Month: April 2018

One day after Elon Musk amused his 20 million twitter followers with a Tesla bankruptcy April Fool’s joke…

Tesla Goes Bankrupt
Palo Alto, California, April 1, 2018 — Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt. So bankrupt, you can’t believe it.

— Elon Musk (@elonmusk) April 1, 2018

… this morning shareholders of Tesla are hardly laughing, with Tesla stock tumbling as much as 5%, down to $254, the lowest level since March 2017, and down 15% YTD.

And while we doubt that Musk’s “joke” prompted the selloff – even if it does cut too close to comfort for the company that burned $3.5 billion in cash last year…

… Tesla has seen a spate of negative news over the past few days, including a rating agency downgrade of the company’s bonds deep into junk status, a recall of all Model S cars built before April 2016, a fatal accident last month involving the company’s driver-assistance system and a growing consensus that the carmaker’s first-quarter deliveries may fall below expectations.

As a reminder, last week, Moody’s downgraded Tesla over concerns about Model S production and a warning it may need another $2 billion in liquidity sending its bonds tumbling, with the yield surpassing that of Ukraine.

Tesla also recalled 123,000 Model S vehicles due to problems with the power-steering component, saying it saw “excessive corrosion” in the power-steering of affected cars.

As we reported overnight, Tesla also admitted that the car involved in a fatal crash in California last week was operating on Autopilot mode, although it claimed that the autopilot was not at fault. This in turn prompted an angry rebuke from the NTSB

“The NTSB is looking into all aspects of this crash including the driver’s previous concerns about the autopilot. We will work to determine the probable cause of the crash and our next update of information about our investigation will likely be when we publish a preliminary report, which generally occurs within a few weeks of completion of field work.”

Still, despite the recent slump in Tesla stock, its market cap remains surprisingly high at $45 billion (as of Friday’s close). John Thompson, head of Vilas Capital Management, summarized it best: “As a reality check, Tesla is worth twice as much as Ford [estimate of the enterprise value of both companies], yet Ford made six million cars last year at a $7.6 billion profit, while Tesla made 100,000 cars at a $2 billion loss.”

TSLA, which last week urged its workers to work extra hard on ramping up Model 3 output, and “prove the haters wrong“, is expected to report Q1 delivery numbers early this week; they are expected to be a disaster.

Needless to say, Thompson believes that Tesla is months away from collapse. A few more jokes from Musk and the company’s bankruptcy should come even faster.

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For the second time in two days, Trump took to twitter to warn about the caravan of migrants headed through Mexico to the the US border, and bashed the Mexican government for allowing migrants untrammeled access to its northern border and Democrats for passing laws that “don’t do their job.”

In doing, the president demonstrated that he’s not only listening to his right-wing critics – of which Anne Coulter the most prominent example – who chastised him as a “lazy ignoramous” and levied charges that “all he wants is for Goldman to like him” – but is clearly worried about the midterms and a potential impeachment should Dems win the House and Senate.

It also seems that the recently emboldened President is at least trying to give the impression of putting his foot down when it comes to his promised border wall (even if he failed to obtain the funding needed to build it) with demands that Congress pass a comprehensive border-security package and lift certain restrictions on ICE agents.

Mexico has the absolute power not to let these large “Caravans” of people enter their country. They must stop them at their Northern Border, which they can do because their border laws work, not allow them to pass through into our country, which has no effective border laws…..

— Donald J. Trump (@realDonaldTrump) April 2, 2018

…Congress must immediately pass Border Legislation, use Nuclear Option if necessary, to stop the massive inflow of Drugs and People. Border Patrol Agents (and ICE) are GREAT, but the weak Dem laws don’t allow them to do their job. Act now Congress, our country is being stolen!

— Donald J. Trump (@realDonaldTrump) April 2, 2018

Trump then reverted to his charge that DACA is officially dead, and it’s the Democrats fault, a claim he first made on Sunday. Still, the president appeared to leave open the possibility of a deal, saying Democrats “must build Wall and secure our borders with proper Border legislation. Democrats want No Borders, hence drugs and crime!”

