Jun 12

Today’s News 12th June 2019

  • US-China Trade War Damage May Be "Irreversible"

    With the trade war between the US and China on the brink of re-escalating once more, a journalist told ABS-CBN News Philippines that damage to global supply chains from the trade war might be “irreversible.”

    President Trump threatened to slap tariffs Monday on the remaining $300 billion of Chinese exports to the US if China’s President Xi Jinping didn’t meet with him at the 2019 G20 Osaka summit on 28–29 June 2019.

    Simon Rabinovitch Asia editor for The Economist told the ABS-CBN host that economic warfare had interrupted complex global supply chains, which took several decades to construct, are now “less efficient.”

    “Even if the tariffs are reversed, the damage itself is irreversible. This is like a massive oil tanker and since it’s begun to shift direction, begun to shift course, it can’t go back to the way it used to be,”

    The global economy has experienced an “extremely long recovery” from the dark days of the 2008 financial crisis, and the business cycle tends to revert into the contraction phase every decade, he said.

    However, there’s hope; he said domestically-driven economies like the Philippines and India are “a little bit sheltered” from the global synchronized slowdown driven by the trade war.

    The best way to visualize just how serious Rabinovitch’s claim of the “irreversible” damage from the trade war is to monitor the global flow of trade. Below is a chart on YoY changes in global trade as measured by the IMF’s Direction of Trade Statistics, courtesy of BMO’s Ian Lyngern. It shows the absolutely collapse in global exports as broken down into three categories:

    • Exports to the world (weakest since 2009),
    • Exports to advances economies (also lowest since 2009), and
    • Exports to the European Union (challenging 2009 lows).

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    In short, even before President Trump slapped China with 25% on $200 billion in goods, global trade had already tumbled to levels last seen during the financial crisis depression. One can only wonder what happens to global trade after the latest escalation is filtered through the global economic system.

     

  • Turkey's New Violent Political Culture

    Authored by Burak Bekdil via The Gatestone Institute,

    • At the heart of the matter is a culture that programs most less-educated masses (and in Turkey average schooling is 6.5 years) into a) converting the “other” and, if that is not possible, b) physically hurting the “other.” A deep societal polarization since President Recep Tayyip Erdoğan’s Justice and Development Party (AKP) came to power in 2002 has widened to frightening levels.

    • After opposition leader Kemal Kılıçdaroğlu was taken to a safehouse, members of the mob surrounded it and chanted, “Let’s burn down the house!”

    • Apparently each unpunished case of political violence committed on behalf of the dominant state ideology (Islamism) and its sacrosanct leader (Erdoğan) encourages the next. In May, a journalist critical of Erdoğan’s government and its nationalist allies was hospitalized after being attacked outside his home.

    In most civilized countries, citizens go to the ballot box on election day — be it parliamentary, presidential or municipal — cast their votes, go home to watch news reporting the results and go to work the next day, some happy, some disappointed, to live in peace until the elections. Not in Turkey, where any political race looks more like warfare than simple democratic competition.

    One reason is the dominance of identity politics in the country that has its roots deep in the 1950s, when Turkey evolved into multi-party politics. The fighting between “us” and “them” goes on since then. At the heart of the matter is a culture that programs most less-educated masses (and in Turkey average schooling is 6.5 years) into a) converting the “other” and, if that is not possible, b) physically hurting the “other.” A deep societal polarization since President Recep Tayyip Erdoğan’s Justice and Development Party (AKP) came to power in 2002 has widened to frightening levels.

    None of the incidents that opposition journalists are facing today is a coincidence.

    In September 2015, for instance, an angry group of AKP fans attacked the editorial headquarters of Hürriyet, Turkey’s largest newspaper, at that time an opposition media company. Smashing the building’s windows with sticks and stones, the crowd chanted: “Allah-u aqbar” (“God is great!”) as if they were in a religious war. In fact, they thought they were in one because Hürriyet at that time was a secular newspaper critical of Erdoğan. For a long time, security forces watched the incidents with only one police team. The crowd took down the flag of the Doğan Group (which then owned Hürriyet) and burned it. After repeated demands, extra police were dispatched. The AKP Istanbul deputy and the head of the AKP youth branch, Abdürrahim Boynukalın, was in the crowd. He announced on his Twitter account, “We are protesting false news in front of Hürriyet and we are reciting the Quran for our martyrs.” It was a jihad: attacking a newspaper…

    A month later, Ahmet Hakan, a prominent Hürriyet columnist and a presenter at CNN-Türk, was outside his home. Hakan was followed home from the television station by four men in a black car before being assaulted near his residence. Hakan was treated for a broken nose and ribs. Only a few months before those incidents, Erdoğan had accused Hürriyet‘s owner of being a “coup lover” and described his journalists as “charlatans”.

    In October 2016, Turkey’s Directorate of Religious Affairs, or “Diyanet,” issued a circular for the formation of “youth branches” to be associated with the country’s tens of thousands of mosques. Initially, the youth branches would be formed in 1,500 mosques. But under the new plan, 20,000 mosques would have youth branches by 2021, and finally 45,000 mosques would have them, in what would look like “mosque militia”.

    Then there is the curious case of the Alperen Hearths, a fiercely pro-Erdoğan group that fuses pan-Turkic racism with Islamism, neo-Ottomanism, and anti-Semitism. In 2016, the Alperen threatened violence against an annual gay pride march in Istanbul. Alperen’s Istanbul chief, Kürşat Mican, said:

    “Degenerates will not be allowed to carry out their fantasies on this land…We’re not responsible for what will happen after this point … We do not want people to walk around half-naked with alcohol bottles in their hands in this sacred city watered by the blood of our ancestors.”

    The Istanbul governor’s office later banned the march.

    Another time, in 2016, Alperen members protested outside one of the most significant synagogues in Istanbul, to denounce Israel’s security measures after a deadly attack at the Temple Mount that left two Israeli police officers dead. “If you prevent our freedom of worship there [at Jerusalem’s al-Aqsa Mosque] then we will prevent your freedom of worship here [at Istanbul’s Neve Shalom Synagogue],” a statement from the Alperen said. “Our [Palestinian] brothers cannot pray there. Putting metal detectors harasses our brothers.” Some Alperen youths kicked the synagogue’s doors and others threw stones at the building.

