Jun 10

Today’s News 10th June 2016

  • "Deliberately Overblown" Brexit Fears Backfire

    Submitted by John Browne via Euro Pacific Capital,

    As the June 23rd BREXIT (the UK-wide referendum to leave the EU) vote draws near, the polls indicate a close result. Those urging a vote for the UK to remain inside the EU are suggesting increasingly dire economic consequences that would follow a yes vote by the British people to leave. Voices from London, Brussels, and Washington have all put immense pressure on British voters to bend to the will of the elites.

    To listen to their commentary one would think that apocalypse was just around the corner. But is there any substance to their warnings?

    The Pro-EU membership camp is led by Prime Minister David Cameron, supported by most of his cabinet, the Bank of England, the BBC and the massive support from the UK and EU governments that have funded enormous advertising campaigns against separation. Given this weight of their power, it is amazing how strong the support for a British exit (BREXIT) has remained.

    When Britain first joined the European Economic Community (the precursor to the EU) in 1973, the primary motivation was the hopes of increasing British trade through participation in the world’s largest free-trade zone. However, the hope that the union would simply be a free-trading zone of sovereign countries has morphed into a drive for an EU superstate that has relentlessly pushed for greater regulations on businesses and people and greater control of local laws that have nothing to do with trade.

    It has been kept remarkably quiet, for instance, that the EU intends to divide the UK into eleven administrative regions, all reporting directly to Brussels. Although Scotland, Wales and Northern Ireland will remain intact as individual national regions, England will be split into eight regions. Worse still, the coastal counties of England will be teamed with regions in Portugal, France, the Netherlands and Germany, where they will remain in a minority role. Even the English Channel is to be renamed. Very little mention is of the EU proposal for EU-wide ID and tax numbers, likely heralding a heavy EU taxation regime.

    Likewise, the proposals to create EU-wide armed forces have been put quietly on the back burner. England has a long and proud history of struggling for its sovereignty. In just the past two centuries she has stood alone against Napoleon and Hitler, before inspiring other nations to join the fray. The presence of French or German armed forces used to support a European police force in the UK will not sit well with the English.

    All this and many more threats to the British people have been kept largely quiet. Instead, the main activities of the Pro-EU group have been concentrated on the economic and monetary catastrophe that would face the UK if it were to cut itself off from trading with the EU. Some call this, ‘Project Fear’. The actual underlying facts paint a somewhat different picture, one that makes the Pro-EU case appear misleading, even deliberately so.

    The basic argument is that with about 50 percent of its current trade with the EU, the UK would face a catastrophic economic and monetary collapse if it left the EU. As a threat, this sounds potentially devastating. Doubtless it has persuaded some. But in the light of reality, a different and far less worrying image emerges.

    The UK has the fifth largest national economy in the world, according to 2015 figures compiled by the International Monetary Fund. In its present state of economic stagnation, the EU can ill-afford to lose the UK. According to the March 2016 Statistical Bulletin from the Office for National Statistics, the UK has had a negative trade balance in goods with the EU that has averaged about $8 billion a month this first quarter. If the UK were to leave without being able to negotiate an independent trade deal, the EU economy might shrink by some $96 billion a year. The UK was the second largest net contributor to the EU budget last year. It follows that the 8 English regions (with Scotland, Wales and N. Ireland considered as 'relatively poor') may in aggregate be the second largest suppliers of future intra-EU money transfers from the so-called 'rich' to the poorer southern and eastern regions of Europe. In that sense, the EU needs the UK more than the other way round.

    The Pro-EU camp ignore the trade balance issue completely and threaten, as did President Obama, that the UK would be left out in the cold, like Switzerland, and unable to negotiate its way out of a disaster. Switzerland is not an EU member and has an economy of less than a quarter the size of the UK’s. And yet from 2009-2013 she exported, on average, 4.6 times the value per person to the EU than does the UK (The Truth About Trade Outside the EU, William Dartmouth MEP, June 2015). With a negative EU trade balance, why would the UK be unable to negotiate, from outside, a trade agreement at least as good as that achieved by Switzerland?

    [As an aside, over dinner many years ago, my occasional Lords and Commons golfing partner Dennis Thatcher asked me how the UK would survive alone in an era when world power blocks and corporations were getting bigger? I replied, “In the same way as Switzerland.” He retorted while hitting the table hard with his hand, “That’s just what Margaret thinks!”]

    Further, the EU negotiates international trade agreements under the auspices of the World Trade Organization (WTO), in the primary interests of the EU, not of the UK. England has flourished by trading globally, especially with the U.S. and the British Commonwealth. The EU has no trade agreements yet with China or Japan. Outside the EU, the UK would be enabled to negotiate freely to trade with the entire world and be unfettered by the EU where it has a muted voice of 1 among 28 members. Furthermore, free of burdensome and costly EU regulations, the British economy likely would be re-energized, particularly among the vital job-creating small business sector.

