According to breaking reports the United States has conducted major airstrikes on Idlib in northwest Syria, which came just after a fierce bombardment over the past days by Russian jets on the province.
The unconfirmed local reports say a large series of explosions on Saturday rocked the countryside just outside Idlib city in what is believed to have been US coalition missile strikes on the insurgent group Horas al-Din’s headquarters (Al-Qaeda affiliate in Syria).
The reported strikes may have also targeted top commanders of Hayat Tahrir al-Sham, the powerful al-Qaeda affiliate operating in Syria, formerly the Nusra Front terror group, including most significantly America's "most wanted" terrorist Abu Mohammed al-Jolani.
#BREAKING US attacks the Jihadist group Horas Al-Din in #Idlib: reports pic.twitter.com/iPFFIjVd5R
— Guy Elster (@guyelster) August 31, 2019
If confirmed the surprising coalition airstrikes would be hugely significant and an almost unprecedented development, given the White House has for years threatened to attack Syrian government and Russian forces over this very thing — aerial bombardment of Idlib.
According to local sources, eyewitnesses observed up to seven explosions before seeing a massive black plume of smoke rise high on the horizon.
At least 40+ militants of the Al-qaida faction "Guardians of Religion Organization" also called "Hurras al-din" including high-ranked leaders/commanders were eliminated in the airstrikes carried out by International Coalition forces.#Syria #Idlib #HTS #SAA #AQ #Al_Qaida #Turkey pic.twitter.com/ToZtHKGCNT
— Rojava Network (@RojavaNetwork) August 31, 2019
It's believed that Horas al-Din and Hayat Tahrir al-Sham may have been holding a high level meeting at a headquarters base.
مصادر متقاطعة: طيران التحالف بقيادة أمريكا ينفذ هجوما بالصواريخ غرب الفوعة في ادلب، لم تتأكد أهدافه بعد وحديث عن قصف اجتماع لحراس الدين... pic.twitter.com/Cw5bdZ8vfD
— زمان الوصل (@zamanalwsl) August 31, 2019
According to Beirut-based Al Masdar News, dozens of jihadists have been reported killed in the attack:
The U.S. military reportedly bombed a group of jihadist rebels near the city of Idlib in northern Syria, local activists reported this afternoon [local time].
According to the reports, the U.S. fired cruise missiles at a base belonging to the Hurras Al-Deen group near the northeastern outskirts of Idlib city.
The reports said that dozens of jihadists, most of them foreigners, were killed during the U.S. military’s attack on the Hurras Al-Deen base near Idlib city.
#Idlib: At least seven seven explosions, targeting the headquarters of al-qaida "Guardians of Religion Organization" were reported a while ago. Report of International Coalition bombings.#Idlib #HTS #AL_qaida #SAA #Syria pic.twitter.com/PXXJ4sVsLX
— Rojava Network (@RojavaNetwork) August 31, 2019
The US coalition had actually targeted a jihadist base in Idlib province earlier this year, however, Saturday's airstrikes if confirmed would mark a major escalation in US coalition counter-terror operations in Idlib.
developing...
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The U.S. opioid crisis has been making headlines again this week after pharmaceutical giant Johnson & Johnson was fined $572 for fuelling the epidemic in Oklahoma in a historic ruling.
As Statista's Niall McCarthy notes, last year, drug overdoses claimed more than 68,000 American lives and 47,000 of those deaths involved an opioid. Even though heroin, prescription opioids and synthetic opioids like fentanyl are receiving most of the attention, deaths from other drugs like cocaine and methamphetamine are increasing.
A new report from the RAND Corporation has shed light on just how many people use illicit drugs across America as well as how much they pay for them.
You will find more infographics at Statista
In 2016 alone, people in the U.S. spent an estimated $146 billion on cocaine, heroin, marijuana and methamphetamine. Adding RAND's figures together from 2006 to 2016 would mean total spending on illegal drugs over the course of the decade was nearly $1.5 trillion.
Out of all four drugs in 2016, users spent the most on illicit marijuana - $52 billion.
The market for the illegal green stuff is around the size of the cocaine and methamphetamine markets combined. Heroin has the second highest financial outlay ($43 billon) followed by methamphetamine ($27 billion) and cocaine ($24 billion).
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Hong Kong watchers were startled, asking if "this was it", when videos and images started emerging of Chinese troops and armored trucks entering Hong Kong.
Subsequent media reports, notably from the People's Daily, suggested that this military maneuver which took place in the "wee hours of Thursday", was due to the 22nd annual rotation of the People's Liberation Army garrison in Hong Kong.
The #HongKong Garrison of the Chinese People's Liberation Army conducted the 22nd rotation of its members in the wee hours of Thursday since it began garrisoning Hong Kong in 1997. pic.twitter.com/MMqaZCCRov
— People's Daily, China (@PDChina) August 29, 2019
Local media reported that the move, approved by the Central Military Commission, "is normal routine annual rotation in line with the Law of the People's Republic of China on Garrisoning the Hong Kong Special Administrative Region, which stipulates that "the Hong Kong Garrison shall practice a system of rotation of its members."
Still, one can't help but wonder at the curious timing of the annual troop rotation, taking place just as Hong Kong protesters brace for even more demonstrations against China, and as Carrie Lam prepares to invoke an Emergency Regulations Ordinance, according to which "The HK government can legally take your property, force you to work for the benefit of the government, deport you (to China?)...and make anything they do legal."
Anyone read the Emergency Regulations Ordinance that carrie lam(b) is considering invoking?! The HK government can legally take your property, force you to work for the benefit of the government, deport you (to China?)...and make anything they do legal 1/ https://t.co/DFWwJbiNP1
— Kyle Bass (@Jkylebass) August 29, 2019
So is China's troop deployment nothing but a "routine and planned" mission, or is China taking advantage of an simple pretext to beef up its HK presence ahead of what many have said will be critical clashes? We'll find out soon enough: one way or another Beijing will need to resolve the ongoing HK mutiny before the October 1, National Day of the PRC holiday, when Xi will be compelled to demonstrate to China (and the world) that he remains fully in control over Hong Kong.
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The company which administers the SAT college admissions test is replacing the so-called "adversity score" with a tool that will no longer reduce an applicant’s background to a single number, an idea the College Board’s chief executive now says was a mistake.
Amid growing scrutiny of the role wealth plays in college admissions and in hopes of appearing "woke" and "politically correct", two years ago the College Board introduced its Environmental Context Dashboard to provide context for a student’s performance on the test and help schools identify those who have done more with less.
In short, it was the SAT's way to implement affirmative action in test results. Skeptics said it was a terrible idea and it now appears they were right.
The version used by about 50 institutions in a pilot program involved a formula that combined school and neighborhood factors like advanced course offerings and the crime rate to produce a single number. But critics called it an overreach for the College Board to score adversity the way it does academics. David Coleman, CEO of the College Board said some also wrongly worried the tool would alter the SAT results.
“The idea of a single score was wrong,” he said, quoted by the AP. "It was confusing and created the misperception that the indicators are specific to an individual student."
So now what?
The New York City-based College Board announced several changes to the tool Tuesday, including the decision to give students access to the information about their schools and neighborhood starting in the 2020-2021 school year.