    More recent times are not more peaceful, sadly. On March 31, when Turks went to the ballot boxes to elect their mayors, violence in one single day claimed six lives and left 115 people injured by sticks, knives, batons and gunfire. A few days later, the death toll increased.

    In a most spectacular show of violence, Erdoğan fans nearly lynched Kemal Kılıçdaroğlu, leader of the main opposition Republican People’s Party (CHP). In April, Kılıçdaroğlu went to a small town on the outskirts of Ankara to attend the funeral of a fallen soldier, killed during clashes with the separatist Kurdish militiamen. During the funeral, he was attacked by a nationalist crowd and taken to a nearby house for protection. A video of the incident on social media showed a mob pushing, shoving and punching Kılıçdaroğlu as he made his way through the crowd. After he was taken to a safehouse, members of the mob surrounded it and chanted, “Let’s burn down the house!” The man who punched the opposition leader, later happened to be an official member of AKP.

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    Pictured: Kemal Kılıçdaroğlu. (Photo by Erhan Ortac/Getty Images)

    The attacker, Osman Sarıgün, after a brief detention, was immediately released. The next day, he was a hero. Flocks of Erdoğan fans rushed to his farmhouse to kiss his hands in the Sicilian “baccio la mano” manner, paying him the utmost respect for physically attacking a leader of the opposition.

    Apparently each unpunished case of political violence committed on behalf of the dominant state ideology (Islamism) and its sacrosanct leader (Erdoğan) encourages the next. In May, a journalist critical of Erdoğan’s government and its nationalist allies was hospitalized after being attacked outside his home. The Yeniçağ newspaper said columnist Yavuz Selim Demirağ was beaten up by five or six people with baseball bats after appearing on a TV show. The assailants escaped the scene in a vehicle.

    Everything went miraculously well for Göknur Damat, a 34-year-old beauty specialist who had been diagnosed with breast cancer. In 2017, she appeared on a television show and, weeping, told the audience that her doctors said she would not live longer than six months. She won Erdoğan’s (and other people’s sympathies) and received an invitation to meet the president, who thereafter called her “my foster daughter.” She was now the darling of all AKP supporters. Her business prospered and, even better, Damat miraculously won her fight against cancer. Recently, however, she made a mistake. She donated 20 liras (approximately $3.50) to the election campaign of the opposition candidate running for mayor of Istanbul. Worse, knowledge of her donation somehow fell into the public domain, with thousands of Erdoğan fans asking, “How come our president’s foster daughter donated to the opposition campaign…” Recently, as she came out of her home, an unfamiliar man approached her, asked: “Are you that braveheart?” and stabbed her in the leg. The attacker, like most others, has not yet been found.

    Turkey never was a Denmark or Norway in political maturity, tolerance and culture but it is dangerously coming closer to being like one of its neighbors to the south or to the east.

  • #KuToo Overtakes #MeToo In Japan

    The Japanese version of the #MeToo-Movement, #KuToo, garnered international attention after a press conference and performance including the inventor of the movement, Yumi Ishikawa. Google searches for the movement, which is encouraging Japanese women to protest against workplace dress codes including mandatory heeled shoes, surged in Japan. A petition recently created by Ishikawa on change.org already has around 20,000 backers.

    Infographic: #KuToo Overtakes #MeToo in Japan | Statista

    You will find more infographics at Statista

    #KuToo is a play on the worldwide feminist movement #MeToo, which has encouraged women to speak out again workplace sexual harassment and discrimination. It also refers to the Japanese words kutsu, meaning shoe, and kutsuu, meaning pain, raising awareness for the fact that many Japanese women wear heels between five and seven centimeters high as part of their workplace uniform.

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    Ishikawa, who works at a funeral parlor part-time, is one of them. She tweeted her frustration about the fact in February and later created the hashtag #KuToo but the movement gained more traction recently in connection with actresses protesting a heel dress code at the Cannes film festival and the aforementioned performance of male Japanese workers strutting around in the heels their female colleagues are used to wearing.

  • What Comes After Trump – World War III?

    Authored by Federico Pieraccini via The Strategic Culture Foundation,

    Those who are familiar with my articles would be aware that I am not given to catastrophism or alarmism. But perhaps the time has come to reflect on who will be president after Trump (whether after this or the next term) and what this will mean for relations with Russia and China.

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    What will the United States’ relations with Russia and China be like when the 46th president of the United States takes office in 2025? This is a question that I often ask myself, especially in light of Trump’s political choices regarding international arms-control treaties (INF Treaty), nuclear proliferation, economic war with China, a financial crisis that is artificially postponed thanks to QE, out-of-control military spending, an increasingly aggressive NATOstance towards the Russian Federation, and continuous provocations against the People’s Republic of China. Where will we end up with after another five years of provocations? For how much longer will Putin and Xi Jinping maintain the “strategic patience” not to respond to Washington with drastic measures?

    Let us imagine we are in 2025

    The four current global hot spots – Iran, Syria, Venezuela and DPRK – have maintained their resistance to Washington’s diktats and have emerged more or less victorious. Syrian territory in its entirety is now under the control of Damascus; Iran has established enough deterrents not to be attacked; Pyongyang continues in its negotiations with Washington as the reunification of the two Koreas continues along; the Bolivarian revolution still lives on in Venezuela.

    Putin is preparing to leave the Russian Federation as president after 25 years. Xi Jinping could see his mandate expire in a few more years. Washington is about to appoint a new president, who in all probability will be the opposite of Trump, in the same way Obama was the opposite of Bush and Trump a reaction to Obama.

    So let us imagine someone emerging in the Democratic Party completely committed to advancing the view of the US deep state and the military-industrial complex – someone like Hillary Clinton, Madeleine Albright or any of the 2019 Democratic candidates for the 2020 elections (the ones with anything to commend them do not count). Such a person would be committed to reinvigorating the idea of American exceptionalism following eight years of a Trump presidency that has mostly focused (the neocons notwithstanding) on domestic issues and the policy of “America First”.