DACA is dead because the Democrats didn’t care or act, and now everyone wants to get onto the DACA bandwagon… No longer works. Must build Wall and secure our borders with proper Border legislation. Democrats want No Borders, hence drugs and crime!

— Donald J. Trump (@realDonaldTrump) April 2, 2018

Yesterday, Trump demanded Senate Majority Leader Mitch McConnell to invoke “the nuclear option” – modifying rules to require only a simple majority to end debate and move to a vote, effectively killing the opposition’s ability to filibuster. Democrats, who made this change for presidential appointments back in 2013, have said they regret it (it allowed Trump to appoint Neil Gorsuch).

Of course, what Trump isn’t saying is just as problematic as whipping up votes from Democrats. Many Republicans are wary of Trump’s lavish border-enforcement promises, and are worried that, between the infrastructure bill, tax reform and the omnibus spending bill – Trump is trying to do to the US what he did to the Trump Organization in the 1990s.

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Global markets started the new week and quarter with very muted trading in Asia as most key markets including Australia, New Zealand , Hong Kong, Canada, UK and most parts of Europe remain closed for Easter holidays. US stock futures are lower…

…and equities in Asia have given up the gains seen early in the session amid fears of escalating trade wars.

As a reminder, overnight China announced that on Monday it imposed tariffs on U.S. products including frozen pork, wine and certain fruits and nuts in response to U.S. duties on imports of aluminum and steel.

MSCI’s world equity index ended up 1.2% last week, but it lost about 1.5% in the first quarter, pushed away from record highs as tensions over global trade escalated, turmoil in the White House deepened and market-leading technology firms wobbled on fears of regulation and other issues. Still, so far the S&P 500 has tested and held the 200d MA twice and has again begun to bounce / stabilize, as all eyes remain on this key technical support level.

“We expect strong and broad-based growth to continue globally,” wrote strategists at Barclays who warned that there were looming risks: “Trade protectionism, U.S. economic policy uncertainty, concerns about higher cross-market volatility and risk premium in core rates markets call for a more tactical approach to risk assets.”

With FX markets on a standstill (more below), the key focus of note today will be China’s new tariffs on 128 US products which officially start today, as well as  softer manufacturing PMI data from many countries in Asia.

The main themes remain the same: trade tensions, a dovish start to life under Powell at the Fed, soggy wages and potentially further changes to the Trump administration, Brexit headline risks, rate hike outlooks being pushed forward in the antipodeans, uncertainty around ECB, JPY’s volatility and political risks in EM and for Oil.

What Asian markets were open saw aggressive profit-taking into the close: Chinese stocks erased gains to end Monday at session lows, following their worst quarter in two years. Brokers bucked broad market declines after the central government announced a trial program for Chinese Depositary Receipts. The Shanghai Composite closed down 0.2%, wiping out an earlier advance of 0.7%.

Similarly in Japan, the Topix closes down 0.4%, erasing gain of as much as 0.4%, with volume 20% below 30-day average. Banks were the biggest drag on benchmark, outweighing gain in “other products” gauge. The Nikkei also slumped 0.3% after wiping out a 0.7% rise.

Asian manufacturing PMI for March have mainly disappointed today and while this is not having an impact on the immediate price action, it is something to keep an eye on. Of note, China’s March Caixin manufacturing PMI data came lower than expected at 51.0 versus exp. 51.7.

It has been a quiet start to the FX week as well, with the Bloomberg Dollar Spot Index falling 0.1%, extending the three-day slide to 0.4% although staying within a tight range, amid muted trading due to the Easter holiday. The pound led gains among G-10 currencies at the start of a week flooded with tier-one data releases out of the U.S, while the yen was marginally weaker after Tankan survey slips.

