only thing seemingly missing from this display of intimidation and hatred were burning tiki torches.

While the radical left seems preoccupied with labeling everyone that disagrees with their political views as white supremacist Nazis, including Israel-loving Middle Eastern women such as myself, threatening displays like this seem awfully similar to the days of the KKK burning crosses on the lawns of blacks they wanted to leave town. That was the message these radicals wanted to send to Tucker Carlson, along with his wife and children, who thank God were not home at the time: leave town and shut up. As someone who has had my own personal address posted publicly by a leftist reporter, the thought of a mother of four hiding in her upstairs closet fearing for her life sends chills down my spine, as it should any decent human being.

How did we get here? Let’s take a trip down memory lane: “Let’s make sure we show up wherever we have to show up … If you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out and you create a crowd, and you push back on them, and you tell them they’re not welcome anymore, anywhere.” Those were the exact words of Congresswoman Maxine Waters at a rally in June 2018. Waters then doubled down on her calls for intimidation and harassment in an MSNBC interview, declaring that she has “no sympathy” for Trump supporters. “The people are going to turn on them. They’re going to protest. They’re going to absolutely harass them until they decide that they’re going to tell the president, ‘No, I can’t hang with you.’

[..] Former Obama Attorney General Eric Holder recently corrected Michelle Obama’s notion that “when they go low, we go high,” referring of course to anyone who didn’t support her husband’s political agenda. “When they go low, we kick them. That’s what this new Democrat party is all about.” Holder proclaimed to a crowd of cheering supporters. Or how about former Secretary of State Hillary Clinton’s statement, “You cannot be civil with a political party that wants to destroy what you stand for, what you care about. That’s why I believe if we are fortunate enough to win back the House and/or the Senate, that’s when civility can start again.”

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As we’ve said many times: declassify the whole thing.

Post Mortem (Kunstler)

Of course The New York Times is no longer a newspaper in the traditional sense, but an advocacy and propaganda arm of the Democratic Party. They’re pushing this desperate gambit because it’s clear that Mr. Trump is taking the gloves off now in this long-running battle. What’s at stake is whether the DOJ will prosecute the actual and obvious collusion that occurred during and after the 2016 election — namely, the misconduct of the highest DOJ and FBI officials in collusion with the Hillary Clinton campaign to cook up the bogus Russia-gate case, and the subsequent scramble to cover up their activities when Mrs. Clinton lost the election and they realized the evidence trail of this felonious activity would not be shoved down the memory hole by Clinton appointees.

The result has been two years with no evidence of Trump-Russia collusion and two years of DOJ / FBI stonewalling over the release of pertinent documents in the matter. There is already an established and certified evidence trail indicating that James Comey, Andrew McCabe, Peter Strzok, Bruce and Nellie Ohr, Lisa Page, and others (including former CIA Director John Brennan and former DNI James Clapper) acted illegally in politicizing their offices. Some of these figures have been subject to criminal referrals by the DOJ Inspector General, Mr. Horowitz. Some of them are liable to further criminal investigation Many of them have been singing to grand juries out of the news spotlight.

Whether Mr. Whitaker remains in his new role, or is replaced soon by a permanent AG confirmed by the Senate, the momentum has clearly shifted. The Democrats, and especially the forces still aligned with Hillary, are running scared all of a sudden. Thus, all the bluster coming from party hacks such as Rep. Jerrold Nadler (D-NY 10th Dist), and Senate Minority Leader Chuck Schumer (D-NY). Mr. Nadler takes the gavel of the House Judiciary Committee in January and is promising a three-ring circus of investigations when he does. If the House moves to a quixotic impeachment effort, they will find that to be a dangerous two-way street, since Mr. Trump’s legal team can also introduce testimony in his defense that will embarrass and incriminate the Democrats. Anyway, the Senate is extremely unlikely to convict Mr. Trump in a trial.

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I understand the thinking, but really, Nikki Haley?!

‘Democrats Won The House But Trump Won The Election’ – And 2020 Is Next (G.)

Henry Olsen, a senior fellow at the Ethics and Public Policy Center thinktank, said Trump had both won and lost. “There’s a split verdict. The voters who made him came back and he maintained a 46% coalition. He lost the voters he lost two years ago in slightly bigger numbers. The Clinton coalition is strong and growing stronger, but it’s electorally inefficient. Trump has kept his minority coalition together and all he needs is a slight improvement to be assured of re-election.” Speaking at the American Enterprise Institute (AEI) thinktank on Thursday, Olsen noted the growing percentage of women in the Democratic party and suggested: “I think it’s very likely that Donald Trump will be facing a woman.”

“And if Donald Trump, who’s known to be ruthless to subordinates, wanted to change the odds in his favour, I think he should dump Mike Pence and select [former UN ambassador] Nikki Haley. “The biggest thing that the Democrats continually push, and the media continually push, is that he is a racist and a sexist, and that is one of the things that weighs very heavily on the Rino- [“Republican in name only”] educated person. So you say: ‘I’ve changed America and the person who’s going to continue this is going to be a competent executive who understands foreign policy and ran her state and is a woman of colour, Nikki Haley.’ It will flummox the left.”

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How legal is Mueller’s appointment, and his investigation? If there is genuine doubt, the legal system should speak.

Federal Court Asks How Sessions Ouster Impacts Lawsuit Challenging Mueller (R.)

A federal appeals court that is weighing a legal challenge to Special Counsel Robert Mueller’s authority said Friday it wanted to know whether the sudden ouster of Attorney General Jeff Sessions could impact or change the outcome of how it should rule. The court’s order directed each party in the case to file briefs by Nov. 19 outlining, “what, if any effect, the November 7, 2018 designation of an Acting Attorney General different from the official who appointed Special Counsel Mueller has on this case.” The order came one day after a three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments on whether Mueller was unlawfully appointed by Deputy Attorney General Rod Rosenstein in May 2017 and wielded too much power.

The challenge to Mueller’s authority was being brought by Andrew Miller, an associate of President Donald Trump’s long-time political adviser, Roger Stone. Several of Stone’s associates have been subpoenaed by a grand jury in recent months, as part of Mueller’s probe into whether Trump’s campaign colluded with Russia. Miller defied the subpoena in May, was later held in civil contempt, and filed a lawsuit alleging that Mueller’s appointment violated the U.S. Constitution and also that Rosenstein had no authority to hire him. Mueller was named special counsel by Rosenstein after Sessions recused himself from the probe. However, Rosenstein lost his role as Mueller’s supervisor on Wednesday after Trump forced Sessions to resign and replaced him with Matt Whitaker.

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The losses continue to add up.

Tech’s Big Five Lost A Combined $75 Billion In Market Value On Friday (CNBC)

It was a down day for big tech. Apple, Microsoft, Amazon, Alphabet and Facebook — the five most valuable U.S. tech companies — lost a combined $75 billion in market value on Friday. They led a 1.7 percent drop in the S&P 500 tech index and a similar slide in the tech-heavy Nasdaq. Amazon was the worst performer of the group, dropping 2.4 percent. Stocks fell across the board Friday as declines in oil prices and skepticism about a trade deal with China raised concerns that economic growth is headed for a slowdown. Thursday’s report from the Federal Reserve pointing to future rate hikes compounded worries and sent investors fleeing from tech companies, which are particularly susceptible to swings in the economy.

Tech stocks are coming off their worst month since 2008. The Nasdaq closed October down 9.2 percent, with Amazon and Alphabet leading the decline down 20 percent and 9.7 percent, respectively. Analysts were underwhelmed by recent tech earnings reports, including those from Amazon, Apple and Alphabet. Amazon gave lower-than-expected guidance going into the holiday season and Apple announced it would no longer disclose unit sales for iPhone, iPad and Mac devices.

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Because Google, Facebook have monopolized ads.

Yelp Craters As Much As 32% As Advertisers Abandon The Site (CNBC)

Yelp cratered as much as 32 percent Friday, a day after releasing third-quarter earnings that revealed advertisers are abandoning the site and denting revenue. Shares fell as low as $29.33, a new 52-week low, before paring some losses to close nearly 27 percent down at $31.92. The plunge makes for the stock’s worst day of trading since going public in 2012. Yelp added zero net new advertising customers during the quarter. Yelp earlier this year switched from long-term advertising contracts in local markets to more flexible, nonterm contracts. That change resulted in significant contract cancellations. Though the cancellations were expected, Yelp failed to compensate with lower-than-expected gross customer adds.

The company reported revenue of $241 million for the quarter, just shy of analyst projections of $245 million. “We do not believe that there was any one single factor behind the new sales shortfall relative to our expectations. Instead, a number of smaller, compounding issues arose, including slower-than-expected sales head count growth, a change in advertising promotions, a technical issue in flowing leads to our reps and a lower success rate in contacting business decision-makers by our outbound sales calls,” Chief Financial Officer Charles Baker said on the company’s earnings call.

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Not sure Corbyn defying his own party is all that wise.

Jeremy Corbyn Says Brexit ‘Can’t Be Stopped’ (Ind.)

Jeremy Corbyn has said that Brexit cannot be stopped in a blow to Labour MPs trying to inch the party towards backing a second referendum. The Labour leader’s comments mark a departure from the party’s official position, which leaves the prospect of fresh vote firmly on the table, including the option to remain in the European Union. Labour’s preferred option is to campaign for a general election but as the Brexit talks enter the chaotic final stages, the party is under pressure to soften its stance towards a new public vote. It comes as transport minister Jo Johnson dramatically resigned in protest at Theresa May’s Brexit plan, saying Britain is “barrelling towards an incoherent Brexit” and demanding a Final Say referendum.

Delegates at Labour’s conference in September, voted overwhelmingly in favour of a motion saying the party “must support all options remaining on the table, including campaigning for a public vote”. Shadow Brexit secretary Keir Starmer also received a standing ovation when he told the conference hall that remaining in the EU could be on the ballot paper in a future vote. But tensions remain over the issue, as influential figures such as Unite boss Len McCluskey and shadow chancellor John McDonnell are unenthusiastic about a re-run of the Brexit vote. Labour has agreed to vote down the prime minister’s Brexit deal if it fails to measure up to its tests on jobs and workers’ rights, which senior figures believe could allow Labour to pursue its preferred option – a general election.

In an interview with the German newspaper Der Spiegel, Mr Corbyn was asked if he would stop Brexit. He replied: “We can’t stop it. The referendum took place. Article 50 has been triggered. What we can do is recognise the reasons why people voted Leave.” Mr Corbyn said the Brexit vote was triggered by people who were “totally angered” by the way their communities had been left behind. He also indicated he felt sorry for the prime minister over the “impossible task” of reaching agreement with Brussels and uniting the Tory party, Mr Corbyn said: “I am a decent human being, I feel sorry for anyone in distress. But the best way for anyone to alleviate distress is to take yourself away from the source of it.”

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Everyone wants a say, of course they do, both in Europe and in the UK.

New Blow To Theresa May As EU Leaders Demand Scrutiny Of Brexit Deal (G.)

Theresa May has been dealt a blow in the Brexit negotiations by EU leaders ahead of a crunch week during which the Brexit secretary, Dominic Raab, had been expected to visit Brussels to unveil the negotiated agreement. Ambassadors for the EU27, including France and Germany, told the European commission that they would need to scrutinise any deal reached with the British before it was made public and a special summit called. The EU’s chief negotiator, Michel Barnier, has largely been given free rein until now. An “optimistic” timetable would have seen Raab arrive on Tuesday to present the legal text agreed between the commission and the British government.

But during a two-hour meeting with the the EU’s deputy chief negotiator, Sabine Weyand, the member states’ representatives insisted they would not be steamrollered into accepting the agreement secured between the two negotiating teams. They told the commission they would need the best part of a week to go through the text should there be an agreement in a sign of the growing nervousness over the prospect of giving away an all-UK customs union in the withdrawal agreement. The development makes it less likely that a November Brexit summit could be convened. EU officials have privately said that 25 November is the last possible date for a summit, and that it would need to be called early next week to allow preparations in EU capitals. May’s chief Brexit adviser, Olly Robbins, is expected to visit Brussels on Sunday given the lack of time to find agreement.

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Hmmm. China shutting down? Note that this happens as the Iran sanctions are still waiting in the wings.

US Crude Oil Posts Longest Losing Streak In Over 34 Years (CNBC)

U.S. crude prices fell Friday for a 10th consecutive session, sinking deeper into bear market territory and wiping out the benchmark’s gains for the year. The 10-day decline is the longest losing streak for U.S. crude since mid-1984, according to Refinitiv data. Crude futures fell for a fifth straight week as growing output from key producers and a deteriorating outlook for oil demand deepen a sell-off spurred by October’s broader market plunge. The drop marks a stunning reversal from last month, when oil prices hit nearly four-year highs as the market braced for potential shortages once U.S. sanctions on Iran snapped back into place.

“The market’s not tight. I think there are windows where you could perceive it to be tight, and I think the markets got caught into that,” Christian Malek, head of EMEA oil and gas research at J.P. Morgan, told CNBC on Friday. “The reality is that we’re still in a world where we’re overproducing and we’ve got surplus.” U.S. West Texas Intermediate crude settled 48 cents lower at $60.19 on Friday. The contract is now down nearly half a percent this year. It fell as low $59.26 on Friday, its weakest level in about nine months.

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Ha! Help is on the way for Big Oil.

There Will Be An Oil Shortage In The 2020s, Goldman Sachs Says (CNBC)

An oil shortage is coming says Goldman Sachs, because firms cannot fully invest in future production. Global oil majors are increasingly looking to invest in lower-carbon areas of the energy sector, as they react to pressure for cleaner energy, both from government policy and investors. “In the 2020’s we are going to have a clear physical shortage of oil because nobody is allowed to fully invest in future oil production,” Michele Della Vigna, Head of EMEA Natural Resources Research at Goldman Sachs told CNBC Friday. “The low carbon transition will come through higher, not lower oil prices,” he told CNBC’s “Squawk Box Europe.”