Renamed “Landscape,” the revised tool will provide data points from government sources and the College Board that are seen as affecting education. They include whether the student’s school is rural, suburban or urban, the size of the school’s senior class, the percentage of students eligible for free- and reduced-price lunch, and participation and performance in college-level Advanced Placement courses at the school. Between 100 and 150 institutions are expected to pilot the new tool this year before it becomes broadly available next year.
Admissions officers also will see a range of test scores at the school to show where the applicant’s falls, as well as information like the median family income, education levels and crime rates in the student’s neighborhood.
The imperfect tool’s creation was an acknowledgment of persistent criticism of the use of admissions tests in an era of concern with unequal access to advanced coursework and high-priced tutors that further advantage those with the means to access them.
Meanwhile, this year’s “Varsity Blues” scandal, which exposed cases of affluent parents cheating the admissions system, has brought further scrutiny. In fact, it confirmed that those with power and money don't outperforming on the SAT due to intangibles - they do so far more directly by bribing corrupt university officials directly.
Still, colleges and universities have for several years been acting on the concerns, with an increasing number no longer demanding SAT or rival ACT scores from applicants. More than 1,000 schools, including elite liberal arts colleges, as well as research universities and for-profit schools, are test-optional, according to the nonprofit group FairTest, which argues standardized tests are biased against minority groups.
As the AP notes, Yale piloted the Environmental Context Dashboard, and admissions dean Jeremiah Quinlan said it’s a consistent way to see information that its admissions officers have always considered when culling through an application pool of 38,000. Just over 1,500 students recently arrived for their first year, more than 20 percent of them eligible for income-based federal Pell Grants, he said. That compares with about 16 percent before the dashboard and 12 percent six years ago.
“It helps us identify students who have excelled in their context in a more clear and convincing way than we ever could have in the past,” said Quinlan, dean of undergraduate admissions and financial aid.
Will the new version be better? Eddie Comeaux, vice chair of the University of California’s Board of Admissions and Relations with Schools, said the improved clarity and transparency of Landscape addressed some of his initial concerns.
He still worries, though, about potential implicit bias among admissions officers, a problem that predates the context tool and is a focus of his work on the board, which regulates admissions practices.
“We want to look at implicit bias training and the ways in which certain indicators might signal a way in which (application) readers advantage or disadvantage certain applications and consciously or unconsciously not be aware of it,” he said.
“I’m less concerned about Landscape,” he said, “than I am about those who are making the decisions utilizing Landscape.”
Because there is always "something" to "explain" away why someone doesn't get a perfect score on the SAT, and heaven forbid it has something to do with one's own personal qualities, ambitions and laziness.
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European and Asian economic data is deteriorating, says economist and author Daniel Lacalle.
“I’d call right now the day of reckoning,” Lacalle says, in this video excerpt of our soon-to-be released podcast In The Arena.
“The entire message from mainstream consensus is ‘Yes there was a global slowdown,’ but using the trade war as an excuse.”
Lacalle argues that the global growth slowdown has absolutely nothing to do with the trade war and says the trend in economic data around the world suggests Wall Street estimates for global growth are still too high.
“We’re now in the reality check period,” Lacalle says.
“Now, the risk of recession is starting to build up.”
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Submitted by Michael Every of Rabobank
Dramatic developments all round, folks. Friday saw China announce retaliation for upcoming increases in US tariffs, which will now rise step-for-step on 1 September and 15 December. We didn’t have to wait long for the response. US President Trump’s blistering set of tweets shouted: “Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon.” Trump also alluded to seeing China as an “enemy” in another tweet.
He then followed through: the 25% tariffs already in place are now 30%, and the additional 10% tariffs due to kick in on 1 September and 15 December are to be 15%. Briefly, it then looked like Trump might be expressing “regret” – but the White House immediately clarified Trump only regrets not setting China tariffs at a higher rate to begin with. Moreover, Trump--and China ‘doves’ Mnuchin and Kudlow--have made clear he is willing to use the International Emergency Economic Powers Act against China, if needed, which could have a far larger impact: goods or firms could be excluded from the US market, or access to the USD denied.
The People’s Daily has stated none of the extreme pressure tactics and intimidation by the US will work with China, which will “unswervingly protect itself” and that “the country's countermeasures will be more rational, firmer and more powerful”; the Global Times added “China will not succumb even if US companies all leave China”. More important for markets is that this morning in Asia CNH briefly hit a low of 7.19; CNY fixing this morning was 7.0570, as on Friday, to try to show that this is actually not the PBOC’s desire: but will that be enough if things keep deteriorating like this? My bearish CNY call has long raised eyebrow: well, since April we have moved 50 big figures. What’s another 58 over 12 months given the current backdrop? In short, we are close to a tariffs up – FX down spiral, which risks panicking everyone. US 10-year yields were at 1.48%, for example. Of course, we have been flagging a trade war since early 2017, calling it a Cold War since late 2017, arguing there is no deal to be done, and recently noted that we expected a full trade escalation. That is, by any definition, an international economic emergency.
But now to the pork pies. Among a potential shattering of supply chains, whether US-China or UK-EU, there are also new connections being made. UK PM Johnson had breakfast with Trump and in front of the cameras pushed him on market access for pork pies as well as cabotage (which Trump probably thought was something you eat). The prospect of a US-UK trade deal within a year is being dangled – but BoJo can only do that OR a deal for closer ties with the EU. The US has already just agreed in principle a trade deal with Japan that has “geopolitics” as much as “local politics” written all over it. The Japanese government has decided that it suddenly needs to slash tariffs on US beef and pork and dairy; and the Japanese private sector has suddenly realised that it needs to buy massive volumes of corn and wheat. How convenient for all involved – and how inconvenient for rival agri exporters like Australia and New Zealand
Meanwhile, the “Biarritz-Krieg” I spoke of Friday is also in evidence on other fronts: Merkel vs. Macron over Macron Vs. Bolsonaro over the Amazon; Macron vs. Trump by trying to sneak in Iran’s –sanctioned- foreign minister to the G7 for a “surprise” visit; and Trump vs. everyone else in wanting to readmit Russia to the grouping as they are key to many of the issues being discussed.
But pork pies have another meaning. For anyone who grew up within the sound of Bow Bells, or who has watched East Enders since birth, will know that “pork pies” means “lies” in Cockney rhyming slang. And there is a lot that about.
For example, at the central banking retreat of Jackson Hole BOE Governor Carney gave a speech where he argued that it was time to contemplate the end of the USD as the global reserve currency! However, note that while safe haven FX like JPY is rallying this morning on trade fears, so is USD against EM FX (including another flash crash in TRY). Indeed, we recently published a report on how Facebook’s Libra could be the spine of a new global reserve system…but added that politics meant this would not happen. Is Carney--whose bank is contemplating being moved from EU to US orbit--unable to realise that real politik? And why did he say it while a guest in the US? Remarkable times – unless he wants a job with Facebook(?)
Furthermore, consider what was supposed to be the main event Friday – Fed Chair Powell’s Jackson Hole speech. I was wrong to say it would have keine weltanschauung. It did: it’s just that it was a vast pork pie. “Challenges for Monetary Policy” argued central banking has seen three phases: a post-WW2 era where policy wasn’t responsive enough and we got start-stop growth –lessons were learned via inflation targeting; a period where policy thought it had found a new “great moderation”, which then ended up with the global financial crisis – lessons have been learned via greater regulation; and now a phase where low inflation and low unemployment can coexist and where horrible trade wars are making decision-making really hard. No suggestion of massive Fed action to come – but the expected blame on tariffs as the cause of all our troubles. Frankly, that’s a High School level of economic history at best.
