Category: zerohedge

Authored by Daniel Lacalle via DLacalle.com,

Much has been written about the economic disaster perpetrated by the Maduro-Chavez regime in Venezuela. The magnitude of it is simply difficult to match. A sad global example of how to destroy a rich country.

The mistake that many make is to think that this wreck has been caused by a combination of incompetence and folly. And they are wrong. The Venezuelan socialist regime has carried out the largest organized robbery in history and has done so with a perfectly designed plan.

The plan was always to expropriate the wealth of the whole country for the benefit of a few political leaders through plundering, destruction of currency and decapitalizacón of the state oil company

What has happened to Venezuela is not a disaster or a coincidence, it is socialism.

It is important to start by debunking the lies of the regime propaganda:

The nonexistent blockade. The United States is one of Venezuela’s largest trading partners. Trade between the United States and Venezuela in 2018 grew by more than 9%. Venezuela has bilateral trade agreements with more than 70 countries. Chavismo, like the Castro regime in Cuba, manipulates its followers by calling the sanctions against members of the regime and the fraudulent use of the country’s funds a “blockade”. The only blockade suffered by Venezuela is that of Chavismo against its citizens.

The nonexistent excuse of oil prices. Venezuela is the only OPEC country in economic depression and hyperinflation. All the oil-producing countries have adapted their economies without falling into the economic destruction and generalized poverty created by Chavismo in Venezuela. Chávez used to say “put the price of oil at zero and Venezuela will not enter into crisis”. It was not necessary. Venezuela squandered the oil revenues received during the first decade with Chavez when crude oil prices rose exponentially and destroyed any hint of wealth later.

The real coup d’état. The only coup is the one that Maduro perpetrated when he manipulated an election whose result was not recognized by the majority of Western countries, with a totalitarian constituent process whose result is not recognized even by the company in charge of the voting system (Smartmatic). Chavismo has used seemingly democratic instruments to silence and destroy the National Assembly and perpetuate Maduro in power through fraudulent elections.

“It is not real socialism”. Many say that Venezuela is not true socialism. If anything has characterized the Venezuelan regime is that it has applied the socialist recommendations and policies by the book: Systematic attack against property rights and nationalization of means of production as established in the National Socialist Plan 2007-2013: expropriate companies, use the box of state companies to political purposes, impose intervened prices and print money massively.

The Venezuelan economic wreck is the biggest organized robbery in history:

First robbery: Expropriation. The Center for the Dissemination of Economic Knowledge (Cedice) estimates that more than 2,500 companies have been expropriated by the Chavez-Maduro regime. Of these companies, the vast majority are now bankrupt and have been devastated by socialist management. The NGO Transparencia Venezuela, in its report Property Owned by the State in Venezuela, describes as “terrible” the management of expropriated companies using ideological and political criteria: “Instead of increasing production, it has decreased.”

Second robbery: the decapitalization of PdVSA. In 1998, PdVSA produced 3.5 million barrels per day, today it does not reach 1.3 million. Meanwhile, the government multiplied the number of employees, firing many excellent Venezuelan engineers and filling the company with crony political supporters, going from 25,000 employees in 1998 to 140,000 in 2017.

PdVSA went from being one of the most efficient and important oil companies in the world to a disaster on the verge of bankruptcy. From their financial statements, it appears that the government drained up to 12 billion US dollars in some years to finance political spending, destroying the cash-flow, balance sheet and the future of the company. These funds have disappeared in a network of clientelistic interests and offshore accounts of regime leaders. Brutal cost increases, spectacular worsening of production and plundering of the cash flow to pay for political spending led the company to increase debt to more than 34 billion dollars, after having been one of the most profitable and with the best balance sheets in the world.

Third robbery: Savings and wages. Inflation, the tax of the poor.  The Chavez regime economic advisers repeated, “printing money for the people does not cause inflation”… Money supply has been increasing exponentially, by 3,000% in a single year, 2018, destroying the purchasing power of the currency.

The strategy is simple, and it is textbook socialism: The government massively increases spending, subsidies and public employment printing local currency thinking that the dollars come from heaven because the Government says so. Then, it destroys its economy by expropriating companies, sinking the private initiative and imposing prices that do not cover the cost of production due to the destruction of the purchasing power of the currency. As such, the economy enters into a downward spiral, so the government continues to spend even more in nominal terms and finances it by printing more worthless paper notes while its foreign exchange reserves plummet. The currency becomes worthless and the government generates hyperinflation and poverty.

