- Russia Sends Nuclear Bombers To Africa As Putin Hosts First-Ever Economic Summit
Russia Sends Nuclear Bombers To Africa As Putin Hosts First-Ever Economic Summit
Russia views Africa as a continent that will achieve supergrowth through 2050. The continent’s population is expected to double alongside energy consumption.
Moscow is making its move to strengthen relations with countries in the region; if that is through oil deals, increased nuclear cooperation, or defense contracts, the shift to Africa is being made today.
What better way to show Washington that Africa is shifting to Russia than land two nuclear-capable bombers in South Africa.
The bombers touched down in South Africa on Wednesday, during the first-ever Russia-Africa summit in the southern Russian city of Sochi. President Vladimir Putin asked African leaders to double trade with Russia through 2025, Reuters reported.
President @MBuhari meets President Vladimir Putin of Russia at the Russia-Africa Economic forum in Sochi. pic.twitter.com/FqU8Nc8Gb4
— Legit.ng (@legitngnews) October 23, 2019
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#RussiaAfricaSummit #Putin #Africa pic.twitter.com/rQrL9ggbEI
— Rauf Mammadov (@RaufNMammadov) October 23, 2019
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#Putin pledges to double trade with #Africa in 5 years #RussiaAfricaSummit #Sochi pic.twitter.com/5KUpwniNeK
— Ruptly (@Ruptly) October 23, 2019
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South African Air Force officials reported that two Tupolev Tu-160 bombers landed at Waterkloof Air Base on Wednesday. At the same time, Russia’s Ministry of Defence released several statements indicating the mission of the planes is to foster increased military cooperation with South Africa.
I was just sent this incredible video of one of the Tu-160s landing at AFB Waterkloof, taken from right under the approach path. pic.twitter.com/uwDZhtjBWE
— Darren Olivier (@darren_olivier) October 23, 2019
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Russian nuclear-capable TU-160 bombers land in South Africa #Newsnight #Newsfile #NewsZERO #NewsAlert #News1st #news #Russian #RussiaAfricaSummit #Russia
#African #Africa #Putin #War pic.twitter.com/uzShF1VnTE— codedtestament (@codedtestament1) October 23, 2019
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Two Russian “Blackjacks”, the world’s largest supersonic nuclear bombers, arrive in South Africa for joint training. Putin hosts dozens of African leaders in Sochi. Russia is back to Africa. pic.twitter.com/HlqdW9Hf0g
— Murad Gazdiev (@MuradGazdiev) October 23, 2019
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Earlier this week, we featured an article from Vanend Maliksetian via OilPrice.com, that outlined Russia’s recent move into Africa and the upcoming importance of this week’s meeting.
“Virtually all great powers have set their eyes on Africa as the continent’s global importance grows. Its population is set to double by 2050 and its economy is expected to expand significantly alongside its energy consumption. It is these projections that have driven Russia to invest heavily in strong relations in the region for when the continent’s explosive growth takes off. The Kremlin’s goal is to emulate China’s success in fostering economic, diplomatic, and military links with Africa. To become an important partner, Moscow is organizing the first-ever Russia-Africa summit on 23-24 October.”
President Putin’s expansion into Africa is to restore the Russian empire to its pre-Soviet collapse size. To do this, Russia must expand into Africa, and increase its imports of natural resources with the continent, increase arms exports with various countries, develop and share nuclear technology, and project power to Washington that Africa is pivoting to Moscow.
“During the Cold War, Moscow maintained strong relations with countries embroiled in anti-colonial conflicts such as Angola, Mozambique, and Algeria. Russia’s strategy in regaining its position vis-á-vis Africa partly revolves in reinvigorating these existing relations,” Maliksetian wrote.
Reuters noted that Tupolev Tu-160 bombers landing at Waterkloof is an example of strong diplomatic ties between the countries.
“Our relations are not solely built on ‘struggle politics’, but rather on fostering mutually beneficial partnerships based on common interests,” Russia said.
Maliksetian noted Russia is positioning itself in Africa as an “alternative to Chinese money and Western meddling.”
President Putin on Monday told TASS News that Western powers have been intimidating African countries to exploit their natural resources.
“We see how an array of Western countries are resorting to pressure, intimidation, and blackmail of sovereign African governments,” he said.
The global status quo is shifting, Western dominance of the world is deteriorating, the American empire stands to lose big if Russia and or China wins control of Africa.
