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Italian Yields Jump As Salvini Threatens To Crash Government

Italian Yields Jump As Salvini Threatens To Crash Government

Clearly emboldened by the EU Parliamentary results, where the League won a plurality of the vote in Italy, Matteo Salvini on Thursday sent BTP yields higher by threatening to crash the Italian government if the Five Star Movement doesn’t back his tax-cut plan.

BTP

BTP yields have been moving higher over the past two weeks as Salvini has brushed off Europe’s threats to fine Italy up to €4 billion over its refusal to rein in its debt and deficit-spending plans. This would be the first time the European Commission has fined a member state over violations of its fiscal rules.

But Salvini, who is now indisputably the most powerful political figure in Italy, isn’t backing down. He has remained defiant, even as Italy braces for the EU to initiate another excessive debt proceeding on Wednesday, when reviews of member states’ fiscal compliance are expected.

As the Telegraph’s Ambrose Evans-Pritchard pointed out in a column yesterday, Salvini has revived threats to initiate an Italian parallel currency – the so-called “mini-BOT” Italian Treasury bills that a Forbes columnist once warned was the “biggest threat to the future of the eurozone.” 

And with Salvini adding to the political chaos by taking the first tentative steps toward ousting Five Star from the ruling coalition, Italian bond holders will have only themselves to blame if they don’t anticipate more market-rattling political chaos, and position accordingly.

Debt is the Hidden Issue in The European Elections

Debt is the Hidden Issue in The European Elections

The citizens of the European Union are called to vote this week for the European Parliament. It is not a real parliament, and it lacks prospects for becoming one, since all important decisions are taken by the unelected heads of the European Commission and the European Central Bank, dubbed “the worst-run Central Bank in the world”.

These elections capture however the general mood of exasperation with current policies. Conservative and extreme Right parties will rise, reflecting widespread scepticism as to the economic course of the EU and its lack of benefits for the common people. The mainstream Left unfortunately neglects these issues, and it will pay the price.

The conservatives generally blame the weak and scapegoat the refugees, the immigrants, the women, and the poor, while promising to save the middle class from the onslaught of big capital. They create false hopes of easy reform, and they never denounce the exploitation inherent in today’s system. History shows however that small owners manage to resist financial stranglehold only when they make common cause with workers and the poor, and they are not afraid to fight.

The economy looks ever more frail. In all, the Eurozone’s nominal GDP stagnates, shrinking 12% in its six largest economies in 2008-2017. The European Union remains indifferent to the peoples’ needs, while it caters for every whim of the corporations. Even so, Quantitative Easing and other crony capitalist schemes promoted by the ECB, such as the Private-Public Partnerships (PPPs) or the new Targeted Long-term Refinancing Operations (TLTRO-III) cannot save the day.

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

Seeds Sown for Major Transatlantic Trade War Starting in May

Seeds Sown for Major Transatlantic Trade War Starting in May 

Trump wants a trade treaty with the EU to include agriculture. France says no. It only takes one.

Trump has made a considerable number of trade threats only to eventually back down. Will it play out that way again?

For a number of reasons, I think Trump will act this time. First, let’s look at the threats.

Severe Pain

On February 25, Trump told the EU Play Ball or ‘We’re Going to Tariff the Hell Out of You’

“The European Union is very, very tough. Very, very tough. They don’t allow our products in. They don’t allow our farming goods in,” Trump said at a meeting with U.S. governors, according to a transcript from the White House. He added that “maybe, in certain ways,” the EU is “tougher than China.”

On March 14, Trump Warned EU of ‘Severe’ Economic Pain if No Progress On Trade Talks.

Partial Agreement Won’t Fly

On April 15, Reuters reported EU Ready to Launch U.S. Trade Talks, but Without Agriculture.

The EU approved two areas for negotiation, opposed by France with an abstention from Belgium. But agriculture was not included, leaving the 28-country bloc at odds with Washington, which has insisted on including farm products in the talks.