Of note: for Monday, the The People’s Bank of China raised the daily reference rate for the yuan to strongest since Aug. 11, 2015, aka the “day of the devaluation”, as the dollar weakened: PBOC raised the yuan reference rate by 0.19% to 6.2764 per dollar. The fixing was in line with expectations: average estimate in Bloomberg survey of 17 traders and analysts was 6.2762. Some of the other notable FX moves, from Bloomberg:

• The Bloomberg Dollar Spot Index falls 0.1%; the measure declined for a fifth straight quarter, ended March 30, its worst run since March 2008
• The pound is the biggest mover amid thin trading as some markets in Asia and Europe remained shut for Easter holidays
• Sterling rises for the first time in five days versus the dollar, climbing 0.4% to $1.4064; rises 0.3% to 87.67 pence against the euro
• The Japanese yen is little changed during London hours after weakening slightly in Asia; analysts project it will weaken against all its G-10 peers this quarter; USD/JPY is forecast to climb to 108 by the end of June, from the current level of 106.35, the median estimate in a Bloomberg survey shows
• U.S. 10-year Treasury yield climbs 2bps to 2.76% after its third straight quarterly advance in the period through March 30

Crude oil prices extended gains, lifted by a drop in U.S. drilling activity as well as by expectations that the United States could re-introduce sanctions against Iran. U.S. drillers cut seven oil rigs in the week to March 29, bringing the total count down to 797. It was the first time in three weeks that the rig-count fell. U.S. crude futures rose 0.3 percent to $65.14 a barrel and Brent advanced 0.5 percent to $69.67 a barrel.

This week, Fed Chairman Jay Powell will be giving his first speech since the FOMC March meeting. He will be giving a speech on the economic outlook on Friday, April 6 during a visit to Chicago. The speech is at 12:30 Chicago time, which is 11:30 EST and 16:30 BST. This will come just after the latest payrolls and AHE report.

U.S. data due this week include Monday’s Institute for Supply Management (ISM) manufacturing index, Wednesday’s ISM non-manufacturing index and the non-farm payrolls report on Friday.

Market Snapshot

• S&P 500 futures down 0.3% to 2,635.25
• STOXX Europe 600 up 0.4% to 370.87
• MSCI Asia Pacific unchanged at 172.76
• MSCI Asia Pacific ex Japan up 0.3% to 565.48
• Nikkei down 0.3% to 21,388.58
• Topix down 0.4% to 1,708.78
• Hang Seng Index up 0.2% to 30,093.38
• Shanghai Composite down 0.2% to 3,163.18
• Sensex up 0.7% to 33,195.21
• Australia S&P/ASX 200 down 0.5% to 5,759.37
• Kospi down 0.07% to 2,444.16
• Brent Futures up 1% to $70.02/bbl
• Gold spot up 0.5% to $1,331.70
• U.S. Dollar Index down 0.08% to 89.90
• German 10Y yield unchanged at 0.497%
• Euro up 0.05% to $1.2330
• Brent Futures up 0.8% to $69.91/bbl
• Italian 10Y yield fell 5.4 bps to 1.532%
• Spanish 10Y yield unchanged at 1.164%

Top Overnight News

• China urged trade talks with the U.S. to prevent greater damage to relations while saying that previously announced retaliatory measures on American imports took effect Monday
• Trump administration to unveil the list of Chinese imports targeted for tariffs this week, according to unnamed officials: Reuters
• Investors, strategists and traders remain bullish on emerging assets for the rest of 2018, a Bloomberg survey shows. Top picks are Asian stocks, followed by Latin American bonds, according to the survey of 15 participants conducted March 22-28; In currencies, Asia came top again, ahead of Europe, the Middle East and Africa and Latin America
• With pressure escalating after one of the worst weeks in its almost 15-year-history, Tesla Inc. raced to manufacture and deliver its mission-critical Model 3 sedan to burnish the numbers it’s about to report to rattled investors
• More American consumers than at any time in 27 years are convinced that it’s better to make big purchases now because retailer discounts and deals won’t be around much longer, according to the University of Michigan’s latest survey of consumer sentiment
• The U.S. Treasury Department plans to meet with market makers and other electronic trading firms to discuss ways to bring more transparency to the $14.5 trillion market for government debt, according to a person familiar with the matter
• President Donald Trump threatened to pull out of the North American Free Trade Agreement if Mexico doesn’t stop people and drugs from flowing into the U.S. from Central America
• Japan 1Q Tankan index 24 vs 25 est, outlook 20 vs 22 est

