Category: zerohedge

The political situation in Italy is once again emerging as a risk factor.

Nearly two months after a stunning defeat for establishment parties, when in the March 4 Italian elections the Euroskeptic Five Star and League parties won a majority of the vote, on Sunday the former premier leader of the Democratic Party Matteo Renzi said that his party had lost the March 4 elections and it is not its role to govern Italy next. Almost as if the PD is trying to wash its hands of what is coming.

He also added that the decision on whether Democratic Party can back a Five Star government lies with party assembly convened May 3 and with each member of Parliament.

Fast forward to this morning, when Five Star leader Luigi Di Maio, commenting on Renzi’s remark, said in a blog post that the movement “did everything to form a government in the interest of Italians” and that the “PD said ‘no’ to citizens’ issues and they will pay for it.”

Then, moments ago, the chaos that is Italian politics re-emerged front and center after the FiveStar, frustrated with being unable to form a government with either the PD or League, called for fresh elections:

• FIVE STAR’S DI MAIO CALLS FOR EARLY ELECTIONS IN ITALY
• DI MAIO CALLS ON LEAGUE’S SALVINI TO SEEK EARLY ELECTIONS

“At this stage there is no solution other than returning to elections as soon as possible, then of course the decision will be up to President Mattarella,” Di Maio said in video statement on Facebook, adding that no change is needed to the electoral law, such as the introduction of a second round, as the new elections would be a challenge between Five Star and League.

Di Maio called on League’s leader Matteo Salvini to join him on the call for new election in June to let the citizens decide, and accused the League of siding with Silvio Berlusconi instead of working with Five Star on a “government for change.”

As a reminder, the March 4 Italian general vote left the legislature divided between three main blocs – Five Star, the center-right coalition and the democrats – without any holding sufficient seats to form a government.

So what would happen if Di Maio gets his wish?

Well, as Bloomberg reported overnight, like in most European nations, Italian political preferences are becoming more right wing as a political impasse in the country drags on nearly two months after the March general election, according to a poll published in La Repubblica.

And in the latest troubling development for Brussels, support for Matteo Salvini’s League was close to 22% compared to 17.4% at the March 4 election, according to the survey, which was conducted by Demos & Pi on April 26 and 27. The Five Star Movement is the most popular party with about 33% of backing, and the Democratic Party is third with 17.8% down from 18.7, the poll showed.

If no coalition deal is reached, new elections are the most likely option, according to Silvio Berlusconi, former prime minister and leader of Forza Italia, which is part of the center-right coalition. “The risk is there if the impasse drags on,” Berlusconi said in an interview with Corriere della Sera.

And while interviews with party leaders published in the country’s main newspapers on Sunday indicated that the deadlock is getting no closer to a resolution, a new election held today that would have the League and Fire Star win 55% of the vote would come as a shock to Europe.

This is reflected in the latest Italian 10Y yields, which spiked on news that Italy may be facing another round of elections in which the euroskeptics could be approaching 60% of the vote.

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

The ongoing surge in the dollar and the 10-Year Treasury’s daily battle with the 3.00% rate (which has proven to be a solid resistance level) have been pushed back to the backburner, as Merger Monday comes back with a bang following a trio of blockbuster deals announced over the weekend including:

• Sprint’s merger with T-Mobile creating the second largest US cell phone carrier
• Marathon’s purchase of Andeavor, creating the largest US refiner
• J Sainsbury’s purchase of Asda from Walmart, creating the largest UK grocery store chain

While superficially, the renewed flood of deals suggests there is a storm brewing for corporate margins and that most/all of these deals will be drastically transformed by the time regulators are done with them (and some may be outright blocked), the deal euphoria has boosted US futures and stocks in both Europe and Asia higher ahead of what is shaping up to be a very busy week, one where the Fed may even surprise with an unexpected rate hike (odds of a May hike right now are a non-trivial 34.5%).

In the US, futures for the S&P 500, Dow Jones and Nasdaq all pointed to a higher open.

“A whole host of anxieties and disquieting news has appeared since the start of the year and has ranged from trade wars to a nuclear threat from N. Korea,” Jefferies equity strategists write in note. “In reality, it is the starting point of financial conditions which matter most for equity markets and these are principally determined by the dollar, long rates and credit markets. Two out of three are changing.”