Tyler Durden
Thu, 10/24/2019 – 02:45 - Europe's Spending Binge Is Slowing Its Economy
Europe’s Spending Binge Is Slowing Its Economy
Authored by Daniel Lacalle via The Mises Institute,
The idea that governments can’t lower taxes because there is a deficit, but are free to raise all expenses even if there is a deficit can be found in many political manifestos these days. Central planners always see the economic challenges as a problem of demand, and as such cringe at the idea of prudent investment and saving. When GDP growth, gross capital formation, and consumption are lower than what Keynesians would want, they always blame the alleged problem on “too much saving.” This is a ridiculous premise based on the perception that economic cycles and excess capacity do not matter and if companies and citizens don’t spend as much as the government wants, then the public sector should spend a lot more.
That is why tax cuts are hated and government spending plans are hailed. Because tax cuts empower citizens while government spending empowers politicians. An extractive view of the economy in which politicians and some economists always consider that you earn too much and they spend too little.
The big bet of the huge increases in spending and taxes that we read about all over the eurozone is that:
a) these will not have an impact on growth,
b) they will improve public accounts and
c) they will exceed budget expectations.
However, we have empirical evidence showing that massive government spending plans and tax hikes generate the opposite effect: weaker economic growth, higher debt and larger imbalances. The probability of attacking potential growth, worsening public accounts and breaching optimistic estimates is more than high.
The empirical evidence of the last fifteen years shows a range of fiscal multipliers of public spending that, when positive, is very poor (below 1) and in most countries, especially with open and indebted economies, the fiscal multiplier of higher government spending has been negative.
Fiscal multipliers are particularly negative in times of weakness in public finances, and nobody can deny that the eurozone has exhausted its fiscal space after more than three trillion euro of expansive budgets in a decade.
More government spending will not spur growth in economies where the public sector already absorbs more than 40% of the GDP, and where the previous large stimulus plans have generated more debt and stagnation.
Adding tax hikes to the formula is even more damaging. The IMF analyzes 170 cases of fiscal consolidation in 15 advanced economies from 1980 to 2010 and finds a negative impact of a 1% increase in taxes of 1.3% in growth two years later.
Additionally, the vast majority of empirical studies going until 1983 and especially in the last fifteen years, show a negative impact of tax increases on economic growth and a neutral or negative impact of increases in spending on growth. Moreover, studies on the effect of bigger tax hikes on tax revenues reveal a negative impact on receipts. In fact, a 1% increase in the marginal tax rate may reduce the taxable income base by up to 3.6%.
The risk for the eurozone is huge because one of the main reasons for its stagnation is precisely the chain of massive fiscal stimulus plans implemented in the past two decades. To say that Germany should copy the fiscal strategy of France, a country that has been in stagnation for three decades defies any economic logic. There is no evidence that Germany is spending or investing ñless than what it needs, rather the opposite.
The problem of the eurozone is not lack of government spending or taxes, but the excess in both.
The string of spending increases announced daily in Europe disguise an extremely dangerous bet: that the ECB will bail out the eurozone forever, especially because the diminishing effects of monetary and fiscal policy are evident.
Tax cuts will not work either if those are not matched with efficiency improvements and red tape cuts precisely to ensure that public services continue to exist within thirty years.
Burdening the private sector with more taxes and increasing an already bloated government spending may lead the eurozone to the Argentine paradox. By ignoring the sources of wealth generation as well as job creation and expelling them with confiscatory and extractive policies all that is achieved is unemployment and stagnation.
The eurozone cannot expect to achieve the growth it has not delivered repeating the same mistakes, further weakening an economy that needs to bet on attracting investment, reinforcing growth and improving technology and the competitiveness of companies.
When politicians charge an economy with large and growing fixed costs, without prioritizing investment attractiveness, productivity and economic freedom, they jeopardize the welfare they pretend to defend.
The problem of productivity, growth, and employment is not solved by putting obstacles to investment and increasing extractive measures.
Growth and the welfare state are not strengthened by putting up political spending and debt as pillars of an economy.
Tyler Durden
Thu, 10/24/2019 – 02:00 - Empire & Interventionism Versus Republic & Noninterventionism
Empire & Interventionism Versus Republic & Noninterventionism
Authored by Jacob Hornberger via The Future of Freedom Foundation,
The chaos arising from U.S. interventionism in Syria provides an excellent opportunity to explore the interventionist mind.
Consider the terminology being employed by interventionists: President Trump’s actions in Syria have left a “power vacuum,” one that Russia and Iran are now filling. The United States will no longer have “influence” in the region. “Allies” will no longer be able to trust the U.S. to come to their assistance. Trump’s actions have threatened “national security.” It is now possible that ISIS will reformulate and threaten to take over lands and even regimes in the Middle East.
This verbiage is classic empire-speak. It is the language of the interventionist and the imperialist.