Asia equity markets were mostly higher but with gains contained amid a holiday-quietened tone (Australia, New Zealand, Hong Kong, EU and UK are all closed) and as participants digested several key data releases including mostly better than expected Chinese PMI figures. Nikkei 225 (+0.7%) was positive as the index shrugged off a disappointing BoJ Tankan where large manufacturers’ sentiment deteriorated for the first time in 2 years and large industry numbers mostly missed forecasts, as the data also showed a strong all industry capex component and increased confidence across smaller businesses. Elsewhere, KOSPI (+0.2%) was also higher amid the improved geopolitical climate in the Korean peninsula, while Shanghai Comp. (+0.3%) was underpinned after better than expected Chinese Official Manufacturing and Non-Manufacturing PMI data over the weekend. Conversely, the Caixin Manufacturing PMI release was less inspiring and fell short of estimates while China also confirmed tariffs on US products in retaliation to US protectionist measures on steel and aluminium, which in turn capped advances in the mainland. Finally, 10yr JGBs were uneventful with price action range-bound amid gains in riskier assets as well as an unchanged BoJ Rinban announcement

Top Asian News

• China Urges More Trade Talks as Tariffs on U.S. Goods Begin
• Japan Stocks to Watch: Oriental Land, Retail, Shimamura, Toyota
• Gold Climbs as Investors Weigh Rise in Trade Tensions
• Indonesia May Need to Follow Fed Hikes, Ex-Finance Chief Says
• Indian Road Builders Jump on Outlook After Year of Record Orders

Markets across Europe were closed for Easter Monday.

Top European News

• Russian Stocks Are Cheap, And With Good Reason: Markets Live
• Portugal’s CP Has Some Train Services Halted Due to Strike: TSF
• UAE Weighs Investment in Baikonur Cosmodrome Upgrade: Interfax
• Ukraine’s Privatbank Says It Sues PwC in Cyprus Court
• Orthodox Policies May Boost Russian Bonds
• Prosafe Says Standstill Pact With Cosco Extended to May 20
• Russia Fintech Will Make Winners, Just Not for Stocks

In FX, the dollar was steady at 106.350 yen, while the euro was almost unchanged at $1.2317. The greenback had gained about 0.6 percent against a basket of six major currencies last week helped by a combination of factors including perceived progress on North Korea issues. The dollar index still lost more than 2 percent last quarter, marking its fifth straight quarter of declines. “A list of important indicators will be released this week, which could help steady market sentiment even though U.S.-China trade concerns and other geopolitical risks continue to linger in the background,” said Koji Fukaya, president at FPG Securities in Tokyo.

In commodities, crude oil prices extended gains, lifted by a drop in U.S. drilling activity as well as by expectations that the United States could re-introduce sanctions against Iran. U.S. drillers cut seven oil rigs in the week to March 29, bringing the total count down to 797. It was the first time in three weeks that the rig-count fell. U.S. crude futures rose 0.3 percent to $65.14 a barrel and Brent advanced 0.5 percent to $69.67 a barrel.

“Investors took their cue from falling U.S drilling counts,” Wang Xiao, head of crude oil research with Guotai Junan Futures said. “But increasing trade friction between China and U.S. is likely to rock global markets and tarnish bullish sentiment in crude oil markets.”

US Event Calendar

• 9:45am: Markit US Manufacturing PMI, est. 55.7, prior 55.7
• 10am: Construction Spending MoM, est. 0.45%, prior 0.0%
• 10am: ISM Manufacturing, est. 60, prior 60.8;

 

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Authored by Arkady Savitsky via The Strategic Culture Foundation,

On March 23, 1983, 35 years ago, President Ronald Reagan unveiled his space-wars program, the SDI, to intercept and destroy incoming missiles and other weapons for battling in this new domain. It never came to fruition, as the technology that existed at that time was insufficiently advanced to meet the requirements.