Della Vigna said “Big Oils” are starting to understand that if they want to be widely owned by investors, they need to show that they are serious about minimizing the amount of carbon in the atmosphere. The Goldman analyst said oil firms only had to look at the steep derating of coal companies over the last 5 years to understand the shift in investor sentiment. Della Vigna said until a transition to full renewables is made, the interim battle will be to own a greater market share of gas-based power. The analyst said with a huge capital cost of gas infrastructure, big state-backed companies looked best placed. “We talk about the new seven sisters emerging, dominating the global oil and gas market because nobody else can finance these mega-projects,” he said.

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Brussels is risking its own powers.

EU Version Of Budget Would Be Economic ‘Suicide’ For Italy – Tria (CNBC)

Brussels and Rome are in a constant back and forth over budget negotiations but analysts told CNBC that it is the markets that matter the most. Officials from the European Union (EU) and Italy have found themselves in a deadlock after the former’s economic forecasts showed the Italian economy would grow at a slower pace in the next two years than Rome thinks. The Italian government was quick to dismiss, blaming the EU for its “inadequate and partial” analysis of the country’s spending plans. These comments came after Brussels said earlier on the day that Italy’s 2019 deficit will reach 2.9 percent and not 2.4 percent as Rome insists.

Both sides have clashed over Italy’s 2019 budget plans after the anti-establishment government promised to increase spending, challenging European fiscal rules. On Friday, Italy’s Economy Minister Giovanni Tria said Brussels’ proposed deficit cuts would be “suicide” for the country’s economy. The unyielding stance from Rome triggered a rise in the yield spread between German and Italian debt, a common measure of risk for European investors. Analysts told CNBC the standoff looks set to continue, and that the EU is laying the ground to open the process that could eventually lead to sanctions — though no EU country has ever been fined for breaching spending limits.

[..] Yields on Italian debt have risen significantly since May — when the two populist parties, Five Star Movement and Lega, joined forces to form the next cabinet. Investors have fretted about the government’s spending plans given that Italy has a massive debt pile — the second largest in the EU at about 130 percent of GDP. In the last seven days alone, the yield on the 10-year Italian bond is up by about 12 basis points. Looking at its performance throughout the year, there has been an increase of about 172 basis points. “The true guardians of fiscal discipline will be, as usual, financial markets,” Lorenzo Codogno, chief economist at LC Macro Advisors said in a note to clients Thursday.

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WIll Khashoggi’s death be good for something after all?

US Won’t Refuel Saudi Coalition Planes Bombing Yemen Anymore (RT)

The Saudi-led coalition fighting in Yemen is opting to refuel its aircraft independently going forward, ending a controversial collaboration with US military assets. The Saudi Press agency released a statement on Saturday explaining that the coalition was able to “increase their capacity” for refueling their aircraft and would do so independently going forward. US Secretary of Defense Jim Mattis confirmed the decision was made in consultation with the US government. On Friday, Reuters reported, citing unnamed US officials, that Washington considering ending the refueling of coalition aircraft in Yemen, citing both the coalition’s own increased capabilities and growing international outrage over the human consequences of the war in Yemen.

Opposition to US collaboration with the Saudi coalition in Yemen has increased following the murder of journalist Jamal Khashoggi at the Saudi consulate in Istanbul. The Saudi-led coalition has been accused of targeting hospitals, water infrastructure, and other civilian targets, and raids on wedding parties and the recent bombing of a school bus have sparked international condemnation. The US and UK have both been criticized for continuing to sell arms to the coalition despite their targeting of civilians and alleged war crimes.

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If ever you want to know who f*cked and f*cked up we are. Supermarkets can sell a million products for which a million acres of rainforests are burned and cut down. But when one of them decides not to play that game, its message is forbidden because it’s too political.

What a lovely Christmas ad. We should have tons of those. And of course you can ask how much of it is aimed at profits, but banning it is insane.

“There’s a human in my forest and I don’t know what to do. He destroyed all of our trees for your food and your shampoo.”

UK Supermarket Anti-Palm Oil Ad Banned For Being Too Political (R.)

British supermarket chain Iceland has been banned from showing its Christmas advert on television because it has been deemed to breach political advertising rules. The discount supermarket company planned to use a Greenpeace-made animated short film, voiced by actress Emma Thompson, called “Rang-tan”, about the destruction of the rainforest caused by palm oil production and its impact on endangered orangutans. Iceland, which earlier this year announced its intention to remove palm oil from its products by the end of 2018, said the film fitted its agenda, leading to its decision to use the film as its Christmas advert.

The film was banned by Clearcast, which is responsible for the clearance of television ads before they are broadcast, on the grounds of it being seen to support a political issue. Under the 2003 Communications Act, an advert is deemed to contravene the bar on political advertising if it is “wholly or mainly of a political nature” or is “directed towards a political end”. Iceland, which trades from 900 stores and specializes in frozen food, said it hoped the advert would raise awareness and improve people’s understanding of rainforest destruction from palm oil production, which it said appears in more than 50 percent of all supermarket products.

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Oct 312018
 
 October 31, 2018  Posted by at 9:59 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Francisco Goya Witches’ Sabbath 1798

 

US Calls For Yemen Ceasefire, Peace Talks ‘In The Next 30 Days’ (AFP)
Erdogan Urges Saudi Prosecutor To Find Out Who Ordered Khashoggi Hit (AFP)
Housing Market Now ‘Reminds Me Of 2006′ – Robert Shiller (MW)
China Debt Bomb Ready to Explode (Rickards)
China Factory Growth Weakest In Over 2 Years, Export Orders Slump Deepens (R.)
Ray Dalio Hails Paul Volcker As ‘The Greatest Man’ He Knows (MW)
The Monster Mash (Kunstler)
No-Deal Brexit Would Trigger Lengthy UK Recession – S&P (G.)
Welcome to the Jungle (Escobar)
After Germany’s Merkel Comes Chaos (John Rubino)
Ocean Shock (Reuters)

 

 

Both Mattis and Pompeo, a coordinated effort. 30 days seems ambitious, but MbS doesn‘t have much leverage left.

US Calls For Yemen Ceasefire, Peace Talks ‘In The Next 30 Days’ (AFP)

The United States called Tuesday for a ceasefire and peace talks in Yemen, as the Saudi-led military coalition sent more than 10,000 new troops toward a vital rebel-held port city ahead of a new assault. Pentagon chief Jim Mattis said the US had been watching the conflict “for long enough,” adding that Saudi Arabia and the United Arab Emirates, which are in a US-backed coalition fighting Shiite Huthi rebels, are ready for talks. “We have got to move toward a peace effort here, and we can’t say we are going to do it some time in the future,” Mattis said at the US Institute of Peace in Washington. “We need to be doing this in the next 30 days.”

He said the US is calling for all warring parties to meet with United Nations special envoy Martin Griffiths in Sweden in November and “come to a solution.” US-Saudi ties have cooled in recent weeks after the murder of journalist Jamal Khashoggi, a prominent critic of the conservative kingdom, that has also tarnished the image of Crown Prince Mohammed bin Salman. Saudi Arabia and its allies intervened in the conflict between embattled Yemeni President Abedrabbo Mansour Hadi, whose government is recognized by the United Nations, and the Huthis in 2015. Nearly 10,000 people have since been killed and the country now stands at the brink of famine, with more than 22 million Yemenis — three quarters of the population — in need of humanitarian assistance.

[..] US Secretary of State Mike Pompeo called for an end to all coalition air strikes in Yemen’s populated areas. “The time is now for the cessation of hostilities, including missile and UAV (drone) strikes from Huthi-controlled areas into the Kingdom of Saudi Arabia and the United Arab Emirates,” Pompeo said in a statement. “Subsequently, coalition air strikes must cease in all populated areas in Yemen.”

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Body still not found.

Erdogan Urges Saudi Prosecutor To Find Out Who Ordered Khashoggi Hit (AFP)

Turkish President Recep Tayyip Erdogan on Tuesday called on Saudi Arabia’s chief prosecutor to find out who ordered the murder of journalist Jamal Khashoggi, and not spare “certain people” in his investigation. “Who sent these 15 people? As Saudi public prosecutor, you have to ask that question, so you can reveal it,” Erdogan said, referring to the 15-man team suspected of being behind the hit. “Now we have to solve this case. No need to prevaricate, it makes no sense to try to save certain people,” he told reporters in Ankara. Khashoggi was killed after entering the Saudi consulate in Istanbul on October 2 to obtain paperwork ahead of his upcoming wedding. His body has not yet been found.

[..] Erdogan said that during the talks Fidan requested the 18 suspects be sent to Turkey for trial, as the killing took place in Istanbul. The Istanbul prosecutor’s office last week prepared a written request for the extradition of the 18 suspects “involved in the premeditated murder”, the justice ministry said, but Riyadh rejected Ankara’s request. Erdogan also urged Saudi Foreign Minister Adel al-Jubeir to explain who the “local co-conspirators” were that were reportedly given Khashoggi’s body after his death. “Again either the Saudi foreign minister or the 18 suspects must explain who the local co-conspirators are. Let’s know who this co-conspirator is, we can shed further light. We cannot let this subject end mid-way.”

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Only this time it’s global.

Housing Market Now ‘Reminds Me Of 2006′ – Robert Shiller (MW)

Famed housing-watcher Robert Shiller said Tuesday that the weakening housing market reminded him of the last market top, just before the subprime housing bubble burst, slashing prices by nearly a third and costing millions of Americans their homes. Home price gains moderated again in the most recent version of the closely-watched housing index that bears his name, which was released Tuesday, and Shiller, a Nobel Prize-winning economist, told Yahoo Finance that such data shows “a sign of weakness.” Housing pivots take more time than those in the stock market, Shiller said. Still, “the housing market does have a momentum component and we’re seeing a clipping of momentum at this time.”

When a startled reporter reminded Shiller that 2006 predated the greatest financial crisis in a lifetime, the Yale economist acknowledged that any correction would likely be far less severe. “The drop in home prices in the financial crisis was the most severe drop in the U.S. market since my data begin in 1890,” Shiller said. “It could be that we’re primed to repeat it because it’s in our memory and we’re thinking about it but still I wouldn’t expect something as severe as the Great Financial Crisis coming on right now. There could be a significant correction or bear market, but I’m waiting and seeing now.”

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Foreign reserves runnning out.

China Debt Bomb Ready to Explode (Rickards)

The great Chinese growth slowdown has been proceeding in stages for the past two years. The reason is simple. Much of China’s “growth” (about 25% of the total) has consisted of wasted infrastructure investment in ghost cities and white elephant transportation infrastructure. That investment was financed with debt that now cannot be repaid. This was fine for creating short-term jobs and providing business to cement, glass and steel vendors, but it was not a sustainable model since the infrastructure either was not used at all or did not generate sufficient revenue. China’s future success depends on high-value-added technology and increased consumption. But shifting to intellectual property and the consumer means slowing down on infrastructure, which will slow the economy.

In turn, that means exposing the bad debt for what it is, which risks a financial and liquidity crisis. China started to do this last year but quickly turned tail when the economy slowed. Now the economy has slowed so much that markets are collapsing. But doesn’t China have over $1 trillion of reserves to prop up its financial system? On paper, that’s true. But in reality, China is “short” U.S. dollars. The Chinese may have $1.4 trillion of U.S. Treasury securities in its reserve position, but they need those assets possibly to bail out their banking system or defend the yuan. Meanwhile, the Chinese banking sector, which in many ways is an extension of the state, owes $318 billion in U.S. dollar-denominated deposits of commercial paper.

From a bank’s perspective, borrowing in dollars is going short dollars because you need dollar assets to back up those liabilities if the original lenders want their money back. For the most part, the banks don’t have those assets because they converted the dollar to yuan to prop up local real estate Ponzis and local corporations. There’s not much left over to bail out the corporate, individual and real estate sectors. This is all part of a global “dollar shortage” attributable to Fed tightening, both in the forms of higher rates but also a reduction in base money. A dollar shortage seems implausible in a world where the Fed printed $4.4 trillion. But while the Fed was printing, the world borrowed over $70 trillion (on top of prior loans), so the dollar shortage is real. The math is inescapable.

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Everyone’s going to call on Beijing to come to the rescue.

China Factory Growth Weakest In Over 2 Years, Export Orders Slump Deepens (R.)

China’s manufacturing sector in October expanded at its weakest pace in over two years, hurt by slowing domestic and external demand, in a sign of deepening cracks in the economy from an intensifying trade war with the United States. Anxiety about China’s cooling growth and its likely drag on the global economy have vexed financial markets recently, and Wednesday’s official Purchasing Managers’ Index (PMI) indicates more stress for investors through coming months. The official PMI – which gives global investors their first look at business conditions in China at the start of the last quarter of the year – fell to 50.2 in October, the lowest since July 2016 and down from 50.8 in September.

It was a touch above the 50-point mark that separates growth from contraction for a 27th straight month, but undershot the 50.6 forecast in a Reuters poll. The latest reading suggests a further loss of momentum in the world’s second-biggest economy, and the deteriorating environment for businesses could prompt more policy support from Beijing on top of a raft of recent initiatives. “All the numbers from China’s PMI release today confirm a broad-based decline in economic activity,” said Raymond Yeung, chief economist for China at ANZ in a client note, adding that conditions for the private sector is “much worse” than headline data suggested. “Besides an expected reserve requirement ratio (RRR) cut next January, we expect future supportive policy actions to be measured. The government’s priority is to avoid a financial blow-up.”

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Not hard to be better than The Oracle, Bernanke and Yellen. But where was Volcker when these three went off the rails?

Ray Dalio Hails Paul Volcker As ‘The Greatest Man’ He Knows (MW)

Those weighty words of praise were tweeted out Tuesday by Ray Dalio, founder of hedge-fund behemoth Bridgewater Associates. Dalio’s social-media nod to the former Fed chair coincides with the release of Volcker’s memoir, “Keeping at It: The Quest for Sound Money and Good Government.”