Venezuela is today the most unequal country in Latin America (ENCOVI, 2017) and one of the poorest. In 2014, extreme poverty was 23.6% and in 2017 it was 61.2%. Total poverty exceeded 87% in 2017 (according to a study by the Central University of Venezuela and the Simón Bolívar University). Venezuela’s economic freedom score according to the Economic Freedom Index of the Heritage Foundation is 25.9, making its economy the 179th in terms of freedom in the 2019 Index. One of the least free economies in the world. According to the Index “monetization of large public deficits, coupled with mismanagement of the state-dominated oil industry, has led to hyperinflation and shortages of foreign currency, basic goods, and industrial inputs. An economic plan launched in August 2018 included the removal of five zeroes from the currency, a massive devaluation, and another large increase in the minimum wage amid persistent ad hoc policy interventionism, heavy state control of the economy, and blatant disregard for the rule of law”.

During the dictatorship of Maduro inflation has reached one million percent and the IMF estimates that it will be 10,000,000% by 2019. Ricardo Hausmann, a professor at Harvard University, perfectly explained the destruction via printing of currency: “When Chávez came to power, the dollar was at 0.547 bolivares (547 of the old). When Maduro arrived it was 26 bolivars: 48 times more expensive. Now Maduro devalued to 6,000,000, 231,000 times more expensive than he found it and 11,000,000 times more expensive than when Chávez arrived. ” Thus, after several increases in the minimum wage on paperless paper, that minimum wage has been at less than $ 17 per month. “Printing money for the people.”

The result of this organized robbery? More than 300 billion US dollars stolen, according to the National Assembly, a devastated economy and massive poverty. Textbook socialism, same results as always.

via ZeroHedge News http://bit.ly/2D12gkj Tyler Durden

More than ten years have passed since Lehman Brothers filed for bankruptcy, ushering in the most acute phase of the financial crisis. And while the punishing affects of the crisis have permanently harmed the finances of middle-class Americans and citizens of other Western nations – savings rates remain at post-crisis lows and fewer adult Americans own stocks than at any point in recent memory – no bank executives have faced criminal penalties – that is, until very recently.

The first trial of a group of banking executives pertaining to fraud that occurred during the crisis began earlier this month in a London courthouse. And while it has nothing to do with sales of the toxic mortgage backed securities and subprime loans that nearly brought down the financial system and forced millions of consumers out of their homes, it might be the closest thing to closure that the UK’s Serious Fraud Office can offer.

As we reported a few weeks back, four Barclays executives, including former CEO John Varley, are on trial for fraud related to two emergency capital raises undertaken in 2008. To try and stave off nationalization (which would have devastated shareholders and, more importantly, placed the executives’ bonuses at risk) the bank turned to a group of Qatari investors who pumped a total of roughly 12 billion pounds (nearly $16 billion) into the bank. In exchange for the emergency loans, Barclays paid 322 million pounds ($423 million) in “fees” – which were, in reality, “dodgy” payoffs to the Qatari sheikh who arranged the financing. To ensure that the deal went through, the executives allegedly conspired to conceal these payments from their investors, the British state and – most importantly – the press.

John Varley

Now that the jury has been selected and the trial begun in earnest, some more juicy details about the prosecution’s case are beginning to leak to the media. To that end, Bloomberg reported that the SFO has produced emails, phone calls and transcripts of conversations to demonstrate to the jury that the four men conspired to mislead investors by entering into fake advisory deals with Qatar to conceal the side payments, and making up a “misleading audit trail” to mask the fact that the money was sent directly to Virgin Islands-based company called “Challenger” that was controlled by the family of then-Prime Minister Sheikh Hamad bin Khalifa Al Thani.

Advisors to Varney reportedly were surprised that he had agreed to go along with the “dodgy” deal.

After lengthy discussions in June 2008, Sheikh Hamad agreed to declare his interest in Challenger, but Varley’s willingness to allow him to be paid a commission structured as an advisory fee still surprised Jenkins, the point man on dealing with the Qataris. He described Sheikh Hamad’s demands as “dodgy” and “wrong,” according to phone transcripts.

The discussions presented on Friday related to the first capital raising, in which the Barclays executives agreed to pay the Qataris a 3.25 percent investment commission – more than double the rate other investors were getting. They agreed to make the extra payments via a deal in which the Qataris would purportedly deliver advice to the bank in the Middle East.

[…]

“I’m very surprised that John Varley, given his ethics, is doing this,” former Middle East head Roger Jenkins told colleague Richard Boath in a phone call that was played to the jury. “It’s like having the president of the United States advise JP Morgan, you just can’t have it.”

In correspondence between the four men and other Barclays employees, European Financial Institutions Head Richard Boath, one of the four executives charged with fraud, joked that he wouldn’t wind up in the dock if the deal were uncovered because he owns a home in Brazil, which doesn’t have an extradition treaty with the UK.

The executives said they were seeking advice from their lawyers on the matter, according to transcripts of the conversations. At one point, Boath asked Barclays lawyer Judith Shepherd whether they would have to demonstrate that the Qataris actually provided services. Shepherd said that they would if there were challenges from investors, the regulator or criminal authorities.