    Now let us think about what has been, and will be, dismantled internationally by Trump during his presidency, namely: the suspension of the INF Treaty and an indication not to extend the New START treaty (on nuclear-arms reduction), deployment of troops on the Russian border in Europe, sanctions, tariffs and economic terrorism of all kinds.

    Ask yourself how likely it is that the next US president will want and be able to improve relations with Russia and China as well as accept a multipolar world order? The answer to that is zero, with the Trump presidency only serving to remind us how every administration remains under the control of the military, industrial, spy and media apparatus, expressed in liberal and neocon ideologies.

    Trump has increased military spending considerably, singing the praises of the military-industrial complex and promising to modernize the country’s nuclear arsenal. Such a modernization would take two decades to be completed, a detail always omitted by the media. For Trump it is a case of “America First”. For the deep state the project is long term and ought to be far more alarming for the global community.

    Russia, China and the US all appear committed to further militarization, with Russia and China strongly focussing on defending their strategic interests in the face of US aggression. Beijing will focus on building a large number of aircraft carriers to defend her maritime borders, while Moscow seeks to seal her skies against missiles and stealthy aircraft (a land campaign against Russia, as history teaches us, has little chance of success).

    Experts predict that any great-power conflict in the near future may consist exclusively of conventional and/or nuclear missiles, combined with robotic technology, drones, artificial intelligence, cyber warfare, A2/AD, hypersonic weapons and sabotage. In addition to nuclear weapons, the platforms from which they are launched, missiles and interceptors, a country’s computational power will be decisive, with quantum computers already a reality in China.

    The US, China and Russia will no longer have any restrictions on the production of nuclear weapons after (absent any new negotiations or agreements to extend it) the New START treaty expires in 2025. The situation regarding cyberspace and near-earth space is certainly alarming, with no explicit treaties between the great powers being in place. The few agreements in force are routinely violated, especially with regard to near-earth vehicles, as Subrata Ghoshroy informs us when discussing the US X-37B military vehicle: ‘Backdoor weaponization of space?‘:

    “Discussions about how to prevent an arms race in space started long ago; the UN Conference on Disarmament even started negotiations on a treaty, but the United States prevented it from going any further. And at the 2008 Conference on Disarmament in Geneva, China and Russia introduced an actual space arms control treaty, popularly known as the Prevention of an Arms Race in Outer Space treaty (PAROS Treaty, 2012)”

    Adding to this alarming situation is the growing US commitment to the doctrine of a preventive nuclear first strike. One wonders how much longer the world will be able to prevent itself from being bombed back to the Stone Age.

    I wrote an article in 2016 dismissing the possibility of a nuclear war as absurd and impossible. But while a lot has changed in the meantime, my opinion has not. Nevertheless, I struggle to understand how such an eventuality can be avoided when the US remains on a collision course with China and Russia.

    Trump appears unwilling to go down in history as the president responsible for kicking off nuclear Armageddon. But what about the next president? The deep state in control of US politics would surely be able to place into office someone who would advance the final justification for a headlong confrontation with Moscow and Beijing.

    If you think I am exaggerating, take Pompeo, a representative of the deep state, and his recent answer to the question of whether Trump was sent by God to save Israel from Iran. “As a Christian, I certainly believe that’s possible”, he responded. If the US elects someone influenced by the messianic vision of American exceptionalism, a vision that refuses to accept the realpolitik of multiple geopolitical poles and great-power competition, then hang on to your hats, for the chances of a nuclear winter will increase dramatically. Just remember that the alternative to Trump was Hillary Clinton, who was calling for a no-fly zone in Syria – that is, for the possibility of the US shooting down Russian fighter jets!

    What would be needed if faced with such a presidency is a healthy, grass-roots internal opposition throughout Europe and the US. As things stand now, there is no longer an anti-war movement, the public disoriented by the mainstream media feeding them a constant stream of lies, misinformation and propaganda. Assange is unjustly imprisoned and Yemeni civilians are continuously bombed, and yet the media tells us that Julian works for the Kremlin, that Moscow wants to destabilize and destroy Europe, that China intends to subjugate the whole world, that Kim Jong-un is seeking the nuclearization of half of Asia, that Assad has massacred hundreds of thousands of civilians, that Saudi Arabia is a country undergoing full reform, and that al-Qaeda is fighting for freedom in Syria!

    In such a current situation, truth is malleable, able to be fashioned and shaped according to the needs and requirements of the military-industrial complex, which needs justifications for its endless wars. The situation can only get worse over the next six years, with citizens less and less able to understand the world around them. The further advances in technology will only help governments and corporations to control information and decide what is right and wrong in a process of mass lobotomization. The Internet will hardly continue to be free, and even if it were to continue in its current state, the ability to offer counter-narratives will be limited by a lack of advertising revenue to expand businesses and reach more people for independent media platforms.

    To avoid the possibility of nuclear annihilation we have to rely on the cool heads and leadership qualities of those who will succeed Vladimir Putin and Xi Jinping (it is unclear when Xi Jinping will leave office).

    Only those who assiduously keep themselves informed are able to appreciate the forbearance that the Sino-Russian leadership has and will continue to have in the face of continuing US provocations.

    But what will happen when these two even-tempered leaders are no longer in power while the means to inflict a devastating blow to the US remain available to their successors? Will the same forbearance remain in the face of ongoing US provocations?

    Moscow will be deploying all sorts of hypersonic weapons that the US cannot intercept, together with a hundred state-of-the-art Su-57 fighters. China will have about six to seven aircraft carriers, escorted by numerous destroyers, each with 112 vertical launch system (VLS) cells, hypersonic missiles, anti-satelliteand electromagnetic weapons.

    The S-500 systems will be scattered throughout Russia (and presumably also in China and Belarus), armed with hypersonic interceptors. In addition to this conventional deterrence, the current Chinese and Russian nuclear arsenal is already capable of wiping out the US in the space of a few minutes.

    Washington will continue to raise the temperature vis-a-vis China and Russia, even after Putin and Xi have left the office. It is therefore likely that their successors will come from their country’s most hawkish and intransigent wings.