But times change. It has been announced that the project is once again to be pursued. The US plans to deploy weapons in space, Russian Foreign Minister Sergey Lavrov issued a warning about this in January. That warning proved accurate.

Donald Trump believes that space is becoming a “warfighting domain,” just like the land, air, and sea, and is thus encouraging the creation of a space force on par with the other branches of the armed forces. It was hardly an off-the-cuff comment.

The idea enjoys strong support in Congress. Pushing forward such an initiative would strengthen the president’s position at a time when he needs it the most. Some lawmakers say that force could be created as part of the Department of the Air Force in just three to five years. The proposal is not popular among the military brass, but on March 13 the president made his views known. “The president is very focused on outcomes. He has prioritized space, he has recognized the threats that have evolved, and the pace with which they’ve evolved, and he recognizes that as a warfighting domain,” says Kenneth Rapuano, assistant defense secretary for homeland defense and global security.

The initiative dovetails with the recently issued National Security Strategy. Some initial steps have already been taken. Deputy Defense Secretary Patrick Shanahan, the chief space adviser, provided lawmakers with an interim report on upcoming space reforms this month. An updated report is due August 1.

No doubt Donald Trump’s statement was prompted by President Putin’s March 1 address to lawmakers in which he unveiled some details about Russia’s new weapons. The balance of forces in the air, land, and sea is not tilting in America’s favor, but domination of space could change that picture. The Joint Vision 2020 states that the US should dominate and control the military use of space.

What could this mean in practice? It’s logical to assume that all the satellites belonging to the branches of the military and STRATCOM will operate under the new command. No doubt the structure will have teeth, such as the HTV-2 and AHW hypersonic-glide-vehicle weapons, the Boeing X-37 spacecraft, and the Dream Chaser reusable space planes. The X-37 has flown several secret missions into orbit carrying mystery payloads. Anti-satellite weapons have been tested. Now that they have undergone testing on land and at sea, laser technology will move to space.

The 1967 Outer Space Treaty imposes no restriction on conventional weapons. The diplomatic efforts to reach an international agreement regulating space activities have been rejected by the US as disingenuous non-starters. In 2014, the UN General Assembly adopted a Russian resolution, “No First Placement of Weapons in Outer Space,” which was dismissed by Washington. The US has never come up any initiatives of its own.

So, the US wants to dominate space. But will it? The USSR has suspended many space-war programs, such as “space-to-space” munitions, which could be quickly brought back to life. The R36 ORB was actually the third stage of the well-known Voevoda (Satan) ICBM. Its warhead could be placed in orbit and left there for some time, reducing to just a few minutes the time required to strike any target on Earth. The weapon was even operational for a short period.

There have been programs to create space platforms, including some that were nuclear powered.

Russia was the only country to successfully use Hall–effect thrusters to maneuver objects in space. In his famous “new weapons” speech, President Putin mentioned the Avangard boost glider that could be easily reconfigured for space-interceptor missions. In 1984 Russia launched a program to create the 79М6 Kontakt anti-satellite (ASAT) system as a direct response to US ASAT tests. The system carried a modified MiG-31D fighter on board that theoretically could attack as many as 24 satellites within a 36-hour period. The Kontakt never became operational, as tensions subsided and Moscow reached an agreement with Washington to terminate the program. It could be resurrected, leaving no American satellite safe. Some sources report that the development has already been revived. And almost all modern US systems are heavily dependent on satellites.

It could be that opening up discussions with Russia on measures to curb the militarization of space might be a much cheaper and more reliable way to safeguard US national security than throwing down the gauntlet. It’s quite likely that the US would touch off a race it won’t win.

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After a seemingly unstoppable surge higher for years, March was a tough one for tech stocks, as the curtain was lifted exposing Oz-like machinations behind the scenes that spooked investors enough to pop the bubble of delusion so many were living in.

After a magnificent 2017, Cryptocurrencies also started 2018 off poorly as yet another ‘bubble’ popped.

However, there was one ‘asset’ that had a tremendous 2017, and has gone on to greater and bubblier things in 2018.

Spot the real bubble in financial markets…

Bitcoin has bust, FANG stocks are FUBAR, but The SNB is accelerating.