Burst of M&A aside, it has been a quiet session, with China and Japan out on holiday until Wednesday, and mainland Europe on holiday tomorrow.

Despite the subdued volumes, in Europe the month is coming to an end on a positive note, with Euro Stoxx 50 up 0.2%. Things have improved for European equities with the Stoxx 600 outperforming the S&P 500 in April and now back above its 200-DMA, thanks in part to the euro, now trading back under $1.2100.

In the UK, shares in the FTSE 100 Index climbed to the highest in almost three months, with retailer J Sainsbury Plc jumping the most on record as it plans to buy Walmart Inc.’s U.K. arm, Asda. Rivals Tesco Plc and Marks & Spencer Group Plc slipped. Helping UK stocks was the latest drop in the pound which tumbled for a fourth day after Amber Rudd quit as U.K. home secretary, and Housing Secretary Sajid Javid was named her replacement.

in Asia, China’s H-shares and the Hang Seng index set the pace for stock gains after China’s PMI beat estimates for both manufacturing and services.

• Chinese Manufacturing PMI (Apr) 51.4 vs. Exp. 51.3 (Prev. 51.5). (Newswires)
• Chinese Non-Manufacturing PMI (Apr) 54.8 vs. Exp. 54.5 (Prev. 54.6)
• Chinese Composite PMI (Apr) 54.1 (Prev. 54.0)

And while China and Japan markets were shut for local holidays, the MSCI Asia Pacific rose 0.6%; with Korean assets still enjoying a boost from last Friday’s historic North-South summit with Kospi index up 0.7% and USD/KRW down 0.9%.

In macro, After unexpectedly sliding on Friday despite the strong Q1 US GDP beat, this morning, the dollar jumped after London open, supported by higher U.S. yields amid lower-than-average flows as Japan and China were shut for holidays. With the BBDXY trading at session highs, the DXY is again back within range of 200-DMA. As noted above, the pound dropped a fourth day on renewed turbulence in the U.K. government, while the euro came under pressure following unexpectedly weak regional inflation readings out of Germany.  The won rallied on optimism over peace at the Korean peninsula and European equities followed Asia peers higher.  Commodity currencies weaker as crude and gold weaken through European open, with the Aussie worst performer among G-10 down 0.2%.

After last week’s fireworks, Treasury futures were little changed, and along with bunds traded in a very tight range, as curves slightly steepened; Italian BTPs underperform as latest indications on government negotiations point towards new elections. Australia 10-year yield falls to 2.78%.

In commodities, WTI crude slipped approaching month end, amidst multiple bearish factors: firstly, month end rebalancing, in thinner trading conditions due to Chinese and Japanese market holidays, a rise in US rig counts pointing to increased production and a firmer USD placing downward pressure ahead of key US data points such as the core PCE price index ahead of the upcoming Fed meeting. The data in particular focus as some analysts are suggesting that should the YY rate post 2.0% (vs. prev. 1.9%) we will be at the Fed’s stated inflation target, signalling a higher possibility for hawkish tones. In addition, technical impulses weighing, with USD 67.80 and USD 67.56 support levels tripped in WTI. Note June Brent futures expire later today. In the metals complex, gold sliding as the risk sentiment continues to improve following reduced Korean tensions, and thereby reducing safe haven demand flows. However, Copper bid following a strong Chinese PMI’s.

Bulletin headline summary from RanSquawk

• M&A action in focus as Sainsbury’s surges up 20% on Asda merger news
• Markets largely tepid in anticipation of US core PCE price index
• Looking ahead, highlights include, German national CPI, US PCE Price Index and Personal Consumption