Amidst all the interventionist chaos in the Middle East, it is important to keep in mind one critically important fact: None of it will mean a violent takeover of the U.S. government or an invasion and conquest of the United States. The federal government will go on. American life will go on. There will be no army of Muslims, terrorists, Syrians, ISISians, Russians, Chinese, drug dealers, or illegal immigrants coming to get us and take over the reins of the IRS.
Why is that an important point? Because it shows that no matter what happens in Syria or the rest of the Middle East, life will continue here in the United States. Even if Russia gets to continue controlling Syria, that’s not going to result in a conquest of the United States. The same holds true if ISIS, say, takes over Iraq. Or if Turkey ends up killing lots of Kurds. Or if Syria ends up protecting the Kurds. Or if Iran continues to be controlled by a theocratic state. Or if the Russians retake control over Ukraine.
It was no different than when North Vietnam ended up winning the Vietnamese civil war. The dominoes did not fall onto the United States and make America Red. It also makes no difference if Egypt continues to be controlled by a brutal military dictatorship. Or that Cuba, North Korea, and China are controlled by communist regimes. Or that Russia is controlled by an authoritarian regime. Or that Myanmar (Burma) is controlled by a totalitarian military regime. America and the federal government will continue standing.
America was founded as a limited government republic, one that did not send its military forces around the world to slay monsters. That’s not to say that bad things didn’t happen around the world. Bad things have always happened around the world. Dictatorships. Famines. Wars. Civil wars. Revolutions. Empires. Torture. Extra-judicial executions. Tyranny. Oppression. The policy of the United States was that it would not go abroad to fix or clear up those types of things.
All that changed with the conversion of the federal government to a national-security state and with the adoption of a pro-empire, pro-intervention foreign policy. When that happened, the U.S. government assumed the duty to fix the wrongs of the world.
That’s when U.S. officials began thinking in terms of empire and using empire-speak. Foreign regimes became “allies,” “partners,” and “friends.” Others became “opponents,” “rivals,” or “enemies.” Events thousands of miles away became threats to “national security.”
That’s when U.S. forces began invading and occupying other countries, waging wars of aggression against them, intervening in foreign wars, revolutions, and civil wars, initiating coups, destroying democratic regimes, establishing an empire of domestic and foreign military bases, and bombing, shooting, killing, assassinating, spying on, maiming, torturing, kidnapping, injuring, and destroying people in countries all over the world.
The results of U.S. imperialism and interventionism have always been perverse, not only for foreigners but also for Americans. That’s how Americans have ended up with out-of-control federal spending and debt that have left much of the middle class high and dry, unable to support themselves in their senior years, unable to save a nest egg for financial emergencies, and living paycheck to paycheck. Empire and interventionism do not come cheap.
The shift toward empire and interventionism has brought about the destruction of American liberty and privacy here at home. That’s what the assassinations, secret surveillance, torture, and indefinite detentions of American citizens are all about — to supposedly protect us from the dangers produced by U.S. imperialism and interventionism abroad. One might call it waging perpetual war for freedom and peace, both here and abroad.
There is but one solution to all this chaos and mayhem — the dismantling, not the reform, of the Pentagon, the military-industrial complex, the vast empire of foreign and domestic military bases, and the NSA, along with an immediate end to all foreign interventionism. A free, peaceful, prosperous, and harmonious society necessarily entails the restoration of a limited-government republic and a non-interventionist foreign policy to our land.
Tyler Durden
Wed, 10/23/2019 – 23:50 - Abu Dhabi's Massive New "Snow Park" Has Almost Been Completed
Abu Dhabi’s Massive New “Snow Park” Has Almost Been Completed
Today in “when you have more oil money than you know what to do with” news, Abu Dhabi’s massive 11,612 square meter “Snow Park” is reportedly “well on its way to completion”, according to The National.
The park, called Snow Abu Dhabi, will be home to the world’s largest “snow play area” and will be located in the upcoming Reem Mall on Reem Island. It is set to be finished by the end of 2020. Reem Island is a natural island 600 metres off the coast of Abu Dhabi island that is being jointly built out by property developers and real estate companies.
The entrance to the park will house an area called Snowflake Garden (make your millennial jokes here), which is described as an open-play area with attractions like ice labyrinths.
The park will also host a Crystal Carousel, which is “centred around a twinkling winter forest and all the magical creatures found within.”
…whatever the hell that means.
The park will maintain an indoor temperature of -2°C (always an easy task in the middle of the desert) and a snow depth of 20 inches. It will also include a retail outlet that will set hats and cold weather clothing. Which, of course, you can then promptly throw out when exiting the park into the 100 degree desert heat.
