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Diesel Protests in France Turn Violent

November 25, 2018

Diesel Protests in France Turn Violent

Emmanuel Macron blames Marine Le Pen for French protests that turned violent. She wasn’t there.

People from across France came to Paris to let the president know how they feel about the taxes in general and the tax on diesel.

​Police Use Tear Gas as Thousands in Paris Defy Protest Ban

The WSJ reports Police Use Tear Gas as Thousands in Paris Defy Protest Ban.

Violence erupted Saturday between police and several thousand demonstrators who defied a protest ban and marched down the famous Parisian avenue Champs Elysées, as the country’s interior minister blamed the far-right for the unrest in the French capital.

On the Champs Elysées, some protesters sang the national anthem and waved French flags, while others carried signs urging the president to resign. Some threw stones at police, who responded by firing tear gas and water cannons. At least 130 people were detained across the nation on Saturday, including 42 in Paris, Interior Minister Christophe Castaner said.

Mr. Castaner blamed Marine Le Pen, head of the far-right party National Rally, for urging protesters to head to the Champs Elysées despite an official ban on demonstrations on the avenue.

“What justifies the fact that French people can’t protest on the Champs Elysées when many other gatherings (World Cup, New Year’s Eve…) happened there?” Ms. Le Pen tweeted on Friday. Ms. Le Pen didn’t attend the protests.

Can’t Afford to Eat

‘People are in the red. They can’t afford to eat’

Idir Ghanes, 42, Unemployed computer technician from Paris: We are here to protest against the government because of the rise in taxes [in general], not just petrol taxes, which is the straw that broke the camel’s back.

…click on the above link to read the rest of the article…

Anti-Carbon Revolt: Massive Road Blocks Against Macron’s Diesel Tax

November 20, 2018

Anti-Carbon Revolt: Massive Road Blocks Against Macron’s Diesel Tax

In stunning irony, the French protest against Macron’s diesel tax, while Macron insists the UK abide by climate accord.

On Saturday, more than 282,700 people, many clad in yellow vests, took to — and, in many places, also literally took — the streets, according to the French Interior Ministry. The ministry said a network of drivers blocked roads at some 2,000 locations across the country, generating backups for miles and causing one death.

The protesters’ chief complaint: the rising cost of diesel fuel. The recent price hike is a direct result of President Emmanuel Macron’s commitment to curbing climate change, which included higher carbon taxes for 2018, the first full year of his term. But beyond the diesel issue, many turned out Saturday to voice any number of other frustrations with the “president for the rich,” who is seen as increasingly removed from ordinary people’s concerns.

The stirrings of the “yellow vest” campaign behind Saturday’s protests began this summer, with online petitions urging Macron to reconsider. But the loudest voice was that of Jacline Mouraud, a white-haired hypnotist and grandmother of three from Brittany who has become the star of the movement.

On Saturday, Mouraud was asked to explain the death of the protester. “I deplore the death of this woman,” she said, speaking to Europe 1 radio. “But who is responsible for this situation? The French government is responsible for the death of this woman.”

According to a poll published Friday by the Odoxa agency for France’s Le Figaro newspaper — albeit with only 1,000 respondents — as many as 3 in 4 French people agree.

Location of Roadblocks

…click on the above link to read the rest of the article…

Crude Down Record 11th Day

November 13, 2018

Crude Down Record 11th Day

Crude is down 22% since the early October high. Comments from Trump negated expectations that OPEC would cut production.

  • Oil prices notched their longest losing streak on record Monday, as comments from President Trump negated expectations that the global oil cartel and its allies will cut production.
  • Light, sweet crude for December delivery fell 0.4% to $59.93 a barrel on the New York Mercantile Exchange, marking the 11th consecutive session of losses, the longest in data going back to 1983.
  • Brent crude, the global benchmark, also closed lower, down 0.1% to $70.12 a barrel.
  • Saudi Arabia’s Mr. Falih on Sunday also said his country would unilaterally slash its exports next month by around 500,000 barrels a day, compared with November levels. However, Russia—currently the world’s largest oil producer—sent mixed messages on whether it would pull back on supply.

Trump Calls for Lower Oil Price

Donald J. Trump on Twitter
Donald J. Trump on Twitter
“Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!”
twitter.com

​Sanctions Not Working Out as Expected

OPEC and allied oil-producing countries will likely need to cut crude supplies, perhaps by as much as 1 million barrels of oil a day, to rebalance the market after U.S. sanctions on Iran failed to cut Tehran’s output, Saudi Arabia’s energy minister said Monday.