EU trade agreement are unanimous. Tiny countries can and have influenced outcomes. It took over a decade to get an agreement with Canada over concerns of tiny nations.

Even if US-EU trade talks take place, nothing will come of them and Trump will quickly get frustrated.

Climate Change Now in the Picture

On April 18, France has signaled it will not cooperate with Trump in any way.

Please consider the new French demand: No EU-US Trade Talks Unless Trump Supports Climate Deal.

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

Disinfo Maginot Line: Protecting EU from ‘Russian Influence’ – by Manufacturing History

Disinfo Maginot Line: Protecting EU from ‘Russian Influence’ – by Manufacturing History

It is now apparent with the release of the Mueller investigation findings, that the great storm that has embattled the US government and establishment since 2016 over supposed Russia-Trump collusion during the US elections, originates not from a genuine tangible source, but a constant stream of rhetoric  driven by partisan corporate media.  One certainty though is the Western narrative of Russia as a ‘malign influence’ will not go away.  While America’s liberal establishment continues to rage at Trump, Europe allies, under the influence of Washington, maintain their aggressive stance towards Russia following the catastrophic US meddling in Ukraine in 2014 and the subsequent reunification of Crimea with Russia.  The question is how can the narrative of ‘malign Russian influence’ be kept going?  Mainstream media will continue its role in this,  but Western governments are also pouring resources into promulgating certain narratives while containing others.  This week, hackers released more documents from the UK government-funded project known as the Integrity Initiative, revealing British government plans to build an umbrella network of organisations across Europe to counter ‘Russian disinformation’.  The following is a look  at one of the EU projects already operating to ensure European populations do not stray from this constructed narrative that at times crosses over into real xenophobic racism, or Russophobia. While researching this phenomenon, it was impossible not to find some of the EU’s counter-propaganda material quite funny.

If we want to know the meaning of disinformation, the American think tank known as the National Endowment for Democracy which funds regime change in the service of US corporate interests, has its own definition, but it’s not important –  so long as we believe Russia or the Nazis invented the problem. 

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

Can the EU Survive the Next Financial Crisis?

Can the EU Survive the Next Financial Crisis?

Despite the ECB’s subsidy of the Eurozone’s banking system, it remains in a sleepwalking state similar to the non-financial, non-crony-capitalist zombified economy. Gone are the heady days of investment banking. There is now a legacy of derivatives and regulators’ fines. Technology has made the over-extended branch network, typical of a European retail bank, a costly white elephant. The market for emptying bank buildings in the towns and villages throughout Europe must be dire, a source of under-provisioned losses. On top of this, the ECB’s interest rate policy has led to lending margins becoming paper-thin. 

A negative deposit rate of 0.4% at the ECB has led to negative wholesale (Euribor) money market rates along the yield curve to at least 12 months. This has allowed French banks, for example, to fund Italian government bond positions, stripping out 33 basis points on a “riskless” one-year bond. It’s the peak of collapsed lending margins when even the hare-brained can see the risk is greater than the reward, whatever the regulator says. The entire yield curve is considerably lower than Italian risk implies it should be, given its existing debt obligations, with 10-year Italian government bonds yielding only 2.55%. That’s less than equivalent US Treasuries, the global risk-free standard.

Government bond yields have been and remain considerably reduced through the ECB’s interest rate suppression and its bond-buying programs. The expansion of Eurozone government debt since the Lehman crisis has been about 50% to €9.69 trillion. This expansion, representing €3.1 trillion, compares with the expansion of the Eurosystem’s own balance sheet of €2.8 trillion since 2009. In other words, the expansion of Eurozone government debt has been nearly matched by the ECB’s monetary creation.

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

Blain: When This Insane Monetary Experiment Ends You Will Have Zero Chance To Exit

Blain: When This Insane Monetary Experiment Ends You Will Have Zero Chance To Exit

This is the day the UK isn’t exiting Europe. Surprised? Not really.