The park will also include an attraction called Flurries’ Mountain that leads to the park’s Enchanted Tree. The tree will soar above the park and will have “creative ornamentation” on each of its branches. Employees will be dressed as “winter wonderland-style characters” and, in sum, the park will host 13 different rides and games.
Chalk this one up as another high quality use of resources in the middle east…
Tyler Durden
Wed, 10/23/2019 – 23:30 - Paul Craig Roberts: Better Relations Between The US And Russia Are Not In The Cards
Paul Craig Roberts: Better Relations Between The US And Russia Are Not In The Cards
Authored by Paul Craig Roberts,
By now Russians must wonder if the better relations they desire with the US are ever to be. US Rep. Tulsi Gabbard, Democrat from Hawaii is the latest peacemaker to be declared “a Russian asset” by Hillary, the DNC, and the presstitutes.
The way the Democrats, the presstitutes, and their Puppet Master – the military/security complex – have it rigged, unless you want to bomb Russia into the stone age, you are a Russian asset.
How, then, can any American leader advocate bringing the dangerous tensions with Russia to an end?
Look what happened to Trump when he declared his intention of “normalizing relations with Russia.” There is nothing more desperate that needs doing, but it cannot happen.
Two immovable mountains stand in the way.
One is the military/security complex’s need for an enemy in order to justify the military/security complex’s $1,000 billion dollar annual budget and the power that comes with it. Fifty-eight years ago in his last address to the American people, President Dwight Eisenhower warned that “we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted only an alert and knowledgeable citizenry can compel the proper meshing of huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”
Ike’s warning went unheeded, and today, more than a half century later, the military/security complex rules America.
The other immovable mountain is the US world hegemonic ideology of the neoconservatives who have controlled US foreign policy since the Clinton regime. The neoconservatives declare the US to be the “indispensible, exceptional” country with the right to impose its will and agendas on the rest of the world.
The collapse of the Soviet Union removed all constraints on Washington’s unilateralism. There was no longer another global power to get in Washington’s way. To keep it this way, neoconservative Under Secretary of Defense Paul Wolfowitz set out the Wolfowitz Doctrine. The doctrine states that it is the “first objective” of US foreign and military policy to prevent the rise of Russia or any country capable of serving as a check on US unilateral action. Caught offguard by Vladimir Putin, who restored Russian sovereignty from Russia’s status as an American vassal under Yeltsin, the neoconservatives and their Western media whores have launched massive propaganda attacks on Russia in order to demonize, isolate, marginalize, and perhaps overthrow with American-financed NGOs, as happened to Ukraine in the Maidan Revolution and as the US is currently attempting in Hong Kong against China.
The hegemonic ideology of the neoconservatives and the military/security complex’s need for an enemy preclude any normalization of relations with Russia.
As I and Stephen Cohen have emphasized, the current tensions between the two nuclear superpowers are far more dangerous than during the Cold War. During the Cold War every American president worked with his Soviet counterpart to reduce tensions.
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John F. Kennedy and Khrushchev defused the Cuban missile crisis and removed the US missiles from Turkey. JFK’s reward was to be assassinated by the CIA and the Joint Chiefs of Staff who concluded that JFK was soft on communism and a threat to the national security of the United States.
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President Richard Nixon opened to China and negotiated the SALT I Treaty and the Anti-Ballistic Missile Treaty with Leonid Brezhnev. Nixon’s reward was to be politically assassinated with the Watergate orchestration and forced to resign.
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President Carter and Brezhnev signed the SALT II Treaty, and Carter was rewarded by the military/security complex throwing its money behind anti-communist Reagan.
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President Reagan outmaneuvered the military/security complex, and he and Gorbachev ended the Cold War.
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The George H.W. Bush administration gave assurances to Gorbachev that if the Soviet Union permitted the reunification of Germany, the US would neither incorporate the former Warsaw Pact into NATO nor move NATO one inch to the East.
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The Clinton regime reneged on the word of the US Government and moved NATO to Russia’s borders.
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Subsequent US regimes – George W. Bush, Obama, Trump – have pulled out of the remaining treaties and agreements and, thereby, elevated the tensions between the nuclear superpowers to the pre-Kennedy era.
The danger of this development is not appreciated.
Nuclear warning systems of incoming ICBMs are notorious for false warnings. During the Cold War both sides received false alarms of incoming attacks, but neither the Amerians nor the Soviets ever pushed the button in response to the warnings.
Why? The reason is that both sides understood that they were working to reduce tensions and to build trust. Both sides understood that in this atmosphere the alarms had to be false.
Today the situation is very different.