Top Headlines from Bloomberg

• In M&A news, T-Mobile US Inc. agreed to acquire Sprint Corp. for $26.5 billion in stock, while Marathon Petroleum Corp. confirmed that it plans to buy rival oil refiner Andeavor in a deal that could create the largest fuel maker in the U.S.; U.K.’s J Sainsbury Plc said it plans to buy Walmart Inc.’s Asda unit in a 7.3 billion-pound ($10 billion) deal
• U.K. PM Theresa May has lost a pro-Europe ally with the resignation of Home Secretary Amber Rudd, the fourth Cabinet member to quit in six months over a scandal, just as internal battles over Brexit come to a head; May named self-described euroskeptic Housing Secretary Sajid Javid to replace Rudd
• Kim Jong Un is turning on the charm ahead of his summit with Donald Trump, adding pressure on the U.S. President to ease sanctions against North Korea even before it’s made any significant concessions
• The 34-year-old dictator plans to invite foreign journalists to witness the shutdown of North Korea’s main nuclear weapons test site in May, South Korean President Moon Jae-in’s spokesman told reporters on Sunday
• Crisis engulfing Australian wealth manager AMP deepened, with Catherine Brenner resigning as chairman after the company admitted misleading the regulator
• China April manufacturing PMI at 51.4; est. 51.3
• S. Korea March industrial output falls 4.3% y/y; est. -1.6%
• Trump administration plans to extend relief from steel and aluminum tariffs to some countries, but not all, when their temporary exemptions expire on Tuesday, Commerce Secretary Wilbur Ross said

Market Snapshot

• S&P 500 futures up 0.2% to 2,677.75
• STOXX Europe 600 up 0.04% to 384.79
• MXAP up 0.6% to 174.25
• MXAPJ up 1% to 569.06
• Nikkei up 0.7% to 22,467.87
• Topix up 0.3% to 1,777.23
• Hang Seng Index up 1.7% to 30,808.45
• Shanghai Composite up 0.2% to 3,082.23
• Sensex up 0.6% to 35,165.48
• Australia S&P/ASX 200 up 0.5% to 5,982.73
• Kospi up 0.9% to 2,515.38
• German 10Y yield rose 0.6 bps to 0.577%
• Euro down 0.2% to $1.2111
• Brent Futures down 1.1% to $73.80/bbl
• Italian 10Y yield fell 0.6 bps to 1.487%
• Spanish 10Y yield unchanged at 1.263%
• Brent Futures down 1.1% to $73.80/bbl
• Gold spot down 0.5% to $1,317.57
• U.S. Dollar Index up 0.1% to 91.67

Asian equity markets were positive but with gains mostly modest amid a holiday-quietened start for the region and ahead of the key risk events this week including the FOMC meeting and US NFP jobs data. ASX 200 (+0.5%) and KOSPI (+0.7%) were higher although weakness across Australia’s commodity sectors restricted upside, while South Korea continued to benefit from improving ties following Friday’s summit and after North Korea vowed to close its nuclear test site. Hang Seng (+1.7%) was the outperformer of the region with the index propped up by China’s largest banks following improved earnings reports and with sentiment also underpinned by better than expected Chinese Manufacturing and Non-Manufacturing PMI data. As a reminder, both Japan and mainland China were closed for holidays with Japan to only open Tuesday and Wednesday amid Golden Week, while China is shut today and tomorrow due to Labour Day. China is said to be planning trade offers for the US delegation including US Treasury Secretary Mnuchin when they visit this week. Reports stated that Beijing is likely to offer to import more goods from US to reduce and offer to negotiate a free trade agreement as well as other measures.

Top Asian News

• Banks and Hedge Funds Drawn Into Noble Group’s Legal Fights
• Noble Group’s Financial Position Is ‘Critical,’ Chairman Says
• Indonesia, India May Hasten Rate Hikes to Stabilize FX, DBS Says
• Philippine Treasury Working on a Bond Deal Amid Failed Auctions

European bourses opened mixed, but since then traded in positive territory (Eurostoxx 50 +0.2%) with modest gains as the region follows suit from Asia overnight. Looking at the sectors, Telecoms are outperforming following the merger of Deutsche Telekom’s (+1.3%) T-Mobile and Softbank’s Sprint; Vodafone (+1.6%) and Orange (+0.4%) higher in sympathy. Energy is the worst performing sector with names subdued amid declining oil prices, BP (-0.8%), Shell (-0.7%) and Total (-0.8%) shares are lower as a result. In terms of stock specifics; Sainsbury’s (+15.0%) shares soared on a merger with Walmart’s ASDA touted at around GBP 12bln. Shares in competitors are lower on this news, with Tesco (-1.2%) at the foot of the FTSE 100.