As we noted previously, The SNB made 32 times more than 85 Swiss private banks… and owns a record $100 billion-plus of American stocks…

$11,589.01. – That’s the US dollar amount of American stocks the Swiss National Bank owns on behalf of every man, woman and child in Switzerland.

Let that sink in.

A Central Bank has taken on itself to expand its balance sheet and invest in the proceeds, not in gold, nor sovereign debt – heck not even in corporate bonds. Nope, the SNB has taken it upon itself to “invest” that money in another country’s most risky part of the capital structure – equity.

And don’t think it’s a small number. It’s almost $100 billion US dollars.

In a strange twist of fate, the Swiss National Bank is not only Switzerland’s Central Bank, but also a publicly traded security.

And that ‘security’ has had a great year so far – up a stunning 93%…

However, as Holger Zschaepitz notes, the market cap of the Swiss National Bank remains below CHF1bn amidst a profit of CHF54.4bn.

But that didn’t stop investors piling in to The SNB in March as a ‘safe haven’ as the rest of the world collapsed…

 

As Macro Tourist’s Kevin Muir concluded previously, I worry that right now, Central Banks are being rewarded for keeping their balance sheets as big and risky as they can stomach. It appears to be a trade with no cost, and in fact, helps out by both keeping their currency weak, and in the meantime, making some money. It encourages them to be extremely slow easing off the accelerator.

The idiocy of Central Banks taking this sort of risk is beyond description, but no sense arguing about it – it is what it is.

But, if this sort of Central Bank insanity continues at this pace even though the global economy is firmly in the green, then it only affirms my belief that Bill Fleckenstein was correct when he said, “the bubbles will continue until the bond market takes away the keys.”

PS: If the Federal Reserve decided to invest $11,589 in the US stock market per American citizen, they would need to buy $3.75 trillion of stocks… That would mean they would have to almost double the already inflated balance sheet. That’s the level of absurdity from the Swiss National Bank.

via RSS https://ift.tt/2JdIyDR Tyler Durden

After a seemingly unstoppable surge higher for years, March was a tough one for tech stocks, as the curtain was lifted exposing Oz-like machinations behind the scenes that spooked investors enough to pop the bubble of delusion so many were living in.

After a magnificent 2017, Cryptocurrencies also started 2018 off poorly as yet another ‘bubble’ popped.

However, there was one ‘asset’ that had a tremendous 2017, and has gone on to greater and bubblier things in 2018.

Spot the real bubble in financial markets…

Bitcoin has bust, FANG stocks are FUBAR, but The SNB is accelerating.

As we noted previously, The SNB made 32 times more than 85 Swiss private banks… and owns a record $100 billion-plus of American stocks…

$11,589.01. – That’s the US dollar amount of American stocks the Swiss National Bank owns on behalf of every man, woman and child in Switzerland.

Let that sink in.

A Central Bank has taken on itself to expand its balance sheet and invest in the proceeds, not in gold, nor sovereign debt – heck not even in corporate bonds. Nope, the SNB has taken it upon itself to “invest” that money in another country’s most risky part of the capital structure – equity.

And don’t think it’s a small number. It’s almost $100 billion US dollars.

In a strange twist of fate, the Swiss National Bank is not only Switzerland’s Central Bank, but also a publicly traded security.

And that ‘security’ has had a great year so far – up a stunning 93%…

However, as Holger Zschaepitz notes, the market cap of the Swiss National Bank remains below CHF1bn amidst a profit of CHF54.4bn.

But that didn’t stop investors piling in to The SNB in March as a ‘safe haven’ as the rest of the world collapsed…

 

As Macro Tourist’s Kevin Muir concluded previously, I worry that right now, Central Banks are being rewarded for keeping their balance sheets as big and risky as they can stomach. It appears to be a trade with no cost, and in fact, helps out by both keeping their currency weak, and in the meantime, making some money. It encourages them to be extremely slow easing off the accelerator.

The idiocy of Central Banks taking this sort of risk is beyond description, but no sense arguing about it – it is what it is.