“I’m already feeling sick,” Boath responded. “I wouldn’t have agreed to it, but there you go.”

“Well big dog will be in the dock first,” Shepherd said, referring to Jenkins. “We’re not playing a game here.”

When Barclays presented a draft advisory agreement to the Qataris, it was roundly rejected, Boath said in another call with Shepherd.

“I could hear the spit landing on the telephone,” he said.

“I do know what he’s getting at but he’s got to grow up,” Shepherd said. “He is going to have to give the services in exchange, otherwise you are going to end up in front of the Fraud Squad explaining why.”

“No, I’ve got a house in Brazil, there’s no extradition treaty,” Boath joked. “I’m off.”

In another phone call, Roger Jenkins, the bank’s former Middle East head who helped arrange the deal, chided his colleagues to stop worrying about what might happen if authorities caught wind of their scheme and just “get on with it.”

In a phone call with Kalaris, Boath raised the possibility of their plan being discovered, prosecutor Brown said, and played a recording of the conversation.

“There’s obviously the jeopardy that we’re rumbled and people say well that was bulls–t, you know, this is just a fee in the backdoor,” Boath said.

“My guess is that we will be completely protected if we disclose that we had an arrangement, right?” Kalaris responded, with Boath then saying that “everyone will have a view on this.”

As Barclays hesitated about the fees, fearing the investment may be blocked by regulators, Jenkins grew impatient.

“F–king stop messing around you stupid people,” Jenkins said in a phone call with Boath, which was played to the jury. “We want their money, so take the f–king risk. Just put it in the prospectus, let’s just move on for f–k’s sake.”

During the crisis, the ever-present fear that the government could turn up at their front door and nationalize the bank led to “paranoia” among top executives, including Investment Banking head Bob Diamond, who went on to become CEO of Barclays (before being toppled in the aftermath of the Libor scandal). He hasn’t been charged in the case.

“John is scared to death that the government turn up tomorrow morning,” Jenkins said in the recording. “And Bob is f—ing paranoid.” Diamond was also worried about losing his job, he added.

Despite the brazenness of these comments, the SFO still has its work cut out for it: prosecutors already botched a criminal case against the bank itself. And due to a shakeup in the people running the probe, many are worried that the SFO might miss what could be its best shot at punishing banking executives for misdeeds committed during the crisis.

via ZeroHedge News http://bit.ly/2HAMxxy Tyler Durden

Authored by Mac Slavo via SHTFplan.com,

The Massachusetts attorney general has declared that the family behind the drug Oxycontin is responsible for the opioid epidemic ravaging the United States.  Purdue Pharma and eight members of the Sackler family who own the company, are being accused of personally starting the opioid crisis by deceptively selling Oxycontin.

According to CBS News, MA attorney general, Maura Healey alleges the Sackler family hired “hundreds of workers to carry out their wishes.” Those wishes included pushing doctors to get “more patients on opioids, at higher doses, for longer, than ever before” all while paying “themselves billions of dollars.” In her lawsuit, Healey names eight members of the family that own Purdue Pharma, alleging they “micromanaged” a “deceptive sales campaign.” In the conclusion to the complaint, Healey said the Sackler family used the power at their disposal to engineer an opioid crisis.

About 400,000 people died from opioid overdoses between 1999 and 2017, according to the Centers for Disease Control and Prevention. The opioid epidemic is also being blamed for the drop in life expectancy in the United States that has been falling since its peak in 2014. On average, about 130 Americans die every day from an opioid overdose.

“They don’t want to accept blame for this. They blame doctors, they blame prescribers and worst of all, they blame patients,” Healey said.

Purdue Pharma, on the other hand, called the accusations “a rush to vilify” the drugmaker.

Healey also said that Purdue Pharma and the Sackler family are “one and the same.”

There’s a lot in the lawsuit that’s still redacted, and lawyers for Purdue plan to argue on Friday that it should stay that way, reported CBS News.

In a statement, Purdue Pharma said the lawsuit “distorts critical facts” and “cherry-picked from among tens of millions of emails and other business documents.” In one such alleged instance, then-president Richard Sackler devised what Healey describes as Sackler’s “solution to the overwhelming evidence of overdose and death,” writing in a confidential email, “we have to hammer on the abusers in every way possible. They are the culprits and the problem.”

“Massachusetts’ amended complaint irresponsibly and counterproductively casts every prescription of OxyContin as dangerous and illegitimate, substituting its lawyers’ sensational allegations for the expert scientific determinations of the Food and Drug Administration (FDA) and completely ignoring the millions of patients who are prescribed Purdue Pharma’s medicines for the management of their severe chronic pain.