    In addition to economic collapse, the Pro-EU camp postulates that the British pound sterling, still one of the top five global trading currencies, would plummet following a BREXIT. However, many informed observers believe the international monetary system is on the cusp of a major collapse. In these circumstances, the vital interests of the Federal Reserve, European Central Bank, Bank of Japan and even the Bank of China would be to steady the ship to avert a collapse of fiat currency. Unimaginable amounts of central bank money could be deployed to save the pound, rendering it a false scare.

    On the other hand, although the UK is not a member of the euro, a BREXIT indirectly could threaten the euro, now the world’s second currency.

    Already a number of EU members are experiencing anti-EU sentiments among their people. The United Kingdom Independence Party (UKIP), which forced the BREXIT vote, is not alone. It is part of a sizable block, styled the Europe for Freedom and Direct Democracy (EFDD) group, in the EU parliament. It is comprised of representatives from the UK, France, Sweden, Italy, Poland, Lithuania and the Czech Republic. In addition, countries like Greece, Spain and Portugal are becoming very unhappy about the implications of Eurozone membership. A for BREXIT vote could ignite an implosion within the Eurozone rather than being a threat to Sterling. This may be what worries the international central banking and political elite most. It has led directly to massive global elite support for Cameron’s Project Fear.

    If the British public wises up to David Cameron’s game of fear and vote for BREXIT, there will be some short-term shock and disruption in currencies, equities, bonds, precious metals and possibly employment. However, the global central bank and political elites could be expected to move very fast to avoid the development of deeper problems. Negotiations likely would be concluded very quickly to calm things down with minimal damage to the UK economy or its currency.

  • The Pentagon's Great Wall Of Impotence

    Authored by Pepe Escobar, originally posted at RT.com,

    No one ever lost money betting on the Pentagon refraining from exceptionalist rhetoric.

    Once again the current Pentagon supremo, certified neocon Ash Carter, did not disappoint at the Shangri-La Dialogue – the annual, must-go regional security forum in Singapore attended by top defense ministers, scholars and business executives from across Asia.

    Context is key. The Shangri-La Dialogue is organized by the London-based International Institute for Strategic Studies (IISS), which is essentially a pro-Anglo-American think tank. And it takes place in the privileged aircraft carrier of imperial geostrategic interests in South East Asia: Singapore.

    As expressed by neocon Carter, Pentagon rhetoric – faithful to its own estimation of China as the second biggest “existential threat” to the US (Russia is first) – revolves around the same themes; US military might and superiority is bound to last forever; we are the “main underwriter of Asian security” for, well, forever; and China better behave in the South China Sea – or else.

    This is all embedded in the much ballyhooed but so far anemic “pivoting to Asia” advanced by the lame duck Obama administration – but bound to go on overdrive in the event Hillary Clinton becomes the next tenant of 1600 Pennsylvania Avenue.

    Real threats are predictably embedded in the rhetoric. According to Carter, if Beijing reclaims land in the Scarborough Shoal in the South China Sea, “it will result in actions being taken by the both United States and … by others in the region.”

    What’s left for China, in Pentagonese, is just to be a member of a hazy “principled security network” for Asia – which will also help protect the East against “Russia’s worrying actions”. Carter mentioned“principled” no less than 37 times in his speech. “Principled” cheerleaders so far include Japan, India, the Philippines, Vietnam and Australia.

    So here’s an instant translation: we do a NATO in Asia; we control it; you will answer to us; and then we encircle you – and Russia – for good. If China says no, that’s simple. Carter proclaimed Beijing will erect a “Great Wall of self-isolation” in the South China Sea.

    If this is the best Pentagon planners have to counteract the Russia-China strategic partnership, they’d better go back to the classroom. In elementary school.

    Navigate in freedom, dear vassals

    Predictably, the South China Sea was quite big at Shangri-La. The South China Sea, the throughway of trillions of US dollars in annual trade, doubles as home to a wealth of unexplored oil and gas. Stagnated and increasingly irrelevant Japan, via its Defense Minister Gen. Nakatani, even advanced the Japanese would help Southeast Asian nations build their “security capabilities” to deal with what he called “unilateral” and “coercive” Chinese actions in the South China Sea. Cynics could not help to draw similarities with Imperial Japan’s Greater East Asia Co-Prosperity Sphere.

    The Beijing delegation kept its cool – to a point. Rear Admiral Guan Youfei stressed, “The US action to take sides is not agreed by many countries.” Youfei – the head of the Chinese office of international military cooperation – did not refrain though from condemning a “Cold War mentality” by the usual suspects.