Think I’ll try something different this morning – a review of the week touching on some of the key themes we should be thinking about. Let me know what you think.

But firstly let me apologise for the lack of porridge this week. On Wednesday it was being unable to find anywhere to sit with a computer in London City Airport. Yesterday it was courtesy of Flybe from Edinburgh – I’d like to thank them for leaving us standing in a cold bus while they tried to rustle up a crew. The BA flight took off on time, although I wonder if it went to Duesseldorf?

Let me start with a rant:

Bond Yields and the END OF ABSALOOTLEY EVERYTHING…

While everyone is panicking about US curve inversion and the possibility it is signalling recession, is the real issue even simpler and more obvious? Should we be worried about tumbling global bond yields? Aside from it being impossible for funds to meet long term liabilities, what’s not to like about lower for longer? Actually – quite a lot. Even the ECB has noticed zero bond yields haven’t exactly stimulated growth and jobs across Europe and done nothing in terms of stimulating inflation.

Equities seem blithely unconcerned despite all the cack about trade-wars, rising political anarchy, and a distinct feel this business cycle is likely to wind-down into a slough of earnings downgrades and suchlike unpleasantness. The smart money is not worried, because they understand the truth – there is nothing to worry about BECAUSE A STOCK MARKET MELTDOWN IS ACTUALLY IMPOSSIBLE!

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

‘They Have Lied for Decades’: European Parliament To Scrutinise Exxon’s Climate Science Denial

‘They Have Lied for Decades’: European Parliament To Scrutinise Exxon’s Climate Science Denial

#ExxonKnew light sign over a highway

With millions of students taking to the streets and oil majors increasingly facing litigation, the fossil fuel industry is finally being held to account for its contribution to the climate crisis.

This week, the EU is taking this accountability up a notch, with ExxonMobil’s decades-long denial of climate science facing the scrutiny of MEPs and the public at a hearing at the European Parliament in Brussels on Thursday.

During the two-hour session, scientists, campaigners and a historian will examine the history of climate denial and in particular the misinformation spread by Exxon, with MEPs able to ask questions about the role and behaviour of the oil major.

The hearing is being held jointly by the petitions committee and the environment, public health and food safety committee. It was arranged following a petition by Food & Water Europe, a Brussels-based non-governmental organisation, which gained 732 signatures.

“To my knowledge, this is the first major body of lawmakers, certainly at the national or international level, to hear on record expert testimony about the history of climate denial today,” says Geoffrey Supran, a postdoctoral fellow at Harvard who has examined Exxon’s history of obfuscation on climate change, and who will testify at Thursday’s hearing. “There’s a general momentum here, that investigative bodies are starting to formalise this enquiry.”

Representatives from the oil company itself won’t attend the hearing, due to “ongoing climate change related litigation in the US”, according to leaked notes from the coordinators of the hearing. Exxon did not respond to requests for comment at the time of publication.

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

Moving Forward, Iran Outflanks the U.S. in Iraq and Beyond

Moving Forward, Iran Outflanks the U.S. in Iraq and Beyond

Iran has successfully navigated the first phase of its resistance to U.S. sanctions pressure. The U.S. State Department has admitted it’s goal of reducing Iran’s oil exports to zero is not feasible.

The goal now is a 25% drop to 800,000 barrel per day. And that is no joke. It’s a big drop from where Iran was looking to produce in the coming years under the auspice of the JCPOA. 

The U.S. will not stop until all avenues have been exhausted or Trump fires his current cabinet. 

Iran’s total non-oil exports have suffered as well, since gas condensate exports have also dropped along with the crude oil numbers. 

But Iran is finding friends in other places. They are currently finalizing a free trade agreement with the Eurasian Economic Union (EAEU) with Belarus leading the talks at the 15th meeting between their Joint Economic Committee. 

Iran’s non-oil exports, however, are still just one-fifth of their peak exports. Like Russia it is working quickly with regional partners to change that dynamic. 

It won’t be enough to overcome the U.S.’s economic pressure in the short term.