In a rush to vilify a single manufacturer whose medicines represent less than 2 percent of opioid pain prescriptions rather than doing the hard work of trying to solve a complex public health crisis, the complaint distorts critical facts and cynically conflates prescription opioid medications with illegal heroin and fentanyl, which are the leading cause of overdose deaths in Massachusetts. Throughout the complaint, the Commonwealth disregards basic facts about Purdue’s prescription opioid medications…”

– Purdue Pharma to CBS News in a statement

Massachusetts is one of 36 states now suing Purdue Pharma. The states are accusing the company of deception in downplaying the dangers of OxyContin. In a 2007 federal settlement, the company admitted to falsely selling the drug as “less addictive” than rival products and were therefore forced to pay $630 million in fines.

Because of the highly addictive properties of opioids, CBD oil is fast becoming a replacement for expensive and dangerous drugs like Oxycontin.  Studies have found that CBD oil is effective for treating neuropathic pain, arthritis pain, anxiety, sleep disorders, and depression.

“I’ve had some patients that have been able to get off some of those pain medications, which they hated taking,” said pharmacist Ira Katz. “It has no addictive properties and far less side effects than do a lot of the prescription pain medications.”

And you get the added bonus of staying out of the increasing drama between government and Big Pharma regarding the blame game for the opioid epidemic.

via ZeroHedge News http://bit.ly/2RkuDid Tyler Durden

For those not holding their breath, the results are in from the United Arab Emirates’ gender equality awards. Perhaps to be expected when a foremost Sunni Gulf autocratic oil and gas state that mimics a medieval feudal monarchy decides to showcase its “progress” in the area of gender equality in the workplace, we have something that sounds straight out of The Onion, but is all too real.

As The Guardian reports, social media exploded in laughter and ridicule “after it emerged that all of the winners of an initiative designed to foster gender equality in the workplace were men.”

Indeed the “awards ceremony” photo op was classic, featuring an all-male cast of honorees receiving awards in the following categories: Best Personality for Supporting Gender Balance, Best Federal Entity for Supporting Gender Balance, and the Best Initiative for Supporting Gender Balance.

UAE Vice President and ruler of Dubai, Sheik Mohammed bin Rashid al-Maktoum, bestowed the certificates and medals in a ceremony on Sunday on the male winners representing various government ministries, including the finance ministry, the federal competitiveness and statistics authority and ministry of human resources respectively.

Thus the additional absurd element is that the UAE government was essentially handing out government “gender equality” recognition awards to itself. This included top ranking generals given that the deputy prime minister and minister of the interior, Lt Gen Sheikh Saif bin Zayed al-Nahyan, received the “best personality supporting gender balance” — supposedly for his tireless efforts implementing maternity leave in the UAE’s military.

. @HHShkMohd honors the winners of the Gender Balance Index 2018. The Index features three categories: Best Personality for Supporting Gender Balance, Best Federal Entity for Supporting Gender Balance, and the Best Initiative for Supporting Gender Balance. #UAE pic.twitter.com/qE5GkYHzTo

— Dubai Media Office (@DXBMediaOffice) January 27, 2019

“We are proud of the success of Emirati women and their role is central to shaping the future of the country,” a tweet from the official Dubai media office announced. “Gender balance has become a pillar in our government institutions.”

Of course, the internet had a good laugh over the UAE’s self-congratulatory progress in  “gender balance”…

pic.twitter.com/ecjh6wk5KX

— Ana Lúcia (@AnneCalie) January 28, 2019

nice pic.twitter.com/A368mmdEot

— Seth Cowan (@Crystal_SethLab) January 27, 2019

pic.twitter.com/Vh0YksvnEf

— Weesue – Ex Fundy (@weesue) January 28, 2019

And the Dubai Media Office’s follow-up tweet dug a deeper hole, after perhaps realizing that a few token women needed to be thrown into the group photo op and media statement. It said: “We are proud of the success of Emirati women and their role is central to shaping the future of the country.” 

. @HHShkMohd: We are proud of the success of Emirati women and their role is central to shaping the future of the country. Gender balance has become a pillar in our governmental institutions. #UAE pic.twitter.com/zKPkn9nTMd

— Dubai Media Office (@DXBMediaOffice) January 27, 2019

Don’t forget to add a few women in the group shot…

See you next year men for the “Gender Balance Index 2019” awards show…

via ZeroHedge News http://bit.ly/2G7djva Tyler Durden

Confirming earlier reports that distressed California utility PG&E had rejected a proposal by some of the world’s most prominent investors that would keep it out of bankruptcy, moments ago Bloomberg reported that the board of the embattled utility which is facing $30 billion in wildfire liabilities, voted late Monday to file for bankruptcy protection as soon as midnight.