In fact, post-WW2 central banks were not independent and didn’t have a pure inflation mandate; moreover, the global economy was highly tariffed and on a gold standard (to which USD was pegged); yet that era’s “stop-start” growth created the West’s middle class. Then, as Triffin had predicted, the system broke down and USD went off gold as Bretton Woods collapsed. In the new fiat era an immediate oil shock meant serious inflation for a decade. Then we had a new phase of tight monetary policy, inflation targeting, and labour-power-destroying globalisation…and so the “great moderation” – which Minsky correctly argued would lead to a crisis. Post that crisis we now apparently have a Fed who doesn’t seem to realise that Minsky dangers lie in SHADOW banking, and in the push-pull of domestic politics vs. the Eurodollar system (an echo of Triffin that Carney does seem to understand) and in China’s massive over-building and over-production. They also don’t realise that labour vs. capital is still the key issue – or won’t say so. As such, while central banks are saying we are at the end of an era--and we are!--pointing fingers at “trade war” as the cause is as helpful as Trump pointing fingers at central banks as the “enemy”. Both are merely symptoms.
In short, international economic emergency, and pork pies, mean rates and bond yields are going lower; gold is going higher; so are havens like JPY and CHF; and yet so is the USD vs. EM FX.
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New statistics published by Britain's Office for National Statistics (ONS) show that the number of EU citizens moving to the UK for work has halved since the Brexit referendum.
As Statista's Niall McCarthy notes, in the year ending June 2016, the number of people moving to the UK for work stood at 190,000 and in the year ending March 2019, that plummeted to 92,000.
You will find more infographics at Statista
The ONS said that the figures are based on "adjusted estimates" after admitting that EU migration had been under-estimated.
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When it comes to unconventional proposal to control the weather, NBC News probably holds the prize with this gem, which we discussed back in January: "A last-ditch global warming fix? A man-made ‘volcanic’ eruption” to cool the planet. Scientists and some environmentalists believe nations might have to mimic volcanic gases as a last-ditch effort to protect Earth from extreme warming."
Another just as ridiculous proposal to "control" atmospheric events emerged during the Eisenhower era, when a government scientist proposed detonating a nuclear bomb over the eye of a hurricane to counteract convection currents.
Why do we bring it up? Because according to an Axios report late on Sunday (which if capital markets weren't collapsing and China wasn't on the edge of invading Hong Kong would have been the top watercooler discussing point tomorrow, but as it stands will hardly make the top 10 most shocking weekend developments) President Trump "suggested multiple times to senior Homeland Security and national security officials that they explore using nuclear bombs to stop hurricanes from hitting the United States."
Is Axios just making stuff up to paint Trump in a crazy light? Perhaps: the publication cotes "sources who have heard the president's private remarks and been briefed on a National Security Council memorandum that recorded those comments", so yes, the left-leaning outlet may have simply brought us another example of "fake news." On the other hand, if true it would be, as Mark Carney would call it "awesome" - after all what better way to lose the reserve currency status of the dollar than its sovereign nation randomly lobbing nukes across the globe... and why not its own territory."
So what do Axios claim happened?
During one hurricane briefing at the White House, Trump said, "I got it. I got it. Why don't we nuke them?" according to one source who was there. "They start forming off the coast of Africa, as they're moving across the Atlantic, we drop a bomb inside the eye of the hurricane and it disrupts it. Why can't we do that?"
Other (once again anonymous) sources told Axios that Trump has suggested multiple times to senior Homeland Security and national security officials that they explore using nuclear bombs to stop hurricanes from hitting the United States, according to sources who have heard the president's private remarks and been briefed on a National Security Council memorandum that recorded those comments.
Asked how the briefer reacted, the source recalled he said something to the effect of, "Sir, we'll look into that."
Trump replied by asking incredulously how many hurricanes the U.S. could handle and reiterating his suggestion that the government intervene before they make landfall.
The briefer "was knocked back on his heels," the source in the room added. "You could hear a gnat fart in that meeting. People were astonished. After the meeting ended, we thought, 'What the f---? What do we do with this?'"
One reason: because this is an idea that's been around for decades, and frequently floated seriously. That said, while Axios clearly is intent on making Trump look (even more) insane, there is no indication that the president is actually pushing ahead with the proposal to start nuking air masses.
Meanwhile, even Axios admits that "the idea keeps resurfacing in the public even though scientists agree it won't work. The myth has been so persistent that the National Oceanic and Atmospheric Administration, the U.S. government agency that predicts changes in weather and the oceans, published an online fact sheet for the public under the heading Tropical Cyclone Myths Page, titled "Why don't we try to destroy tropical cyclones by nuking them?"
The page states: "Apart from the fact that this might not even alter the storm, this approach neglects the problem that the released radioactive fallout would fairly quickly move with the tradewinds to affect land areas and cause devastating environmental problems. Needless to say, this is not a good idea."
Responding to the article, a senior administration official said, "we don't comment on private discussions that the president may or may not have had with his national security team." A different senior administration official, who has been briefed on the president's hurricane bombing suggestion, defended Trump's idea and said it was no cause for alarm. "His goal — to keep a catastrophic hurricane from hitting the mainland — is not bad," the official said. "His objective is not bad."
"What people near the president do is they say 'I love a president who asks questions like that, who’s willing to ask tough questions.' ... It takes strong people to respond to him in the right way when stuff like this comes up. For me, alarm bells weren't going off when I heard about it, but I did think somebody is going to use this to feed into 'the president is crazy' narrative."
Axios also notes that 3 weeks after Trump's 2016 election, National Geographic published an article titled, "Nuking Hurricanes: The Surprising History of a Really Bad Idea." It found, among other problems, that:
Dropping a nuclear bomb into a hurricane would be banned under the terms of the Peaceful Nuclear Explosions Treaty between the U.S. and the former Soviet Union. So that could stave off any experiments, as long as the U.S. observes the terms of the treaty.
Whether this story is true or not, we doubt that hurricanes have much to worry about. Now, if we were Fed Chair Powell, we would be far more concerned.
Trump deciding who to nuke first: Iran or the Marriner Eccles building
— zerohedge (@zerohedge) July 19, 2019
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Amid Brexit, the unpredictability of Trump's presidency ongoing conflicts in Yemen and Syria and countless other factors, the world is becoming less stable and increasingly fragile. Given the situation in 2019, Statista's Niall McCarthy notes that the results of The Fund For Peace's Fragile State Index is particularly interesting this year.
Yemen has been named the most fragile state, ahead of South Sudan and Syria.
Considering the political situation in both three countries their place at the top of the index is hardly surprising.
You will find more infographics at Statista
What is particularly interesting this time around is the list of the countries who saw their score increase the most. This includes Venezuela which is struggling with an economic and leadership crisis of unprecedented dimensions. Brazil's score worsened by the same margin after it elected a new controversial president known for his harsh right-wing rhetoric.
The UK, which is mired in a complicated divorce process with the EU, had the fourth highest increase in the index. Finland was named the least fragile country worldwide in 2019, ahead of Norway and Switzerland.
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The slew of ransomware attacks on U.S. cities that we have documented exhaustively (here , here and here) looks as though it is continuing. This time, 23 towns in Texas were hit by a "coordinated" ransomware attack late last week, according to CNBC.