Russia and its leadership have been demonized and excoriated by Western politicians and media. Americans and their vassals in Europe have been taught to hate and fear Russians. The Russian government has experienced false accusations never before experienced in diplomatic affairs. Neither side can possibly trust the other. Add to this the fact that response times are now in the minutes, and you should be able to comprehend that the world can be blown up due to nothing more than a false alarm.
For the ideological neoconservatives and the greed-ridden corrupt American military/security complex to put life on Earth under this kind of risk indicates that neither neoconservatives nor armaments industries are capable of subordining their self-interests to life itself.
Normally, the restrained, non-confrontational responses of Vladimir Putin and Russian Foreign Minister Sergei Lavrov to American insults and provocative actions would be admirable. But with the US playing the role of the bully, passive Russian responses to bullying encourage more bullying. As kids of my generation learned, when confronted with a bully you immediately stand up to him. Otherwise, he sees you as lacking self-respect and resolve and ups the bullying. The only way to avoid the fight is to stand up to him immediately.
The Russian government’s failure to stand up to Washington’s bullying guarantees more bullying. Sooner or later the bullying will cross a line, and Russia will have to fight.
A less passive Russian government could do a lot for peace.
Tyler Durden
Wed, 10/23/2019 – 23:10 -
- Gulfstream Is Back In The Race For The World's Biggest Private Jet
Gulfstream Is Back In The Race For The World’s Biggest Private Jet
Gulfstream is now (again) gunning for bragging rights to the world’s biggest private jet, according to Bloomberg. Gulfstream’s G650 was unseated as the world’s largest luxury jet by Bombardier’s Global 7500 last year.
But now, Gulfstream’s new G700, a roomier version of its flagship G650, is set to debut in 2022 and will be capable of flying 7,500 nautical miles and cruising at just under the speed of sound.
Gulfstream President Mark Burns said on Monday that the plane has “the tallest, widest, longest cabin in our industry.”
Gulfstream is making a bet that the $76 million G700 will entice some of the richest flyers in the world with its large cabin and upgraded range. Qatar Airways has already ordered 10 of the aircraft for its charter service, Qatar Executive.
But the luxury jet market is anything but booming right now. A recent study by Honeywell concluded that deliveries could begin flagging in 2021 as a result of a slowdown in orders. And even though new luxury jet offerings are coming to market this year and next, the industry still faces threats from the ongoing U.S./China trade war, Brexit and a slowing global economy.
Bombardier’s Global 7500 came to market two years later than planned and was a product of a full-on new design layout.
David Coleal, president of Bombardier’s aviation unit said: “Global 7500 is the industry flagship. It’s a clean sheet design, built to perform like no other. Remember, anything else out there is just a stretch.”
Bombardier’s plane has a range of 7,700 nautical miles and can fly at Mach 0.925, also slightly less than the speed of sound. It costs $73 million, has a wingspan of 104 feet and has a cabin with four distinct seating zones.
Gulfstream waited on announcing its new plane until it had delivered two new smaller jets: one G500 and one G600. The G600 began shipments in June and the G500 debuted about a year earlier. Both models were introduced in 2014, whereas the flagship G650 debuted in 2012.
Tyler Durden
Wed, 10/23/2019 – 22:50 - Escobar: Burn, Neoliberalism, Burn!
Escobar: Burn, Neoliberalism, Burn!
Authored by Pepe Escobar via The Strategic Culture Foundation,
Neoliberalism is – literally – burning. And from Ecuador to Chile, South America, once again, is showing the way.
Against the vicious, one-size-fits-all IMF austerity prescription, which deploys weapons of mass economic destruction to smash national sovereignty and foster social inequality, South America finally seems poised to reclaim the power to forge its own history.
Three presidential elections are in play.
Bolivia’s seem to have been settled this past Sunday – even as the usual suspects are yelling “Fraud!” Argentina and Uruguay are on next Sunday.
Blowback against what David Harvey has splendidly conceptualized as accumulation by dispossession is, and will continue to be, a bitch. It will eventually reach Brazil – which as it stands continues to be torn to pieces by Pinochetist ghosts. Brazil, eventually, after immense pain, will rise up again. After all, the excluded and humiliated all across South America are finally discovering they carry a Joker inside themselves.
Chile privatizes everything
The question posed by the Chilean street is stark: “What’s worse, to evade taxes or to invade the subway?” It’s all a matter of doing the class struggle math. Chile’s GDP grew 1,1% last year while the profits of the largest corporations grew ten times more. It’s not hard to find from where the huge gap was extracted. The Chilean street stresses how water, electricity, gas, health, medicine, transportation, education, the salar (salt flats) in Atacama, even the glaciers were privatized.