In his new book, Volcker says he’s worried about the impact of money in politics and argues that the U.S. is devolving into a plutocracy. “We face a huge challenge in this country to restore a sense of public purpose and of trust in government,” he wrote in the book. “It will require critically needed reforms in our political processes and leaders who can restore and preserve a consensus upon which our great democracy can depend.” Volcker, 91, served as Fed chair from 1979 until 1987, and he’s widely credited for stopping runaway inflation during that time. He was also chairman of the Economic Recovery Advisory Board under Obama from 2009 to 2011.

Dalio wasn’t the only one to give Volcker some love in light of his memoir. Martin Wolf of the Financial Times is also a big fan, saying that he’s “the greatest man I have known,” because “he is endowed to the highest degree with what the Romans called virtus (virtue): moral courage, integrity, sagacity, prudence and devotion to the service of country.” Wolf said “the pinnacle of Volcker’s career” was when he achieved something many thought impossible: he slew inflation. “Great credit is due to Jimmy Carter, who appointed him, and Ronald Reagan, who supported him. But Volcker did it, despite great criticism,” Wolf explained. “The costs were huge. But he was right: it had to be done.”

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“And if it happens that the Dems don’t prevail, and don’t manage to get their hands on the machinery of congress — then what?”

The Monster Mash (Kunstler)

The Democratic Party war on white people and their dastardly privilege has been the theme all year long, with its flanking movement against white men especially and super-especially the hetero-normative white male villains who rape and oppress everybody else. Anyway, that’s the strategy du jour. I’m not persuaded that it’s going to work so well in the coming election. The party could not have issued a clearer message than “white men not welcome here.” Very well, then, they’ll vote somewhere else for somebody else. And if it happens that the Dems don’t prevail, and don’t manage to get their hands on the machinery of congress — then what?

For one thing, a lot of people get indicted, especially former top officers from various glades of the Intel swamp. It shouldn’t be a surprise, given the numbers of them already called before grand juries and fingered by inspectors general. But it may be shocking how high up the indictments go, and how serious the charges may be: sedition… treason…? These midterm election may bring the moment when the Democratic Party finally blows up, at least enough to sweep away the current coterie of desperate idiots running it. It’s time to shove the crybabies offstage and allow a few clear-eyed adults to take the room, including men, yes even white men. And let all the shrieking, clamoring, marginal freaks return to the margins, where they belong.

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That recession is now certain, deal or not. Even in case of a deal, 1000s of documents must be signed. A deal will not mean a return to BAU.

No-Deal Brexit Would Trigger Lengthy UK Recession – S&P (G.)

Britain’s economy will suffer rising unemployment and falling household incomes that would trigger a recession should Theresa May fail to secure a deal to prevent the UK crashing out of the European Union next year, according to analysis by the global rating agency Standard & Poor’s. Property prices would slump and inflation would spike to more than 5% in a scenario that S&P said had become more likely in recent months following deadlock with Brussels over a post-Brexit deal. In a warning that included a possible downgrade to the UK’s credit rating, which would bring with it an increase in the Treasury’s borrowing costs, S&P said it still expected both sides in the Brexit talks to come to an agreement before next March, when the UK is scheduled to leave the European Union.

But it warned that the chance of a “no-deal” Brexit had risen in recent months to such an extent that it needed to warn international investors about the potential challenges ahead. [..] S&P Global Ratings credit analyst Paul Watters, said: “Our base-case scenario is that the UK and the EU will agree and ratify a Brexit deal, leading to a transition phase lasting through 2020, followed by a free trade agreement. “But we believe the risk of no deal has increased sufficiently to become a relevant rating consideration. This reflects the inability thus far of the UK and EU to reach agreement on the Northern Irish border issue, the critical outstanding component of the proposed withdrawal treaty.”

Coming only a day after the chancellor said the failure to secure a deal would force him to hold an emergency budget, S&P’s analysis joins a welter of independent reports that forecast that a split from the EU without a deal will deal a serious blow to the prospects of the UK economy. Last month rival agency Moody’s said the risks to the British economy had “risen materially” in recent months.

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If you think Trump’s scary, this guy’s in a league of his own.

Welcome to the Jungle (Escobar)

It’s darkness at the break of (tropical) high noon. Jean Baudrillard once defined Brazil as “the chlorophyll of our planet”. And yet a land vastly associated worldwide with the soft power of creative joie de vivre has elected a fascist for president. Brazil is a land torn apart. Former paratrooper Jair Bolsonaro was elected with 55.63 percent of votes. Yet a record 31 million votes were ruled absent or null and void. No less than 46 million Brazilians voted for the Workers’ Party’s candidate, Fernando Haddad; a professor and former mayor of Sao Paulo, one of the crucial megalopolises of the Global South. The key startling fact is that over 76 million Brazilians did not vote for Bolsonaro. His first speech as president exuded the feeling of a trashy jihad by a fundamentalist sect laced with omnipresent vulgarity and the exhortation of a God-given dictatorship as the path towards a new Brazilian Golden Age.

French-Brazilian sociologist Michael Lowy has described the Bolsonaro phenomenon as “pathological politics on a large scale”. His ascension was facilitated by an unprecedented conjunction of toxic factors such as the massive social impact of crime in Brazil, leading to a widespread belief in violent repression as the only solution; the concerted rejection of the Workers’ Party, catalyzed by financial capital, rentiers, agribusiness and oligarchic interests; an evangelical tsunami; a “justice” system historically favoring the upper classes and embedded in State Department-funded “training” of judges and prosecutors, including the notorious Sergio Moro, whose single-minded goal during the alleged anti-corruption Car Wash investigation was to send Lula to prison; and the absolute aversion to democracy by vast sectors of the Brazilian ruling classes.

That is about to coalesce into a radically anti-popular, God-given, rolling neoliberal shock; paraphrasing Lenin, a case of fascism as the highest stage of neoliberalism. After all, when a fascist sells a “free market” agenda, all his sins are forgiven.

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My old buddy John Rubino is right, but the story’s bigger than this. Merkel’s been given far too much power.

After Germany’s Merkel Comes Chaos (John Rubino)

After a long, initially-successful run promoting European integration and mass immigration, German Chancellor Angela Merkel saw the bottom fall out of her political fortunes this year. This week she stepped down as leader of the formerly-dominant Christian Democrat party and promised not run again when her term as Chancellor ends in 2021. What happens next is almost certain to be chaotic, as the following chart (courtesy of this morning’s Wall Street Journal) makes clear. Note that in August of 2017 the two least popular parties were the far right Alternative for Germany (blue line) and the far left Greens (green line). In the ensuing 14 or so months AfG’s support rose from single digits to around 17% while the Greens rocketed from the bottom of the pack to 20%.

If you didn’t know what these two parties stood for you might think, “Fine, they’re new and interesting, so let them form a coalition and govern for a while.” Unfortunately they’re more likely to kill each other in street fights than work together, since the former want closed borders and free markets while the latter want increased regulation and unlimited immigration. The alternative to an AfG/Green coalition then becomes some combination of the remaining, more centrist (by European standards at least) parties. But the biggest of those parties – Merkel’s Christian Democrats and their coalition partner Social Democrats – are in freefall, precisely because of what they’ve done while in power. So there appears to be no way to put these puzzle pieces together to produce a stable government.

And – here’s where things get truly scary – a stable Germany under Merkel’s bland but firm hand has been the only thing holding the European Union and eurozone together. If Germany descends into internal turmoil without a coherent government to push the Italys and Hungarys around, European populists/nationalists will fill the resulting vacuum. Borders will be re-imposed within and without the EU, national government budgets – already above EU deficit limits in many cases – will explode. Already-debilitating debts will keep rising, and the ECB will be forced to bail out Italy for sure and probably several other member states after that.

Read more …

Intro to an elaborate series of reports by Reuters, kudos for the effort. Fish have moved north and deeper, leaving entire communities without their proteins.

Ocean Shock (Reuters)

To stand at the edge of an ocean is to face an eternity of waves and water, a shroud covering seven-tenths of the Earth. Hidden below are mountain ranges and canyons that rival anything on land. There you will find the Earth’s largest habitat, home to billions of plants and animals – the vast majority of the living things on the planet. In this little-seen world, swirling super-highway currents move warm water thousands of miles north and south from the tropics to cooler latitudes, while cold water pumps from the poles to warmer climes. It is a system that we take for granted as much as we do the circulation of our own blood. It substantially regulates the Earth’s temperature, and it has been mitigating the recent spike in atmospheric temperatures, soaking up much of human-generated heat and carbon dioxide.

Without these ocean gyres to moderate temperatures, the Earth would be uninhabitable. In the last few decades, however, the oceans have undergone unprecedented warming. Currents have shifted. These changes are for the most part invisible from land, but this hidden climate change has had a disturbing impact on marine life – in effect, creating an epic underwater refugee crisis. Reuters has discovered that from the waters off the East Coast of the United States to the coasts of West Africa, marine creatures are fleeing for their lives, and the communities that depend on them are facing disruption as a result. As waters warm, fish and other sea life are migrating poleward, seeking to maintain the even temperatures they need to thrive and breed.

The number of creatures involved in this massive diaspora may well dwarf any climate impacts yet seen on land. In the U.S. North Atlantic, for example, fisheries data show that in recent years, at least 85 percent of the nearly 70 federally tracked species have shifted north or deeper, or both, when compared to the norm over the past half-century. And the most dramatic of species shifts have occurred in the last 10 or 15 years. Fish have always followed changing conditions, sometimes with devastating effects for people, as the starvation that beset Norwegian fishing villages in past centuries when the herring failed to appear one season will attest. But what is happening today is different: The accelerating rise in sea temperatures, which scientists primarily attribute to the burning of fossil fuels, is causing a lasting shift in fisheries.

Read more …

Oct 162018
 


M. C. Escher Doric columns 1945

 

Yemen On Brink Of ‘World’s Worst Famine In 100 Years’ (G.)
Humanity Is ‘Cutting Down The Tree Of Life’ (G.)
‘Hyperalarming’ Study Shows Massive Insect Loss (WaPo)
America’s Budget Deficit Jumps By 17% As Spending Surges (CNBC)
More Free Money: A Carry Trade in Liquidity (Mish)
Powell Has Lost His North Star, And The Fed Is Flying Blind (MW)
Facebook Paid £15.8 Million In UK Tax On £1.2 Billion In 2017 Revenues (BBC)
Ecuador To Assange: No Talking Politics, Pay Own Bills, Look After Cat (RT)
Brexit Deal Slipping To December Amid Deadlocked Talks (Ind.)
No-Deal Brexit Is ‘More Likely Than Ever Before’ – Tusk (Ind.)
Syria’s Chessboard (Hallinan)

 

 

As Stormy Daniels and Elizabeth Warren see their ‘cases’ blow up in their faces 3 weeks before the midterms, the best PR and legal teams that money can buy are framing a Khashoggi narrative nobody will be able to credibly deny. Or at least Erdogan is not showing his hand. But now that Pompeo’s in the region anyway, let’s put this on his agenda. 12 to 13 million at risk of starvation.

Yemen On Brink Of ‘World’s Worst Famine In 100 Years’ (G.)

Yemen could be facing the worst famine in 100 years if airstrikes by the Saudi-led coalition are not halted, the UN has warned. If war continues, famine could engulf the country in the next three months, with 12 to 13 million civilians at risk of starvation, according to Lise Grande, the agency’s humanitarian coordinator for Yemen. She told the BBC: “I think many of us felt as we went into the 21st century that it was unthinkable that we could see a famine like we saw in Ethiopia, that we saw in Bengal, that we saw in parts of the Soviet Union – that was just unacceptable. “Many of us had the confidence that would never happen again and yet the reality is that in Yemen that is precisely what we are looking at.”

Yemen has been in the grip of a bloody civil war for three years after Houthi rebels, backed by Iran, seized much of the country, including the capital, Sana’a. The Saudi-led coalition has been fighting the rebels since 2015 in support of the internationally recognised government. Thousands of civilians have been caught in the middle, trapped by minefields and barrages of mortars and airstrikes. The resulting humanitarian catastrophe has seen at least 10,000 people killed and millions displaced. Speaking on Sunday evening, Grande said: “There’s no question we should be ashamed, and we should, every day that we wake up, renew our commitment to do everything possible to help the people that are suffering and end the conflict.”

Read more …

And it’s not just people that we’re killing:

Humanity Is ‘Cutting Down The Tree Of Life’ (G.)

Humanity’s ongoing annihilation of wildlife is cutting down the tree of life, including the branch we are sitting on, according to a stark new analysis. More than 300 different mammal species have been eradicated by human activities. The new research calculates the total unique evolutionary history that has been lost as a result at a startling 2.5bn years. Furthermore, even if the destruction of wild areas, poaching and pollution were ended within 50 years and extinction rates fell back to natural levels, it would still take 5-7 million years for the natural world to recover. Many scientists think a sixth mass extinction of life on Earth has begun, propelled by human destruction of wildlife, and 83% of wild mammals have already gone.

The new work puts this in the context of the evolution and extinction of species that occurred for billions of years before modern humans arrived. “We are doing something that will last millions of years beyond us,” said Matt Davis at Aarhus University in Denmark, who led the new research. “It shows the severity of what we are in right now. We’re entering what could be an extinction on the scale of what killed the dinosaurs. “That is pretty scary. We are starting to cut down the whole tree [of life], including the branch we are sitting on right now.” Ecosystems around the world have already been significantly affected by the extermination of big animals such as mammoths, he said.

[..] Davis said each lost species had its own intrinsic value, but the loss of the most distinct creatures was most damaging: “Typically, if you have something that is off by itself, it does some job that no other species is doing.” The losses are already affecting ecosystems, he said, particularly the vanishing of “megafauna”. These huge creatures roamed much of Earth until humans arrived and included giant cats, deer, beavers and armadillos. “We are now living in a world without giants,” said Davis. “So the seeds of big fruit are not dispersed any more because we don’t have mammoths or gomphotheres or giant ground sloths eating those fruits.” Another example, he said, is the widespread loss of wolves. This means smaller predators like coyotes thrive and more birds are killed, radically changing food chains.

Read more …

“Between January 1977 and January 2013, the catch rate in the sticky ground traps fell 60-fold..”