But as I always say if it survives the initial onslaught then market forces open up opportunities for change. Things like INSTEX, the EU special purpose vehicle for getting around U.S. sanctions, is a perfect example.

Bilateral trade outside of the U.S. dollar is another.

North-South Trade Routes

The completion of the North South Transport Corridor (NSTC) is also helping. For example, trade turnover between Azerbaijan and Iran rose more than 70% last year. 

Speaking in the event, [Azeri Trade Minister] Mustafayev mentioned the 12 meetings between the two countries’ presidents during the past five years and said “that is an indication of how good the relations between the two countries are.”

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

Blain’s Morning Porridge – March 18th 2019

Blain’s Morning Porridge – March 18th 2019


“It’s the edge of the world and all of western civilization, the Sun may rise in the East at least its settled in a fine location..” 

In the headlines this morning: https://www.morningporridge.com/stuff-im-watching

What a Saturday…Well done Wales on a well-deserved Grand Slam. But, I wonder if there is a hidden message in Scotland’s remarkable comeback being dashed as England clawed back an undeserved draw at Twickenham? The Scots haven’t won on English turf since 1983. They played a blinder second half.. while all the English could provide was a surly Farrell dodging a yellow card.  Perhaps it was a lesson in the tedious inevitability of modern life and a timely reminder it’s not a fairy-tale? (Shame… we wis robbed!) Perhaps Trump, Trade Wars, Income Inequality, the mis-match between asset prices and reality, and all the rest is just stuff that’s stupid, unfair and just the way it is..

Meanwhile, back on Planet Misery… what we got to look forward to? 

The Boeing saga rumbles on. It could be a month till we learn what caused the crash a week ago. The focus is not just upon the possibility Boeing has failed to correct and fully inform users of stall-prevention system problems on the B-737 Max, but now on the US FAA for its dithering and lack of clear action. The agency has been rudderless and leaderless for over a year, neglected by the administration after Trump wasn’t able to put his personal pilot at its head!  

And it’s another last chance for a Brexit deal with Theresa May going for third time lucky – apparently. The Westminster rumours say she’s still likely to lose with many of the Hard-Brexit crowd still hoping to achieve a No-Deal exit – justifying it as giving the UK a stronger post exit negotiating position with Europe.

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

Time Runs Out on U.S. Opposition to Nordstream 2

Time Runs Out on U.S. Opposition to Nordstream 2

The Nordstream 2 pipeline represents the last stand of U.S. influence over the internal affairs of Europe. 

Once finished it will stand as a testament to the fundamental split between the European Union and the United States.

Europe will this as its first successful defense of its newly-declared independence. And the U.S. will have to come to terms with no longer having control overseas.

This is a theme repeating itself all around the world right now. 

Your view of Nordstream 2 depends on who you are. 

If you are the U.S. it is a massive rebuke of the post-WWII institutional order mostly paid for by the U.S. to rebuild Europe and protecting it from the scourge of the U.S.S.R.

From Europe’s perspective it’s, “Job well done and all that but Russia isn’t a threat anymore and it is time for us to come out from underneath the U.S.’s shadow.”

And if you are Russia Nordtream 2 is the wedge driving these two adversaries apart while improving national security on your western border.

Europe has imperial ambitions of its own and Nordstream 2 is a very important part of that. Those ambitions, however, are not in line with those in the U.S., particularly under the “leadership” of Donald Trump. 

Trump has this strange idea that the U.S. has gotten nothing in return for our running the world these past seventy-odd years. Our massive trade deficit is wealth stolen by our trade partners in Trump’s simplistic mind.

He refuses to see the wealth we’ve ‘lost’ as squandered by decades of corruption, sloth, regulatory over-reach, etc. 

And so, to Trump, Nordstream 2 is an abomination because he’s funding NATO to protect Europe from Russia but they then are increasing the amount of gas they buy from that very same ‘enemy.’