In pursuing a Chapter 11 bankruptcy filing, PG&E is declining a proposal by an investing group led by Paul Singer’s Elliott Management that would’ve been backed by $4 billion in bonds and given the company enough cash to stay avoid bankruptcy while working through its liabilities. A second group of investors including Ken Griffin’s Citadel and Leon Black’s Apollo who had pitched a rival plan, were also rebuffed.

By rejecting the last minute rescue bids, PG&E – which was rated investment grade as recently as a few weeks ago by both S&P and Moody’s- is set to file one of the biggest U.S. utility bankruptcies of all time, with over $30 billion in debt about to be in default. The company  which serves 16 million customers, said a Chapter 11 filing is the only way it can handle the crippling costs of 2017 and 2018 wildfires that its equipment has been blamed for igniting. Since November, when California was hit by the deadliest fire in its history, the company has seen its shares plunge by 75 percent and its credit rating cut to junk.

By going from investment grade to bankruptcy within one year, PG&E will be what BofA recently dubbed not a “fallen angel” but a “failing angel”, representing a singular event: when it files for bankruptcy some time in the next 12 hours, PG&E will become the third largest IG default since 1999, behind Lehman and Worldcom, with $17.5bn of index eligible debt.

The chart below lists all US index defaults since 1999 that occurred within one year of being included in ICE BofAML benchmark US high grade index. The three largest defaults in terms of index notional were Lehman ($34.9bn), WorldCom ($22.9bn) and CIT Group ($12.4bn).

By filing before the end of the month, PG&E joins an exclusive group of formerly-IG companies, including Enron, Lehman and MF Global, that defaulted directly out of IG, before making it into the HY index first as Fallen Angels.

The last minute investor proposals to provide PG&E with emergency funding were spurred by last week’s surprising finding that PG&E wasn’t responsible for 2017’s Tubbs Fire, the deadliest of the Wine Country blazes that tore through Northern California. The goal was to buy PG&E more time to seek relief from wildfire claims, perhaps through an act by state legislature, according to the people.

In the end, however, it was not enough.

The PG&E board vote followed a decision by California utility regulators to approve a waiver allowing PG&E to access $5.5 billion of debtor-in-possession financing, which is necessary to allow the company to operate under Chapter 11 protection. Bankers have been seeking to offer parts of that financing to investors, and after meeting resistance from some potential lenders, were still poised to sell the debt, Bloomberg reported.

And while it is unclear how many bonds PG&E’s various investment consortiums own, one clear loser is BlueMountain Capital, which similar to Baupost, bought PG&E shares right before the stock collapsed, and challenged the California power giant’s plans to seek bankruptcy protection. In an open letter to PG&E’s board, it said there is “overwhelming evidence” that the utility holding company is solvent — and that a bankruptcy filing is “damaging, avoidable and unnecessary.”

In retrospect, it may have also been inevitable, and the result will be tens of millions in losses for BTFDers like BlueMountain.

In a regulatory filing, BlueMountain also cited a PG&E form 8-K earlier this month in which the company said it could shore up liquidity by using its assets to secure more capital, or access alternative capital. A spokesman for BlueMountain declined to comment on whether the firm is working with either of the rival financing groups.

Meanwhile, oblivious to the demands of its vocal shareholders, PG&E is already preparing for life under bankruptcy protection with Reuters reporting that the company is set to hire turnaround specialist James Mesterharm as its chief restructuring officer to help the company navigate bankruptcy proceedings.

Mesterharm, a managing director at AlixPartners, previously served as restructuring chief at Eastman Kodak during its bankruptcy proceedings, and also advised General Growth Properties and Zenith Electronics during their Chapter 11s. He has advised PG&E in the weeks leading up to its anticipated bankruptcy filing, Reuters said.

via ZeroHedge News http://bit.ly/2RnyX0e Tyler Durden

Just hours after The Bank of England refused to hand over $1.2 billion of Venezuela’s gold from its custody vaults (stored there after the completion of a gold-swap transcation with Deutsche Bank) to President Maduro (after heavy lobbying from US officials), The Guardian reports that a UK foreign office minister is now urging the same Bank of England to transfer the bullion to the self-proclaimed interim leader Juan Guaidó.

In a statement to British MPs, Sir Alan Duncan said the decision was a matter for the Bank and its governor, Mark Carney, and not the government. But he added:

“It is they who have to make a decision on this, but no doubt when they do so they will take into account there are now a large number of countries across the world questioning the legitimacy of Nicolás Maduro and recognising that of Juan Guaidó.”

Guaidó has already written to Theresa May asking for the funds to be sent to him.

The former chair of the foreign affairs select committee Crispin Blunt said the current Venezuelan central bank president was not legitimate, since he had not been appointed by the country’s national assembly.