    In 2025 Putin and Xi will hopefully have succeeded in avoiding a conflict with the US through the skillful employment of diplomatic, economic and often military means, playing a moderating role that stands in contrast to that played by the West, which, not understanding this approach, brands it as extremist.

    Imagine that the tensions between these three countries continues to steadily increase over the next five years at the same rate as it has over the last 10 years. How will the respective deep states of Russia and China react? Imagine in these two countries the appointment of two intransigent personalities ready to respond to US provocations.

    Washington continues its inexorable decline relative to other powers as a result of the new multipolar reality, which evens out the distribution of geopolitical weight over a wider area of the global chessboard. We must hope, for the sake of humanity, that Washington’s decline will accelerate to such an extent under the Trump presidency that the US will be forced to focus instead on its own internal problems. Reaching such a point would require the collapse of the global economy that is based on the US dollar; but this is another story altogether that could also end in bloodshed.

    Trump is appreciated by a part of the deep state for his efforts to reinvigorate Washington’s military-industrial complex by practically offering it a blank check. This is without considering Trump’s economic-financial assault on allies and enemies alike, which seems to be an attempt to squeeze the last drops out of any remaining advantage to the dollar-based system before it collapses.

    The long-term plan of the US elites sometimes seems to be to provoke a great-power conflict in order to gain victory and then construct a new global financial order atop the rubble.

    The selling of US government bonds by Russia, China and several other countries is an important indicator of global economic trends. The conversion of these securities into gold and other currencies is further confirmation of multipolarity. The IMF’s inclusion of the yuan in its basket of reserve currencies is a tangible example of the multipolar world in action and the diminishing power of the US. The sustainability of US public and private debt comes from investor confidence in US government bonds. The system hangs together through the willingness of investors to buy this trash printed by the Fed. The investors’ confidence lies not so much in the ability of the US to repay the debt but in its ability to use the most powerful military in the world to bully other countries into purchasing US securities that only serve to further fuel US imperialism.

    Moscow and Beijing’s efforts to untangle themselves from this system is the way they will deny oxygen to the economic-military threat posed by Washington.

    If the US deep state thinks it can squeeze out any last remaining benefits from the dollar system, collapse everything in a great-power conflagration, and then revive the US dollar system in a new form atop the rubble, then it is miscalculating terribly.

    If my predictions regarding technological progress between now and 2025 are correct, with quantum computing and artificial intelligence and so on, then perhaps Moscow and Beijing will be able to avert this apocalypse with the clicks of a mouse thousands of miles away. Science fiction? Possibly. But who would have been able to imagine that Bashar al-Assad’s Syria would be capable, after six years of war, to repel 90% of the latest-generation missileslaunched by Israel? Technology has a democratizing effect.

    If you think I am exaggerating, try reflecting on the fact that Washington has been at war almost every year since World War II, conducting clandestine operations in more than 50 countries and killing millions of civilians directly and indirectly, all the while having the world believe it is a blameless force for good on the side of truth and justice.

    We live in a world based on lies. Without this reality changing in the foreseeable future, with the mainstream media continuing to keep much of the population disoriented and confused, then it is not too difficult to imagine the United States by 2025 pulling the rug out from under everybody’s feet through a great-power conflict, so as to build atop the debris a new, unchallengeable Pax Americana.

  • The Future Is Here: Watch Robot Cop Pull Over Driver And Issue Ticket 

    Engineer Reuben Brewer and SRI International, a nonprofit scientific research institute based in California, developed a police robot for traffic stops. This new robot is expected to act as a buffer between the officer and motorist during an encounter, reported The Washington Post.

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    The project began several years ago in Brewer’s garage but has since been in development at SRI International’s facilities in California. The robot, dubbed GoBetween, is designed to make it safer for both the officer and the motorist.

    “The main advantage of a robot over a human is that physical danger no longer matters,” Brewer wrote after being reached by email by The Post.

    “The robot is purely defensive, so it can’t hurt the motorist. If the motorist damages the robot, it’s only money to replace it.”

    “People are more dangerous when they’re scared, so the goal is to remove the possibility of being physically hurt so that they’re less scared and less dangerous,” he added.

    When the officer pulls over a vehicle, GoBetween is deployed, which is a mechanism attached to the driver’s side of the police car, extends a rolling aluminum track to the motorist’s window with a robot at the end. At the same time, a spike strip extends from the robot and unfolds between the vehicle’s front and rear tires, stopping a potential high-speed chase.

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    GoBetween is a weaponless robot includes two video cameras, a microphone, bar-code scanner, and a speaker that allows the police officer and motorist to communicate. The car-bode scanner allows the driver to scan their license, a signature pad allows the driver to sign a ticket, and a printer provides the driver with a ticket. Brewer told The Post future prototypes will include new sensors, including a Passive Alcohol Sensor to “sniff for drunk driving.”

    Brewer pointed out GoBetween may reduce tension at traffic stops. He admitted his robot could not remove human bias from interactions between police officers and drivers.

    “Whatever inequalities there currently are with police cars pulling over minorities more often will still be there once there’s a robot on their car,” he wrote.

    “The difference is that those interactions (however unequal they may be) shouldn’t result in anyone getting hurt or killed.”

    The robot has been shown to several police departments and received an underwhelming response, Brewer said.

    Police officers across the country make more than 50,000 traffic stops per day, according to The Stanford Open Policing Project.

    In 2017, the FBI’s Uniform Crime Report showed 5,108 officers were assaulted during traffic stops and pursuits, at an average of 14 officers per day.

    Brewer said he’s working on securing a pilot test for GoBetween with a police department.

    “I’d love to have a police department test my prototype during actual traffic stops so that we can learn what its real-life limitations are,” he added.

    “It’s ready to go, just need a willing partner to test it out!”

    The policing environment of the 2020s could so much different than what is seen today. A new wave of investments in automation could alleviate some of the dangers that police officers encounter while on duty. But – with the proliferation of self-driving cars, GoBetween could one day eliminate the need for human officers patrolling the streets, in search for drivers abusing traffic laws.