“..our study indicates that climate warming is the driving force behind the collapse of the forest’s food web. ”

‘Hyperalarming’ Study Shows Massive Insect Loss (WaPo)

Insects around the world are in a crisis, according to a small but growing number of long-term studies showing dramatic declines in invertebrate populations. A new report suggests that the problem is more widespread than scientists realized. Huge numbers of bugs have been lost in a pristine national forest in Puerto Rico, the study found, and the forest’s insect-eating animals have gone missing, too. In 2014, an international team of biologists estimated that, in the past 35 years, the abundance of invertebrates such as beetles and bees had decreased by 45 percent. In places where long-term insect data are available, mainly in Europe, insect numbers are plummeting. A study last year showed a 76 percent decrease in flying insects in the past few decades in German nature preserves.

The latest report, published Monday in the Proceedings of the National Academy of Sciences, shows that this startling loss of insect abundance extends to the Americas. The study’s authors implicate climate change in the loss of tropical invertebrates. “This study in PNAS is a real wake-up call — a clarion call — that the phenomenon could be much, much bigger, and across many more ecosystems,” said David Wagner, an expert in invertebrate conservation at the University of Connecticut who was not involved with this research. He added: “This is one of the most disturbing articles I have ever read.”

[..] “We went down in ’76, ’77 expressly to measure the resources: the insects and the insectivores in the rain forest, the birds, the frogs, the lizards,” Lister said. He came back nearly 40 years later, with his colleague Andrés García, an ecologist at the National Autonomous University of Mexico. What the scientists did not see on their return troubled them. “Boy, it was immediately obvious when we went into that forest,” Lister said. Fewer birds flitted overhead. The butterflies, once abundant, had all but vanished. García and Lister once again measured the forest’s insects and other invertebrates, a group called arthropods that includes spiders and centipedes. The researchers trapped arthropods on the ground in plates covered in a sticky glue, and raised several more plates about three feet into the canopy.

The researchers also swept nets over the brush hundreds of times, collecting the critters that crawled through the vegetation. Each technique revealed the biomass (the dry weight of all the captured invertebrates) had significantly decreased from 1976 to the present day. The sweep sample biomass decreased to a fourth or an eighth of what it had been. Between January 1977 and January 2013, the catch rate in the sticky ground traps fell 60-fold. “Everything is dropping,” Lister said. The most common invertebrates in the rain forest — the moths, the butterflies, the grasshoppers, the spiders and others — are all far less abundant. “Holy crap,” Wagner said of the 60-fold loss.


Comparison of the average dry-weight biomass of arthropods caught per 12-h day in 10 ground (A) and canopy (B) traps within the same sampling area in the Luquillo rainforest.

Read more …

If there are no insects left, who cares about deficits? What’s the use?

America’s Budget Deficit Jumps By 17% As Spending Surges (CNBC)

The U.S. federal budget deficit rose in fiscal 2018 to the highest level in six years as spending climbed, the Trump administration said Monday. The deficit jumped to $779 billion, $113 billion or 17 percent higher than the previous fiscal period, according to a statement from Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney. It was larger than any year since 2012, when it topped $1 trillion. The budget shortfall rose to 3.9 percent of U.S. GDP. The deficit increased by $70 billion less than anticipated in a report published in July, according to the two officials.

Federal revenue rose only slightly, by $14 billion after Republicans chopped tax rates for corporations and most individuals. Outlays climbed by $127 billion, or 3.2 percent. A spike in defense spending, as well as increases for Medicaid, Social Security and disaster relief, contributed to the increase.

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“If the goal was to bail out the banks at public expense (and it was) it’s clear Bernanke had a far better plan than the ECB.”

More Free Money: A Carry Trade in Liquidity (Mish)

Not only do banks earn free money on excess reserves, they can borrow money and make guaranteed free money on that.

The Federal Reserve Bank of St. Louis discusses the Carry Trade in Liquidity: “The IOER [interest on excess reserves] has been the effective ceiling of other short-term interest rates. The figure above compares the IOER with overnight rates on deposits and repos. As we can see, the IOER has mostly remained above these two rates, implying that (at least some) banks have been able to borrow funds overnight, deposit them at the Fed and earn a spread, in essence engaging in carry trade in liquidity markets.”

How Much Free Money?

While the Fed has been busy giving banks free money by paying interest on excess reserves, banks in the EU have suffered with negative interest rates, essentially taking money from banks and making them more insolvent. If the goal was to bail out the banks at public expense (and it was), it’s clear Bernanke had a far better plan than the ECB.

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The Fed’s been flying blind at least since Bernanke talked about ‘entering uncharted territory’. That’s what that means.

Powell Has Lost His North Star, And The Fed Is Flying Blind (MW)

Federal Reserve Chairman Jerome Powell is in an unenviable position. Folks expect him to fine-tune interest rates to keep the economy going and inflation tame but he can’t make things much better — only worse. Growth is nearly 3% and unemployment is at its lowest level since 1969. What inflation we have above the Fed target of 2% is driven largely by oil prices and those by forces beyond the influence of U.S. economic conditions — OPEC politics, U.S. sanctions on Iran, and dystopian political forces in Venezuela and a few other garden spots. When the current turbulence in oil markets recedes, we are likely in for a period of headline inflation below 2%, just as those forces are now driving prices higher now.

Overall, long-term inflation has settled in at the Fed target of about 2%. The Fed should not obsess about it but keep a watchful eye. Amid all this, Powell’s inflation compass has gone missing. The Phillips curve, as he puts it, may not be dead but just resting. To my thinking, it’s in a coma if it was ever alive at all. That contraption is a shorthand equation sitting atop a pyramid of more fundamental behavioral relationships. Those include the supply and demand for domestic workers and in turn, an historically large contingent labor force of healthy prime-age adults sitting on the sidelines, the shifting skill requirements of a workplace transformed by artificial intelligence and robotics, import prices influenced by weak growth in Europe and China, and immigration.

Of course, Mariner Powell has his North Star — what economists affectionately call R* (R-Star), but it is no longer at a fixed position in Powell’s sky. R* is the federal funds rate that neither encourages the economy to speed up or slow down. However, with businesses needing much less capital to get started or grow these days and for decades China and Germany—the second and fourth largest economies globally—racking up current account surpluses and savings to invest abroad, it is no wonder the forces of supply and demand have been driving R* down to historically low levels.

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They use what they don’t pay in taxes, to spy on you.

Facebook Paid £15.8 Million In UK Tax On £1.2 Billion In 2017 Revenues (BBC)

Facebook’s UK tax bill has tripled to £15.8m – but the social media giant will see an immediate cut because of a tax credit. The final bill comes to £7.4m, since Facebook will see tax relief of £8.4m after awarding shares to employees. In 2016, Facebook’s tax bill rose to £5.1m, following a major overhaul of the social media firm’s tax structure. However, the company’s profits only climbed by £4m year-on-year from £58.4m to £62.7m in 2017. The company’s UK office provides marketing services and sales and engineering support to the company. Facebook’s revenue rose by a third year-on-year to £1.2bn in 2017, because of increased revenues from inter-company and advertising reseller services in 2017.

“We have changed the way we report tax so that revenue from customers supported by our UK teams is recorded in the UK and any taxable profit is subject to UK corporation tax,” said Facebook’s Northern Europe vice-president, Steve Hatch. [..] The publication of Facebook’s 2017 tax accounts follows extensive criticism from policymakers and the media over the last 12 months of how much tax tech giants typically pay in Europe. Large technology companies have been condemned for moving sales through other countries and paying modest amounts of tax in the UK.

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Hard to gauge what exactly this means, time must tell. Seems good that they talk of medical help. but will he be able to get it?

Ecuador To Assange: No Talking Politics, Pay Own Bills, Look After Cat (RT)

WikiLeaks supporters were thrilled to hear that Ecuador would restore Julian Assange’s internet connection. But his hosts – who have in some ways become his jailers – reportedly imposed a long list of restrictions on his behavior. While stating that he is allowed to exercise his “right of communication and freedom of expression,” a nine-page document already leaked online forbids the journalist from engaging in political activity or doing anything to interfere in the affairs of other states. The document expressly states that Ecuador cannot be held liable for the content of Assange’s communications, but nevertheless prohibits him from engaging in activities that might damage the relationship between Ecuador and other states.

Assange’s communications were cut seven months ago, after he criticized Spanish authorities’ treatment of voters during the Catalan independence referendum. Assange must pay for his own WiFi. He must use only his own devices, absent written government permission, and provide the embassy with serial number, model number, and brand name for those devices. He must also pay for his own medical evaluations, with the option of transferring to a hospital in case of an emergency – an option repeatedly denied him by UK authorities, who refused to guarantee safe passage without arrest in the event of such a transfer. Assange’s health has been the subject of much concern during his six-year confinement in the Embassy.

Visitors are also slapped with new restrictions. They must submit visit requests in writing to the embassy chief, giving their name, nationality, profession and place of work, reason for visiting, email and social media accounts, and even the serial numbers for phones and other devices they wish to bring inside. The new rules even mandate the collection of IMEIs, unique identification numbers specific to a phone handset. While repeat visitors receive a less restrictive screening process, they can have their access revoked at any time without an explanation. All visitor data will be turned over to the Ecuadorian Ministry of Foreign Affairs and other unspecified parties.

The restrictions include a threat to use UK police to arrest visitors or seize communications equipment should the journalist violate the lengthy list of rules. Adding insult to injury, the embassy threatened to remove Assange’s cat to a shelter should they decide he is not cleaning up after the animal properly.

Read more …

They lost two years doing nothing but fight amongst themselves. That time was always badly needed.

Brexit Deal Slipping To December Amid Deadlocked Talks (Ind.)

A Brexit deal now looks unlikely until just before Christmas after Theresa May admitted “weeks” may be needed to break the deadlock in talks with Brussels. The delay was also signalled by Ireland’s prime minister who warned of log-jammed negotiations dragging into December, increasing concern that stalled talks could simply collapse into a “disaster” no-deal situation. In a veiled swipe at Brexiteers, European Council President Donald Tusk said solving the vexed issue of the Irish border had proved “more complicated than some may have expected” and said no deal is now “more likely than ever”.

A further sign of slippage came when the EU confirmed it would take a decision this week on whether a special summit once proposed for November to publicly seal a Brexit deal, will be needed given the state of talks. But despite the deadlock, Ms May again came under intense pressure from Conservative Eurosceptics to refuse anything resembling the EU’s proposals, amid signs she is diluting her stance to secure a deal. The October summit was once supposed to be the moment a withdrawal deal was locked in, with expectations already having slipped to a potential specially arranged meeting in November – even under those circumstances the outline would have had to have been agreed at this week’s meeting.

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More likely by the day.

No-Deal Brexit Is ‘More Likely Than Ever Before’ – Tusk (Ind.)

A no-deal Brexit is “more likely than ever before”, the president of the European Council has warned, ahead of a make-or-break summit of EU leaders in Brussels. Donald Tusk, who has described this week’s top-level meeting as “the moment of truth”, said Brexit had “proven to be more complicated than some may have expected”. But he said that “that we are preparing for a no-deal scenario must not, under any circumstances, lead us away from making every effort to reach the best agreement possible”.

Mr Tusk’s warning, made in a letter to EU leaders formally inviting them to the summit, comes a day after negotiations between the European Commission and UK Government hit a a wall over the question of how to prevent a hard border in Northern Ireland. Over dinner on Wednesday night the heads of state or government of the 27 remaining EU member states will decide whether there is any pointing holding a special Brexit summit in November – or whether the horse has already bolted. It is now confirmed that Theresa May will address the 27 leaders before the dinner in a last-ditch bid to win them over; though she will not be allowed into the main discussion itself.

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Russia and Assad delayed their final offensive to offer the jihadists a way out. But now these are refusing to leave.

Syria’s Chessboard (Hallinan)

The Syrian civil war has always been devilishly complex, with multiple actors following different scripts, but in the past few months it appeared to be winding down. The Damascus government now controls 60 percent of the country and the major population centers, the Islamic State has been routed, and the rebels opposed to Syrian President Bashar al-Assad are largely cornered in Idilb Province in the country’s northwest. But suddenly the Americans moved the goal posts—maybe—the Russians have fallen out with the Israelis, the Iranians are digging in their heels, and the Turks are trying to multi-task with a home front in disarray. So the devil is still very much at work in a war that has lasted more than seven years, claimed up to 500,000 lives, displaced millions of people, destabilized an already fragile Middle East, and is far from over.

There are at least three theaters in the Syrian war, each with its own complexities: Idilb in the north, the territory east of the Euphrates River, and the region that abuts the southern section of the Golan Heights. Just sorting out the antagonists is daunting. Turks, Iranians, Americans and Kurds are the key actors in the east. Russians, Turks, Kurds and Assad are in a temporary standoff in the north. And Iran, Assad and Israel are in a faceoff near Golan, a conflict that has suddenly drawn in Moscow. Assad’s goals are straightforward: reunite the country under the rule of Damascus and begin re-building Syria’s shattered cities. The major roadblock to this is Idilb, the last large concentration of anti-Assad groups, Jihadists linked with al-Qaeda, and a modest Turkish occupation force representing Operation Olive Branch. The province, which borders Turkey in the north, is mountainous and re-taking it promises to be difficult.

For the time being there is a stand down. The Russians cut a deal with Turkey to demilitarize the area around Idilb city, neutralize the jihadist groups, and re-open major roads. The agreement holds off a joint Assad-Russian assault on Idilb, which would have driven hundreds of thousands of refugees into Turkey and likely have resulted in large numbers of civilian casualties. But the agreement is temporary—about a month—because Russia is impatient to end the fighting and begin the reconstruction. However, it is hard to see how the Turks are going to get a handle on the bewildering number of groups packed into the province, some of which they have actively aided for years. Ankara could bring in more soldiers, but Turkey already has troops east of the Euphrates and is teetering on the edge of a major economic crisis.