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

EU is Steadily Moving Towards Creation of 1984-Style Ministry of Truth

EU IS STEADILY MOVING TOWARDS CREATION OF 1984-STYLE MINISTRY OF TRUTH

EU Is Steadily Moving Towards Creation Of 1984-style Ministry Of Truth

The European Parliament passed a recommendation calling  Russia “the main source of disinformation in Europe” and appealing for increased funding for the EU’s East StratCom Task Force, which already got 1.1 million euros in 2018.

HINT: The East StratCom Task Force is a EU body focused on so-called proactive communication of EU policies and activities in the Eastern neighbourhood (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) and beyond (Russia and further).

The passed document says that East StratCom Task Force as well as its two task-force subdivisions dealing with the southern neighborhood and Western Balkans, should get “adequate financial and personnel resources which are still required, aimed at the significant increase of their potential, effectiveness, professionalism, institutional continuity and quality of work, as well as safeguarding them against political meddling by officials and countries that back Russian disinformation.

Furthermore, it called on EU member states “to ensure that electoral laws take into account possible threats stemming from disinformation campaigns” and urged them to “adapt their electoral rules on online campaigning and to monitor and evaluate the transparency features in relation to political advertising introduced by the online platforms.”

The suggestions also include support for “independent and diverse Russian-language media in the countries of the Eastern Partnership and beyond” and “to focus on the EU accession countries and partners in the EU neighborhood by assisting them in their efforts to counteract hostile propaganda and disinformation activities.”

The formal justification of the moves suggested in the document is based on the mainstream media narrative that Russia every day carries out disinformation campaigns and cyber attacks, aimed at increasing tensions within the EU and its member states.

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

EU: Telling Europeans What to Think

EU: Telling Europeans What to Think

  • The above initiatives, of course, exist in addition to all the other measures that the EU has put in place to “guide” Europeans onto the path of proper thinking… which the untransparent and unaccountable online tech giants — Facebook, Google, Twitter and Mozilla — signed in October 2018, and their 2019 “Code of Conduct on countering illegal online hate speech online.”
  • In the same vein as China’s “reeducation camps” or the former Soviet Union’s “rehabilitation centers” that abused psychiatry for political purposes, Marine Le Pen in September was ordered to undergo psychiatric tests for tweeting the pictures, ostensibly to establish whether she “is capable of understanding remarks and answering questions”.
  • It is probably safe to say that the first victims of the EU’s media literacy policies will be diversity of opinion and free speech.
Marine Le Pen (pictured at podium), the leader of France’s Rassemblement National (National Rally) party, posted tweets condemning the Islamic State terrorist group, including photos of their murdered victims. For this, she was charged with the crime of “disseminating violent images,” and ordered by a court to undergo a psychiatric evaluation to determine whether she “is capable of understanding remarks and answering questions.” (Photo by Sylvain Lefevre/Getty Images)

The first European Media Literacy Week, an initiative of the European Union, will take place March 18-22 in various European cities. The week is a new initiative by the European Commission, putatively “to underline the societal importance of media literacy and promote media literacy initiatives and projects across the EU”. The European Commission explains its policy of strengthening ‘media literacy’ within the EU — which could have been a noble and useful initiative — the following way:

“With the rapid rise of digital technology and its increasing use in business, education and culture, it is important to ensure everyone can understand and engage with digital media.

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

Default Or Exit: A Battle Between Italy And The EU Is Inevitable

Default Or Exit: A Battle Between Italy And The EU Is Inevitable

Conte Salvini Maio

There is a dual Italian crisis brewing in the European Union. On the one hand, it is a political, or even geopolitical, crisis. Italy is undermining the unity of the European Union; blocking the EU’s recognition of those behind the coup in Venezuela as the legitimate authority; preventing the expansion of sanctions against Russia; and even supporting the ‘yellow vest’ movement in France, which is arousing the anger of the French government.

On the other hand, the crisis is economic in nature. Italy is once more sliding into a recession (economic growth was negative in the country); Italian banks are again facing financial problems; and the business media has already estimated that the Italian economic crisis could blow up the entire European banking system.