  • “We Are Extremely Angry": Thousands Of Protesters Block Hong Kong Roads In Protest Against China Extradition Bill

    Two days after over 1 million people protested in the streets of Hong Kong – unsuccessfully – against a proposed extradition bill that would allow Beijing to take people from Hong Kong to stand trial in mainland China on Wednesday morning in a fresh display of defiance against the contentious extradition bill, thousands of protesters started barricading roads and began stopping traffic from accessing the HK legislature on Wednesday morning, as the government’s proposal returns to a full council meeting.

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    According to the SCMP, crowds of predominantly young people, some dressed in black and wearing face masks, dragged metal barriers and linked arms, closing off roads surrounding the government building.The protesters had arrived as early as Tuesday night, with some clashing verbally with police over the force’s heavy presence.

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    Many have skipped work or class to join, in response to numerous online calls for strikes. While the police has refused to engage so far, there were occasional reports of police using pepper spray on some protesters. Meanwhile, the numbers of protesters are expected to grow during the day after some unions called for a strike Wednesday.

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    Civic groups and organizations mobilized Tuesday, adding to small businesses and groups who called for a general strike and a school boycott to “defend Hong Kong.”

    Late Tuesday, the government restricted access to its headquarters, which also houses the legislature. Local media reported that police were planning to deploy 5,000 officers in response to expected protests. Police declined to comment on the figure.

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    As reported previously, lawmakers are due to begin debating the bill so that a vote can be held by the evening of June 20. In an unusual move Tuesday, Andrew Leung, president of Hong Kong’s mostly pro-government legislature, scheduled extra sessions for the bill to proceed more quickly than usual to a vote. Meanwhile, revealing how China has already stripped the city of its democracy, opposition lawmakers are unable to block the bill because they lost their veto power after authorities ousted several democratically elected lawmakers through court orders and barred others from running.

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    On Monday, following Sunday’s massive protests, city’s leader, Carrie Lam said she would quickly press ahead with the bill. The government has already bypassed the usual scrutiny of the new legislation by a committee of lawmakers. Amid mounting pressure and death threats, Lam has insisted that the legislation is needed to plug legal loopholes and prevent Hong Kong from becoming a haven for fugitives.

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    The proposed amendments include a mechanism for extraditions to mainland China, triggering fears in Hong Kong that Beijing could detain people in Hong Kong and try them across the border under its more opaque legal system. Mounting opposition has stirred from all corners of society, including businesspeople, lawyers and activists, who say the bill would undermine Hong Kong’s relative autonomy and independent judicial system.

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    The U.S. on Monday expressed concern that the bill, if passed, “could damage Hong Kong’s business environment and subject American citizens residing in or visiting Hong Kong to China’s capricious judicial system.” The U.S. shares the concerns of many in Hong Kong over the lack of protections for people in the proposed law, said State Department spokeswoman Morgan Ortagus.

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    In addition to the protest, a social workers union has called for a strike, with Hong Kong’s largest teachers group, which has 100,000 members, encouraging teachers to gather outside government headquarters—which also houses the legislature—and urged schools to be lenient with those who skipped classes to protest.

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    “We are extremely angry,” said Fung Wai-wah, president of the Hong Kong Professional Teachers’ Union, who called Lam arrogant for pushing ahead. “She ignores the people’s voices as if they are dirt and muck.” Naturally, the city’s Education Bureau said the calls for a school boycott were “extremely irresponsible.”

    Just as predictable, Beijing has backed Lam, with officials telling state media that foreign powers had colluded with local dissidents to cause unrest, straight out of Maduro’s playbook. According to the WSJ, the government is taking precautions to contain future protests after Sunday’s march—which had been largely peaceful—turned violent overnight with some protesters clashing with police.

  • Trump's Feud With China Is A Carbon Copy Of Reagan's Trade War With Japan: Is A New Plaza Accord Imminent?

    Name the US trade-war adversary in the following real-life scenario:

    • Trade tensions were precipitated by a large bilateral trade imbalance and a perception of an “unfair” advantage, which were exacerbated by new US administrations that pursued tax cuts even as the Federal Reserve was in tightening mode.

    • Targeted US trade actions have failed to significantly reduce the US trade imbalance with this nation

    • As the US trade deficit with this country has continued to grow, so has bipartisan political pressure to do something about it.

    • Dollar depreciation coincided with a fading fiscal boost and more accommodative monetary policy that was directionally consistent with the political aim of boosting exports.

    • Under growing bipartisan support, the US pushed this nation to take more sweeping action such as pledging to increase imports, and significantly cut its trade surplus, or potentially face a 25% tariff on all of its exports.

    If you said the nation in question is China, and the year is 2019, you are wrong (well, partially), because the events described above represent Ronald Reagan’s bilateral trade dispute with Japan in the early 1980s.

    The fact that the biggest geopolitical conflict of modern times is running off a 35-year-old script This has profound implications for not only how Trump’s own trade war with the world’s second most powerful nation will conclude, but also for the dollar, because it was against the above-described backdrop that authorities signed the historic “Plaza Accord” in 1985, and according to Goldman, a similar outcome may be coming, one which would result in “choppy dollar downside in the months ahead.”

    But let’s back up.

    As Goldman’s Michael Cahill writes today, there is never anything really new under the sun, and trade negotiations between the US and China “have so far followed a strikingly similar pattern to the bilateral US-Japan trade dispute” in the early 1980s: in both cases, talks were precipitated by a large bilateral trade imbalance and a perception of an “unfair” advantage, which were exacerbated by new US administrations that pursued tax cuts even as the Federal Reserve was in tightening mode. In another parallel, what began as trade negotiations ultimately sprawled into other areas including market access, government subsidies and currency policy.

    However, there are also important structural differences, first and foremost among them is that the US and Japan have been strategic allies for decades (and Japan depends heavily on the US for its national security), and this likely explains why Japan ultimately acquiesced to a number of US demands—including the “Plaza Accord” to dramatically strengthen its exchange rate. These differences help explain why so far the Yuan’s behavior has been very different from the Yen’s dramatic appreciation in the late 1980s, and prompt the question if Trump isn’t making a huge gamble in assuming that China will fold, just like Japan did three and a half decades ago.