That’s classic accumulation by dispossession, as the cost of living has become unbearable for the overwhelming majority of 19 million Chileans, whose average monthly income does not exceed $500.
Paul Walder, director of the Politika portal and an analyst for the Latin-American Center of Strategic Analysis (CLAE) notes how less than a week after the end of protests in Ecuador – which forced neoliberal vulture Lenin Moreno to ditch a gas price hike – Chile entered a very similar cycle of protests.
Walder correctly defines Chile’s President Sebastian Pinera as the turkey in a long-running banquet that involves the whole Chilean political class. No wonder the mad as hell Chilean street now makes no difference between the government, the political parties and the police. Pinera, predictably, criminalized all social movements; sent the army to the streets for unmitigated repression; and installed a curfew.
Pinera is Chile’s 7th wealthiest billionaire, with assets valued at $2.7 billion, spread out in airlines, supermarkets, TV, credit cards and football. He’s a sort of turbo-charged Moreno, a neoliberal Pinochetist. Pinera’s brother, Jose, was actually a minister under Pinochet, and the man who implemented Chile’s privatized welfare system – a key source of social disintegration and despair. And it’s all interlinked: current Brazilian Finance Minister Paulo Guedes, a Chicago boy, lived and worked in Chile at the time, and now wants to repeat the absolutely disastrous experiment in Brazil.
The bottom line is that the economic “model” that Guedes wants to impose in Brazil has totally collapsed in Chile.
Chile’s top resource is copper. Copper mines, historically, were owned by the US, but then were nationalized by President Salvador Allende in 1971; thus war criminal Henry Kissinger’s plan to eliminate Allende, which culminated in the original 9/11, in 1973.
Pinochet’s dictatorship later re-privatized the mines. The largest of them all, Escondida, in the Atacama desert – which accounts for 9% of the world’s copper – belongs to Anglo-Australian giant Bhp Billiton. The biggest copper buyer in world markets is China. At least two-thirds of income generated by Chilean copper goes not to the Chilean people, but to foreign multinationals.
The Argentine debacle
Before Chile, Ecuador was semi-paralyzed: inactive schools, no urban transport, food shortages, rampant speculation, serious disturbances on oil exports. Under fire by the mobilization of 25,000 indigenous peoples in the streets, President Lenin Moreno cowardly left a power void in Quito, transferring the seat of government to Guayaquil. Indigenous peoples took over the governance in many important cities and towns. The National Assembly was AWOL for almost two weeks, without the will to even try to solve the political crisis.
By announcing a state of emergency and a curfew, Moreno laid out a red carpet for the Armed Forces – and Pinera duly repeated the procedure in Chile. The difference is that in Ecuador Moreno bet on Divide and Rule between the indigenous peoples’ movements and the rest of the population. Pinera resorts to outright brute force.
Apart from applying the same old tactics of raising prices to obtain further IMF funds, Ecuador also displayed a classic articulation between a neoliberal government, big business and the proverbial US ambassador, in this case Michael Fitzpatrick, a former Assistant Secretary for Western Hemisphere matters in charge of the Andean region, Brazil and the Southern Cone up to 2018.
The clearest case of total neoliberal failure in South America is Argentina. Less than two months ago in Buenos Aires, I saw the vicious social effects of the peso in free fall, inflation at 54%, a de facto food emergency and the impoverishment of even solid sectors of the middle class. Mauricio Macri’s government literally burned most of the $58 billion IMF loan – there’s still $5 billion to arrive. Macri is set to lose the presidential elections: Argentines will have to foot his humongous bill.
Macri’s economic model could not but be Pinera’s – actually Pinochet’s, where public services are run as a business. A key connection between Macri and Pinera is the ultra-neoliberal Freedom Foundation sponsored by Mario Vargas Llosa, who at least boasts the redeeming quality of having been a decent novelist a long time ago.
Macri, a millionaire, disciple of Ayn Rand and incapable of displaying empathy towards anyone, is essentially a cipher, pre-fabricated by his Ecuadorian guru Jaime Duran Barba as a robotic product of data mining, social networks and focus groups. A hilarious take on his insecurities may be found in La Cabeza de Macri: Como Piensa, Vive y Manda el Primer Presidente de la No Politica, by Franco Lindner.
Among myriad shenanigans, Macri is indirectly linked to fabulous money laundering machine HSBC. The president of HSBC in Argentina was Gabriel Martino. In 2015, four thousand Argentine accounts worth $3.5 billion were discovered at HSBC in Switzerland. This spectacular capital flight was engineered by the bank. Yet Martino was essentially saved by Macri, and became one of his top advisers.