    As for Japan, China’s Foreign Ministry detailed that “countries outside the region should stick to their promises and not make thoughtless remarks about issues of territorial sovereignty.” Japan has absolutely nothing to do with the South China Sea.

    Beijing’s reclamation work on reefs in the South China Sea naturally put it in direct conflict with Vietnam, the Philippines, Malaysia and Brunei. So US meddling – under the convenient cover of“freedom of navigation” – had to be inevitable. “Freedom of navigation” operations are a silly intimidation game in which a US Navy ship or plane passes by a Chinese-claimed island in the South China Sea.

    It was up to Admiral Sun Jianguo, Deputy Chief of the Joint Staff Department of China’s Central Military Commission, to cut to the chase, stressing “the provocation of certain countries” and adding that “selfish interests” have led to the South China Sea issue becoming “overheated”. He slammed the Pentagon for double standards and “irresponsible behavior”. And he slammed the Philippines for taking the conflict to a dubious UN arbitration court after breaching a bilateral agreement with China;“We do not make trouble but we have no fear of trouble.”

    The Chinese position prefers dialogue and cooperation – and Jianguo re-stressed it, calling for ASEAN to make a move. In fact China has already reached what is called a four-point consensus with Brunei, Cambodia and Laos on the South China Sea two months ago. The Philippines are a much harder nut to crack – as the Pentagon is taking no prisoners to lead Manila “from behind”.

    Even Vietnam, via Deputy Defense Minister Nguyen Chi Vinh, made it clear – in the same plenary session as Admiral Jianguo – that Vietnam prefers solutions via the UN Convention on the Law of the Sea as well as negotiation between China and ASEAN.

    Bend over to our rules – or else

    After Shangri-La’s rhetorical excesses, the action moved to Beijing, the site of the 8th China-US Strategic and Development Dialogue. That’s the annual talkfest launched in 2009 by Obama and then Chinese President Hu Jintao.

    Chinese Vice Foreign Minister Zheng Zeguang painted a rosy picture, stressing the exchange of“candid, in-depth views on important and sensitive issues of shared concern.” Chinese Ambassador to the US Cui Tiankai once again needed to point out that the relationship is just “too important” to be “hijacked” by the South China Sea. And yet this is exactly the Pentagon’s agenda.

    Beijing though won’t be derailed. As State Councilor Yang Jiechi put it, ASEAN-China dialogue is progressing via what Beijing calls the “dual-track” approach, according to which disputes are negotiated between the parties directly involved. That implies no Washington interference.

    Beyond what is discussed either at Shangri-La or at the China-US dialogue, the Big Picture is clear. ‘Exceptionalistan’ planners have molded a narrative where China is being forced to make a choice; either you bend over to “our” rules – as in the current unipolar geostrategic game – or else.

    Well, Beijing has already made its own choice; and that entails a multipolar world of sovereign nations with no primus inter pares. The Beijing leadership under Xi Jinping clearly sees how the so-called international“order”, actually disorder, is a rigged system set up at the end of WWII.

    Wily Chinese diplomacy – and trade – knows how to use the system to advance Chinese national interests. That’s how modern China became the “savior” of global turbo-capitalism. But that does not mean a resurgent China will forever comply with these extraneous “rules” – not to mention the morality lessons. Beijing knows ‘Exceptionalistan’ would not agree even to divide the spoils in a geopolitical spheres-of-influence arrangement. Plan A in Washington is containment – with possibly dangerous ramifications. There is no Plan B.

    The bottom line – thinly disguised by the somewhat polite responses to Pentagon threats – is that Beijing simply won’t accept anymore a geopolitical disorder that it did not create. The Chinese could not give a damn to the New World Order (NWO) dreamed up by selected ‘Masters of the Universe’. Beijing is engaged in building a new, multipolar order. No wonder – alongside with strategic partner Russia – they are and will continue to be the Pentagon’s top twin threat.

  • A Day In The Life Of Several Hundred Laid Off Nomura Traders

    Back in April, Japan's largest brokerage, Nomura, announced that it was quitting the European equity business. The decision was a cost cutting measure, and was made easier by the fact that the European operation hadn't made a profit since 2010.

    Nomura isn't alone, Investment banks across the globe are cutting equity traders as a result of the current trading environment.

    The following is what it was like for a group of London traders the day Nomura made the announcement that their services were no longer required, as chronicled by Bloomberg.

    * * *

    The fact that the division had only made one annual pretax profit since being bought from bankrupt Lehman Brothers Holdings in 2008 created an environment where traders would have to filter out the rumors of impending cuts quite frequently. However on April 11, it wasn't business as usual.

    At One Angel Lane, Nomura’s stylish, eco-friendly European headquarters, employees have learned to filter out rumors of impending cuts. The division has only made an annual pretax profit once since it was bought from bankrupt Lehman Brothers Holdings Inc. in October 2008 — a fact so often mentioned one half-expects it to be printed on employees’ business cards.