    For those who were too young, or too stoned, to remember, here is a brief recap of the US-Japan trade conflict.

    In the 1970s, the US had been targeting Japanese exports of specific industries, using a “trigger price mechanism” on steel products and “voluntary export restraints” (VERs) on color TVs, which Japan introduced to avoid steep tariffs. But things intensified in the early 1980s. As a Presidential candidate, Ronald Reagan (whose chief economic advisor, Martin Feldstein passed away today at the age of 79) pitched himself as a free-trader, but said there was room for the government to be “legitimately involved” in certain industries—specifically autos—where US companies faced stiff (and potentially unfair) competition from abroad. In May 1981, Japan introduced VERs on autos to set a positive tone ahead of the Prime Minister’s trip to Washington to meet the new president. This pattern repeated itself a number of times over the next few years; bilateral talks led to a gradual reduction in Japan’s trade barriers or new restrictions on exports to the US.

    Nevertheless, in another early echo of events taking place today, the US trade deficit continued to grow, causing intense scrutiny from across the US political spectrum. At the end of Reagan’s first term (December 1984), US Trade Representative Bill Brock wrote that “it is not unreasonable to ask if we have wasted four years.” Brock said that, given the political climate, it was “vital” that Japan committed to double imports from the US and cut the bilateral trade deficit in half, or he feared things were approaching a “flash point.”

    By late summer 1985, those predictions looked prescient. As Goldman recalls, the US Congress had drafted over 200 pieces of trade-related legislation, including a prominent one that would have required Japan to reduce its trade surplus or face a 25% tariff on all exports (sound familiar?). Congress pledged to take action by mid-October unless there were clear signs of progress.

    And yet something is missing from this historical comparison: against this backdrop, global authorities signed the historic “Plaza Accord” in late September 1985, one which sent the dollar plunging over the next few years.

    Is another Plaza accord in the cards? According to Goldman, the answer is yes.

    But if Goldman is right, and the fate of the dollar and yuan are about to be thrown for a major loop, that means learned from the fate of the yen in the 1980s.

    Sure enough, in the years before the Plaza Accord, USDJPY was roughly stable against an appreciating Dollar. There were a few concentrated cases of Yen appreciation in response to lower trade barriers, such as when Japan agreed to limit export credits (effectively hiking some domestic interest rates). But, in general, the Yen did not depreciate in response to escalating trade tensions. Even in early 1985, when pressures were particularly intense, JPY depreciated less than other major currencies, according to Goldman’s Cahill who charts the value of the yen and the dollar in the chart below:

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    To be sure, it wasn’t just trade tensions that help send the dollar surging in the early 1980s: Early in the decade, the combination of tax cuts and the hawkish policies of the Federal Reserve boosted the Dollar against most trading partners: just like much of 2018.

    And just like now, growth in the US rose sharply, while growth in the rest of the world picked up only moderately.

    Later, the Fed was engaged in a cutting cycle around the time of the Plaza Accord, and the Accord’s success is widely attributed at least in part to the alignment of monetary and currency policy.

    So is a Plaza Accord 2.0 imminent, and if so, is the yuan, just like the yen, set to appreciate much higher as the dollar slides? According to Goldman, there are three reasons why the experience with the Yuan has so far been very different to that of the Yen in the 1980s, despite the obvious parallels between the two trade conflicts.

    • First, from a valuation standpoint, it was generally accepted that the Yen was exceptionally cheap before the Plaza Accord was implemented. By contrast, Goldman’s  FX strategists think CNY is only slightly undervalued at present levels, so the currency might need to react more to offset new trade barriers.

    • Second, while broad tariffs were occasionally threatened in the 1980s, the “tools of choice” were generally narrow export restrictions against specific industries. In that regime, currency moves cannot directly offset protectionist trade actions, and should be smaller due to their concentrated nature.

    • Finally, and most importantly, the US and Japan were strategic allies even during the trade conflict (especially because Japan relies on the US for military defense). While trade tensions strained the relationship at times, markets likely perceived only a small risk of serious escalation, and Japan often acquiesced to US demands (most prominently in the Plaza Accord itself).

    By contrast, the US and China are seen as chief rivals in many ways, and the strategic ties do not run nearly as deep. As a result, markets might more readily price that trade tensions will escalate and sprawl into other policy areas, and China appears less willing to accommodate US requests to change domestic policy. In addition, while Japanese companies were able to offset new trade measures by moving production to the US, Chinese companies would not be able to do this as easily because of security concerns.

    It is also is likely that Chinese policymakers might view Japan’s experience with the “lost decade” as a cautionary tale for what might happen if it makes sweeping changes too quickly, and that is setting Goldman’s trading strategy today. Taken together, China seems unlikely to be as accommodating as Japan was in the 1980s, and even speculation about potential currency agreements in the now-stalled trade negotiations fell well short of the Plaza Accord.

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    And yet, as Goldman concludes, there are a number of notable parallels between now and trade tensions in the 1980s, with several key takeaways.

    • First, the US focus on trade deficits—both then and now—is ultimately about competitiveness. The last time around, political pressure on Japan grew, and even prominent “free traders” eventually supported interventionist policies. There is evidence that this is also becoming the case today.

    • Second, while trade policies had some impact, the Dollar traded mostly with economic fundamentals. In the late 1980s, Dollar depreciation coincided with a fading fiscal boost and more accommodative monetary policy that was directionally consistent with the political aim of boosting exports.

    So while a Plaza Accord 2.0 may not be imminent – mostly because China would never concede to a treaty that Japan did in the 80s for a very specific set of reasons – Goldman believes that same environment today could result in even more FX volatility, one where the race to the bottom is not contained to an international “accord”, but a chaotic race of every man for himself, leading to “choppy Dollar downside in the months ahead.”

    One final observation: the US trade feud with Japan, and the subsequent Plaza accord, all resulted in the build up of systemic imbalances that eventually culminated with in 1987’s Black Monday. What will happen to today’s hyperfinancialized world if one Monday morning the market drops 20%, wiping out almost $20 trillion in value in minutes?