The comments from the minister, Khalid al-Falih, show the balancing act the U.S. allies face in dealing with President Donald Trump’s actions related to the oil industry.

Trump in recent weeks demanded the oil cartel increase production to drive down U.S. gasoline prices. “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” he tweeted Monday.

…click on the above link to read the rest of the article…

How Italy Leaves the Eurozone, Step by Step

November 9, 2018

How Italy Leaves the Eurozone, Step by Step

Earlier today, Italy told the EU where to go with it budget demands. Expect the EU to huff and puff.

The EU demands Italy do something about its buildup of debt. In response, Italy dismisses ‘implausible’ EU forecasts, says budget is sound.

“There are no grounds for questioning the soundness and the sustainability of our reforms,” Prime Minister Giuseppe Conte said in a statement. “For this reason we consider any other type of scenario for Italy’s public accounts to be absolutely implausible.”

If Italy does not budge, the Commission could launch an “excessive deficit procedure” that could eventually result in fines, though these have never been levied on any country in the monetary union.

“The European Commission’s forecasts for the Italian deficit are in sharp contrast to those of the Italian government and derive from an inaccurate and incomplete analysis (of the budget),” said Economy Minister Giovanni Tria.

“We regret to note this technical slip on the part of the Commission, which will not influence the continuation of constructive dialogue with (it).”

Excessive Deficit Procedures Coming Up

Mercy, that sounds ominous, but I cannot any concrete example of the EU ever doing anything.

Reuters has a Factbox List of Key Dates, five of which have already passed with no consequences. Here are the remaining steps to laugh at.

  • Nov. 19: In the event its budget were rejected by the Commission, the Italian government would have three weeks from the date of the EU opinion to submit a revised budget.
  • Dec. 3: Monthly Eurogroup meeting.
  • Dec. 10: The Commission would have three weeks, likely until Dec. 10, from the submission of Italy’s amended budget to adopt a new opinion in which it would describe Italy’s overall budgetary position and its impact on the whole euro zone.

…click on the above link to read the rest of the article…

26 Experts Weigh in On How and When the Next Financial Crisis Will Happen

November 1, 2018

26 Experts Weigh in On How and When the Next Financial Crisis Will Happen

Focus Economics solicited opinions from 26 economic writers on the next financial crisis. I was one of them.

Looking for opinions on the next financial crisis?

Here’s a portion of the prelude to the opinions. I was one of those quoted.

It is often stated that there is a major financial crisis every 10 years or so. Having said that, it’s been a little over a decade since the Lehman Brothers collapse sparked the last global financial crisis (GFC) and with global economic growth starting to show signs of petering out, some in the media and elsewhere in the public eye are forecasting another global financial crisis in the very near future.

There has been a variety of reports from prominent analysts lately with predictions as to when the next crisis will hit and what will spark it. Strategists at J.P. Morgan Chase recently made a splash with their announcement of a new predictive model that pencils in the next crisis to hit in 2020. Additionally, J.P. Morgan’s Global Head of Macro Quantitative and Derivatives Research, Marko Kolanovic, has highlighted a potential precipitous decline in stocks that could cause what has been termed “the Great Liquidity Crisis.” He identified the shift away from actively managed investing toward passive investing strategies such as exchange-traded funds, index funds and quantitative-based trading strategies, as well as computerized trading as the potential culprit, which could not only be the catalyst for the next crisis but could also exacerbate the fallout.

…click on the above link to read the rest of the article…

Brutally Honest: Facebook Removes then Restores Images from Yemen

October 27, 2018

Brutally Honest: Facebook Removes then Restores Images from Yemen

A couple of questions describe the problem with censorship: Who controls the censors? What biases do they have?

For a few hours after The New York Times published an article about conflict and hunger in Yemen, Facebook temporarily removed posts from readers who had tried to share the report on the social platform.

At issue was a photograph of a starving child.

The article included several images of emaciated children. Some were crying. Some were listless. One, a 7-year-old girl named Amal, was shown gazing to the side, with flesh so paper-thin that her collarbone and rib cage were plainly visible. Tens of thousands of readers shared the article on Facebook, but some got a message notifying them that the post was not in line with Facebook’s community standards.

Facebook had addressed the issue by Friday night.

“As our community standards explain, we don’t allow nude images of children on Facebook, but we know this is an important image of global significance,” a spokeswoman said in an emailed statement. “We’re restoring the posts we removed on this basis.”