     

    On April 11, though, the noise was louder than usual. A senior executive had let slip to a colleague at a barbecue that he was dreading the following week because the bank was shutting down equities. By the time media reports of unspecified job cuts in the U.S. and Europe appeared at lunchtime, all semblance of work had ground to a halt. Desk heads asked their managers what was going on. According to one of those doing the asking, they were told there was nothing to worry about.

     

    That changed early the next morning when e-mails went round ordering staff to attend a compulsory meeting. Research analysts and salespeople caught the elevators up to the 11th floor; traders congregated on the third. By 9 a.m., it was official. Everyone was given an “at risk” letter, in which the firm offered to help them find alternative roles over the next 45 days, but they knew it was typically just a formality.

    After listening to speeches by senior managers and human resources personnel, everyone was told to gather their belongings, leave key cards at reception, and exit the building. Most made their way to All Bar One and The Folly, the only pubs open in the city of London at that hour, to have a pint, and perhaps even to express a sigh of relief that there was no longer a daily worry about whether or not a job would be there the next morning.

    The Folly, a pub operated by Drake and Morgan Bars and Restaurants

    They made their way in dribs and drabs. Hundreds of displaced bankers, shuffling up Suffolk Lane to All Bar One and along Upper Thames Street toward the Folly, the only pubs in the City of London open that early on an overcast Tuesday morning.

     

    The shell-shocked men and women sipping pints and consoling each other had become part of a growing population. Faced with a toxic blend of zero-interest rates, stiffer capital requirements and a collapse in trading revenue, banks including Barclays Plc, Deutsche Bank AG and Credit Suisse Group AG have announced large cuts to their European operations in recent months. Even U.S. firms, with higher profitability, are trimming staff.

     

    Among the bankers who stayed in the pubs until late in the evening, seemingly attempting to stave off the inevitable by remaining in the financial district, there were at least some expressions of relief. Nomura had already conducted one round of restructuring, in 2012, following the appointment of Koji Nagai as chief executive officer. Unlike his predecessor, Nagai was openly skeptical about Nomura’s place in a saturated and tightly regulated European market. The whiff of insecurity pervaded the trading floor.

     

    The bank went on a cost-cutting drive and, under the direction of a new compliance team hired from UBS Group AG, started to clamp down on even minor breaches to company rules. Staff members were chastised for sending presentations to their personal e-mail accounts to work on over the weekend. One group of traders was threatened with dismissal after being caught on closed-circuit TV stealing candy from a vending machine.

    Knowing their fate was one thing, however one important question remained unanswered: would those that were let go still receive a bonus. Figuring that the financial year finished prior to being let go, many assumed that a bonus would still be provided – sadly, they were wrong.

    For the newly unemployed, one question loomed large: Would they still get a bonus? Nomura’s financial year finished at the end of March — well before any decision was announced regarding job cuts. Some traders and bankers assumed that, since they’d worked a full year, they would still receive an award.

     

    They were wrong. On May 9, Nomura wrote to staff notifying them they would get nothing. Discretionary bonuses, the letters pointed out, were based on factors including future value to the company. Some bankers are now considering challenging the decision, citing a 2000 case in which a departing Nomura prop trader successfully sued the firm for 1.35 million pounds ($2 million). Nomura declined to comment on the bonus decision.

    To top everything off, in addition to being fired and told no bonus would be paid out, some traders were summoned back to the office to face a disciplinary hearing. In trying to prepare for a future job search, they forwarded themselves documents they felt may be needed in the future, such as research reports, excel models, and even in one case, even a list of clients. Not only did the bank clamp down on those cases, which as a result will inevitably make it more difficult to find work in the future for those involved, the bank has yet to respond to those that simply asked for some work documents that may help in a future job search, even though Nomura had pulled out of Europe.

    A second letter landed on the doorsteps of a handful of employees later that month, summoning them back to the office for a disciplinary hearing. In the hours before the cuts were announced, about five analysts had forwarded themselves documents they might need if they lost their jobs: research reports, Excel models and, in at least one case, a list of clients.

     

    Nomura, like most banks, prohibits employees from forwarding any work documents to personal e-mail accounts. In tense meetings, the individuals explained themselves and asked for leniency. The bank is now considering what action, if any, to take. Possibilities include firing them for gross misconduct, thereby depriving them of severance pay and making it hard to find a job elsewhere; or handing out written warnings that will show up in a reference to a prospective employer. The analysts, who range from a junior associate to an industry veteran, fear that any measures will hamper their efforts to find alternative positions at a time when the industry is retrenching. Nomura declined to comment on the situation.