  • The FBI Tragedy: Elites Above The Law

    Authored by Victor Davis Hanson via NationalReview.com,

    After decades in the FBI, the top brass came to believe they could flout the law and pursue their own political agendas.

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    One of the media and beltway orthodoxies we constantly hear is that just a few bad apples under James Comey at the FBI explain why so many FBI elites have been fired, resigned, reassigned, demoted, or retired — or just left for unexplained reasons. The list is long and includes director James Comey himself, deputy director Andrew McCabe, counterintelligence agent Peter Strzok, attorney Lisa Page, chief of staff James Rybicki, general counsel James Baker, assistant director for public affairs Mike Kortan, Comey’s special assistant Josh Campbell, executive assistant director James Turgal, assistant director for office of congressional affairs Greg Bower, executive assistant director Michael Steinbach, and executive assistant director John Giacalone. In short, in about every growing scandal of the past two years — FISA, illegal leaking, spying on a presidential candidate, lying under oath, obstructing justice — someone in the FBI is involved.

    We are told, however, that the FBI’s culture and institutions are exempt from the widespread wrongdoing at the top. Such caution is a fine and fitting thing, given the FBI’s more than a century of public service. Nonetheless, many of those caught up in the controversies over the Russian-collusion hoax were not recent career appointees. Rather, many came up through the ranks of the FBI. And that raises the question, for example, of where exactly Peter Strzok (22 years in the FBI) learned that he had a right to interfere in a U.S. election to damage a candidate that he opposed.

    And why would an Andrew McCabe (over 21 years in the FBI) think he had the duty to formulate an “insurance policy” to take out a presidential candidate? Or why would he even consider overseeing an FBI investigation of Hillary Clinton’s improper use of emails when his wife had been a recent recipient of Clinton-related PAC money? And why would McCabe contemplate leaking confidential FBI information to the press or even dream of setting up some sort of operation to remove a sitting president under the 25th Amendment? And how did someone like the old FBI vet Peter Strozk ever end up at the center of the entire mess — opening up the snooping on the Trump campaign while hiding that fact and while briefing the candidate on Russian interference in the election, interviewing Michael Flynn, preening as a top FBI investigator for Robert Mueller’s dream team, right-hand man of “Andy” McCabe, convincing Comey to change the wording of his writ in the Clinton-email-scandal investigation, softball coddling of Huma Abedin and Cheryl Mills, instrumental in the Papadopoulos investigation con — all the while conducting an affair with fellow FBI investigator and attorney Lisa Page and bragging about his assurance that the supposedly odious Trump would be prevented from being elected. If a group of Trump zealots were to call up the FBI tomorrow and allege that a member of Joe Biden’s family has had unethical ties with the Ukrainian or Chinese government, would that gambit “alarm” the FBI enough to prompt an investigation of Biden and his campaign? How many career-professional Peter Strozks are still at the agency?

    In sum, why did so many top FBI officials, some with long experience in the FBI, exhibit such bad judgment and display such unethical behavior, characterized by arrogance, a sense of entitlement, and a belief that they were above both the law and the Constitution itself? Were they really just rogue agents, lawyers, and administrators, or are they emblematic of an FBI culture sorely gone wrong?

    How and why would James Comey believe that as a private citizen he had the right to leak classified memos of presidential conversations that he had recorded on FBI time and on FBI machines?

    Does the FBI inculcate behavior that prompts its officials to repeatedly testify under oath that they either don’t know or can’t remember – in a fashion that would earn an indictment for most similarly interrogated private citizens? Was Strozk’s testimony to the Congress emblematic of a career FBI agent in his full? Was Comey’s? Was McCabe’s?

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    To answer those questions, perhaps we can turn to an analogous example of special counsel and former FBI director Robert Mueller. We are always advised something to the effect that the admirable Vietnam War veteran and career DOJ and FBI administrator Bob Mueller has a sterling reputation, and thus we were to assume that his special-counsel investigation would be free from political bias. To suggest otherwise was to be slapped down as a rank demagogue of the worse kind.

    But how true were those beltway narratives? Mueller himself had a long checkered prosecutorial and investigative career, involving questionable decisions about the use of FBI informants in Boston, and overseeing absolutely false FBI accusations against an innocent suspect in the sensationalized anthrax case that began shortly after 9/11.

    The entire Mueller investigation did not reflect highly either on Mueller or the number of former and current DOJ and FBI personnel he brought on to his team. In a politically charged climate, Mueller foolishly hired an inordinate number of political partisans, some of whom had donated to the Clinton campaign, while others had legally defended the Clinton Foundation or various Clinton and Obama aides. Mueller’s point-man Andrew Weissman was a known Clinton zealot with his own past record of suspect prosecutorial overreach.

    Mueller did not initially disclose why FBI employees Lisa Page and Peter Strozk were taken off his investigative team, and he staggered their departures to suggest that their reassignments were normal rather than a consequence of the couple’s unprofessional personal behavior and their textual record of rank Trump hatred. Mueller’s very appointment was finessed by former FBI director and Mueller friend James Comey and was largely due to the hysteria caused by Comey’s likely felonious leaks of confidential and classified FBI memos — a fact of no interest to Mueller’s soon-to-be-expanded investigation.

    During the investigation, Mueller was quite willing to examine peripheral issues such as the scoundrelly behavior of former Trump lawyer Michael Cohen and the inside lobbying of Paul Manafort for foreign governments. Fine. But Mueller was curiously more discriminating in his non-interest in crimes far closer to the allegations of Russian collusion. That is, he was certainly uninterested about how and when the basis for his entire investigation arose — the unverified and fallacious Steele dossier that had been deliberately seeded among the FBI, CIA, and DOJ to achieve official imprimaturs so it could then be leaked to the press to ruin the campaign, transition, and presidency of Donald Trump.

    Mueller’s team also deliberately edited a phone message from Trump counsel John Dowd to Robert Kelner, General Michael Flynn’s lawyer, to make it appear incriminating and possibly unethical or illegal. Only after a federal judge ordered the full release of the transcript did the public learn the extent of Mueller’s selective and misleading cut-and-paste of Dowd’s message.