It took Facebook a few hours to realize it made a mistake in removing brutally honest images of the effects of the civil war in Yemen.

The images expose the blatant hypocrisy of the US in backing the corrupt Saudi Arabia regime in its war in Yemen.

This was not a nude image. It is not a “community standards” image. Nor was there any doubt about the authenticity of the image.

Any censor can judge “community standards” however they want, but Facebook is an international phenom, not Podunk USA.

Facebook could have and should have said “we f*ed up yet again” but never expect that.

Rather than rejecting that image, Facebook should have promoted it.

Instead, we had temporary censorship. Next time it might not be temporary.

Eight Reasons a Financial Crisis is Coming

October 24, 2018

Eight Reasons a Financial Crisis is Coming

It’s been about 10 years since the last financial crisis. FocusEconomics wants to know if another one is due.

The short answer is yes.

In the last 10 years not a single fundamental economic flaw has been fixed in the US, Europe, Japan, or China.

The Fed was behind the curve for years contributing to the bubble. Massive rounds of QE in the US, EU, and Japan created extreme equity and junk bond bubbles.

Trump’s tariffs are ill-founded as is Congressional spending wasted on war.

Potential Catalysts

  1. Junk Bond Bubble Bursting
  2. Equity Bubble Bursting
  3. Italy
  4. Tariffs
  5. Brexit
  6. Pensions
  7. Housing
  8. China

Many will blame the Fed. The Fed is surely to blame, but it is prior bubble-blowing policy, not rate hikes now that are the problem.

1. Junk Bonds

Many have labeled this an “everything bubble” which is not quite accurate. Yes, the Fed re-blew the housing bubble as well as an equity bubble. But the real standout is the bubble in junk bonds.

Companies are borrowing money to buy back shares at absurd valuations.

In the US, close to 15% of the companies in the S&P 500 only survive because they can roll over their debt. For discussion, please see Rise of the Zombie Corporations: Percentage Keeps Increasing, BIS Explains Why.

I expect a junk bond crash and that will take equities lower with it.

2. Equity Bubbles

Stock valuations are stretched almost beyond belief. The CAPE – Shiller PE was only surpassed by the DotCom bubble. The CAPE PE on October 3 when I last wrote about it was 33.49.​

There will be few places to hide. GMO Forecasts US Equity Losses for 7 Years.

​We may not see a “crash” per se, but if not, then expect a slow bleed over many years, Japanese style.

…click on the above link to read the rest of the article…

Warning! Civilization at Risk, Crisis by 2040 (And Other Nonsensical Climate BS)

October 24, 2018

Warning! Civilization at Risk, Crisis by 2040 (And Other Nonsensical Climate BS)

The amount of climate scaremongering in the past few weeks is stunning. And it’s all pure bullshit.

Check out these headlines.

Q&A

Q.What do all of those headline have in common?

A. They are all based on the same study. The study is riddled with huge numbers of blatant errors making the study for lack of better words, pure bullshit.

Riddled With Errors

  • Almost no quality control checks have been done: outliers that are obvious mistakes have not been corrected – one town in Columbia spent three months in 1978 at an average daily temperature of over 80 degrees C. One town in Romania stepped out from summer in 1953 straight into a month of Spring at minus 46°C. These are supposedly “average” temperatures for a full month at a time. St Kitts, a Caribbean island, was recorded at 0°C for a whole month, and twice!
  • Sea surface temperatures represent 70% of the Earth’s surface, but some measurements come from ships which are logged at locations 100km inland. Others are in harbors which are hardly representative of the open ocean.

…click on the above link to read the rest of the article…

Italy Openly Defiant of Eurozone Stability Pact, Deliberately and Knowingly

October 23, 2018

Italy Openly Defiant of Eurozone Stability Pact, Deliberately and Knowingly

Eurozone officials and the ECB are in a quandary over Italy’s deliberate defiance of budget rules.

There is a fundamental irony in Italy’s open defiance of Eurozone stability rules. Both France and Germany did the same in 2003.

It is hard to concoct a more fundamental challenge to the European Commission’s authority than a member state announcing, like Italy did yesterday, that it is going to break the rules deliberately and knowingly. Such purposeful disregard threatens the whole rules-based edifice of the Commission’s authority, and ultimately treaty-based European integration.

In the current face-off between Brussels and Rome over Italy’s budget, a look back at the years 2003-2005 is as amusing as it is instructive. Then it was France and Germany that smashed the stability pact.