     

    Separately, several former employees have asked the company to provide them with work documents they say will help them find roles elsewhere, such as their proprietary models and databases. They argue there is no reason for Nomura to refuse since it will no longer be competing in Europe. So far, no decision has been reached.

    In the rush to leave One Angel Lane, many employees didn't have time to grab all of their belongings. Old family photographs, items of clothing and professional mementos lie in storage awaiting collection, a reminder of the human cost when a business fails.

     

     

     

  • On Death And Taxes: "The Greed Of The Government Can Never Be Overstated"

    Submitted by Jeremiah Johnson (nom de plume of retired Green Beret of the United States Army Special Forces) via SHTFPlan.com,

    Readers, you’re awake to the horrors of the Federal Government, our rapidly-declining GDP and ever-increasing debts.  Trillions of dollars have been stolen, in the form of appropriations and programs that funnel directly from the tax-base: the fat “cash-cow” that the government suckles from.  The taxes are life-sustaining to the government juggernaut, managed by the ever self-serving “representatives” of Congress who approve pay raises for themselves, immunity from prosecution from (what was formerly) insider trading, and exonerate themselves from any and all ethics violations.

    Taxes keep the government going, keep the system emplaced and you the citizen in your place, from birth to death.  The website ivn.us reports the breakdown for the federal government’s feedings:

    Personal income taxes               47.4%

    Corporate income taxes             34.1%

    Social insurance taxes                9.9%

    Tariffs/gas taxes/fees                 8.5%

    Ben Franklin summarized the position of the average citizen two centuries ago:

    “In this world nothing can be said to be certain, except death and taxes.”

    Franklin was correct; however, he should have reversed the order, because taxes can both bring on death and still haunt the deceased after their passing.  The best example of this is the death tax, where a person’s estate is assessed after their death.  Their heirs better pay the tax man!  Yes, how exactly does all of that work?  The deceased individual worked all of their lives, paying income taxes both federal and state, paying off their house and mortgage, paying their property tax.

    If they paid for their house in full, and all related property taxes, then why is it assessed for a death tax?

    The death tax is labeled conveniently as an “inheritance tax,” much in the manner that conquest and possession of more property is done by a municipality.  Labeled aseptically as “annexation,” it is where the nabobs of the “grand council” of the municipality vote to take for themselves (sorry, the municipality) more land/territory.  It’s all within their laws, and everyone smiles and pays the additional taxes happily ever after.

    This year more than $3.4 trillion in federal taxes are estimated to be taken in by the federal government.  Add to this the $1.5 trillion in local and state taxes, and this figure amounts to more than 31% of the nation’s income.  Meanwhile look at the tax dodges that the Clinton’s perform, such as the multiple-listed addresses for corporations in the state of Delaware, and the undeclared revenues for their books and speaking engagements.

    On December 16, 1773, American colonists disguised as Indians destroyed 342 cases of tea stored on board 3 cargo ships of the British navy.  The price of tea included a tax of 30 pence per pound in England.  In the American colonies, that tax was only 3 pence per pound, and yet the colonists wouldn’t take it: they acted.  A far cry from today, where the citizens just accept all of it complacently and without more than an anguished bleat.

    “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”

    -Will Rogers

    For the most part that is true, with the exception of the inheritance taxes, in which the dead person’s estate is divided up: the heirs either pay or lose the property that has already been paid for and property taxes paid year after year!  If you have a million dollars in the bank saved over 20 years, and you suddenly die, if the taxes have already been paid year after year on your income, then why do they double-dip and tax you after your death?

    It is all about control and dominion.  Government produces nothing, takes everything it can, and consumes all of it with wanton, avaricious gluttony.  The greed of government can never be overstated.  There are only politicians, no leaders, and those who misrepresent themselves and the Constitution in order to manipulate us and claim to represent us. They only represent themselves.  The fiat currency and the Petrodollar are already leveraged to the hilt with a negative balance after the phony, inflated, CBO-doctored GDP.

    We have no leaders, only rulers.  The communist truism is correct: all authority comes from the barrel of a gun.  Taxes are a means with which to destroy wealth and property passed from one generation to the next, and control the masses, subjugating them and dominating them via the color of law that make them always answerable to a superficially-benevolent but in reality malevolent government.  All governments are vampires, and the blood they drain from the people is the blood of their taxes.  We have taxation with misrepresentation, while these miscreants continue to wine, dine, and fete themselves on their trips to Martha’s Vineyard and Cozumel.  On death and taxes, only the former allows you to escape the latter, and not even then.

  • China Orders 1,000 Heavy Transport Aircraft "Based On The Experience Of The United States And Russia"

    As tensions escalate to dangerous levels in the South China Sea and in eastern Europe, an interesting decision has been made be the Chinese government.