Top European News

• Elliott, Telecom Italia Board Nominees Fully Support CEO Genish
• U.K. Gender Pay Gap Wider Than in Most of Europe, Study Says
• Pound Extends Drop as May Troubles Persist Amid Dollar Demand
• Dixons Carphone Drops on Sainsbury Plan to Put Argos Into Asda

In FX, the Dollar is firmer vs all G10 peers approaching the end of April and a positive 1st month of Q2, with the index forming a solid base above 91.500. Rebalancing models are somewhat mixed, but indicating moderate Usd demand overall, while some are also positioning for a potential positive inflation assessment from this week’s FOMC and already looking ahead to Friday’s NFP. AUD/NZD: The weakest G10 links and still looking prone to further downside if 0.7550 and 0.7050 fail to hold amidst declines in commodity prices and holiday-thinned trade with China and Japan closed. Little support gleaned from better than expected Chinese PMIs, as the cross pivots 1.0700 ahead of the RBA meeting overnight that is not seen deviating from the neutral stance. GBP: Sterling remains under pressure and on course to end a 13 year sequence of gains vs the Usd in the month of April after a dramatic change in fortunes in the last 2 weeks. A run of disappointing data has seen May BoE hike prospects plunge from 90%+ to around 20% or just under, and PMIs in the next 3 days could wipe out tightening expectations altogether if weak. Adding further to the Pound’s woes, another top Government resignation, ongoing doubts about a Brexit deal and a marked reduction in CFTC long positions alongside RHS interest in Eur/Gbp for month end (cross above 0.8800 as a result).

In commodities, oil is falling approaching month end, amidst multiple bearish factors. Firstly, month end rebalancing, in thinner trading conditions due to Chinese and Japanese market holidays, a rise in US rig counts pointing to increased production and a firmer USD placing downward pressure ahead of key US data points such as the core PCE price index ahead of the upcoming Fed meeting. The data in particular focus as some analysts are suggesting that should the YY rate post 2.0% (vs. prev. 1.9%) we will be at the Fed’s stated inflation target, signalling a higher possibility for hawkish tones. In addition, technical impulses weighing, with USD 67.80 and USD 67.56 support levels tripped in WTI. Note June Brent futures expire later today. In the metals complex, gold sliding as the risk sentiment continues to improve following reduced Korean tensions,  and thereby reducing safe haven demand flows. However, Copper bid following a strong Chinese PMI’s.

On today’s calendar, inflation data should be the overwhelming focus for markets today with preliminary April CPI reports due in Germany and Italy, and the March PCE core and deflator readings along with personal income and spending due in the US. Other data worth highlighting is the official April PMIs in China along with the April Chicago  PMI, March pending home sales and April Dallas Fed PMI in the US. Earnings highlights on include McDonalds and Allergan

US Event Calendar

• 8:30am: Personal Income, est. 0.4%, prior 0.4%; Personal Spending, est. 0.4%, prior 0.2%
• 8:30am: PCE Deflator MoM, est. 0.0%, prior 0.2%; PCE Deflator YoY, est. 2.0%, prior 1.8%
• 8:30am: PCE Core MoM, est. 0.2%, prior 0.2%; PCE Core YoY, est. 1.9%, prior 1.6%
• 9:45am: Chicago Purchasing Manager, est. 58, prior 57.4
• 10am: Pending Home Sales MoM, est. 0.5%, prior 3.1%; Pending Home Sales NSA YoY, prior -4.4%
• 10:30am: Dallas Fed Manf. Activity, est. 25, prior 21.4

DB’s Jim Reid concludes the overnight wrap

Apple’s results on Tuesday may have some implications for the wider market and could go either way with investors worried about sales but with a possible mega payout as compensation. Definitely one to watch. In fact it’s a busy week of US data/events with plenty to keep US yields in the spotlight after a notable sell-off in the first half of the week followed by a notable rally over the last couple of days (US 10yr -2.4bp Friday to 2.958%, -7.5bps from intra week highs on Wednesday).