Beware the IMF vulture ventures
All eyes now should be on Bolivia. As of this writing, President Evo Morales won Sunday’s presidential elections in the first round – obtaining, by a slim margin, the necessary 10% spread for a candidate to win if he does not obtain the 50% plus one of the votes. Morales essentially got it right at the end, when votes from rural zones and from abroad were fully counted, and the opposition had already started to hit the streets to apply pressure. Not surprisingly, the OAS – servile to US interests – has proclaimed a “lack of trust in the electoral process”.
Evo Morales represents a project of sustainable, inclusive development, and crucially, autonomous from international finance. No wonder the whole Washington Consensus apparatus hates his guts. Economy Minister Luis Arce Catacora cut to the chase: “When Evo Morales won his first election in 2005, 65% of the population was low income, now 62% of the population has access to a medium income.”
The opposition, without any project except wild privatizations, and no concern whatsoever for social policies, is left to yell “Fraud!”, but this could take a very nasty turn in the next few days. In the tony suburbs of southern La Paz, class hate against Evo Morales is the favorite sport: the President is referred to as “indio”, a “tyrant” and “ignorant”. Cholos of the Altiplano are routinely defined by white landowning elites in the plains as an “evil race”.
None of that changes the fact that Bolivia is now the most dynamic economy in Latin America, as stressed by top Argentine analyst Atilio Boron.
The campaign to discredit Morales, which is bound to become even more vicious, is part of imperial 5G war, which, Boron writes, totally obliterates “the chronic poverty that the absolute majority of the population suffered for centuries”, a state that always “maintained the population under total lack of institutional protection” and the “pillaging of natural wealth and the common good”.
Of course the specter of IMF vulture ventures won’t vanish in South America like a charm. Even as the usual suspects, via World Bank reports, now seem “concerned” about poverty; Scandinavians offer the Nobel Prize on Economics to three academics studying poverty; and Thomas Piketty, in Capital and Ideology, tries to disassemble the hegemonic justification for accumulation of wealth.
What still remains absolutely off limits for the guardians of the current world-system is to really investigate hardcore neoliberalism as the root cause of wealth hyper-concentration and social inequality. It’s not enough to offer Band-Aids anymore. The streets of South America are alight. Blowback is now in full effect.
Tyler Durden
Wed, 10/23/2019 – 22:30 - Never Mind The Algos: Fund Manager Earns 10%+ Returns Using FBI Interview Techniques
Never Mind The Algos: Fund Manager Earns 10%+ Returns Using FBI Interview Techniques
Australian money manager Rhett Kessler learned the art of negotiation from the masters: professional FBI Agents who work with terrorists, master criminals and desperate psychopaths who got in way over their head.
Now, the senior fund manager of the $727 million Pengana Australian Equities Fund, is telling Bloomberg that the FBI’s interview techniques for getting under the skin of CEOs during criminal investigations – a tool used to catch them in lies, exaggerations and deflections of blame for their actions – can also be useful for investment analysts seeking to evaluate companies and their management.
Rhett Kessler
In a way, Kessler’s hedge fund is a lot like the FBI: They’re constantly investigating targets, only the fund’s targets are usually public companies, not criminals. Like the FBI, “We have a dossier on each management team.”
Here’s how Kessler puts these tools to work: Before looking too deeply into a company, he first tries to gauge whether they’re trustworthy and competent. The approach has yielded amazing returns for Kessler: his fund has posted double-digit returns, on average, since it was founded in 2008.
But what’s most important here is that Kessler’s interview technique appears to be producing reliable, steady returns at a time when the hottest funds of the day are dumping millions of dollars into building complex algorithms and embracing other quant-driven techniques to try and gain an edge over the competition. Kessler has apparently found an edge just by talking to people, a much less expensive strategy.
Here’s more from BBG:
The Pengana Australian Equities Fund has gained 10.4% per year, net of fees, since July 2008, topping a 6.7% advance in the Australian Stock Exchange All Ordinaries Index, according to the fund’s most recent report on its website. Kessler says the rush into passive investing and quantitative strategies in recent years will “create a better environment for stock pickers as the herd gets bigger.”
Then again, the fact that Kesslerr has millions of dollars at his disposal makes it easier to gain access to key figures within companies.
Many of Kessler’s best-performing names are small companies involved in ostensibly “boring” businesses.
Kessler’s fund counts among its top holdings stocks such as Aristocrat Leisure Ltd., which sells gaming machines to casinos and clubs, and CSL Ltd., a maker of pharmaceutical and diagnostic products derived from human plasma. Aristocrat is up 45% this year, while CSL has risen 35%.