    According to Sputnik, back in January the People's Liberation Army Air Force was preparing to develop a new fleet of stealth fighters and heavy transport aircraft. The heavy transport aircraft, the Xian Y-20 transport, was going to be built in order to give Beijing a "fast and reliable platform" to deliver arms and soldiers over long distances.

    Model Y-20 Transport

    During a technology exhibition in Beijing, Aviation Industry Corporation of China (AVIC) elaborated on the governments plans for the Y-20. Although originally thought that Beijing would want only 400,  "More than 1,000 Y-20s will be needed" said Zhu Qian, head of AVIC's large aircraft development office – the reason? "Based on the experience of the United States and Russia" Zhu says.

    Now that's an interesting nugget of information. So due to the fact that the US and Russia are at odds, China needs 1,000 heavy transport aircraft – why would that be, is China planning on getting involved if ever the US and Russia got into a military dispute?

    The Y-20 weighs roughly 220 tons, has four turbofan engines, and can carry up to 66 tons of cargo at a range of about 3,230 miles. This means the heavy transport aircraft can reach everywhere in Europe and Asia, the US state of Alaska, Australia, and North Africa.

    So to summarize, due to what's happening between Russia and the United States, China has ordered nearly triple the amount of heavy transport aircraft it originally intended so that it could take tanks and other military equipment anywhere in Europe.

    Which reminds us of what we reported earlier today. As China sailed a warship by disputed islands that are claimed to be controlled by Japan, Japanese officials also stated that a two Russian vessels were also spotted in the contested zone. Something tells us that there may be a military alliance in the works between Russia and China, and that could present significant problems for the US as it tries to bully both simultaneously.

  • State Department Delays More Clinton-Related Records Requests… Up To 75 Years

    Submitted by Mike Krieger via Liberty Blutzkrieg blog,

    Obstruction anyone?

    Recall that a couple of days ago in the post, Obama Administration Delays Release of Hillary Clinton TPP Emails Until After the Election, we learned:

    Trade is a hot issue in the 2016 U.S. presidential campaign. But correspondence from Hillary Clinton and her top State Department aides about a controversial 12-nation trade deal will not be available for public review — at least not until after the election. The Obama administration abruptly blocked the release of Clinton’s State Department correspondence about the so-called Trans-Pacific Partnership (TPP), after first saying it expected to produce the emails this spring.

    Well there’s more to this story. International Business Times reports:

    As the election season accelerates, requests for public information from the State Department surrounding communications from former Secretary of State Hillary Clinton have hit speed bumps.

     

    A review of publicly available records requests from users of the transparency site MuckRock shows that inquiries related to the Democratic presidential nominee are more likely to be delayed until after the election than other requests to the State Department — a trend government watchdogs say highlights the challenges the government has faced under President Obama to live up to its transparency aims.

     

    Though the files reviewed by IBT constitute just a fraction of the tens of thousands of inquiries the State Department processes annually — too few, experts said, to establish any sign of deliberate obstruction — they underscore the difficulty of probing Clinton’s tenure as the top U.S. diplomat, even as interest in her record mounts.

     

    Four of the five Clinton-related records requests maintained at MuckRock have been given approximate due dates after the election in early November. These include a request filed by International Business Times Senior Investigations Editor David Sirota regarding Clinton’s contested record on trade issues, reported Monday. The fifth request has passed its estimated May completion date and has yet to be updated.

     

    By contrast, of 20 Freedom of Information Act (FOIA) requests updated in the past three weeks by the State Department, only half had been postponed until after the 2016 presidential election, receiving estimated completion dates in October or earlier.

     

    Though the agency has fulfilled numerous Clinton-related requests in the past year, spokespeople declined to specify how many outstanding inquiries into Clinton records remain or how many responses are due before the election.

     

    Despite adding dozens of staffers to its FOIA offices, the State Department argued in court that it would take 75 years to complete a review of documents related to the Republican National Committee’s sweeping request of records for former Clinton aides.

     

    But it isn’t all external pressures hobbling the State Department. A scathing agency audit earlier this year into the agency’s processes found “procedural weaknesses” leading to “inaccurate and incomplete” responses. The State Department, on average, takes the longest among government agencies to complete simple requests: 111 days.

     

    Complicating matters is the fact that Clinton emails must face review not only from the State Department, but also from any other government agency that feels it has a stake in disclosure of the contents. The intelligence community has played a particularly active role in scrutinizing the cache, retroactively marking dozens of Clinton emails classified. More than 2,000 documents have been kept from public view over secrecy concerns.

    I’m sure there’s nothing there in the pubic interest.

    The White House is one of the government offices that gets to view documents, and watchdogs have accused the executive branch of delaying the release of politically sensitive material. Though Obama launched his presidency with a promise to be the “most transparent” in history, his administration has had a fitful record on openness — earlier this year, Vice News reported that executive officials worked to undermine congressional FOIA reforms.