The state's Department of Information Resources says that the attack started last Friday morning and targeted "smaller local governments" within the state.
Greg Abbott, the governor of Texas, ordered a "Level 2 Escalated Response" following the incident. This is part of a four step response protocol and is one step below the highest level of alert, which is labeled "Emergency".
The state's emergency management planning guide says that level two means “the scope of the emergency has expanded beyond that which can be handled by local responders. Normal state and local government operations may be impaired.”
Governor’s Office deputy press secretary Nan Tolson said: “Governor Abbott is also deploying cybersecurity experts to affected areas in order to assess damage and help bring local government entities back online.”
These attacks follow a slew of ransomware attacks that have occurred in places like Maryland and Florida, among other states. In each case, significant sums of money were lost either from ransom demands or from the damage caused by the attack. The Texas Department of information resources said:
“The State of Texas systems and networks have not been impacted. It appears all entities that were actually or potentially impacted have been identified and notified,” the DIR said. While the state has determined that one “threat actor” was responsible for all 23 attacks, they have not yet determined who was responsible.
“Investigations into the origin of this attack are ongoing; however, response and recovery are the priority at this time.”
The state is being assisted by federal and state agencies that include FEMA and the Department of Homeland Security. They are also being helped by Texas A&M’s Information Technology and Electronic Crime unit and the Texas Military Department, which is part of the National Guard.
The locations of the attacks are being kept private while the problems are being fixed, according to Edward Block, who served as the Texas state Chief Information Security Officer until October 2016.
Block said: "I would suspect that there are systems that are still being recovered. [Going public] kind of paints a target on the back of those agencies."
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Just when you thought Trump's real estate ambitions over Greenland - which we confirmed by the president yesterday - couldn't get any more bizzare, or self-deprecating..
I promise not to do this to Greenland! pic.twitter.com/03DdyVU6HA
— Donald J. Trump (@realDonaldTrump) August 20, 2019
... they did moments ago, when Trump tweeted that due to the Danish PM's comments that the country has no interest in selling Greenland to the US, which to the president apparently is tantamount to an international scandal, Trump would is postponing his meeting scheduled in two weeks, and added that "the Prime Minister was able to save a great deal of expense and effort for both the United States and Denmark by being so direct", adding that he thanks her for that.
....The Prime Minister was able to save a great deal of expense and effort for both the United States and Denmark by being so direct. I thank her for that and look forward to rescheduling sometime in the future!
— Donald J. Trump (@realDonaldTrump) August 20, 2019
Now that diplomacy is out of the question, is Trump about to go hostile, either in the capital markets...
Tomorrow Trump will announce a 3% stake in Denmark and launch a website with a plan detailing the benefits of breaking up Denmark and Greenland to unlock value.
— Lots of Corn (@LotsOfCorn) August 20, 2019
... or with the help of Raytheon and Lockheed.
Or is Greenland, eager to find the highest bidder, set to hire a financial advisor and begin a sale process? You laugh, but everything has become so surreal it is certainly possible.
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On 6 August 1991, British physicist Tim Berners-Lee at CERN in Switzerland published the first ever website, the WorldWideWeb (W3).
By the end of 1992 there were ten websites online and, after CERN made the W3 technology publicly available on a royalty-free basis in 1993, the internet gradually started to grow into the all-encompassing giant that it is today.
By 1994, there were close to 3 thousand sites, one of which was a fledgling Yahoo! which, originally called 'Jerry and David's Guide to the World Wide Web', started its online life as a web directory.
By the time Google came onto the scene there were over two million websites.
You will find more infographics at Statista
As Statista's infographic shows, today there are 1.71 billion, and looking at Internet Live Stats' counter, despite being lower than 2017's 1.76 billion, this figure is currently increasing at a fast rate.
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Late on Friday, the Trump Administration made another unexpected concession to Beijing when the Commerce Department announced it would extend a reprieve given to Huawei permitting the Chinese firm to buy supplies from US companies so that it can continue to service existing customers. Now, on Monday, in an interview with Fox Business, Commerce Secretary Wilbur Ross affirmed that Huawei will receive another 90 day reprieve to conduct business with some US businesses.
Breaking news- Confirmed. @CommerceGov Secy wilbur ROSS just confirmed the US is extending #Huawei deadline while also adding 46 subsidiaries to the "entity list" @MorningsMaria @FoxBusiness "nov19th new deadline for us CO's to stop selling to huawei. pic.twitter.com/401npSsDoz
— Maria Bartiromo (@MariaBartiromo) August 19, 2019
Stock futures, which had seemingly already shrugged off the carnage of last week, were already pointing toward a higher open, but moved even higher on the news.
All of this is happening after Trump announced last week that he would delay imposing the 10% on some $300BN in mostly consumer goods in what appeared to be a panicked response to the market's vicious selloff, as well as fears that more tariffs could hurt holiday sales at a fragile time for the economy. Instead of going into effect on Sept. 1, those tariffs won't start now until mid-December. Ross also said the Commerce Dept has added another 40 Huawei subsidiaries to its entities list.
US is giving Huawei another 90 days to conduct some business in the U.S., Commerce Sec. Wilbur Ross tells Fox Business.
Of course, as one Twitter user pointed out, Ross has continued to parrot the Trump Admin line about US consumers not paying tariffs - particularly when the Administration just moved to delay the next round of tariffs so as to avoid a "stagflation"-type scenario.
Ross still peddling the line about how US consumers aren't paying the tariffs.... seems silly saying it after moves to delay some Sept tariffs so not to impact holiday spending
— Yogi Chan (@Yogi_Chan) August 19, 2019
Ross also parroted Trump's line that there will likely be a recession 'eventually', but that the 2s10s inversion - the latest in a string of US yield curve inversions - is hardly reason to panic.
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Project Fear Returns: 'Leaked' Report Shows UK Faces Food, Fuel, & Drugs Shortages In No-Deal Brexit
After unexpectedly conceding to China last week, when Trump announced he would delay imposing the bulk of the 10% tariffs on $300BN in mostly consumer-focused goods from September 1 until mid-December, a move that surprised analysts as it was not based on any concessions from Beijing but was merely a panicked response to the tumbling stock market, late on Friday Trump made another unexpected concession when the Commerce Department announced it would extend a reprieve given to Huawei permitting the Chinese firm to buy supplies from U.S. companies so that it can service existing customers.
Back in May, after the US Commerce Dept blacklisted Huawei, it allowed the Chinese telecom giant to purchase some American-made goods in a move aimed at minimizing disruption for its customers, many of which operate networks in rural America.
The “temporary general license” will be extended for Huawei for 90 days, according to Reuters, and will renew an agreement set to lapse on August 19, continuing the Chinese company’s ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.
Earlier this year, the U.S. government blacklisted Huawei blocking it from buying U.S. goods, and alleging the Chinese company is involved in activities contrary to national security or foreign policy interests; at the time the ban was seen as a major escalation in the trade war between the world’s two top economies. As an example cited by Reuters, the blacklisting order cited a criminal case pending against the company in federal court, over allegations Huawei violated U.S. sanctions against Iran.
The United States also says Huawei’s smartphones and network equipment could be used by China to spy on Americans, which allegations the company has vehemently and repeatedly denied.
Still, Reuters sources noted that the situation surrounding the license, which has become a key bargaining chip for the United States in its trade negotiations with China, remains fluid and the decision to continue the Huawei reprieve could change ahead of the Monday deadline.