There is a strong possibility that the EU’s leaders will soon be faced with a choice: try to save Italy (and the whole of Europe) from yet another crisis or set an example by punishing the Italian government for the country’s independent economic and foreign policies. In turn, Italian Prime Minister Giuseppe Conte’s government will most likely have its own dilemma to deal with: bow down and sell its principles to get help from Brussels or go all out and regain Italian independence. The choice will not be easy and either decision will be painful. Neither ending to this Italian drama could really be called happy. As this headline in The Telegraph quite rightly notes: “Crisis brewing in Italy will lead to default, exit from the euro, or both.”

Conte Salvini Maio
Italian Prime Minister, Giuseppe Conte delivers his speech during the confidence vote for the new government at the Italian Senate. In the picture at left vice premier Luigi Di Maio and right vice premier Matteo Salvini, Italy, Rome, June 05, 2018

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

France Recalls Ambassador From Italy After “Unprecedented” Verbal Attacks

France Recalls Ambassador From Italy After “Unprecedented” Verbal Attacks

The diplomatic row between France and Italy is escalating. More than half a year after Italy summoned the French ambassador over Europe’s migrant row, on Thursday France one-upped Italy when it announced it would recall its ambassador to Italy, citing “outrageous” verbal attacks, repeated “meddling” in its domestic affairs and “unacceptable” provocations.

La France rappelle son ambassadeur en Italie “après des attaques” “sans précédent” (Quai d’Orsay) #AFP

The French foreign ministry said the decision was taken following a meeting between Italy’s deputy prime minister Luigi Di Maio and leaders of the French Yellow Vest protester movement, trumpeting his support for the grassroots protests in defiance of President Emmanuel Macron.

“This is unprecedented since the war,” the foreign ministry said in an emailed statement on Thursday. “Having disagreements is one thing, but using the relationship for electoral purposes is quite another.”

Luigi di Maio, Italy’s Deputy Prime Minister and leader of the anti-establishment 5-Star Movement hailed the “winds of change across the Alps” yesterday on Twitter after meeting with Yellow Vest activists Cristophe Chalencon and Ingrid Levavasseur.

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

UK vegetable and fruit supplies at risk

UK vegetable and fruit supplies at risk

Potatoes on the wing – and thin pickings for all as UK crops wilt. Image: By Lucas Sankey on Unsplash

Britons’ familiar and well-loved fish and chips could become scarcer as politics and climate change imperil UK vegetable and fruit supplies.

LONDON, 5 February, 2019 − A combination of Brexit − Britain’s move to leave the European Union − and climate change is threatening UK vegetable and fruit supplies for its 66 million people.

Brexit-associated delays at ports could result in widespread shortages of a range of imported vegetables and fruit such as lettuces and tomatoes, particularly if the UK crashes out of Europe at the end of March this year with no deal in place.

Now there’s more bad news on the British food front; a just-released report says climate change and resulting abnormal weather conditions are causing significant decreases in the UK’s own vegetable and fruit harvests.

The study, produced by the Climate Coalition in association with the Priestley International Centre for Climate at the University of Leeds in the UK, says about 60% of food consumed in Britain is domestically produced.

The unusually warm summer in 2018 – the hottest ever in England since records began in 1910, according to the report – led to a drop in the onion harvest of 40% and a decline of between 25% and 30% in the carrot crop.

In 2017 the UK’s apple growers lost 25% of their produce due to unseasonably warm weather followed by an unusually late series of frosts.

“It’s really hard work growing fruit and vegetables, but erratic and extreme weather pushes you over the edge”

The study says climate change-related extreme and unpredictable weather is putting at risk future supplies of potatoes – a staple of the British diet.

“The UK could lose almost three-quarters of the area of land currently well-suited for potatoes by the 2050s under climate projections”, says the report.

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

Olduvai IV: Courage
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Olduvai II: Exodus
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