The highlights are a Fed meeting (Wednesday end), US Treasury quarterly refunding plan announcement (Wednesday), PCE inflation data (today) and the April employment report (Friday). Inflation data in Europe (Thursday) is also due out along with a first look at Q1 GDP (Wednesday), while the final PMI revisions are also due. Earnings will also continue with 147 S&P 500 companies reporting and 55 Stoxx 600 companies. In the US, 268 companies in the S&P 500 have reported their 1Q results so far (54% of market cap). DB’s Binky Chadha and team noted that 78% of the companies have beat on EPS, which is the highest ratio since 2010, while the aggregate earnings beat (8.9%) is also more than double the historical average. Further, growth appears to be broad based  with all sectors on track to post double digit EPS growth, led by Energy (91%), Technology (34%) and the Financials (28%). In aggregate, corporate earnings are on track to be up at least 24% yoy in the quarter.

Back to this week, in terms of the Fed on Wednesday, the consensus is for no change in policy which is a view also shared by the market with futures pricing implying odds of just 5% for a hike. There is no press conference so it’s the statement that will be of note. DB think there might be a tweak to the inflation language acknowledging the move towards 2% on YoY inflation rather than “have continued to run below 2 percent”. Outside of this the most important data come at the far end of the week. Today we’ll see the March PCE data with the consensus at a +0.2% mom core reading. Base effects (the well flagged wireless price rolloff) should help push the YoY core PCE reading to +1.9% (DB 1.9%) from +1.6%. For payrolls on Friday, the consensus expect a 195k nonfarm reading following the weather influenced 103k print in March. Average hourly earnings are also expected to have risen +0.2% mom and will be the centre point of the report (see details of strong ECI numbers from Friday below) while the unemployment rate is forecast to fall a tenth to 4.0% (it’s been remarkably steady at 4.1% for 6 months – DB think it breaks through 4% soon and continues lower this year and next). The other notable data worth noting in the US this week is the April ISM manufacturing print tomorrow which is expected to fall nearly a point to 58.5. Back to bonds and Wednesday’s US Treasury quarterly refunding plan will be closely watched with the expectation for another across the board boost to auction sizes in light of the tax cut announcement and increased spending.

In Europe GDP and CPI data will be the main focus. With regards to the former, on Wednesday we’ll get a first look at Q1 GDP for the Euro area with the consensus and DB currently expecting +0.4% qoq growth (averaged 0.7% qoq in 2017). For CPI, we’ll see the April report for the Euro area on Thursday with the consensus expecting a +0.9% yoy print for the core, having held at +1.0% yoy for the last 3 months. Also worth highlighting in Europe this week are the final revisions to the April PMIs including a first look at the data for the non-core and UK. Away from the data in Europe expect Brexit headlines to come back to the fore with EU and UK negotiators undergoing another round of talks from Wednesday. Staying in Europe, today’s latest CSPP will be a focus given the surprise sharp drop off in corporate purchases in April so far and Draghi’s refusal to acknowledge such a buying slowdown had begun in last week’s press conference. Something has to give here! For more on the week ahead, the full day-by-day guide is at the end today.

This morning in Asia, markets are trading higher with the Hang Seng (+1.50%), Kospi (+0.72%) and ASX200 (+0.54%) all up, while markets in China and Japan are closed for holidays. The Korean Won jumped c1% vs. the Greenback as tensions in the peninsula eased further this morning, in part as North Korea announced the symbolic step of shifting its time zone 30 minutes earlier to align with South Korea “as a first practical step for national reconciliation”. Datawise, China’s April manufacturing and non-manufacturing PMI were both slightly above consensus, at 51.4 (vs. 51.3 expected) and 54.8 (vs. 54.5 expected) respectively.

Now quickly recapping other markets performance from Friday. US bourses were little changed (S&P +0.11%, Nasdaq +0.02%; Dow -0.05%) as stronger results from tech companies were partly offset by weakness in energy stocks, such as Exxon Mobil, which dropped -3.8% post its result. In Europe, the Stoxx 600 edged up +0.23% and rose for the second consecutive day. Elsewhere, the US dollar index dipped -0.02% while Sterling dropped -0.99% following a softer than expected 1Q GDP print. Notably, the Bloomberg implied odds of a potential May rate hike in the UK fell 33ppt to c23% on Friday.

Moving onto some of the weekend headlines. On trade, the Commerce Secretary Ross noted that the US plans to extend the temporary exemption on steel tariffs to some countries post 1 May, but not all. On the other side, leaders from the UK, Germany and France have spoken via a joint conference call and a German spokesman noted afterwards that “they agreed that the US should take no measures against the EU or else the EU should be ready to defend its interests…” Back home in the UK, PM May’s ally Ms Amber Rudd has quit as the Home Secretary on Sunday, which could add to the recent Brexit uncertainties.