Another source said that President Trump and Chinese President Xi Jinping are expected to discuss Huawei in a call this weekend.
Despite the last minute reprieve, the world’s largest telecommunications equipment maker is still prohibited from buying American parts and components to manufacture new products without additional special licenses. Many Huawei suppliers have requested the special licenses to sell to the firm. Commerce Secretary Wilbur Ross told reporters late last month he had received more than 50 applications, and that he expected to receive more.
Curiously, some of the biggest critics of the Huawei ban have been US companies: out of $70 billion that Huawei spent buying components in 2018, over $11 billion went to U.S. firms including Qualcomm, Intel and Micron Technology.
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The Mediterranean is still the deadliest place for migrants worldwide. Despite the numbers of migrants crossing the Mediterranean Sea decreasing recently, Statista's Katharina Buchholz notes that the death toll caused by unsafe ships and reckless fixers still stood at almost 2,300 in 2018. This was almost half of all migrants’ deaths recorded by research project Missing Migrants. In 2016 alone, more than 5,000 died in the Mediterranean.
You will find more infographics at Statista
840 migrants have already died in the Mediterranean this year, showing that the grueling trend is likely to continue.
The number of deaths on the African continent has fallen significantly recently, whereas in the Americas, the number of deaths is rising. Many people are killed here as they flee from the Northern triangle states of El Salvador, Guatemala and Honduras on their way to the U.S..
Missing Migrants’ data are estimates established with the help of the International Organization for Migration (IOM), national authorities and media sources.
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It was dormant for more than 20 years, exhibiting very little fluctuations in light. Then one day, it woke up, baffling astronomers around the world.
A supermassive black hole in the center of the Milky Way called Sagittarius A* has just started flashing 75 times brighter than it has ever been seen before, following a two-decade 'quiet' period, RT reports.
UCLA Astronomer Tuan Do and his team observed the transformation of the black hole using the WM Keck Observatory in Hawaii over four nights.
The team observed a bizarre flash on May 13, and captured it in a two-hour time-lapse that condensed the phenomenon down to just a few seconds.
Check it out below:
Here's a timelapse of images over 2.5 hr from May from @keckobservatory of the supermassive black hole Sgr A*. The black hole is always variable, but this was the brightest we've seen in the infrared so far. It was probably even brighter before we started observing that night! pic.twitter.com/MwXioZ7twV
— Tuan Do (@quantumpenguin) August 11, 2019
As Do explained, the footage above begins with Sagittarius at its brightest, or at least the brightest point that the team saw and recorded.
Astronomers from all over the world are now scrambling to collect data and figure out exactly what caused the phenomenon.
So far, there are several theories.
"Maybe more gas is falling into the black hole and that leads to higher amounts of accretion, which leads to it being brighter," Do told a science publication.
There’s also the possibility that the black hole consumed a nearby gas cloud that had been documented nearby in 2014.
But at least five powerful research telescopes will continue to observe the black hole for as long as it's visible.
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Blain's Morning Porridge, submitted by Bill Blain of Shard Capital
“Summer Breeze makes me feel fine… blowing thru the jasmine on my mind..!
Run for the hills..? Nope.
How much more horrible does this need to get: Chinese Police Troops poised on the Hong Kong Border? Bond Yields inverted and tumbling lower? Germany sliding into recession? China hiding internal pain? Global Equity threatening to puke completely? Italy government about to fall? Brexit? Trade wars deepening? Political gridlock? Geopolitical uncertainty? A new banking crisis? The outlook looks horrible… but Relax. Just Do It! The sun will likely come up tomorrow. And don’t forget we are right in the Ides of August: the thinnest, most illiquid time of the year. Crashes usually happen in October!
We’ve also got a growing awareness from global regulators, central bankers, and politicians of just how badly flawed policy responses and their unintended consequences have been since 2008. None of them want to jeopardize their electoral chances or future careers. If crisis crunches into crash there is the reality of a rescue bailout to factor in. (How is the question – central banks are out of options on rates, so I guess they just buy everything and end the logic of free markets for ever…)
Plus, it’s a simple fact there is loads and loads of ready cash sitting waiting for the opportunity to invest on a market reset. When the whole street is waiting for a correction as the moment to buy... It doesn’t happen till you don’t expect it.
Let’s not be overly optimistic. There are clearly troubles ahead, but I suspect they are likely to be tactical in the short-run. The risk is a couple of tactical shocks could precipitate a strategic collapse. Let me explain – all it might take is a couple of key stock shocks to really crush market sentiment, and spin us into a situation where the “authorities” have to respond to crisis.
Let me give you the four stocks I think you should be watching for signs we’ve in the deep solids…
- First up is HSBC. If Hong Kong kicks off, there has to be a massive sell off in the bank. It gets 90% of its profits from Hong Kong – which is already massively destabilised as a result of the tensions and protests. Money and skills are exiting the territory and heading towards Singapore. HSBC is already on the China sh*t-list over Huawai. If you think the Chinese will enable a foreign bank and signal of imperialism to flower in a New Hong Kong, then please can I have a quarter of whatever you are smoking. (And HSBC makes my blood boil: Yesterday I tried to pay money to my daughter’s new account in Oz. I gave the details to HSBC over the phone, but they refused to make any payments unless I answered a host of deeply personal questions about why – they knew it was daughter! I understand why, but they were so bloody rude and arrogant about it – treating me like a child. I gave up. I am also writing to the FCA to make formal complaint: they screwed up 3 credit card repayments in a row, and then promised to respond to my initial complaint within 8 weeks. They offered me a meeting in a Southampton branch to discuss. I said no – let’s meet in London when I live and work during the week. They considered that sufficient grounds to close the case. They are definitionally useless.)
- Second stock to watch is GE – in the press yesterday because the guy that exposed Madoff says they are guilty of a $38 bln fraud in their insurance and Baker Hughes business. Ouch. Late last year I warned GE had a very limited time to fix itself – See “Is GE Going to Repay its Debt”. Now GE may be working round its problems, but another wobble and the kind of 15% stock crash we saw last night makes that path even more perilous. Bad news sticks.
- Third is Boeing. I’ve written about its problems so many times – back in July warning that as the biggest component stock on the Dow, Boeing could be the name to trigger collapse. There is no idea when it gets the B 737 Max programme back in the air or if anyone will now fly it. The company is still in denial, and the likelihood of massive legal action as the scale of their regulatory capture of the FAA becomes apparent is growing. The sheer greed of their top management and how they pushed back safety in pursuit of bonueses and their pay packages could yet crush the company and force a policy response from US government that could totally change their position selling planes abroad.
- And, then there is We-Work’s IPO. You really could not make it up how one sided the terms of the IPO are and what it actually says about the company’s “mission”, values and its boss – Adam Neumann. To buy this stock you would need to be insane. If it’s not the absolute top of the crazy tech IPO market, then the world needs a reset. To read the details try this from the Register: Authentic Tech Company Vibes, right down to billion in losses and admission it may never be profitable. And the thing is – its not a Tech company at all. It’s a rather poorly managed property play run by a snake oil salesman who’d bluffed some stupid money. Here’s what I said about We-Work back in January.
I am sure there are a host of other equity and bond stories that could provide the sparks that light a market conflaguration in coming weeks. Or maybe we will get lucky and the fires keep get put out before they take hold. We only need to be unlucky a few times….