France and Germany argued at the time that the breach was temporary and that growth would resume later. Thos are exactly the arguments Italy makes today.

Interested parties may wish to read the November 26, 2003 Telegraph article France and Germany Smash Euro Pact.

The lead paragraph is amusing as are some further down the line.

The eurozone’s Stability and Growth Pact was effectively killed off yesterday when EU finance ministers refused to enforce treaty law against France and Germany for persistently breaching the spending rules.

France and Germany won backing for their “flexible” interpretation of the pact after a stormy exchange with smaller states. In the formal show of hands later, only Holland, Austria, Finland and Spain voted to uphold treaty law, although Belgium, Sweden, Denmark and Greece voted for a lesser condemnation.

If you seek further irony, it was Germany that demanded the pact in return for giving up the Deutsche Mark.

…click on the above link to read the rest of the article…

“Ultra-FICO” to Boost Credit Scores Giving Millions More Access to Credit

October 22, 2018

“Ultra-FICO” to Boost Credit Scores Giving Millions More Access to Credit

Just in the nick of time not: Fair Isaac is launching a new type of credit score that will give millions more credit.

Just as the economy is peaking, consumers with a low FICO could get a higher “UltraFICO“, a new score that factors in bank-account activity as well as loan payments.

Credit scores for decades have been based mostly on borrowers’ payment histories. That is about to change.

Fair Isaac Corp., creator of the widely used FICO credit score, plans to roll out a new scoring system in early 2019 that factors in how consumers manage the cash in their checking, savings and money-market accounts. It is among the biggest shifts ever for credit-reporting and the FICO scoring system, the bedrock of most consumer-lending decisions in the U.S. since the 1990s.

The UltraFICO Score, as it’s called, isn’t meant to weed out applicants. Rather, it is designed to boost the number of approvals for credit cards, personal loans and other debt by taking into account a borrower’s history of cash transactions, which could indicate how likely they are to repay.

The new score, in the works for years, is FICO’s latest answer to lenders who have been clamoring for a way to boost loan approvals.

UltraFICO is the latest in a recent series of changes by credit-reporting and scoring firms that are helping boost consumers’ credit scores.

Equifax, Experian and TransUnion last year began deleting most tax-lien and civil judgment information from credit reports. They also have been removing certain accounts in collections, following settlements with state attorneys general dating back to 2015 over how they manage errors and certain negative information on credit reports.

…click on the above link to read the rest of the article…

“One Size Fits Germany” Math Impossibility, Get Your Money Out of Italy Now!

October 19, 2018

“One Size Fits Germany” Math Impossibility, Get Your Money Out of Italy Now!

Italy, on the Euro, has a currency that is 9% too high. Germany, on the Euro, has a currency that is 11% too low.

There was much discussion yesterday about the US Treasury report that determined China was not a currency manipulator.

However, there are six countries on the manipulation watch list: China, Japan, Korea, India, Germany, and Switzerland.

  • Japan, Germany, and Korea have met two of the three criteria in every Report since the April 2016 Report having material current account surpluses combined with significant bilateral trade surpluses with the United States.
  • Germany has the world’s largest current account surplus in nominal dollar terms, $329 billion over the four quarters through June 2018, which represented its highest nominal level on record. Germany also maintains a sizable bilateral goods trade surplus with the United States, at $67 billion over the four quarters through June 2018. There has been essentially no progress in reducing either the massive current account surplus or the large bilateral trade imbalance with the United States in recent years, in part because domestic demand in Germany has not been sufficiently strong to facilitate external rebalancing and because Germany’s low inflation rate has contributed to a weak real effective exchange rate.

Try Fixing This

  1. The Euro is 11% undervalued in Germany, the largest Eurozone economy.
  2. The Euro is 9% overvalued in Italy, the third largest Eurozone economy.

The normal way central banks make adjustments to fix over-valued or undervalued situation is through interest rate policy or direct currency intervention.

No matter which the ECB does, it will impact Italy and Germany in opposite directions.

Meanwhile, interest rates are on the verge of spiraling out of control in Italy.

Italy vs Germany 10-Year Bond Spread

…click on the above link to read the rest of the article…

St Louis Fed Discloses More Free Money: A Carry Trade in Liquidity

October 16, 2018

St Louis Fed Discloses More Free Money: A Carry Trade in Liquidity

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.

Interest Rate on Excess Reserves

​How Much Free Money?

Fed vs ECB

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.