Read more …

Jun 192018
 
 June 19, 2018  Posted by at 12:07 pm Finance Tagged with: , , , , , , , , , , ,  14 Responses »


Paul Gauguin Why are you angry? 1896

 

Yes, you have every right to be outraged at the disgraceful treatment of children on America’s borders. But that does not give you the right to NOT be outraged by what America has done and is today still doing to children in, just to name a few places, Syria, Libya and Yemen. Be outraged, but don’t make it an echo chamber issue. Because if you do, you, too, are in a cage.

So if you see the wives of former presidents speak out about the child separation policies, ask yourself where they get the moral authority to speak out on such issues, after their husbands have bombed the crap out of many countries, killing many many children in the process. And don’t let’s get started about Hillary Clinton when she was Secretary of State.

Presently in Yemen, 20 million people depend on humanitarian aid, and the US are helping Saudi Arabia et al bomb the only port left through which that aid can reach them, to smithereens. 8.5 million Yemenis are already starving, and some 3 million of them are children. Where is your outrage over that?

Where is the outrage over the American and international treatment of Julian Assange, who has been in the Ecuador embassy in London for six years today? Where is it?

Don’t get coaxed into selective outrage by your news media, who like nothing better than to tell you what to be outraged by, and what not. If you allow that to happen, you have lost your freedom and your independence. Ask why they tell you a certain story at the moment they tell it. Ask why they tell it the way they do.

Yes, it has come to this. Every single story you read or hear needs to be scrutinized. Because there’s an agenda behind all of them, left, right or middle. And because the media have figured out that constantly driving you from one selective outrage to another is very profitable for them. Critical thought is not.

Yes, there are sociopaths in the Trump administration. But that’s nothing new. There have been sociopaths in every administration. It’s how our political systems work. Sh*t floats to the top.

Yes, US border policies have intensified. But whatever you think of that, migrants and refugees are not a new issue. Nor are the reasons why people flee their homes and communities. Whether it’s Africa or Central America, people flee because of what western governments, military and intelligence services have done to their homelands.

And until we stop doing that, they will keep coming. So much of our prosperity and power is derived directly from other people’s poverty and despair. So much of our wealth has been stolen from other people’s resources. If you want to be outraged at something or someone, start with yourself. Start thinking.

What is happening today is awful. But so many awful things happened in the past that you never showed outrage about. And yet these things are all inextricably linked. One leads to another.

America shouldn’t be outraged about Trump without being outraged about its entire political system, and all of its actors. Without that, outrage about Trump has no meaning, and will lead to nothing at all. Or rather, it will lead to a more divided country, full of people played for profit and political games.

The US invasion of Vietnam ended to a large extent because of protests in the streets. Perhaps that is what is needed once again. But the underlying issues, the ones that had led to the invasion in the first place, were not solved then. And that is what it is all about.

Nor is it an American problem per se. Europe is just as culpable. Children drowning, children in cages, what’s the difference, in the end it all comes from the same mindset. Which needs a radical reset. But what are the odds of that happening?

Our cultures are based on exploiting other peoples and nations, and then telling ourselves we deserve what we have. How are you going to change that? The only way to resolve the global refugee problem is to make sure people have a future where they are born. And the only thing we actually do is to make that impossible.

Yes, be outraged.

 

 

Jun 192018
 


Vittorio Matteo Corcos Sogni 1896

 

Threatened By The Truth – Julian Assange Anniversary (IE)
25,000 Flee As Fighting In Yemen Port City Hodeida Escalates (AP)
It’s Time To Get Enraged At What Western Imperialists Have Done To Syria (CJ)
Paul Tudor Jones Warns The Next Recession Will Be ‘Really Frightening’ (Y.)
Trump Threatens New Tariffs On $200 Billion In Chinese Goods (CNBC)
China Enters the Trade Trap (IICS)
Chasing Yield during ZIRP & NIRP Evidently Starved Human Brains of Oxygen (WS)
Why Germany Neither Can Nor Should Pay More To Save The Eurozone (Varoufakis)
Macron’s Euro Zone Reforms: Grand Vision Reduced To Pale Imitation (R.)
Hopeless European Millennials And The Populist Takeover (John Rubino)
Spain’s New Government To Remove Franco’s Remains From Mausoleum (AFP)
A Very British Disease (Coppola)
Thousands Of Public Buildings And Spaces In England Sold Off A Year (G.)
Coercion (Jim Kunstler)
Sharp Fall In Number Of People Seeking Asylum In EU (G.)

 

 

If you’re not outraged by Assange’s situation, you have no right to be outraged by anything else.

Threatened By The Truth – Julian Assange Anniversary (IE)

Today marks the sixth anniversary of Wikileaks founder Julian Assange’s effective house arrest in London. He cannot move around in public, because he fears he will be arrested and extradited to America — a daunting prospect, since a UN special rapporteur described Chelsea Manning’s treatment by that country’s justice system as torture. Assange is divisive. Hawks wish him nothing but misfortune and a stretch in jail. According to journalist John Pilger, a leaked official memo says: “Assange is going to make a nice bride in prison. Screw the terrorist. He’ll be eating cat food forever.” If you stand at the other end of the spectrum, Assange is a hero who revealed how our world really works.

Consequently, he has been relentlessly targeted. Hilary Clinton has contributed to this process, as Assange highlighted the Clintons’ links with Saudi Arabia and the multimillion donations that kingdom made to their foundation, after she, as secretary of state, sanctioned an $80bn Saudi arms deal. Assange remains, despite illegal efforts to revoke it, an Australian citizen, but he has not enjoyed the support a person who has not been charged with anything, much less convicted of anything, might expect from a democracy. These are indeed murky waters, but Assange’s ordeal reconfirms a truth: News is something someone, somewhere, does not want published. That’s why he is such a threat.

Read more …

Yes, the treatment of children on America’s borders is a disgrace. But don’t make it an echo chamber issue. Kids in Hodeida are much worse off. Where is the outrage?

25,000 Flee As Fighting In Yemen Port City Hodeida Escalates (AP)

The UN spokesman said on Monday that tens of thousands of residents have fled the fighting along Yemen’s western coastline, where Yemeni fighters backed by a Saudi-led coalition are engaged in fierce battles with Iranian-backed Houthi rebels. Stephane Dujarric, the spokesman for the UN secretary-general, told reporters on Monday that about 5,200 families, or around 26,000 people, have fled the fighting and sought safety within their own districts or in other areas in Hodeida governorate. ‘‘The number is expected to increase as hostilities continue,’’ he said. Emirati troops, along with irregular and loyalist forces in Yemen, have been fighting against Houthis for Hodeida since Wednesday.

Coalition warplanes rained missiles and bombs on Houthi positions near Hodeida airport, in the city’s south. The offensive for Hodeida has faced criticism from international aid groups, who fear a protracted fight could force a shutdown of the city’s port and potentially tip millions into starvation. About 70 percent of Yemen’s food enters via the port, as well as the bulk of humanitarian aid and fuel supplies. Around two-thirds of the country’s population of 27 million relies on aid, and 8.4 million are already at risk of starving.

Read more …

And there are more things you should be outraged by.

It’s Time To Get Enraged At What Western Imperialists Have Done To Syria (CJ)

Rumors are again swirling of an impending false flag chemical weapons attack in Syria, just as they did shortly before the highly suspicious Douma case in April. Warnings from Syrian and Russian intelligence, as well as US war ship movements and an uptick in US funding for the Al Qaeda propaganda firm known as the White Helmets, give these warnings a fair bit of weight. Since the US war machine has both a known regime change agenda in Syria and an extensive history of using lies, propaganda and false flags to justify military interventionism, there’s no legitimate reason to give it the benefit of the doubt on this one. These warnings are worth taking seriously.

So some people are understandably nervous. The way things are set up now, it is technically possible for the jihadist factions inside Syria and their allied imperialist intelligence and defense agencies to keep targeting civilians with chemical weapons and blaming the Assad government for them until they pull one off that is so outrageous that it enables the mass media to manufacture public support for a full-scale assault on Damascus. This would benefit both the US-centralized empire which has been plotting regime change in Syria for decades and the violent Islamist extremists who seek control of the region. It also creates the very real probability of a direct military confrontation with Syria’s allies, including Russia.

But the appropriate response to the threat of a world war erupting in Syria is not really fear, if you think about it. The most appropriate response to this would be unmitigated, howling rage at the western sociopaths who created this situation in the first place.

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No stabilizers.

Paul Tudor Jones Warns The Next Recession Will Be ‘Really Frightening’ (Y.)

Legendary global macro trader Paul Tudor Jones is warning that asset prices are too high. And furthermore, he’s concerned about what the next recession might look like. He shared his thoughts on Monday during a conversation with Goldman Sachs CEO Lloyd Blankfein as part of the firm’s “Talks at GS” series. The hedge fund billionaire, who rarely gives interviews or makes public comments on the markets, cautioned that across asset classes “you have to be thinking this is a highly dubious sustainable price.” Jones doesn’t think the low interest rates we have now due to easy monetary policy are sustainable over time. He said that interest rate policy is “crazy.” He further argued that the Trump administration’s stimulative fiscal policy isn’t sustainable either.

“You look at prices of stocks, real estate, anything,” he said. “We’re going to have to mean revert to a normal real rate of interest with a normal term premium that’s existed for 250 years. We’re going to have to get back to that. We’re going to have to get back to a sustainable fiscal policy and that probably means the price of assets goes down in the very long run.” In the short run, the market is “jacked up and ready to go,” he said. Blankfein added that it’s like “pouring lighter fluid on an already lit fire.” During the financial crisis, central banks had a lot of room to ease monetary policy and governments had more flexibility to push stimulative fiscal policy. Today, there’s less room and flexibility.

“The next recession is really frightening because we don’t have any stabilizers,” Jones said. “We’ll have monetary policy, which will exhaust really quickly, but we don’t have any fiscal stabilizers.”

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“Trump is going to have to find some way to back down and let China save face..”

Trump Threatens New Tariffs On $200 Billion In Chinese Goods (CNBC)

President Donald Trump has requested the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent. The new duties will go into effect “if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” the president said in a statement provided by the White House late on Monday. Beijing has pledged to fight back if Trump goes ahead with the new tariffs. U.S. stock index futures fell following the news, while Asian equity markets were mixed. It’s the latest development in escalating trade tensions between the world’s two largest economies.

On Friday, the U.S. announced a 25 percent tariff on up to $50 billion of Chinese products, prompting Chinese President Xi Jinping’s administration to respond witha 25 percent tariff on $34 billion of U.S. goods. “It’s one thing to retaliate with $50 billion here and $50 billion there but when the [U.S.] president trots out another $200 billion, that’s quite concerning,” Max Baucus, former U.S. ambassador to China under President Barack Obama, told CNBC. “This reminds me little bit of an old western … If there’s a gunfight trade war, somebody’s going to get hurt,” he continued: “Trump is going to have to find some way to back down and let China save face so that both sides can back down gradually and respectfully.”

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Democracy?

China Enters the Trade Trap (IICS)

Perhaps nobody knows what President Trump will do next, including President Trump, but right now it looks like he has successfully maneuvered China into a trade trap. The goal is to slow China’s economy such that military modernization slows and its economy cannot catch up with the United States. Meanwhile, implementation of this strategy is called “Beijing’s playbook” and the whole time President Trump speaks positively about Xi Jinping and China’s help in other areas. Bloomberg: Xi to Counter Trump Blow for Blow in Unwanted Trade War “The Chinese view this as an exercise in self-flagellation, meaning that the country that wins a trade war is the country that can endure most pain,” said Andrew Polk, co-founder of research firm Trivium China in Beijing. China “thinks it can outlast the U.S. They don’t have to worry about an election in November, let alone two years from now.”

This is the mistake autocrats always make about Western governments and the United States. They view the messy and inefficient political system (intentionally designed that way to protect liberty) as a weakness. They think politicians care more about elections than anything else. They see the difficulty in reaching consensus as a weakness. However, they miss the fact that democratic governments enjoy greater legitimacy. If the U.S. reaches a majority in favor of confronting China on trade, then President Trump has the far stronger political hand. Confronting China on trade raises President Trump’s popularity. His base and independent voters favor this policy. Democrats oppose him because he is Trump, but they would lose votes if the only issue in November was “Confront China on trade, yes or no?”

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“..new issuance of Treasuries “will absorb such a large share of dollar liquidity that a crisis in the rest of the dollar bond markets is inevitable.”

Chasing Yield during ZIRP & NIRP Evidently Starved Human Brains of Oxygen (WS)

Let’s be clear: It’s not just Argentina. But Argentina is the most elegant example. The exodus of the hot money from emerging markets where cheap dollar-debts were used to fund pet projects and jack up leverage is – once again – in full swing. Cheap dollar-debt in emerging markets is an old sin that, like all old sins, is repeated endlessly. The outcome is always trouble. But during the act, it sure is a lot of fun for everyone. The exodus of the hot money is even gripping the non-basket-case emerging economies of Asia where it’s causing the worst indigestion since 2008.

Bloomberg: “Overseas funds are pulling out of six major Asian emerging equity markets at a pace unseen since the global financial crisis of 2008 – withdrawing $19 billion from India, Indonesia, the Philippines, South Korea, Taiwan, and Thailand so far this year.” While emerging markets shone in the first quarter, suggesting resilience to Federal Reserve tightening, that image has shattered over the past two months. With American money market funds now offering yields around 2% – where 10-year Treasuries were just last September – and prospects for more Fed hikes, the bar for heading into riskier assets has been raised.”

“It’s not a great set-up for emerging markets,” James Sullivan, head of Asia ex-Japan equities research at JPMorgan Chase, told Bloomberg. “We’ve still only priced in about two thirds of the US rate increases we expect to see over the next 12 months. So the Fed is continuing to get more hawkish, but the market still hasn’t caught up.” [..] “Dollar funding of emerging market economies has been in turmoil for months now,” Patel wrote – because yeah, the era of the cheap dollar is over, and investors should have figured that out two-and-a-half years ago when the Fed started hiking rates. But the market didn’t want to believe that the Fed would actually do it. And suddenly over the past two months, it downs on these geniuses that the Fed has actually been hiking rates and will continue to do so for some time.