Bottom line – I suspect we are at something of a wake-up and smell the coffee moment. It’s going to be painful and massive pressure on top level level stocks will trigger all kinds of post-shock consequences. It will likely trigger a regulatory reaction and a buying opportunity. I suppose the only strategy is stay awake and be a boy-scout: be prepared..
Meanwhile, back in Camelot… Blain’s Brexit Watch
When I get round to writing the definitive comedy about Brexit I am going to ask Jeremy Corbyn to play himself. He’s brilliant. An unchallenged masterof pathos, gormlessness, and a capacity for self-delusion that would be unbeatable if parliament didn’t already contain Hammond and the Liberals. However, his offer to lead the country might not be so stupid – he’s not saving No-Brexit. He’s strectching out the pain, promising Brexit Tomorrow, if you still want it. Bottom line on Brexit. Going to hurt. UK will feel pain, and recover. Not so sure about Europe.
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The United Kingdom's Ministry of Social Justice ad regulator has stricken two advertisements from the approved list for following longstanding gender stereotypes.
On Wednesday, the Advertising Standards Authority (ASA) announced that they "drew the line" over ads by Volkswagen and cream cheese maker Philadelphia for perpetuating the offensive stereotypes, according to DW.com.
In Volkswagen's case, their ad featured men participating in adventurous activities, while women sat on a beach next to a baby buggy. According to the ASA, "images of men in extraordinary environments and carrying out adventurous activities" vs. "women who appeared passive" were stereotypical and not nice.
Volkswagen pushed back against the judgement, arguing that their advertisement featured men and women "taking part in challenging situations."
The Philadelphia cream cheese advert, meanwhile, featured two men easily distracted by the snack while forgetting about their babies, which the ASA said "implied that the fathers had failed to look after the children properly because of their gender," and "relied on the stereotype that men were unable to care for children as well as women."
Philadelphia's parent company, Mondelez UK, said that they are "extremely disappointed with the ruling."
UK authorities introduced the new rules in June, after pressure from campaigners focusing on sexism. The new rules focused on banning "gender stereotypes which are likely to cause harm or serious or widespread offense.”
A spokeswoman for the women's rights group the Fawcett Society, Ella Smillie, told the Reuters news agency advertisers need to "wake up and stop reinforcing lazy, outmoded gender stereotypes.”
"We know that children internalize [gender stereotypes] in a way that limits their aspirations and potential in life,” she added.
A study by data and consultancy firm Kantar showed less than one in ten adverts have an authoritative female in it, despite research which shows consumers respond better to women than men in adverts. -DW.com
While the ASA cannot fine Volkswagen and Philadelphia, the advertisements won't be able to taint impressionable UK minds anymore.
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The Pew Research Center has released a new poll showing that U.S. public views of China have becoming increasingly unfavorable amid the ongoing trade war and continued geopolitical tensions in the South China Sea. Statista's Niall McCarthy details that the poll comes as the Trump administration decided to backtrack on imposing new tariffs on a range of high-profile Chinese imports with some describing the move as a temporary ceasefire in the bitter trade war between the two nations.
The research found that 47 percent of Americans had an unfavorable view of China in 2018 and that rose to 60 percent by spring 2019.
You will find more infographics at Statista
That's the highest level ever recorded by Pew in the 14 years since they first asked the question. The lowest level was recorded back in 2006 when the share finding China unfavorable was just 29 percent. The polling also found that just under a quarter of Americans (24 percent) consider China a threat. That's up on 2014 and 2007 when the share was 19 percent and 12 percent respectively.
In terms of political affiliation, a majority of Democrats and Republicans view China in an unfavorable light. Negative views are more pronounced among Republicans and Republican-leaning independents, 51 percent of whom held an unfavorable view in 2018. This year, that climbed dramatically to 70 percent. Unfavorability has also soared among Democrats, climbing from 49 percent in 2018 to 59 percent in 2019.
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One day after the Chinese press roundly mocked the Trump tariff delay as proof the US was losing the trade war with China, with the Global Times saying that "Chinese experts said the sudden postponing of impending tariffs showed that the maximum pressure tactics of the US are losing their bite when it comes to China", a suddenly emboldened Beijing - perhaps sensing that it is indeed dealing with a weaker opponent - called planned U.S. tariffs on an additional $300 billion in Chinese goods a violation of accords reached by Presidents Donald Trump and Xi Jinping, and warned it would take all necessary measures to impose new tariffs on its own.
Echoing what Global Times editor in chief Hu Xijin said overnight, a short Thursday statement from the State Council Tariff Committee said the new 10% levies have taken the U.S. and China off the track of resolving their dispute through negotiation, and noted that China “has no choice but to take necessary measures to retaliate,”, without specifying what the nation would do. The committee has overseen tit-for-tat retaliatory tariffs on American products.
According to an analysis by twitter China watcher, Trinh Nguyen, the amount China has left under tariffs is about USD10bn (already imposed 110bn) "so not much ammunition & will need curb investment/FX deval/UST/rare earth curb. Chart below 👇🏻 US has plenty left & reflects trade diff w/ China."
China: Will have to take all necessary measures to impose new tariffs.
— Trinh Nguyen (@Trinhnomics) August 15, 2019
The amount China has left is ~USD10bn (already imposed 110bn) so not much ammunition & will need curb investment/FX deval/UST/rare earth curb. Chart below 👇🏻 US has plenty left & reflects trade diff w/ China. pic.twitter.com/eieW5WF2MM
But what is most troubling, is that contrary to Trump's implied expectation that China would respond with an olive branch of its own and according to Steven Englander, "will expect China to reciprocate by buying US agricultural products in the coming weeks", not only does China not plan on doing so but - as we warned yesterday - will send relations between the two nations into even greater turmoil with escalation of its own.
As far as I know, the Chinese side requests that both sides respect the consensus reached at Osaka summit, which is removing all additional tariffs, not delaying some. I doubt Chinese side will resume large-scale purchase of US farm products under current circumstances. pic.twitter.com/74vf9PrKXo
— Hu Xijin 胡锡进 (@HuXijin_GT) August 14, 2019
In kneejerk response to the apparent escalation, European stocks declined and U.S. equity futures pared a gain. The Stoxx Europe 600 index fell while the three main American equity contracts trimmed an earlier jump after China’s move.
And with the ball no longer in China's court now that Beijing has spat in Trump's coy attempt at quasi-appeasement, we look closely at Trump's twitter feed where the US president has two options: either offer even more concessions to China (unlikely), or escalate tensions even more and potentially remove the proposed tariff delay, sending stocks plunging.
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Automobile sales in India are crashing at the steepest pace since December 2000, an auto industry body told Reuters on Tuesday.
The Society of Indian Automobile Manufacturers (SIAM) said domestic passenger vehicle sales in July plunged 30.9% to 200,790. It's the ninth consecutive month of declines and the steepest drop in 18 years.
India has been a significant manufacturing hub for carmakers until 2017, with annual sales of passenger vehicles growing by 33% over the past five years.
The downturn in the automobile industry is a significant obstacle for Prime Minister Narendra Modi's government because autos account for 50% of India's manufacturing output.
Automobile companies, directly and indirectly, employ more than 35 million people.
"If this industry goes down, then everything gets hurt. Manufacturing, jobs, and revenue to the government," Vishnu Mathur, director general, SIAM, told Reuters on Tuesday, adding that car and motorcycle manufacturers have already slashed about 15,000 jobs.