Blunt has sent letters to the foreign secretary, Jeremy Hunt, and to the chancellor, Philip Hammond, urging a decision.

Notably, the reason the BoE initially gave for its initial refusal to release was due to its insistence that standard measures to prevent money-laundering be taken – “including clarification of the Venezuelan government’s intentions for the gold.”

“There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain,” the newspaper said.

Separately, as we reported previously an official told Reuters that the repatriation plan has been held up for nearly two months due to difficulty in obtaining insurance for the shipment, needed to move a large gold cargo:

“They are still trying to find insurance coverage, because the costs are high,” an official told Reuters.

All of which appears to have suddenly been swept under the carpet now Guaidó has been installed.

Duncan said Hunt would be discussing the next steps in the European Union’s efforts to support Guaidó in Bucharest on Thursday.

However, it’s not a done deal yet as  shadow foreign secretary, Emily Thornberry, cautioned against a rush to oust Maduro:

“Judging by its record in recent years, the Maduro government fits none of those descriptions, but I would also believe that it is a mistake in situations like this simply to think that changing the leader will automatically solve every problem, let alone the kind of US-led intervention being threatened by Donald Trump and [the US national security adviser] John Bolton.”

Nevertheless, with much of the Western world now backing Guaidó in his coup, it seems the gold bullion will be winging its way to The Assembly’s coffers very soon.

via ZeroHedge News http://bit.ly/2HDlq5c Tyler Durden

Following the US prosecutors decision to charge Huawei with financial fraud, Chinese tech stocks are tumbling on concerns the trade war will hit corporate profits.

Bloomberg notes that shares of Huawei suppliers are also impacted after the U.S. accused Huawei of stealing trade secrets and defrauding banks.

• In Taipei, TSMC -3.1%, Largan -1.5%, MediaTek -1.4%

• In Hong Kong, ZTE Corp. -1%; China Telecom -1.4%; China Unicom -1.3%; Sunny Optical -4.1%; Q Technology -2.3%; Chinasoft International -4.8%

• In China, Zhejiang Crystal-Optech -3.6%; O-film Tech -6.5%; Shenzhen Everwin Precision -2.6%; Sunwoda Electronic -3%; Shenzhen Sunyes Electronic Manufacturing -1.5%; Shenzhen Sunway Communication -3.5%; Fiberhome Telecom Technologies -2%.

US tech companies are also under further pressure overnight as Nasdaq futures slide to the day-session lows…

via ZeroHedge News http://bit.ly/2RTGid6 Tyler Durden

Authored by Tim Daiss via Oilprice.com,

Much has already been written about how Qatar, Australia and even the U.S. are jockeying to lock in global LNG market share. The race for top LNG global producer comes as global markets for the super-cooled fuel morphs from usually distasteful (from the buyer’s perspective) over-reliance on long-standing 20-year restrictive off-take agreements to a mix of long-term agreements, mid-term deals, short and pure spot deals, while a myriad of players, including trading houses like Trafigura, Vitol, Gunvor and Glencore are changing market fundamentals. These changes will increasingly see the fuel trade more like a real commodity in some ways similar to the world’s top two traded commodities: crude oil and iron ore. These top four LNG trading houses, for their part, traded approximately 27 mt of LNG in 2017- – around nine percent of total LNG sold worldwide, while the amount in 2018 increased as these four heavyweights were joined by even more traders of all sizes.

As more countries start to import LNG to offset over-reliance on dirtier burning fossil fuels, including coal and even crude oil, much is at stake for both producers and buyers. For Qatar, until recently unaccustomed to challenges to its top LNG spot, the stakes could be the highest of all players involved. The tiny, gas-rich kingdom already left OPEC (likely under geopolitical pressure) and is now planning to increase its already impressive 77 million tonnes per annum (mtpa) liquefaction capacity to 110 mtpa within five years. For the Qataris, not only is national pride on the line as it seeks to fend off Australia’s recent attempts to usurp it from top global LNG producer, but its very survival geopolitically and economically is at stake too.

Isolated Qatar, no more

Qatar finds itself in an unenviable position, mostly ostracized by its Arab neighbors over allegations of terrorism funding, which Doha denies, and still suffering a boycott instigated in 2017 by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. Qatar has little choice but to defend its LNG production and exporting prowess, as well as diversifying and investing in rival LNG producers’ LNG sectors, including the U.S.

Australia, though admittedly dependent on energy exports, mostly LNG and coal, is not as vulnerable as Qatar, while the U.S., which could compete with both Qatar and Australia in terms of liquefaction capacity by the mid to last part of the next decade if more projects are pushed through, has the most diversified economy in the world, including currently being the top crude oil producer with that position likely to remain at least in the mid-term.