    Of course, this appears to be part of a much larger effort to conceal who Hillary Clinton really is from the voting public. It’s the same reason she refuses to release her Wall Street speech transcripts — she needs to be able to pretend to be something she’s not during the election.

    Here’s another related example, also from International Business Times:

    Facing an increasingly tough primary fight against Bernie Sanders last October, former Secretary of State Hillary Clinton, now the presumptive Democratic nominee, tried to distance herself from her push to negotiate the controversial Trans Pacific Partnership trade deal during her time atop the State Department (2009-2013). After months of taking positions on the deal that were criticized — even by members of her own party — as vague, Clinton said the deal wasn’t what she’d hoped it might be.

     

    Since then she’s held fast on that position, weathering a primary fight that was anything but expected from the populist, self-described Democratic socialist Sanders, who has repeatedly railed against the TPP. At the same time, a review of the hardback edition of her memoir as secretary of state, “Hard Choices,” compared to the paperback — first noted by the Center for Economic and Policy Research (CEPR) — finds that segments of the book where Clinton describes an effort to convince American countries to join the TPP negotiations have been left out.

     

    We encouraged “all open-market democracies driving toward a more prosperous future to join negotiations with Asian nations on TPP, the trans-Pacific trade agreement,” the original version of the book reads in a two-page segment discussing a 2009 conference in El Salvador. Those two pages have been cut from the paperback version of the book, according to CEPR.

     

    Requests for comment sent to the Clinton campaign and Simon & Schuster, publisher of “Hard Choices,” were not immediately returned.

    hmm…

  • Peak Youth

    The world will experience “peak youth” in 2020 for the first time in human history, as the number of people aged over 65 is expected to outnumber those under 5 years old.

     

     

    As BofAML notes, a key implication of an aging population is that an economy’s savings rate tends to rise while increases in investments tend to decline.

    It is this aging global population that has thwarted the “war on deflation” in recent years (among other things like excess debt, deleveraging, and technical disruption)…

    Aging populations increase the need to save for a longer retirement and lead to higher healthcare costs (note that in the next 10 days, 112,000 people will reach retirement age in the US, Europe, and Japan).

    Source: BofAML

  • Peter Schiff Warns "This Is The Point Where The Fed's Real Problems Begin"

    Submitted by Peter Schiff via Euro Pacific Capital,

    Stop me if you’ve heard this one before: A Fed official walks into a bar and says the economy is improving and rate hikes are appropriate. The patrons order another round to celebrate. Then disappointing data comes out, the high fives stop, and the Fed official ducks out the back…only to come back the next day saying the same thing. Anyone who pays even the smallest attention to the financial media has experienced versions of this joke dozens of times. Yet every time the gag gets underway, we raise our glasses and expect the punch line to be different. But it never is. Last week was just the latest re-telling.
     
    For nearly a month the Fed’s bullish statements stoked optimism on the economy and raised expectations, based particularly on the most recent FOMC minutes, for a summer rate hike. But these hopes were dashed by the May non-farm payroll report, which reported the creation of only 38,000 jobs in May, the worst monthly performance in six years, based on data from the Bureau of Labor Statistics (BLS). The number missed Wall Street’s estimate by a staggering 120,000 jobs. If not for the 37,000 downward revision reported for April (160,000 jobs down to 123,000), May could have shown a contraction. This would have constituted a major black eye to the Obama Administration’s favorite talking point that its policies have led to 75 months of continuous job gains. (6/3/16, Democratic Policy & Communications Center).
     
    To make the report even stranger, the plunge in hiring was accompanied by a drop in the unemployment rate to just 4.7%. Of course the fall in the unemployment rate was a function of another major drop in the labor force participation rate to just 62.6%, matching the June 2015 rate, which was the lowest level since the late 1970s (BLS). So the unemployment rate did not fall because the unemployed found jobs, but because they stopped looking. The market reaction was swift and sharp, as it always has been when a fresh shot of cold water has been thrown in the face of market boosters. The dollar fell hard and gold rose sharply.
     
    But we can rest assured that despite any embarrassment that the Fed may be experiencing for having so gloriously misdiagnosed the current economic health, it will be right back at it in a few days, telling us about all the positive economic signs that are emerging and how it is ready and willing to start raising interest rates at the earliest opportune moment. Boston Fed president Eric Rosengren waited exactly 48 hours to start that campaign as he sounded bullish notes in a Monday speech in Finland. (6/6/16, Greg Robb, MarketWatch)
     
    Given how many times this scenario has unfolded, leading to the point where even reliable Fed apologists like CNBC’s Steve Liesman have begun questioning the Fed’s credibility, one wonders what the Fed hopes to achieve by continuously walking into the bar with a new smile. But this performance is the only policy tool it has left. The Fed appears to believe that perception makes reality, so it will never stop trying to create the rosiest perception possible. It may view its own credibility as expendable.
     