Here’s a rundown of their top holdings:
Presently, Kessler’s main fund has 15% of its assets in cash – wary of deteriorating economic data in Australia and high stock valuations. If any young investors ever have an opportunity to take a similar class with FBI instructors, they should jump at the chance. Among the techniques that Kessler learned: Asking questions to which you already know the answers.
This allows Kessler to determine whether the CEO is honest, or prone to exaggeration. These personality traits, Kessler found, can have a tremendous impact on how an individual runs a business.
“For every 10 questions we are going to ask, we all know the answers to three or four of them,” he said. Some of them will be to show the person in a good light. Some of them will be to show the person in a bad light. And we know the answers. “
Another technique he employs: What they call “A, B, C, D” questions.
He sometimes asks what he calls the “A, B, C, D question.” In this, the fund manager has deliberately missed the point, leaving out one piece of information that’s crucial to understanding the situation – something that reflects badly on the executive. He’s checking if the interviewee will point it out.
“That’s why we call it the A, B, C, D question,” Kessler said. “Are they a volunteer of bad information or not?”
That question is supposed to gauge whether executives will easily volunteer information that reflects poorly on them or the company. Readers can probably imagine how this might be helpful.
Bottom line: If you ever have the opportunity to take a class about interrogation techniques, take it.
Tyler Durden
Wed, 10/23/2019 – 22:10 - Rickards: For Trump, "It's The Economy, Stupid!"
Rickards: For Trump, “It’s The Economy, Stupid!”
Authored by James Rickards via The Daily Reckoning,
The trade war is taking a heavy toll on China. Chinese growth slowed to 6% in the third quarter, slower than expected and the slowest growth rate since 1992.
That 6% growth represents a sharp drop from the 6.8% growth China registered in the first quarter of 2018. China’s growth still exceeds developed economies by far, but it is notably weak relative to China’s past performance and relative to expectations.
China is the world’s second-largest economy (after the U.S.) and produces over 16% of global output. A 0.5% decline in Chinese output slows global growth by 0.08%, which is nontrivial considering that global growth is expected to be only 3% in 2019, according to the IMF.
More importantly, China’s growth figures are almost certainly overstated.
About 45% of Chinese GDP is “investment” (compared with about 25% for a developed economy), but 50% of that investment is wasted on white elephant projects and ghost cities that will not earn returns. If that wasted investment were subtracted from GDP, China’s actual growth rate would be 5.8%.
Other adjustments for overlooked bad debts and “smoothing” of official figures would put China’s actual growth closer to 4% or even lower.
China’s economy is a house of cards and even government figures are beginning to show that’s true. The real figures are worse. China’s best case is a possible recession and its worst case is a full-blown financial panic.
China is losing the trade wars, losing the public relations wars and beginning to show cracks in the foundation.
All are good reasons for investors to keep away.
The news might be bad for China. But it’s good for President Trump, despite the latest impeachment nothingburger.
The economy will be the deciding factor in next year’s election.
The 1992 Bill Clinton election campaign war room had a sign that said, “It’s the economy, stupid.”
That was intended as a constant reminder to campaign staff that they were to focus on U.S. economic performance almost exclusively in their efforts.
Clinton had come from nowhere to become the Democratic nominee and challenge George H. W. Bush, who was running for reelection. Bush’s approval ratings in 1991 were over 90% after he led the successful campaign to oust Saddam Hussein from Kuwait.
He looked unbeatable for reelection in 1992, which is one reason so few Democrats jumped into the race. Yet Bush had an Achilles heel, which was the economy.
The U.S. had a fairly mild recession from July 1990–March 1991. The recovery was weak and most Americans believed we were still in recession in 1992 even though the recession was technically over by then. Jobs are a lagging indicator and many workers who were laid off in 1991 still had not returned to work by 1992.
Clinton’s strategist, James Carville, understood that jobs were more important than foreign policy triumphs. He urged Clinton to run on the economy, and Clinton won.
In fact, presidents running for a second term almost always win reelection unless there is a recession late in the first term. That’s what cost Bush and Jimmy Carter their reelections.
Otherwise, it’s smooth sailing for second-term victories. The good news for Trump is that he fits the mold of presidents heading for reelection.
A new projection by Moody’s shows Trump winning as many as 351 electoral votes (only 270 electoral votes are needed to be president). Moody’s analysis is based on state-by-state economic conditions and historic voting patterns, not polls.
Trump should win all of the swing states (Pennsylvania, Ohio, Florida, Michigan, Wisconsin) and pick up new states won by Hillary Clinton in 2016 (Minnesota, New Hampshire, Virginia). It looks like a victory of historic proportions for Trump… as long as he avoids a recession.
Tyler Durden
Wed, 10/23/2019 – 21:50
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