Patel not only blamed the QE unwind but also the simultaneous and massive issuance of new Treasury debt by the US government to fund its ballooning deficits. This new issuance of Treasuries “will absorb such a large share of dollar liquidity that a crisis in the rest of the dollar bond markets is inevitable.”

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Excellent speech by Yanis. Read and learn. He may be the only one around with a real way to save the EU.

Why Germany Neither Can Nor Should Pay More To Save The Eurozone (Varoufakis)

[..] I wanted a Germany that was hegemonic and efficient, not authoritarian and caught up in a European Ponzi scheme. That was in 2013. Two years later, in March 2015, I wrote an article, while Greece’s finance minister, referring to the first and second bailout loans, of 2010 and 2012. Allow me to quote from it: “The fact is that Greece had no right to borrow from German – or any other European – taxpayers at a time when its public debt was unsustainable. Before Greece took on any loans, it should have initiated debt restructuring and undergone a partial default on debt owed to its private-sector creditors. But this “radical” argument was largely ignored at the time.

Similarly, European citizens should have demanded that their governments refuse even to consider transferring private losses to them. But they failed to do so, and the transfer was effected soon after. The result was the largest taxpayer-backed loan in history, provided on the condition that Greece pursue such strict austerity that its citizens have lost one-quarter of their incomes, making it impossible to repay private or public debts. The ensueing – and ongoing – humanitarian crisis has been tragic… Animosity among Europeans is at an all-time high, with Greeks and Germans, in particular, having descended to the point of moral grandstanding, mutual finger-pointing, and open antagonism. This toxic blame game benefits only Europe’s enemies.”

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More Europe at this point in time will only lead to more tension.

Macron’s Euro Zone Reforms: Grand Vision Reduced To Pale Imitation (R.)

When French President Emmanuel Macron laid out a sweeping vision for eurozone reform last September, he spoke of “rebuilding Europe”, with a common budget for the euro nations and a single minister to oversee it all. The proposals he will discuss when he sits down with German Chancellor Angela Merkel outside Berlin on Tuesday will be far less ambitious, with deep differences between the two European powerhouses. Many economists agree with Macron that fundamental reforms are needed to strengthen the eurozone and insulate the single currency — the most potent symbol of Europe’s integration — from future crises, like the 2010-13 sovereign debt contagion that nearly tore the euro apart.

But Merkel has limited room to act due to political pressure at home, and is always at pains to ensure France and Germany aren’t pushing ahead with plans that have no deep backing from the rest of the European Union. Macron and Merkel will discuss a separate budget for the 19 countries that share the single currency but much smaller than he wanted. Then there are gaps in opinion over a fund to calm bond markets in a crisis and a backstop for the banking system. “Things are going in the right direction, but the proposals we’re getting from the Germans aren’t sufficient,” said a French official who acknowledged there were deep differences between the two sides.

A German official said there were still big questions about what sort of agreement Tuesday’s meeting would produce on the budget for the euro zone. The official said Merkel’s recent political troubles over migration policy could mean she is less inclined to make concessions to the French leader. Besides the disagreement between France and Germany, it is also the nature of negotiations between the eurozone countries that grand ideas get chipped away at until a compromise is reached that satisfies all parties.

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“Where Germany has trading partners willing to borrow big to buy Mercedes and Beemers, the US has the world’s reserve currency, which acts as an unlimited credit card for our entitlement state and military/industrial empire.”

Hopeless European Millennials And The Populist Takeover (John Rubino)

Europe is frequently held up as an example of how the rest of the world should behave on a variety of issues. But this comparison misses at least two things: First, “Europe” is actually a lot of different countries in a lot of different situations. Second, much of what seems to work over there only does so because it’s being financed with ever-increasing amounts of debt. For countries, as for individuals, borrowing money is fun at first but beyond a certain point becomes debilitating, as interest payments begin to crowd out everything else. That’s where a growing number of Europe’s failed states now find themselves, with overly-generous pensions and overly-restrictive labor laws making it virtually impossible to run a functioning market-based economy.

The result: Fewer good jobs and more frustrated voters – especially young ones who have seen only the downside of the current system – and the resulting rise of populist political parties that recognize the problems without offering coherent solutions, thus guaranteeing even more chaos in the future. As Today’s Wall Street Journal notes, in Italy and Greece, nearly a third of young adults not only aren’t working but aren’t enrolled in school or training. What are they doing? Apparently just sitting around and stewing about life’s injustice. As for where they’re sitting and stewing, in Greece, Italy and Spain it’s now normal for adults all the way into their 30s to live with their parents, largely because they can’t find work that pays enough to afford a house, car and other requirements of independent life.

As for Germany, which looks great by comparison, keep in mind that a big part of its economic outperformance is due to other EU countries borrowing huge amounts of money to buy German exports. When the latter run out of money – a point which is clearly coming – Germany suffers twice, once when it loses important customers and again when its banks, having lent trillions of euros to Italy, Spain, et al, have to eat those losses. But bad-mouthing Europe should not be seen as implicit praise of the US. We, like Germany, have an advantage that’s both unfair and temporary. Where Germany has trading partners willing to borrow big to buy Mercedes and Beemers, the US has the world’s reserve currency, which acts as an unlimited credit card for our entitlement state and military/industrial empire.

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Starting to like Sanchez.

Spain’s New Government To Remove Franco’s Remains From Mausoleum (AFP)

Spain’s new Socialist government is determined to remove the remains of Francisco Franco from a vast mausoleum near Madrid and turn it into a place of “reconciliation” for a country still coming to terms with the dictator’s legacy. “We don’t have a date yet, but the government will do it,” Prime Minister Pedro Sanchez said late Monday during his first television interview since being sworn in on June 2 after toppling his conservative predecessor Mariano Rajoy in a confidence vote. He recalled that a non-binding motion approved last year in parliament called for Franco’s remains to be exhumed from the massive Valley of the Fallen mausoleum some 50 kilometres (30 miles) northwest of Madrid and the site turned into a “memorial of the victims of fascism”.

“Spain can’t allow symbols that divide Spaniards. Something that is unimaginable in Germany or Italy, countries that also suffered fascist dictatorships, should also not be imaginable in our country,” Sanchez added. Earlier on Monday Socialist party spokesman Oscar Puente said the mausoleum should be transformed into a “place of reconciliation, of memory, for all Spaniards, and not of apology for the dictatorship.” Franco ruled Spain with an iron fist from the end of the country’s 1936-39 civil war until his death in 1975, when he was buried inside a basilica drilled into the side of a mountain at the Valley of the Fallen, one of Europe’s largest mass graves.

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A history. “Simply provide everyone with a basic income so that they can afford to live, then let them get on with whatever they want to do.”

A Very British Disease (Coppola)

The desire to judge people’s motives rather than addressing their needs is a “British disease”. We have been suffering from it for hundreds of years, cycling endlessly through repeated cycles of generosity and harshness. Each cycle ends in public outrage and an abrupt reversal: but the memory eventually fades, and the disease reappears in a new form. In this post, I outline the tragic history of Britain’s repeated attempts to “categorise the poor”.

[..] worst of all, using rules and sanctions to compel the genuinely work-shy to work diverts attention and resources away from those who really need help. And it unfairly stigmatises the vast majority of those who are not working, or who are not working as many hours as we think they should, whether through unemployment, sickness or disability. Study after study has shown that in general, people want to work. The problem is that suitable jobs aren’t always available. And yet there remains a prevalent view, even among people who should know better, that people must be compelled to work, or to work harder, with harsh treatment. But today’s sanctions for those who won’t or can’t work are mild compared to the punishments of old: why should they be any more successful?

We would do better to concentrate our attention on helping those who genuinely want to work to find fulfilling, productive and well-paid jobs. And we should also stop trying to decide whether someone “deserves” social support. We have been trying to distinguish between the “deserving” and “undeserving” poor for eight hundred years, and we are no better able to make that judgement now than we were in the fourteenth century, or the sixteenth, or the nineteenth. It is time to give up this fruitless attempt to judge people’s motives. Simply provide everyone with a basic income so that they can afford to live, then let them get on with whatever they want to do.

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Next up: sell Parliament.

Thousands Of Public Buildings And Spaces In England Sold Off A Year (G.)

More than 4,000 public buildings and spaces in England are being sold off every year, with more than 7,000 others at risk over the next five years, a charity has said. Locality says the majority of the sites being offloaded by local authorities are sold to private developers for the highest price, forever lost to communities around them. The charity wants the government to create a £200m-a-year community ownership fund for the next five years to help preserve the buildings and spaces for the use of local people. Tony Armstrong, its chief executive, said: “This is a sell-off on a massive scale. We know that many of the buildings being lost have valuable community uses.

“Everyone of us can think of a local public building or outside space we love and use, from libraries to lidos and town halls to youth centres. They are owned by the public and they’re being sold off for short-term gain to fill holes in council budgets. “Many hundreds of local community groups are stepping up and fighting for community ownership. But they urgently need support and help with startup costs if they are to compete with the commercial developers.” The Great British Sell Off report is published on Tuesday and is based on freedom of information requests sent to all 353 local authorities in England. Locality received 55 responses on the number of buildings and spaces sold between the financial years 2012-13 and 2016-17, as well as 127 replies about sites identified as surplus over the next five years, extrapolating the results to obtain national totals.

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“..if human relations are solely about power, than exercising power over others is all that matters..”

Coercion (Jim Kunstler)

Mr. Peterson laid it out nicely: identity politics assigns everyone to ethnic, racial, and sexual groups, and all the human relations among them amount to never-ending battles for political power. Nothing else matters. Individuals especially don’t matter, only the group. And no group has abused its power more than European white men. This animating idea comes out of the mid-20th century “post-structural critical theorists” Jacques Derrida and Michel Foucault, whose Marxian views emerged conveniently at a time when women and non-white people were vying for departmental chairs in the college humanities and social science programs, and thus have two generations been indoctrinated.

Well, if human relations are solely about power, than exercising power over others is all that matters. Hence, the key to identity politics: it’s all about coercion, making others do your will by threat of force and force itself. These days, the main threat is depriving heretics and apostates of their livelihood. That’s what happened to Brett Weinstein at Evergreen U in Washington State last year, and to Jordan Peterson himself at the U of Toronto, when he objected loudly and publicly to a new Canadian federal law that sought to punish citizens who refused to use the new menu of personal pronouns for the rapidly multiplying new gender categories (e.g. ze, zir, they, xem, nem, hir, nir….)

Both Weinstein and Peterson refused to be coerced and found themselves inadvertently leading a movement against the pervasive, creeping coercion of our time — which has now spread from the campuses into corporate life, with the HR departments working overtime to enforce thought among employees, because company profits are at stake (e.g. Starbucks day-off for “diversity and inclusion training”).

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Somewhat curious that the big political problems start just as the numbers fall.

Sharp Fall In Number Of People Seeking Asylum In EU (G.)

Fewer people sought asylum in the European Union last year, although numbers remain higher than before the arrival of 1 million people in 2015 triggered a political crisis that continues to divide Europe. Showing a sharp drop in asylum claims, the latest report from the EU’s asylum office was published on Monday after emergency talks in the German government over asylum policy and a bitter standoff between EU nations over a migrant rescue ship that eventually docked in Spain after being banned from Italy and Malta. The EU’s asylum office counted 728,470 applications for international protection in 2017, a 44% reduction on the 1.3m applications the previous year.

More than 1 million people entered the EU in 2015, many fleeing the war in Syria. Syria, Iraq and Afghanistan remain the most frequent countries of origin for asylum seekers, accounting for 29% of all claims. The downward trend of asylum claims continued in the first four months of 2018, the EU asylum office said, although numbers have still not returned to pre-crisis levels. About 460,000 people applied for asylum in EU countries in 2013. The fall in asylum applications reflects a sharp drop in people making the hazardous journey over the eastern Mediterranean to Greece and the central Mediterranean to Italy, although there has been an increase in people travelling from west Africa to Spain, albeit from a lower base.

Germany continues to receive more applications for asylum than any other country in Europe, with 222,560 claims in 2017, folowed by Italy, France and Greece. The UK was in fifth place, with 33,780 applications, accounting for 4.6% of all EU asylum claims. But the backlog remains high: 954,100 claims are awaiting a decision, including 443,640 in Germany, according to the EU asylum office.

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Jun 152018
 
 June 15, 2018  Posted by at 12:42 pm Finance Tagged with: , , , , , , , , , , ,  15 Responses »


Edward John Poynter Erato, Muse of Poetry 1870

 

This is something I’ve commented on many times. Like two months ago, when I wrote:

“As for Donald Trump, as much as we would like to engage in constructive criticism of the man and his government, we find we no longer can. The anti-Trump echo-chamber has turned so deafening that any intelligent debate about his policies is being drowned out amid the never ending flow of fake news and half truths and innuendo and empty smears that US media continue to spout. With a brief lull when the bombs fell on Syria.

Thank you, New York Times, WaPo, CNN, MSNBC. Thank you for killing the entire discussion, thank you for killing off journalism. There is a lot to say about Trump, much of it critical, but we can no longer open our mouths. Because we don’t want to be in the same camp as you. Life in the echo chamber has given us vertigo. We had to get out.”

Jim Kunstler thanked me for saying that. He very much feels the same way. Nothing has changed. They’re still at it, and we still can’t get a word in edgewise. I was thinking earlier today that the best the MSM can do to promote its own case is to praise Trump from time to time. Because that is the only way they could attract some ears and eyes from outside their echo chamber.

They won’t do it. Being negative about the US president makes them too much money. It leaves us with a situation in which the one half of America that reads and hears New York Times, WaPo, CNN, MSNBC has become fully isolated from the other half. Yes, this is risky. But this, too, will be blamed on Trump.

Meanwhile, border policies where children are forcefully separated form their parents need criticism and condemnation from all of the nation. But there is nobody left who can reach the entire nation. A year and a half of 24/7 unproven allegations about collusion with Russia has seen to that.

Therefore, when the Intercept wrote about a Human Rights Watch report last month in Obama’s Deportation Policy Was Even Worse Than We Thought , the MSM don’t cover it, because it doesn’t fit the narrative. But when Trump uses the same ICE machinery to scare potential immigrants away, it’s suddenly considered newsworthy.