Federation of Automobile Dealers Associations (FADA) warned that the automobile downturn would continue to cycle down through 2H19, leading to more job losses with dealerships and across the entire industry.
"The majority of job cuts have happened in the last three months...It started around May and continued through June and July," FADA President Ashish Harsharaj Kale told Press Trust of India.
Kale said, "Right now most of the cuts which have happened are in front-end sales jobs, but if this (slowdown) continues, then even the technical jobs will be affected because if we are selling less then we will also service less, so it is a cycle."
Already, the auto sector has cut as many as 350,000 jobs; this includes auto manufacturing, auto parts manufacturing, and dealership jobs.
Last month, Bosch Ltd, the largest parts maker in India, published a memo that outlined how it suspended operations at its Gangaikondan plant in Tamil Nadu for a week in late July to "avoid unnecessary build-up of inventory."
Ram Venkataramani, President, Automotive Component Manufacturers Association of India (ACMA), said the 15% to 20% cut in auto production had triggered an auto crisis in India, could lead to at least one million people being laid off.
The auto crisis - regarded by industry executives as a disastrous downturn that could be one of the worst seen in the country's history.
Auto companies have asked the Modi government for tax breaks to offset the slump.
"The data shows an urgent need for a revival package from the government. The industry is doing everything possible to increase sales, but it needs government support to prevent the crisis from worsening," Mathur told reporters in New Delhi.
The current manufacturing slowdown in India is cyclical and isn't expected to trough for the next several years. Autos were the first domino to fall, and next, it could be the Indian consumer. The bust cycle has begun.
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Blain's Morning Porridge, submitted by Bill Blain of Shard Capital
Global Credibility Under Pressure – We’ve been Tangoed!
This morning’s headlines are screaming how Argentina and President Mauricio Macri have precipitated yet another crisis on the stressed geopolitical battlefront… Relax. We are more than used to dealing with Argentina defaults… But, its far more complex than that. The latest Argentina Dance Macabre is all about Global Credibility. It’s another Massive Fail!
What does it say about the credibility of Global Institutions and Policy when Argentina’s whole market collapsed following a primary for an election in December? Ex-IMF president, and soon to be head of the ECB, Christine Lagarde personally staked her support for President Mauricio Macri’s pro-market government when she steamrollered through the IMF’s biggest ever bailout of $56 billion for Argentina last year.
It now looks an extremely poor call on Lagarde’s part. Macri won a mere 32% of the vote, while former president Cristina Fernandez de Kirchner won 47%. Don’t Cry for Me Argentina indeed… Domestic Argentine Politics have left the IMF looking stupid.
There are three major issues to consider here:
First there is the absolute predictability of what’s just happened in Argentina:
In return for the 2018 Bailout, the IMF demanded its usual pound of flesh policies: Austerity, Austerity and Austerity, spiced with inflation-targeted monetary policy, fiscal tightening, currency controls, and the keys to the Peso printing presses. Give Lagarde some credit – she did give lip service to the people with a smattering of minor austerity mitigants in terms of gender equality and social provision. But, essentially the IMF’s answer to yet another predictable Argentinian crisis was more of the same programme. You know the definition of madness…
The programme did achieve some minor success: bringing down Argentina’s primary deficit and putting the trade balance in to surplus – but only because they spent IMF money supporting the peso. “Surprisingly” Austerity wasn’t to the electorate’s taste – inflation remains out of control and poverty is rising allowing politicians to exploit the widening income-gap divide. What a complete shock! Who could have possibly predicted an unhappy electorate would damn Macri at the polls and favour former Peronista’s from the last century instead? (US Readers – Massive Sarcasm Alert.)
While the new Macri government was welcomed by markets in 2015 – it was immediately clear it didn’t have widespread and deep-rooted political support. His government was perceived as a tool of global investment banks, global money and the supranationals. The electorate went along with it for a while, but the results of “neo-liberalising” the economy were disastrous; killing jobs, creating a balance of payments crisis, devaluation, driving inflation, and yet another flirtation with default – hence the new IMF bailout.
Macri failed to deliver on his promises to the electorate: inflation wasn’t reined in, but soared to 60-70. Instead of growth the economy tumbled into recession. And more and more people fell into extreme poverty. Compare and contrast with the experience of Argentina under the populist Peronistas, the Kirchners, who drove recovery in the early 2000s via easy monetary and a massive fiscal spending initiatives. These didn’t work so well when commodities declined, recession struck the currency sagged and massive monetary corruption followed. Argentina came close to default in 2012, and a naval vessel was actually seized by one creditor!
The Macri programme effectively went to the dogs y’day. The laughable Argie Century Bond crashed as low as 60 y’day. Default swaps are 40 cents upfront (pay $40mm to insure $100mm). Short-term debt is yielding near 40%. Argentinians voted for former leftist politician Kirchner instead, despite the widespread accusations of corruption, and the likelihood her election will simply deepen ongoing crisis.
The second point to this on-going Argentine Crisis is what does it say about Lagarde?
She is a gifted politician, a former French finance and apparently very efficient. She is not a trained central banker, but give her credit for being self-aware. She recently admitted: “The Argentine economic situation has proved incredibly complicated and I dare say that many of those involved, including us, underestimated a bit, when we started with the Argentine authorities building the programme.”
Her new job at the ECB is going to be a political minefield. She will need to draw Europe into agreement on fiscal policy support for Southern European Economies – which is a massive political issue when she’s seen as Macron’s candidate, Merkel is about to exit the stage, and the next crop of German Leader’s look crushingly incompetent in the leadership department. The Italian League has already thrown down it’s gauntlet – if they don’t get permission to start spending their way out of recession, they are going to do it anyway.
Lagarde has to balance the economic conservatism of Europe’s strongest economy, Germany, against the risks of “free-spending” other European’s creating further debt crisis. And she has to do it while holding the Euro together, dealing with consequences of Brexit, and being a distinct number 2 on the priority list for national governments. Is she up to it?
If Lagarde thinks Argentina’s economic situation is complex, wait till she tries to balance the ECB. Her job is not to simply continue the “do-what-ever-it-takes” Mario Draghi “keep-the-Euro-going” mantras, but to actually move the European economy forward in a political vacuum. The answer is not Austerity, Austerity, Austerity – but that’s her most likely only weapon in the ECB’s armoury. There are clear parallels between Argentina and Europe – much to be learnt in how not to handle recovery in the face of populism and undeliverable political promises.
The third point to learnt from the new Argentina crisis is who leads the IMF now that Legarde is off to Frankfurt?
The European’s have decided they want their compromise candidate, Kristalina Georgieva, to lead the institution. Its always been led by a European. Rest of world don’t like that. While I’m sure Ms. Georgieva of the World Bank is an excellent candidate… I am sure there are better. Mark Carney – Canadian and Irish. Why Not. He’s a proper banker..
What a complete ClusterF**k.
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Billows of smoke and fire are rising above Baghdad's skyline after a massive explosion has reportedly engulfed a weapons depot said to be controlled by a pro-Iranian militia in the Iraqi capital.
Stunning footage of the explosion's aftermath in Dora neighborhood is circulating, which is not far from the sprawling US embassy, which has itself over the past months been targeted in sporadic mortar attacks.