Inevitable De-Industrialisation of Europe

October 13, 2018

Inevitable De-Industrialisation of Europe

EU ministers agreed to binding cuts in CO2 emissions of 35% by 2030. The German auto industry won’t be able to deliver.

Hamburg was first in May. Stuttgart, home of Mercedes and Porsche, was second in July.

A diesel ban in Frankfurt came third.

Only older cars that do not meet emission standards are banned, but diesel is now toxic. No one wants to buy diesel.

Merkel Can No Longer Protect Car Makers

Adding to the woes, Merkel has lost control. She is no longer able to protect German industry.

The European Parliament just voted to cut CO2 emissions by 40%. The European ministers voted for a 35% reduction. The latter is binding.

Car sales dropped sharply in September.

Eurointelligence on Autos and German Industry

The German government – backed by its usual eastern European allies – fought in vain to head off the tougher standards.

Germany’s environment minister Svenja Schulze deliberately – and astonishingly – weakened her own negotiating position by making clear that her personal preference would have been for tougher targets than those she was officially defending as her government’s position.

An administrative court in Berlin decided yesterday that the city of Berlin needs to ban diesel cars – compliant with Euro norms five and earlier – in important areas of the city, including Friedrichstrasse and Leipziger Strasse. There is no ban for petrol cars as the emissions in question are nitrogen oxide. The ban will have to be implemented by July 2019 at the latest. The plaintiff was a German environmental NGO, which had sued for a city-wide ban of diesel.

Car Sales Plunge

…click on the above link to read the rest of the article…

Catastrophic Destruction by Michael, Millions Without Power, Towns Destroyed

October 12, 2018

Catastrophic Destruction by Michael, Millions Without Power, Towns Destroyed

Hurricane Michael destroyed entire towns. The electric grid won’t need to be restored, it will need to be rebuilt.

✔
 ·

primer on this thread just so those outside state understand a little bit about NW part of the state. It is a place we fell in love with as a family years ago & have spent many long weekends enjoying :

✔

Panama City is a vibrant seaside city. Popular vacation spot for both families & college students. Early reports from locals is catastrophic devastation. As it was described to me, the electric grid won’t need to be restored, it will need to be rebuilt.

Destruction for Miles and Miles

​Mexico Beach

​Search and Rescue Begins Amid Ruins of Florida Coast

Some people elected to ride the hurricane out.

That was not a good move. At least six are dead. More will come.

A Search and Rescue Effort Begins amid ruins of Florida Coast.

Search-and-rescue teams rushed on Thursday to reach communities that Hurricane Michael leveled, hoping to find survivors of the powerful storm after its rampage through the Florida Panhandle and beyond left buildings collapsed and splintered, hospitals damaged, roads and water systems compromised and more than a million homes and businesses without electricity.

Although it was clear by afternoon that the storm had caused widespread damage, some areas remained largely cut off, and the authorities were trying to deploy rescuers by helicopter and boat.

“This is a very dense part of the state, so it’s going to be a lot of work to get to everybody,” Gov. Rick Scott of Florida said. “But we will get to everybody.”

…click on the above link to read the rest of the article…

IMF Warns About Emerging Markets: Hello “Always Late” IMF, Global Crisis Coming

October 11, 2018

IMF Warns About Emerging Markets: Hello “Always Late” IMF, Global Crisis Coming

The IMF is finally warning that there may be an emerging market crisis. Hello IMF, it’s already here. Look ahead.

The IMF is perpetually late in its forecasts. Here’s the latest hoot: IMF Warns of Possible Emerging-Markets Crisis.

A new study by the International Monetary Fund projects emerging economies will muddle through recent market turbulence without a severe shock to their financial systems, but flags an outside chance of a crisis.

In a “severely adverse” scenario, the IMF says capital could flood out of countries at a pace not seen since the 2008 global financial crisis.

Outside Chance of a Crisis? What the Hell?

Argentina and Turkey are both in a full-blown crisis. So is Pakistan which last week went to the IMF for help.

Here’s a hint: It’s a certifiable crisis to go to the IMF for a bailout.

And what about Venezuela deep in hyperinflation.

Wake-Up Call

“This should serve as a wake-up call,” Ms. Lagarde said of the mounting debts and risks of capital outflows.

Wake-up call to do what? Please tell us Ms Lagarde.

The emerging market crisis is already underway.

When the global junk bond and equity bubbles pop, we will not just be talking about emerging markets that are in trouble.

Hello IMF, please wake up.

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