    There is also the possibility, however unlikely, that the Fed officials are not just trying to create growth through open-mouth operations, but that they actually believe that their policies are working, or are about to work. This would be as dogged a commitment to policy as medieval doctors had for bloodletting, which they thought was a useful therapy for a variety of ailments. Doctors at that time had all kinds of seemingly plausible reasons why the technique was effective. If the patient did improve after draining blood, it was taken as a sign of validation. But they would continue to apply the leeches even if the patient did not improve. Failure was simply a sign that more blood needed to be drained. Similarly, central bankers consider ultra-low, and even negative, interest rates as an ambiguous stimulant that will create growth when applied in large enough doses.
     
    But what if modern central bankers, much like medieval doctors, are operating on a wrong set of assumptions? We know now that draining blood creates conditions that actually decrease a patient’s ability to fight infection and recover. Perhaps, one day, bankers will come to a similarly delayed conclusion about how zero and negative interest rates have prevented a real recovery that would otherwise have naturally taken place.
     
    That’s because artificially low interest rates send false signals to the economy, prevent savings and investment, and encourage reckless borrowing and needless spending. They prevent the type of business and capital investment that is needed to create real and lasting economic growth. But don’t expect bankers, or their cheerleaders on Wall Street, the financial media, government, or academia, to ever make this admission. They do not believe in the power of free markets. They believe in government. Such a leap is simply beyond their powers of comprehension.
     
    But there is another cycle here that is much more influential on the current market dynamic and should be much easier to spot. When the Fed talks up the economy and promises rate increases, the dollar usually rallies. When the dollar rallies, U.S. multi-national corporate profits take a hit, and the market falls. When the market falls, economic confidence falls and puts pressure on the Fed to maintain easy policy. This is a loop that the Fed does not have the stomach to break.
     
    Because the Fed waited more than seven years to lift rates from zero, the cyclical "recovery" is already nearing its historical limit, if it's not already over. This could put the Fed into a position of raising rates into a weakening economy. Normally it does so when the economy is accelerating. Some identify this delay as the Fed's only policy error. But had it moved earlier, the recession would have simply arrived that much sooner. The Fed's actual policy error was thinking it could build a "recovery" on the twin supports of zero percent interest rates and QE, and then remove those props without toppling the “recovery.”
     
    But despite all this, there are those who still believe that the Fed will deliver two more rate hikes this year. Given the anemic growth over the past two quarters, the recent plunges in both the manufacturing and service sectors, average monthly non-farm payroll gains of only 116,000 over the past three months (most low-wage, and part-time) and the stakes contained in the election that is just six months away, such a conclusion is hard to reach. Instead, I expect we will get the same bar gag we have been getting for the past year. Many of those who now concede that a June hike is off the table still believe July to be a possibility. I believe the Fed will go along with that hype until it can no longer get away with it…then it will start bluffing about September, or perhaps December.
     
    The Fed has to keep talking about rate hikes so it can pretend that its policies actually worked. But the truth is that the Fed policies have not only failed, they have made the problems they were trying to solve worse, and raising interest rates will prove it. So the Fed resorts to talking about rate hikes, to maintain the pretense that its policies worked, without actually raising them and proving the reverse. This can only continue as long as the markets let the Fed get away with it or until the numbers get so bad that the Fed has to admit that we have returned to recession. That is the point where the Fed’s real problems begin.

     

  • Venezuela Opposition Leader Hit On The Face With Metal Pipe As Police Watch

    Following the recent tragic stories of mass looting by the country’s starving population, which has resulted in at least one death, and even people resorting to killing animals for food, little can shock us anymore as we follow Venezuela’s total social disintegration. Which is why we took today’s news that the leader of Venezuela’s congressional opposition bloc was hit in the face with a pipe, and bloodied as he attempted to make his way into a government building, with hardly any surprise at all.

    As photographs circulating online show, government supporters attacked Congressman Julio Borges with a pipe.

     

    He spoke at a press conference after the attack with blood streaming down from his nose and mouth, and bloody stains on his button-down shirt.

    Borges had been attempting to enter the headquarters of the country’s electoral body in downtown Caracas with other opposition figures. The area was heavily militarized, with lines of police looking on.


    Borges accused police of pushing him toward gangs loyal to President Nicolas Maduro.

    “Government supporters beat us with total impunity with pipes, stones, and explosives that went off in the middle of a group of lawmakers,” Borges said. “Maduro, what we want is to vote.”

    The opposition is pushing for a recall referendum against Maduro this year. They accuse elections officials of dragging their feet to delay the process. Borges said the officials refused to meet Thursday. A Maduro official previously has said that there will be no referendum.

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