Oh, and France uses the exact same scare tactics, going as far as ripping children’s soles from their shoes. We should all condemn these atrocities, and make them stop. But it’s not going to happen if you guys insist on making it an anti-Trump thing, because half the country won’t listen to any more of that.

Journalism and news media must be a force to unite a nation, not one that divides it simply because there’s -more- profit in that.

The neverending Trump innuendo reached another new high in the North Korea meeting, with the ‘media’ competing with each other to find yet another terrible mistake or intentional screw-up by the man who is President of all Americans (like it or not). A feeding frenzy on nothingburgers.

Trump was accused of hob-nobbing with dictators. Excuse me, but all US presidents have done that. He wasn’t being tough enough, he was giving far too much away with nothing in return. Well, that’s not how South Koreans see it, and this concerns them a whole lot more than a bunch of ‘reporters’ covering the beltway.

Truth is, Trump did a good job, everything went well, he put Kim Jong-un in a position where the latter will have to deliver on denuclearization, or face the -international- consequences. It is quite the achievement, but if you wake up every single morning looking for more bad things to say about someone, yes, chances are you miss the good things.

You’re also probably missing the Saudi, US-supported, attacks on Hodeidah, the port city that is Yemen’s last lifeline to the world, and the only chance millions of people have of escaping a famine not seen since the Middle Ages.

That is the kind of thing that should be on your front pages, and opening your news shows, not that North Korea happens to have a border with Russia nudge nudge wink wink, and Trump saluted some Korean general.

America needs real news and real journalism, and it needs it badly. Instead it has an increasingly divisive set of well-paid propagandists who break the country ever further apart. The OIG report that came out yesterday confirms this more and better than anything.

When the country’s own ‘intelligence’ conspires to influence the political process, while the media report on outside influence only, then yes, you have a problem. As I was writing earlier today, you have to wonder how many people will still be working at the FBI by the end of the year.

Something else I’ve said before: the only hope of survival the MSM have in the age of the interwebs is to be brutally honest and open. Real news and real journalism. Because simply spouting opinions is something they will be trumped on by the many many millions of people with social media accounts who already do that every day, anonymously, and for free.

The old media don’t stand a chance against that army. The only thing that can save them is the truth.

 

 

Mar 062018
 
 March 6, 2018  Posted by at 11:16 am Finance Tagged with: , , , , , , , , , , ,  11 Responses »


Vincent van Gogh Le Moulin à Poivre, Montmartre 1887

 

EU Proposes Retaliatory Tariff of 25% Against U.S. Goods (BBG)
Trump’s Tariff Threat On European Cars Could Spell Big Trouble For Germany (CNBC)
Retail Investor Bullishness Collapses (WS)
World’s ‘Shadow Banks’ Continue To Expand (R.)
China to Ease Bad-Loan Provision Rules to Support Growth (BBG)
China Faces an ‘Impossible Challenge’ on Budget, Tax and GDP (BBG)
China’s Coming Meltdown Will Rapidly Spread to US (Rickards)
Sex, Money & Happiness (Roberts)
British Can’t Deliver Promises Of Frictionless Trade (Fintan O’Toole)
Canada’s Looming Economic Meltdown (GT)
Coinbase Accused of Cheating Consumers in More Ways Than One (BBG)
US, UK Support World’s Worst Humanitarian Disaster In 50 Years (CP)
Light It Up (Jim Kunstler)
The Ocean Currents Brought Us In A Lovely Gift Today (G.)

 

 

Trump said ‘if you don’t have steel, you don’t have a country’. Is he all that wrong?

EU Proposes Retaliatory Tariff of 25% Against U.S. Goods (BBG)

The EU is preparing punitive tariffs on iconic U.S. brands produced in key Republican constituencies, raising political pressure on President Donald Trump to ditch his plans for taxing steel and aluminum imports. Targeting $3.5 billion of American goods, the EU aims to apply a 25 percent tit-for-tat levy on a range of consumer, agricultural and steel products imported from the U.S. if Trump follows through on his tariff threat, according to a list drawn up by the European Commission and obtained by Bloomberg News. The list of targeted U.S. goods – including motorcycles, jeans and bourbon whiskey – sends a political message to Washington about the potential domestic economic costs of making good on the president’s threat.

Paul Ryan, Republican speaker of the House of Representatives, comes from the same state – Wisconsin – where motorbike maker Harley-Davidson is based. Earlier this week, Ryan said he was “extremely worried about the consequences of a trade war” and urged Trump to drop his tariff proposal. Other U.S. officials will also feel the pressure. Bourbon whiskey hails from Senate Majority Leader Mitch McConnell’s home state of Kentucky. San Francisco-based jeans maker Levi Strauss is headquartered in House Minority Leader Nancy Pelosi’s district. The EU’s retaliatory list targets imports from the U.S. of shirts, jeans, cosmetics, other consumer goods, motorbikes and pleasure boats worth around €1 billion; orange juice, bourbon whiskey, corn and other agricultural products totaling €951 million; and steel and other industrial products valued at €854 million.

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Tariff on US cars exported to Europe is 25%. Tariff on EU cars imported in US is 10%. Looks like there is room for talks there.

Trump’s Tariff Threat On European Cars Could Spell Big Trouble For Germany (CNBC)

The war of words between President Donald Trump and the EU could lead to some serious pressure on the German auto industry, one expert told CNBC. Trump threatened via Twitter on Saturday to hit back at any tariff measures from the European Union — floated in response to Trump’s recently announced global steel import tariffs — in kind. The billionaire businessman’s potential next target? European cars. And the biggest victim of them all may be Germany. “It would be quite severe if we were to face additional import duties to ship the cars into the U.S. — the Germans in particular are very, very exposed,” Arndt Ellinghorst, the head of global automotive research for advisory firm Evercore ISI, told CNBC Monday.

He noted the example of BMW, which sells about 350,000 cars in the U.S. annually, roughly 70% of which come from Europe. “That’s probably an $8 billion to $9 billion revenue stream, if you put a 5 to 10% additional cost on it, it would cost something like $400 million to $800 million. Some of that would be absorbed by the company, and some of it would have to be absorbed by the consumer in the U.S.” Ellinghorst did add that cars being shipped from the U.S. into Europe faced a 10% import duty while European cars into the U.S. faced a 2.5% import duty. “I think what the administration is talking about is to balance out this difference in tariffs to make it more of an equal playing ground for American and European carmakers,” he said.

Out of roughly six million cars exported by Europe in 2016, more than one million were absorbed by the U.S. — just over 16% — its largest country market by a wide margin. Meanwhile, of America’s $53.6 billion in car exports that same year, the value of its car exports into Europe was $11.8 billion, or roughly 22% of the total, according to the Observatory of Economic Complexity. The U.S. is the third-largest car exporter globally after Germany and Japan, accounting for 7.7% of total world exports. It ran a trade deficit of more than $151 billion overall with Europe in 2017.

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The aftermath of the reurn of volatility.

Retail Investor Bullishness Collapses (WS)

TD Ameritrade’s Investor Movement Index – “designed to indicate the sentiment of retail investors” based on what they’re doing in their accounts and “how they are actually positioned in the markets” – plunged 23% in February to 5.95, the biggest month-over-month plunge in the history of the index, “as volatility returned to the market.” This comes after a 9% plunge of the index in January, the largest month-over-month plunge in three years, which occurred despite the final spurt of the rally that took the stock market indices to new highs on January 26. It’s as if retail investors, for once, smelled a rat. After which the sell-off started:

TDA Chief Market Strategist JJ Kinahan explained in an interview that TDA’s clients “didn’t want to be as exposed” in February to risk “as they were.” “What’s interesting is they were net buyers, and they were net buyers because of the February 9th move,” he said. “They bought a lot of stocks that day. But as the month went on, they just continued to sell those stocks back out, and then some. So it was a really interesting pattern that developed.” The stocks they bought had “lower beta than some of the stocks they sold,” he said. “So it was really and truly a risk-off trade. But the bigger part about it is they lightened up their exposure across the board. So one or two days truly of buying,… but after that, not only selling what they’d bought that day, but selling on top of it what they’d bought earlier” this year and last year.

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Hard to gauge how much of a grip the Financial Stability Board has on the actual numbers. 2016 is the first time they include China. But what do they actually know, and how much is guesswork?

World’s ‘Shadow Banks’ Continue To Expand (R.)

Growth in global bond, real estate and money market funds continued to swell the world’s“shadow banking” sector, a watchdog that coordinates financial regulation for the G20 big economies said on Monday. The Financial Stability Board said its“narrow” measure of shadow banking activities that could pose a threat to stability, rose 7.6% to $45.2 trillion in 2016, the latest year for which figures have been collated. It represents 13% of total financial system assets in the 29 jurisdictions surveyed. Data from China and Luxembourg were included in the measure for the first time. “Non-bank financing provides a valuable alternative to bank financing and helps support real economic activity,” the FSB said in its report. Nevertheless, increased reliance on non-bank funding could give rise to new risks, it said.

The so-called shadow banking sector, made up of companies other than banks that provide financial services, has been treated with suspicion by some regulators since the financial crisis a decade ago. Still, it has some champions among policymakers who say it helps keep capital markets more liquid. The European Union actively courts participants to diversify away from heavy reliance on bank loans for EU companies. Apart from debt investment funds, the measure of shadow banking also includes the repurchase and debt securitization markets as well as hedge funds involved in credit. Faced with few rules in the past, sub-sectors like securitization are now regulated and seen to pose less risk to stability.

Open-ended bond funds, hedge funds that offer credit and money market funds account for 72% of the narrow measure, and grew by 11% in 2016. Regulators have asked funds to have safeguards in place for extreme market turbulence to avoid instability from fire sales of assets if many investors ask for their money back. The United States accounts for 31% of the narrow measure, followed by China with 16%, the Cayman Islands at 10% and Japan at 6%. A broader measure, which includes all financial firms that are not central banks, banks, pension funds or insurers, rose 8% to $99 trillion to represent 30% of global financial assets, its highest level since at least 2002, the FSB said.

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How transparent are these shadows?

China to Ease Bad-Loan Provision Rules to Support Growth (BBG)

China is relaxing rules governing how much banks must set aside to cover bad loans, people with knowledge of the matter said, a sign that regulators are comfortable the nation’s lenders are sound enough to extend additional credit and support the economy. The China Banking Regulatory Commission has issued a notice lowering the bad-loan coverage ratio to a minimum 120% from the previous 150%, the people said, asking not to be identified as the matter isn’t public. Relaxed bad-loan coverage rules will allow banks to extend more credit, supporting an economy the government expects to expand about 6.5% this year, a slower pace than in 2017. Additional lending from giants such as Industrial & Commercial Bank of China would also counter some of the effects on the economy of President Xi Jinping’s campaign to curb financial risk, one of the government’s top priorities.

The changes also indicate regulators are confident that they’ve come to grips with a bad-loan epidemic that plagued lenders over the past few years. In 2016, when problem loans at Chinese banks were on the rise, the CBRC resisted lobbying from the nation’s lenders to relax the provisioning thresholds. The timing of the CBRC move suggests that “nonperforming loans are not a problem,” analysts at Shenwan Hongyuan said in a research note. [..] According to the notice, the CBRC will differentiate the amount of provisions an individual bank must hold within the new band of 120% to 150%, based on the level of its capital, the accuracy of its loan classification policies and its proactiveness in handling nonperforming loans, the people said.

China’s banking industry has a bad loan coverage ratio above 180%, CBRC official Xiao Yuanqi said at a briefing last week, indicating banks have plenty of room to reduce provisions. As well as lowering the threshold, the CBRC notice said it will reduce the amount of provisions banks must hold against their total loan book, including healthy loans, to as low as 1.5% from the previous 2.5% minimum.

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They can’t have it all.

China Faces an ‘Impossible Challenge’ on Budget, Tax and GDP (BBG)

Premier Li Keqiang has an “impossible challenge” if he wants to slash China’s budget deficit target, deleverage the economy, and cut taxes, according to Pantheon Macroeconomics. Li on Monday said this year’s deficit goal was cut to 2.6% of gross domestic product, from 3%, the first reduction since 2012. At the same time, he pledged tax cuts of 800 billion yuan ($126 billion) for companies and individuals and set a 6.5% annual economic growth target – the same as last year’s target but slower than the actual performance of 6.9%. “These targets suggest tight monetary conditions and tight fiscal policy, with GDP growth holding up, despite an intensified deleveraging campaign,” said chief Asia economist Freya Beamish in London. “Something’s got to give. We reckon it’s fiscal policy, though monetary policy could also turn out on the easier side, with the yuan also set to weaken.”

[..] While China is aiming for a narrower official deficit, leaders still plan to expand the issuance of special purpose bonds, which are sold by local governments to finance items that aren’t included in the general public budget and not counted in the deficit ratio released annually. Local governments have used special bonds to help pay for highways, railroads and other construction projects in recent years, and the securities are designed to be covered by returns of the projects rather than general revenues. Special purpose bond issuance will jump to 1.35 trillion yuan this year to prioritize “supporting ongoing local projects to see them make steady progress,” the Finance Ministry said Monday. That’s up from 800 billion yuan in 2017 and 400 billion yuan in 2016.

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An entire series of companies guaranteeing each other’s debt. How does that surface in those shadow reports?

China’s Coming Meltdown Will Rapidly Spread to US (Rickards)

The coming credit crisis in China is no secret. China has $1 trillion or more in bad debts waiting to explode. These bad debts permeate the economy. Some are incurred by Chinese provincial authorities trying to get around spending limitations imposed by Beijing. Some are straight commercial loans on bank balance sheets. Some are external dollar-denominated debts owed to foreign creditors. The most dangerous type of debt involves a daisy chain of insolvent corporations buying debt from each other. A single cash advance of $100 million can be passed from corporation to corporation in exchange for a new promissory note, used to extinguish an old unpayable promissory note. Repeated enough times, the $100 million can be used as window dressing to prop up $1 billion or even $2 billion of bad debts.