But, if this sort of Central Bank insanity continues at this pace even though the global economy is firmly in the green, then it only affirms my belief that Bill Fleckenstein was correct when he said, “the bubbles will continue until the bond market takes away the keys.”

PS: If the Federal Reserve decided to invest $11,589 in the US stock market per American citizen, they would need to buy $3.75 trillion of stocks… That would mean they would have to almost double the already inflated balance sheet. That’s the level of absurdity from the Swiss National Bank.

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Via The Gatestone Institute,

Europe All Inclusive, a book by former Czech President Václav Klaus, co-authored by the Arab-speaking economist Jiří Weigl, recently published by Hungary’s Századvég School of Politics Foundation, has already been translated into six languages. The Századvég School of Politics Foundation is connected to the think tank Századvég, which, in turn, is close to the FIDESZ party led by Hungarian Prime Minister Viktor Orbán. In the book, the authors write:

“What we see today is a similarly fundamental challenge to the future of Europe… and especially its ‘integrated’ part, is riddled with hypocrisy, pseudo-humanism and other dubious concepts. [When] the most dangerous of them are the currently fashionable, and ultimately suicidal, ideologies of multiculturalism and human-rightism…

These ideologies promote the notion that migration is a human right, and that the right to migrate leads to further rights and entitlements including social welfare hand-outs for migrants…

Europe is weakened by the leftist utopia of trying to transform a continent that was once proud of its past into an inefficient solidaristic state, turning its inhabitants from citizens into dependent clients.“

In February 2018, Former Czech President Václav Klaus (left) delivered a copy of the Hungarian translation of his book, Europe All Inclusive, to Viktor Orbán (right), the Prime Minister of Hungary. (Image source: Václav Klaus Institute)

The following are excerpts of a speech, “Is Our Membership in the EU a Real Blessing?“, delivered by Václav Klaus at the Corvinus University of Budapest on February 22, 2018:

I came to Budapest to participate in the launching of the book about the recent mass migration to Europe. Its formal launching took place yesterday in the Hungarian Academy of Sciences.

Our ambition in writing the book was to contribute to the refutation of the false and misleading interpretations of the current European migration crisis. They have been promoted and propagated by the European political and intellectual elites with their progressivist, multicultural, politically correct views and attitudes. Their thinking is based on the untenable assumption that the mass migration is a positive social phenomenon. We strongly disagree. It is not a positive phenomenon, it destabilizes Europe, it endangers the peaceful and quiet developments in individual European countries.

History teaches us that any mass migration creates considerable cultural, social and political conflicts, shocks and tensions. Its costs have always been much higher than its benefits. We see it in Europe these days. The costs connected with it are high and visible and – to be frank – we have not been able to find any benefits from of it. It is evident that Europe does not need any mass migration.

We are aware of the specifics regarding the current mass migration, of the Hungarian stance, which is the result of the courageous — and in Europe singular and isolated — position of Prime Minister Orbán. We can assure you that his views are greatly supported in the Czech Republic. I am glad to say that my own views are very similar to Prime Minister Orbán’s views.

There are plenty of arguments suggesting that the contemporary migration crisis is connected with the post-democratic character of the EU: it is a by-product of the already long-existing European crisis; systemic errors and misconceptions of European policies; built-in defects of EU institutional arrangements, and the ideological confusions and prejudices of European multicultural political elites.

My criticism is based on the fact that we are – due to our EU membership – once again masterminded from abroad and that our sovereignty is again considerably constrained.

The substance of my polemics with the EU arrangements is based both on the criticism of the negative effects of the ambitions to centralize economically and excessively unify the European continent. It is also based on those who underestimate the negative consequences of undemocratically suppressing nation-states in favor of a pan-European governance.

In the communist era, our dream was to be free citizens, not just inhabitants of our non-free states. Regarding mass migration, the issue of citizenship has become crucial again. Citizenship reflects that one belongs to a particular political community. I strongly disagreed with a well-known and often quoted statement by President Obama, when he famously announced that he is “a citizen of the world”. The European political elites similarly keep saying that they are citizens of Europe. Yet, it is impossible to be a citizen of Europe. Europe is not a political community. One can only be an inhabitant of Europe.