Qatar’s FDI pivot

Amid all of these developments, Qatar is now courting foreign countries to invest in its gas sector. On Wednesday, a Reuters report, citing industry sources, said that Qatar is preparing to issue a tender for energy firms seeking a stake in its gas expansion project, drawing interest from long-standing partners as well as newcomers Chevron, Norway’s Equinor and Italy’s Eni. Plans to expand Qatar’s LNG facilities, already the largest in the world, by more than a third in the next five years are considered one of the most lucrative investments in the rapidly growing global gas market, the report added.

State-run Qatar Petroleum (QP) is also preparing to issue a tender seeking partners to invest in the construction of a fourth LNG train, or production line, that will see its capacity grow to 110 mtpa.

Qatar’s pivot from mostly self-financing its gas sector to offering ownership to foreign firms is also a cleverly orchestrated geopolitical move, considering its still terse tensions with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. It’s a hedge that in case relations with the four major Arab countries continue to sour, it has the protection of foreign oil companies vested in its energy sector – a pure energy play with brilliant geopolitical overtones.

via ZeroHedge News http://bit.ly/2G8WKPp Tyler Durden

A subsidiary of Google’s parent company Alphabet, Sidewalk Labs, is using real-time mobile location data from millions of cellphone users collected over long periods of time in order to help urban planners make critical decision on transportation and land use. The program, known as Replica, gathers and anonymizes cellphone user data, then models simulations which allow civil engineers see when, how and where people travel in Urban areas.

“Replica provides a full set of baseline travel measures that are very difficult to gather and maintain today, including the total number of people on a highway or local street network, what mode they’re using (car, transit, bike, or foot), and their trip purpose (commuting to work, going shopping, heading to school),” wrote Nick Bowden of Sidewalk Labs last year. 

The problem? According to The Intercept, transportation authorities in cities adopting the technology such as Kansas City, Portland and Chicago have no clue where the data is coming from, and Sidewalk’s lack of transparency has raised questions over privacy rights.

“The privacy concerns are pretty extreme,” said urban technology expert and author, Ben Green, in an email to The Intercept. “Mobile phone location data is extremely sensitive.”

An Associated Press investigation showed that Google’s apps and website track people even after they have disabled the location history on their phones. Quartz found that Google was tracking Android users by collecting the addresses of nearby cellphone towers even if all location services were turned off. The company has also been caught using its Street View vehicles to collect the Wi-Fi location data from phones and computers. –The Intercept

While Sidewalk claims that the data they collect from unspecified third-party vendors is “de-identified” – a process by which an individual’s identifying information is stripped from the dataset,” location data can be used to “re-identify” a person based on their habits. 

“It’s obvious what home people leave and return to every night and what office they stop at every day from 9 to 5 p.m,” said Tamir Israel, a staff lawyer at the Canadian Internet Policy & Public Interest Clinic. 

If Sidewalk Labs has access to people’s unique paths of movement prior to making its synthetic models, wouldn’t it be possible to figure out who they are, based on where they go to sleep or work? “We see a lot of companies erring on the side of collecting it and doing coarse de-identifications, even though, more than any other type of data, location data has been shown to be highly re-identifiable,” he added. –The Intercept

In short – while Sidewalk claims to go to great lengths to safeguard privacy because the data they use is already de-identified (using methods such as aggregation, differential privacy techniques, or outright removal of unique behaviors, according to The Intercept), their lack of transparency means we have no way to know if this is true or not. 

Sidewalk says they buy their data from telecommunications companies and companies which aggregate mobile location data from various apps. “We audit their practices to ensure they are complying with industry codes of conduct,” said Bowden. “No Google data is used. This extensive audit process includes regular reporting, interviews, and evaluation to ensure vendors meet specified requirements around consent, opt-out, and privacy protections.”

Yet because the exact sources of data have not been revealed, it is unclear whether Replica draws from the ranks of unregulated apps that profit from indefinite privacy policies to continuously collect users’ precise whereabouts. Publicly available documents from cities piloting or purchasing Replica offer conflicting information about Replica’s exact sources of data. A document from the Illinois Department of Transportation describes Replica’s data sources as “mobile carrier data, location data from third-party aggregators and Google location data, to generate travel data for a region.” This data sample, it adds, “is not limited to Android devices” and “is collected from individuals for months at a time, allowing for a complete picture of individual travel patterns.” In Portland, documents filed with its city council state that the data is sourced from “Android Phones and Google apps.” Officials at the Portland Bureau of Transportation told Oregon Public Broadcasting that some of the sources of Sidewalk Lab’s mobile location data may also come from other sources, not yet known to them. Minutes from a regional transit planning meeting for Kansas City suggest that it’s possible for Replica “to get data on things like Uber & Lyft,” while a city PowerPoint states that the tool is “based off of Google data.” –The Intercept

“Replica is a perfect example of surveillance capitalism, profiting from information collected from and about us as we use the products that have become a part of our lives,” says Brenda McPhail who heads up the Canadian Civil Liberties Association’s Privacy, Technology and Surveillance Project. 