These kinds of accounting tricks will land you in jail in the U.S., but it’s an accepted practice in China as long as the corporate CEO is a “Princeling” (a politically connected Communist Party insider descended from the old guard) or an oligarch willing to pay bribes. This state of affairs has existed for years. The question investors keep asking is, “How long can this last?” How long can the daisy chain keep operating to gloss over a sea of bad debt and give the Chinese economy an appearance of good health? Well, the answer is the Ponzi will not likely last much longer. Even compliant Chinese regulators are starting to blow the whistle on bad loans and the banks that cover them up. So the good news is that China is starting to address the problem. The bad news is that if China gets serious about cleaning up bad debts, their growth will slow significantly and so will world economic growth.

That’s bad news for global stock markets. Essentially, China is on the horns of a dilemma with no good way out. On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes like wealth management products (WMPs). The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities. The Communist Chinese leadership knew that a day of reckoning would come. The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase). Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.

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Americans can’t get away from the money makes you happy syndrome.

Sex, Money & Happiness (Roberts)

“Sex” and “Money” are probably two of the most powerful words in the English language. First, those two words got you to look at this article. They also sell products, books, and services from “How To Have Better Sex” to “How To Make More Money” — ostensibly so you can have more of the former. Unfortunately, they are also the two primary causes of divorce in the country today. But “happiness,” is also an interesting word because it is ultimately derived from the ability to obtain money and the lifestyle with which it will afford. Researchers at Purdue University recently studied data culled from across the globe and found that “happiness” doesn’t rise indefinitely with income. In fact, there were cut-off points at which more annual income had a negative effect on overall life satisfaction.

So, what’s that number? In the U.S., $65,000 was found to be the optimal income for “feeling” happy. In the U.S., despite higher levels of low income (now there’s an oxymoron), inflation-adjusted median incomes have remained virtually stagnant since 1998.

However, the chart above is grossly misleading because the income gains have only occurred in the Top 20% of income earners. For the bottom 80%, they are well short of the incomes needed to obtain “happiness.”

For most American “families”, who have to balance their living standards to their income, the “experience” of “happiness” is more of a function of “meeting obligations” each and every month. Today, more than ever, the walk to the end of the driveway has become a dreaded thing as bills loom large in the dark crevices of the mailbox. If they can meet those obligations, they are “happy.” If not, not so much.

In my opinion, what the study failed to capture was the “change” in what was required to achieve “perceived” happiness following the “financial crisis.” Just as with “The Great Depression,” individuals forever altered their feelings about banks, saving and investing after an entire generation had lost “everything.” It is the same today as sluggish wage growth has failed to keep up with the cost of living which has forced an entire generation into debt just to make ends meet. As the chart below shows, while savings spiked during the financial crisis, the rising cost of living for the bottom 80% has outpaced the median level of “disposable income” for that same group. As a consequence, the inability to “save” has continued.

[..] Not surprisingly, the “financial stress” in American households is leading to other factors which are fueling the “demographic” problem in the future. The equation is very simple – when individuals are stressed over finances they are less active sexually. This was shown in a recent study by the National Bureau of Economic Research. Ahead of the past three US recessions, the number of conceptions began to fall at least six months before the economy started to contract. As the FT notes, while previous research has shown how birth rates track economic cycles, the scientific study is the first to show that fertility declines are a leading indicator of recessions. [..] To the researchers’ surprise, they found that falls in conceptions were a far better leading indicator of recessions than many commonly used indicators such as consumer confidence, measures of uncertainty, and purchases of big-ticket items such as washing machines and cars.

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Sheer incompetence. Much more of that to come.

British Can’t Deliver Promises Of Frictionless Trade (Fintan O’Toole)

In 2016, more than 310 million people and nearly 500 million tonnes of freight crossed the UK’s borders. If this continues to happen in a “frictionless” way after Brexit, the disturbances to the status quo in Ireland will be limited. If it doesn’t, hang on to your hats. Frictionless trade is the only condition under which Brexit can happen without inflicting a hard border on Ireland. It is almost certainly a political impossibility if the UK leaves the customs union. But even if it could somehow be agreed in principle, there is another enormous obstacle: the actual capacity of the British to handle it. On Friday, after Theresa May’s big set-piece speech on Brexit, the DUP leader Arlene Foster issued a glowing endorsement. She referred back to a paper issued by the UK government last August: “Those proposals can ensure there is no hard border between Northern Ireland and the Republic of Ireland after we exit the EU.”

Foster recognises how much unionism is staking on that document and on the ability of the UK’s bureaucracies to deploy technology to take the sting out of the potentially toxic irritant of the Irish Border. This forces us to consider something that would previously have been of little interest to Irish people: the recent and dismal history of the UK’s adventures in using digital technology to control its borders. In 2003, the British established a spanking new “e-borders” system which was meant to collect and analyse advance passenger information for people travelling into the UK. It had a generous timescale – the full programme was meant to be in place by 2011. In 2010, the Home Office admitted that e-borders was so useless it had to be abandoned. By then, it had spent £340 million (€380 million) on the programme.

The cancellation of the contract led to a legal settlement for another £150 million. The Home Office then spent another £303 million on a new programme, bringing expenditure to £830 million. In 2015, the National Audit Office reported that all of this expenditure “has failed, so far, to deliver the full vision” of what was supposed to be achieved. The current date for completion of the programme is 2019. The whole thing will have taken a mere 16 years. On the same timescale, the new post-Brexit systems on which the future of Ireland may hinge would be delivered in 2035. In 2015, 55 million UK customs declarations were made by 141,000 traders. Once Brexit happens, that will increase fivefold to 255 million. Leaving aside all the issues of political principle, this is the vast logistical challenge that will have to be dealt with if May and Foster are to get the Brexit they want.

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The numbers are interesting, the political stance not so much.

Canada’s Looming Economic Meltdown (GT)

Canada’s Fourth Quarter economic growth was 1.7% following positive signs of growth earlier in the year. This growth, however modest, is attributable to easy credit and the increased consumer spending. At this time, Canadian households are facing one the largest indebtedness when compared to most other countries. For every $1.00 of income, consumers owe $1.68. This is the highest income to debt ratio in the world. For low-income Canadian households, the $1.00 disposable income to $3.33 debt ratio is even worst. Canada, along with other nations, especially emerging markets are carrying records levels of consumer debts, may be facing a serious crash as further growth becomes unsustainable.

Canada combined deficit rose to $18.1 billion in 2016, from $12.9 billion in the previous year. Higher debts and increased spending are causing serious concerns that the Canadian economy is on an unsustainable economic path. A considerable portion of Canada’s future economic growth has been predicated on strengthening and improving the country’s infrastructure. However, Prime Minister Trudeau’s policies are destined to strangle potential economic growth by shifting C$7.2 billion allocated to infrastructure improvements to government programs such as gender equality hiring opportunities. According to the Conference Board of Canada’s Craig Alexander: “This isn’t a budget that’s about growth, as much as it’s about equality and breaking down barriers to opportunity.”

Canada appears to be stunting its own economic growth as a matter of policy. Three major infrastructure projects, The Northern Gateway pipeline ($7.9 billion), the Pacific Northwest LNG project ($36 billion), and possibly the Energy East pipeline ($15.7 billion) would have been instrumental in guaranteeing economic growth for decades to come. However, these have been stymied in favor of Trudeau’s economic egalitarian vision. As a result, investors have been abandoning certain projects. The last time Canada’s saw such heavy-handed government interference in its economy was during the presidency of Trudeau’s father, Pierre Trudeau.

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This could hurt.

Coinbase Accused of Cheating Consumers in More Ways Than One (BBG)

Coinbase was slapped with a pair of lawsuits by disgruntled consumers, one alleging insider trading by employees at the giant digital currency exchange and the other accusing the company of failing to deliver cryptocurrencies to people who didn’t have accounts. The class-action suits come as Coinbase and other crypto startups are beefing up their staffs with regulatory experts to legitimize themselves as they prepare for government authorities to impose stricter rules. The first of the complaints filed in San Francisco federal court centers on Coinbase’s announcement in December that it would enable purchases of the bitcoin spinoff known as Bitcoin Cash. The customer who sued alleges that employees were tipped off a month in advance, allowing them to instantly swamp Coinbase with buy and sell orders and leaving other traders at a great disadvantage.

Coinbase CEO Brian Armstrong said at the time that the company would investigate an increase in the price of bitcoin cash in the hours before its Dec. 19 announcement and that any employee or contractor found to have violated internal policies would be terminated. “To date, neither Armstrong nor the company has disclosed the result of its purported investigation,” according to the March 1 lawsuit. In the other suit, two men claim that they were unable to redeem bitcoin that had been transferred to them through Coinbase via their email addresses in 2013. They allege that when they got reminder notices in February, they tried to recover the bitcoin only to discover that the links provided by Coinbase were broken. They accused the company of keeping their funds and say they want to represent “thousands” of other people in the same position.

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As long as the press continue to ignore this, who cares really?

US, UK Support World’s Worst Humanitarian Disaster In 50 Years (CP)

“The situation in Yemen – today, right now, to the population of the country,” UN humanitarian chief Mark Lowcock told Al Jazeera last month, “looks like the apocalypse.” 150,000 people are thought to have starved to death in Yemen last year, with one child dying of starvation or preventable diseases every ten minutes, and another falling into extreme malnutrition every two minutes. The country is undergoing the world’s biggest cholera epidemic since records began with over one million now having contracted the disease, and new a diptheria epidemic “is going to spread like wildfire” according to Lowcock. “Unless the situation changes,” he concluded, “we’re going to have the world’s worst humanitarian disaster for 50 years”.

The cause is well known: the Saudi-led coalition’s bombardment and blockade of the country, with the full support of the US and UK, has destroyed over 50% of the country’s healthcare infrastructure, targeted water desalination plants, decimated transport routes and choked off essential imports, whilst the government all this is supposed to reinstall has blocked salaries of public sector workers across the majority of the country, leaving rubbish to go uncollected and sewage facilities to fall apart, and creating a public health crisis. A further eight million were cut off from clean water when the Saudi-led coalition blocked all fuel imports last November, forcing pumping stations to close.

[..] As of late January, fuel imports through the country’s main port Hodeidah were still being blocked, with cholera cases continuing to climb as a result. And on 23rd January, the UN reported that there are now 22.2 million Yemenis in need of humanitarian assistance – 3.4 million more than the previous year – with eight million on the brink of famine, an increase of one million since 2017.

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America’s fast becoming a cartoon nation.

Light It Up (Jim Kunstler)

It must be hard on The New York Times editors to set their hair on fire day after day in their effort to start World War Three. Today’s lead story, Russian Threat on Two Fronts Meets Strategic Void in the U.S., aims to keep ramping up twin hysterias over a new missile gap and fear of Russian “meddling” in the 2018 midterm elections. The Times’s world-view begins to look like the script of a Batman sequel with Vlad Putin cast in The Joker role of the cackling psychopath who must be stopped at all costs! America’s generals have switched on the Batman signal beacon, but Donald Trump in the role of the Caped Crusader, merely dithers and broods in the splendid isolation of his 1600 Penn Avenue Bat Cave, suffering yet another of his endless bipolar identity crises.

For God’s sake, The Times, shrieks, do something! The Russians are coming! (Gotham City’s Chief of Police Hillary said exactly that last week in a Tweet!) I think they misunderstood Mr. Putin’s recent message when he announced a new hypersonic missile technology that would, supposedly, cut through any imaginable US missile defense. The actual message, for the non mental defectives left in this drooling idiocracy of a republic, was as follows: Nuclear war remains unthinkable, so kindly stop thinking about it. Mr. Putin’s other strategic position is also misrepresented — actually, not even acknowledged — in Monday’s NYT propaganda blast, namely, to discourage the USA’s decades-long policy of regime change here, there, and everywhere on the planet, creating a debris trail of one failed state after another.

As a true-blue American, I must say these are two admirable propositions. Is it fatuous to add that atomic war is unlikely to benefit anyone? Or that the world has had enough of US military “meddling” in foreign lands? Of course the shopworn trope of Russian “meddling” in the 2016 election still occupies the center ring of the American political circus. Today’s Times story includes another clumsy attempt to set up expectations that the 2018 midterm elections will be hacked by Russia, in order to keep the hysteria at code-red level. As usual, the proposition assumes that the alleged 2016 hacking is both proven and significant when, going on two years, there is no evidence of hacking besides the obviously amateurish Facebook troll farm.

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Sickening to watch.

The Ocean Currents Brought Us In A Lovely Gift Today (G.)

A British diver has captured shocking images of himself swimming through a sea of plastic rubbish off the coast of the Indonesian tourist resort of Bali. A short video posted by diver Rich Horner on his social media account and on YouTube shows the water densely strewn with plastic waste and yellowing food wrappers, the occasional tropical fish darting through the deluge. The footage was shot at a dive site called Manta Point, a cleaning station for the large rays on the island of Nusa Penida, about 20km from the popular Indonesian holiday island of Bali. In a Facebook post on 3 March Horner writes how the ocean currents had carried in a “lovely gift” of jellyfish and plankton, and also mounds and mounds of plastic.

“Plastic bags, plastic bottles, plastic cups, plastic sheets, plastic buckets, plastic sachets, plastic straws, plastic baskets, plastic bags, more plastic bags, plastic, plastic,” he says, “So much plastic!” The video shows Horner swimming through the mess for several minutes and also how the waste coagulated on the surface, mixing in with some organic matter to form a slick of floating rubbish. Manta Point is regularly frequented by numerous manta rays that visit the site to get cleaned of parasites by smaller fish, but the video shows just one lone manta in the background. “Surprise, surprise, there weren’t many mantas there at the cleaning station today…” notes Horner, “They mostly decided not to bother.”

Several weeks ago thousands across Bali took part in a mass clean up, in attempt to rid the island’s beaches, rivers and jungles of waste, and raise awareness about the harmful impacts of trash. Rich Horner said that while divers regularly see “a few clouds of plastic” in the rainy season, the slick he identified is the worst yet. Divers returned to the site the next day, he reports, by which time the slick had already moved on, “continuing on its journey, off into the Indian Ocean..”

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