I want to live in a Europe with less of the EU and with more of the nation-states. The currently prevailing EU ideology (I call it Europeism) systematically undermines the traditional, historically proven building blocks of the European society: the nation state, the family, the man.

I am very much in favor of the increased openness of the European society. It was attained in the first phase of the European integration process (in the era of the EEC and the EC). I am, however, very critical of the increased bureaucratic centralization, of the permanently growing regulations that suppress human activity, and of the frustrating de-democratization that is connected with the second phase of the European integration process (with the era of the EU), with the European unification. To sum it up, our membership in such an entity is a very mixed blessing. We should have the courage to say it loudly.

*  *  *

Václav Klaus is the former president and former prime minister of the Czech Republic and author more than 40 books, including: Europe All Inclusive: A Brief Guide to Understanding the Current Migration Crisis” (2017), Blue Planet in Green Shackles: What Is Endangered: Climate or Freedom? (2007) andRenaissance: The Rebirth of Liberty in the Heart of Europe (1997). The excerpts were shortened by Josef Zbořil and are reprinted here with the kind permission of the author.

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London has surpassed New York City’s murder rate for the second month in a row, due mostly to a spike in knife crime and shootings which left 15 Londoners dead in February – nine of whom were age 30 or younger, and 22 dead in March vs. New York City’s 21, according to the Sunday Times.

While both cities have around 8.5 million people, NYC’s murder rate has dropped by around 87% since the 1990’s, while London’s has grown approximately 40% in just three years – not including deaths from terrorist attacks. Experts have credited the NYPD’s zero-tolerance policing model driving down the homicide rate in NYC from around 2,000 deaths in 1990 to 230 last year. 

London, however, is experiencing a spike in violent crime. 

On Saturday a murder probe was launched after a 36-year-old woman was killed in what is believed to be the 30th incident of fatal knife crime in the capital this year. 

The death came just hours after a man 23-year-old man died after being stabbed in the neck in Plumstead, south-east London on Thursday evening.

Jacob Whittingham, charity head of programmes for Fight for Peace, told the paper: “What’s scary about London is the randomness of the crime. –standard.co.uk

“With young people in London, you have no idea if and when you may be the victim of a violent crime — that’s why they feel the need to carry weapons.” 

The latest victim was stabbed to death after leaving an Earlsfield bar in south West London early Saturday morning. Police responded to a call around 1:10 a.m. that a man had been found injured on Ellerton Road, only to find a 20-year-old man suffering from a stab wound. Despite efforts to save his life, the man was declared dead at the scene just before 2 a.m. 

A 21-year-old man has been arrested on suspicion of his murder, and is currently in custody at a west London police station.

Detective Chief Inspector Mark Cranwell said: “Sadly, another family has been left devastated with the tragic death of a young man from an act of violence. We are appealing to anyone who was in the area to come forward.”

That said, London remains substantially safer overall in comparison to New York City – with fewer than half of the homicides NYC experienced in 2017. That said, according to the Telegraph, a person is nearly six times more likely to be burgled in London than in New York City, and 1.5 times as likely to fall victim to a robbery. 

London also has nearly three times the number of reported rapes, however the Telegraph notes that differences in reporting methodology may account for the vastly higher number in London.

London Metropolitan police commissioner, Cressida Dick, says that social media is partly to blame for the rise in knife violence, and battling gangs have sparked up longstanding “postcode wars,” so – you know, not migrants. 

“London remains one of the safest cities in the world,” a spokesperson for the Metropolitan Police told The Independent. ”The Met is concerned at the increase in murders in London, and specialist detectives from the Met’s Homicide and Major Crime Command are investigating.

“One murder is one to many, and we are working hard with our partners to understand the increase and what we can all do to prevent these tragedies from happening in the first place.”

To combat the rising violence, Dick has announced a new task force of around 100 officers to help tackle violent crime in London. 

Hopefully they’re more effective than these super troopers:

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