“We need to start asking, as a society, if we are going to continue to allow business models that are built around exploiting our information without meaningful consent.”

via ZeroHedge News http://bit.ly/2RTpXoJ Tyler Durden

Authored by Max Gulker via The American Institute for Economic Research,

The most effective politicians often have a kind of cynical genius for speaking the language of feelings while brazenly disregarding facts. Count Rep. Alexandria Ocasio-Cortez among them. Her statements at a Martin Luther King Day event this week have almost too many fallacies to count:

Millennials and people, you know, Gen Z and all these folks that will come after us are looking up and we’re like: “The world is gonna end in 12 years if we don’t address climate change and your biggest issue is how are we gonna pay for it?”…This is our World War II.

At Reason, Nick Gillespie dismantles two of those fallacies. First, Ocasio-Cortez’s cavalier approach to paying for her preferred environmental programs invalidates her comparison to the Second World War, where the government raised taxes and borrowed heavily from its citizens. Second, as I also wrote recently, climate change poses real risks, but they’re the type of risks to be approached by looking at costs and benefits rather than the existential risks posed by Hitler, Mussolini, and Imperial Japan.

But in her invocation of a generational struggle, Ocasio-Cortez unknowingly revealed that the left is stuck in a framework for addressing societal problems that is largely a relic of history. And those who argue against its policy prescriptions often unwittingly make the same assumption.

Strong centralized nation-states are good at marshaling resources to defeat other nations in wars. But how have more recent “wars” we’ve fought against drugs, poverty, and terrorism turned out? Society has gone through staggering changes since 1941, and so have the problems we face. The left should think long and hard about these changes before planning its next round of wars.

The “Wars” We’ve Lost

A comparison to the failed war on drugs is instructive. The belief was that the government could attack both the supply and demand sides of illegal substances with strong, centralized action. But ending the sale and abuse of drugs is a vastly different problem from winning military battles against a nation led by a tyrant. Drug abuse is a fundamentally dispersed problem. Rogue smugglers and dealers have command structures far more complicated than nations. And users make tragic and unhealthy decisions for a wide variety of reasons that “experts” still have trouble understanding.

The problems our society has with drugs are the emergent results of billions of complexly interwoven individual decisions. They are nothing like those in a traditional military conflict. And because we tried to address them that way, it’s hard to say we haven’t failed. And Lyndon Johnson’s war on poverty involved massive public housing projects that made problems worse along with clever-sounding welfare programs – again centralized solutions to decentralized problems. And the actual military and security threats we most often face today involve rogue actors buried deep within that complex web of individuals.

Eighty years ago we relied on a government that solved problems by exploiting its vast size, a mass media that kept people similarly informed, and an ability for individuals to express themselves generally confined to reaching one’s friends and neighbors.

Today, individuals have unprecedented ability to access niche products and ideas from around the world, and communicate with virtually anyone. Unlike 80 years ago, we live in a complex, technologically driven, and increasingly decentralized society. And yet, there’s the same government, relying on its centralization and scale to manage problems that are complete mismatches to this approach. In my opinion, this is the central source of the political tension we all feel that appears to only get worse.

Strength Through Peace

Poverty, unequal access to health care and education, and environmental degradation are real problems. The left insists that we declare more wars, following the 1940s model of large, top-down programs enacted by the nation-state. But these programs all resemble the failed wars I just described. Taking education as an example, we currently rely on top-down administration and accept the outsized interests of entrenched groups. Instead, we could allow school choice, and unleash the power of markets and social entrepreneurship to find ways to educate our children that a room full of experts could never match.

A history of military conflict shows us that when people perceive an existential threat, they are willing to sacrifice some degree of freedom to the government. By labeling climate change an existential threat without being willing to have a good-faith discussion of costs, benefits, and options, it is not overly dramatic to say that some left-wing politicians are playing a dangerous game with our freedom. And by not unleashing the decentralized private sector on the problem, their ideology may prevent actual problems from being solved.

I don’t like demonizing my political opponents, and many of these politicians are simply wrong and have a stubborn unwillingness to question themselves that to some degree all humans share – traits that are certainly not unique to the left. I also know many rank-and-file progressives who simply want to help people and solve the problems discussed in this article.

The type of solutions I have in mind radically depart from what we’ve tried and found unsuccessful in the past decades. I have nowhere near all the answers, but it is imperative that economists build on these ideas and communicate them to all Americans. That, Rep. Ocasio-Cortez, is the central challenge of this generation.

via ZeroHedge News http://bit.ly/2sRzSfN Tyler Durden