#Baghdad weapons depot blast #Iraq pic.twitter.com/TzsRlCr1al
— Steven nabil (@thestevennabil) August 12, 2019
According to The Times of Israel, "Local media reports that the weapons storehouse is owned by the Sayyid of Martyrs Battalions, an Iraqi Shiite militia supported by Tehran."
Unconfirmed reports suggest the weapons storage facility may have been targeted by ISIS terror cells.
#breaking: Huge explosion at a weapons depot near Dora , Baghdad moments ago pic.twitter.com/UsJvPJ7ld0
— Steven nabil (@thestevennabil) August 12, 2019
Locals are currently evacuating the area as ammunition explodes in the early evening sky, sending rockets and projectiles flying in all directions and into residential homes.
Sky News Arabia reported that incoming mortar shells set off sirens in the area around the US embassy in Baghdad, known as the Green Zone. — Times of Israel
WATCH: Large smoke pillars rising in #Iraq's capital. An explosion had ripped through the city approximately two hours ago, reportedly near the US embassy. #Baghdad pic.twitter.com/2m1llk8eL8
— i24NEWS English (@i24NEWS_EN) August 12, 2019
Officials with the Baghdad Operations Command posted a social media statement saying “explosion occurred because of the piling up of ammunition inside the Saqr military base in southern Baghdad.”
Footage of massive explosion in Baghdad, #Iraq in what was reported as blast at PMF militia weapons depot: pic.twitter.com/sUInTlP1zt
— Joyce Karam (@Joyce_Karam) August 12, 2019
Sirens are going off, with further reports that shells have possibly landed at the US diplomatic compound in the city.
A giant mushroom shaped cloud of black smoke can currently be observed hanging over the southern part of Baghdad. Videos show scenes of what sounds like a war zone.
11)
— Heshmat Alavi (@HeshmatAlavi) August 12, 2019
"Blast at pro-Iranian militia base weapons depot rocks Baghdad"https://t.co/ze4yuUz6kO
More footage of the blast site.pic.twitter.com/8IkZ1HLfzc
developing...
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Things in China are going from bad to worse, when as reported earlier, the Hong Kong airport authority advised all passengers are advised to leave the terminal buildings as soon as possible in an unprecedented disruption after thousands of anti-government protesters occupied the airport terminal building.
#BREAKING: Hong Kong airport authority says all passengers are advised to leave the terminal buildings as soon as possible https://t.co/q2CcRFkC1r
— Amichai Stein (@AmichaiStein1) August 12, 2019
However, what confirmed that as Beijing has been warning for the past week, Hong Kong's insubordination will no longer be tolerated by Beijing, was a video - complete with dramatic World War III style music - published by the state-owned tabloid Global Times, which showed "The People's Armed Police have been assembling in Shenzhen, a city bordering Hong Kong, in advance of apparent large-scale exercises."
So will China invade Hong Kong and potentially trigger a global war as the west has no choice but to come to the wayward territory's defense? We will find out, but recall what what Steve "the Big Short" Eisman said last week, who said that his biggest fear right now are the Hong Kong protests, warning that "the people who are protesting are not backing down, the Chinese government doesn’t seem to be backing down, so if cooler heads don’t prevail it’s possible things in Hong Kong could get very ugly" and adding that "That’s actually what I’m worried about the most right now, because every weekend we’ve got this drama where the people of Hong Kong are having protests in the millions and its starting to get very violent."
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Back in 2016, when the first negative interest rate bonds first emerged, we offered readers with a glimpse of the NIRP future:
After an intense pow-wow between the administration, Congressional leaders and the Federal Reserve, the Negative Mortgage Rate Program (NMRP) is born. The program is simple. Homeowners will be paid to borrow. The Federal Reserve declares that the NMRP is a brilliant extension of NIRP (negative interest rate policy), because it will benefit everyone, not just the 1%ers.
Here's how it works: No downpayment needed. 100% financing.
No payments needed. This is the reverse of the negative amortization loans during the subprime era. In other words, it is a negative negative amortization, or neg-neg-am loan. The loan balance will decrease instead of increase.
No need for mortgage insurance since, with no payments, there can be no defaults.
No qualifying needed, hence removing the entire cumbersome loan application process.
Your interest cost will be -$1,000 per year. In other words, your loan balance will be $99,000, if you make no payments at all. Using a commonly accepted 30 year term, the loan balance at the end of 30 years would be around $50,000, all without the borrower having to pay a dime in mortgage expense.
Well for Denmark, the future is now, because three years later and with over $15 trillion in negative-yielding debt around the world, Denmark's third largest bank is now offering borrowers mortgages at a negative interest rate, effectively paying its customers to borrow money for a house purchase.
Jyske Bank said this week that customers would now be able to take out a 10-year fixed-rate mortgage with an interest rate of -0.5%, meaning customers will pay back less than the amount they borrowed, or precisely what we said would happen in our 2016 preview of the dystopian future.
What this means is that if you buy a house for $1 million and pay off your mortgage in full in 10 years, you would pay the bank back only $995,000. No mortgage payments would be due between the purchase and payoff date, so effectively a borrower only has to repay principal... with a small discount, guaranteeing that the bank loses money on the loan.
"It's another chapter in the history of the mortgage," Jyske Bank housing economist Mikkel Høegh told Danish TV, according to Copenhagen Post. "A few months ago, we would have said that this would not be possible, but we have been surprised time and time again, and this opens up a new opportunity for homeowners."
"In practical terms... the negative interest rate will act as a 'subsidy' to the repayment. And the repayment portion will become smaller and smaller as the debt is reduced," explained Høegh.
How is that possible? "Yes, I hardly understand it either. In fact, I said it can't happen. But we have figured out how to have a negative rate mortgage" explained Høegh.
That said, even with a negative interest rate, banks often charge fees linked to the borrowing, which means homeowners could still pay back more.
As Insider notes, Jyske Bank's negative rate is the latest in a series of extremely low interest offers from banks to Danish homeowners.
What is even more bizarre however, is that unlike most of its European peers, Danmarks Nationalbanken, Denmark's central bank, has held its main lending rate positive at 0.05 percent since January 2015, whereas much of Europe and Switzerland have cut their rates in deep negative territory for the past 5 years.
And while negative rates on mortgages are only now becoming available to consumers, they have been available on short-term mortgage bonds in Denmark since May, according to Bloomberg. "It's never been cheaper to borrow," Lise Nytoft Bergmann, the chief analyst at Nordea's home finance unit in Denmark, told Bloomberg.
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So what happens next? This is what we concluded three years ago:
Before you call us nuts, this is actually already reality. The governments of Germany, Switzerland, Japan and others are charging savers for the privilege of lending them money. Why stop there? Let the people enjoy negative interest rates when they buy a house, or a car, or borrow for a college education. In fact, why bother with taxes. Just let the government borrow to operate. The more it borrows, the more it makes.
And here we are, with banks now praising - and paying - debtors, whose loans are automatically repaid, while crushing savers who have to suffer negative interest rates on their deposits.
As such, the next (il)logical step is to take upside down finance to its extreme, and unleash MMT - i.e., helicopter money - on the population, because with a record $246 trillion in global debt outstanding, the only way forward is through a grand reset, one which inevitably involves hyperinflating the debt away. And that - as Bernanke predicted when he explains how to avoid deflation in his famous 2002 speech - will require a literal "helicopter drop" of money. Luckily, with negative rates, money is now worthless so the final lap in the grand race to the bottom of currency devaluation should be relatively quick.
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