    Mueller’s own explanations about the extent to which he was guided by the precedent of presidential exemption from indictment are at odds with his own prior statements and in conflict with what Attorney General Barr has reported from a meeting with Mueller and others. In those meetings, Mueller assured that he was after the truth and did not regard prior legal opinions about the illegality of indicting a sitting president as relevant to his own investigations. But when he essentially discovered he had no finding of collusion, he then mysteriously retreated to the previously rejected notion that he was powerless to indict Trump on a possible obstruction charge.

    Mueller displayed further contortions when he recited a number of alleged Trump wrongdoings but then backed off by concluding that, while such evidence for a variety of different reasons did not justify an indictment of Trump, nonetheless Trump should not be exonerated of obstruction of justice.

    Mueller thereby established a new but lunatic precedent in American jurisprudence in which a prosecutor who fails to find sufficient cause to indict a suspect nonetheless releases supposedly incriminating evidence, with a wink that the now-besmirched suspect cannot be exonerated of the alleged crimes. Think what Mueller’s precedent of not-not-guilty would do to the American criminal-justice system, as zealous prosecutors might fish for just enough dirt on a suspect to ruin his reputation, but not find enough for an indictment, thereby exonerating their own prosecutorial failure by defaming a “guilty until proven innocent” suspect.

    It is becoming increasingly apparent that Mueller’s team knew early on in their investigation that his lead investigators Peter Strzok and Lisa Page had been correct in their belief that there was “no there there” in the charges of collusion — again the raison d’être of their entire investigation.

    Yet Mueller’s team continued the investigation, aggregating more than 200 pages of unverified or uncorroborated news accounts, online essays, and testimonies describing all sorts of alleged unethical behavior and infelicities by Trump and his associates, apparently in hopes of compiling their own version of something like the Steele dossier. Mueller sought to publish a compendium of Trump bad behavior that fell below the standard of criminal offense but that would nonetheless provide useful fodder for media sensationalism and congressional partisan efforts to impeach the now supposedly not-not guilty president.

    Note again, at no time did Muller ever investigate the Steele dossier that had helped to create his existence as special counsel, much less whether members of the FBI and DOJ had misled a FISA court by hiding critical information about the dossier to obtain wiretaps of American citizens, texts that Mueller himself would then use in his effort to find criminal culpability.

    We were told throughout the 22-month investigation that “Bob Mueller does not leak.” But almost on a weekly schedule, left-wing cable news serially announced in formulaic fashion that “the walls were closing in on” and the “noose was tightening around” Trump as another “bombshell” disclosure was anticipated, according to “sources close to the Mueller investigation,” “unnamed sources,” and “sources who chose to remain unidentified.” On one occasion, CNN reporters mysteriously showed up in advance at the home of a Mueller target, to capture on camera the arrival of paramilitary-like arresting officers.

    When it is established beyond a doubt that foreign surveillance of and contact with George Papadopoulos was used to entrap a minor Trump aide as a means of providing an ex post facto justification for the earlier illegal FBI and CIA surveillance of the Trump campaign, and when it is shown without doubt that Steele had little if any corroborating evidence for his dirty dossier, Mueller’s reputation unfortunately will be further eroded.

    Yet the question is not merely whether a Comey, McCabe, or Mueller is atypical of the FBI. Rather, where in the world, if not from the culture of the FBI, did these elite legal investigators absorb the dangerous idea that FBI lawyers and investigators could flout the law and in such arrogant fashion use their vast powers of the government to pursue their own political agendas? And why was there no internal pushback at a supercilious leadership that demonstrably had gone rogue? Certainly, the vast corpus of the Strzok-Page correspondence does reflect a unprofessional, out-of-control culture at the FBI.

    Just imagine: If an agent Peter Strozk interviewed you and overstepped his purview, would you, the aggrieved, then appeal to his boss, Andrew McCabe? And if Andrew McCabe ignored your complaint, would you, the wronged, then seek higher justice from a James Comey, who in turn might rely on a legal opinion from a Lisa Page or a brief from a James Baker? And failing that, might a Robert Mueller as an outside auditor rectify prior FBI misconduct?

    Fairly or not, the current FBI tragedy is that an American citizen should be duly worried about his constitutional rights any time he is approached by such senior FBI officials. That is not a slur on the rank and file, but the legacy of the supposed best and brightest of the agency and their distortions of the bureau’s once professional creed.

    *  *  *

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  • Not The Onion: Biden Promises To Cure Cancer If Elected

    Having promised to “make America America again,” Democratic presidential frontrunner Joe Biden decided to one-up President Trump during their dueling rallies in Iowa… though this time, we suspect “sleepy” Joe may have over-reached.

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    Not content with the usual impossible campaign promises, Biden promised to cure cancer if he’s elected…

    “I’ve worked so hard in my career, that I promise you, if I’m elected president you’re gonna see the single most important thing that changes America, we’re gonna cure cancer,” Biden told a crowd in Ottumwa, Iowa on Tuesday.

    While the fight against cancer is close to Biden’s heart – his son Beau died of the disease in 2015 – the grand promise did nothing to reassure potential voters that he is more than just a flip-flopping panderer.

    Biden should know better, as RT reports, while vice president under Obama, he worked on the administration’s “Cancer Moonshot” – which was supposed to fit 10 years of “advances in cancer prevention, diagnosis and treatment” into five. While such a goal is conveniently impossible to evaluate, he would at least have learned how cancer research works, especially since he founded the Biden Cancer Initiative after leaving the White House. That he’d make such a bizarre promise despite his experience confused many on social media…

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    Most recently, Biden’s sudden about-faces on the Hyde Amendment, which blocks the use of federal funds for abortions, and the US’ relationship with China:

    Biden on May 1: “China is going to eat our lunch? Come on, man…They’re not competition for us.“

    Biden today: “We are in a competition with China…We need to get tough with China. They are a serious challenge to us, and in some areas a real threat.”

    …have confused voters who aren’t sure what (if anything) he stands for, spawning a new nickname from President Donald Trump: “Floppy Joe.”

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