Over in Asia late on Friday afternoon, China’s PBoC issued the final version of the Guidelines on Asset Management Businesses, which aims to tackle risks arising from the shadow banking sector. Our Chinese economists believes the new regulations remove a good part of policy uncertainty in 2018, where a notable change is that the “transition period” of the new rules toward full compliance has been extended to end-2020 versus mid-2019 in the draft version. Overall, our team believes the downside risk of disorderly deleveraging has been mitigated, or at least delayed, by the new Guidelines and their GDP growth forecast remains unchanged (2018 of 6.6% – Link).

Before we take a look at today’s calendar, we wrap up with other data releases from Friday. In the US, the 1QGDP was firmer than expected (2.3% vs. 2.0% expected), in part as inventories made a 0.4ppt contribution to growth during the quarter. The employment cost index also beat at 0.8% qoq (vs. 0.7% expected) and lifted annual growth to 2.7% yoy. Notably, this is the fastest pace since 4Q 2008 and continues a steady uptrend over the past two years. Wage and salaries rose 0.9% qoq in 1Q and up 2.9% yoy. Elsewhere, the 1Q core PCE and personal consumption were both in line at 2.5% qoq and 1.1% respectively, with the former representing the biggest increase since 2011. Finally, the final reading of the University of Michigan consumer sentiment index was revised slightly upwards to 98.8 (vs. 98 expected).

In the UK, the 1Q GDP was below market at 0.1% qoq and 1.2% yoy (vs. 1.4% expected) and marked the lowest reading since the end of 2012 in the first quarter. Harsher weather and thereby a 3.3% qoq decline in construction activity were some of the key drags. Meanwhile the Nationwide house price index rose 2.6% yoy in March. Over in Germany, its April unemployment rate was in line at 5.3%. In France, 1Q GDP came in at 2.1% yoy (vs. 2.3% expected) as growth in household spending remained soft at 0.2% qoq and net exports made no contribution to growth this quarter. Elsewhere, France and Spain’s April CPI were both slightly below consensus, at 1.8% yoy (vs. 1.7% expected) and 1.1% yoy (vs. 1.2% expected) respectively. Finally, the Euro area’s April economic confidence (112.7 vs. 112 expected) were above market while the final reading of the April consumer confidence was confirmed at 0.4.

On today’s calendar, inflation data should be the overwhelming focus for markets today with preliminary April CPI reports due in Germany and Italy, and the March PCE core and deflator readings along with personal income and spending due in the US. Other data worth highlighting is the official April PMIs in China along with the April Chicago  PMI, March pending home sales and April Dallas Fed PMI in the US. Earnings highlights on include McDonalds and Allergan

via RSS https://ift.tt/2Ft5kog Tyler Durden

Submitted by Bill Blain of Mint Partners

“When you hear our drums, hear them sound, we’re gonna fight until we have won this town…”

Last day of April and it still feels like Feb. Something isn’t right.

I was out sailing y’day and was frozen to the very bone. It should not be this way – this time last year I had first-degree sunburn. The weather’s confusion is a bit like the markets – where are we going next in terms before the long awaited spring finally arrives? Too many blogs talking about “Sell in May and Stay Away” this morning. Not so sure. The next two-weeks are likely to be thin: Europe is on holiday for the May Celebrations tomorrow, and the UK is taking next Monday off. (The UK never joined the EHS – the European Holiday System, which was one of the more attractive aspects of being part of the European Super-state.)

This week is going to be about Data and Geopolitics. Korea looks solved – or is fat-Boy just playing for time? Lets see how much access he really grants, and how he embraces the World and its institutions. We’ve got Trump playing nice across Asia, and the trade discussions in Beijing this week will be followed up by full meeting next.

In terms of data, I’m worried it’s going to remain divergent, continuing to break the Global Alignment Scenario. We’re expecting very strong and Risk-On data from the US. After last week’s stronger than expected growth number – a solid 2.3%, there should see the trend continue through wages, including Friday’s April Jobs report, confirming the strength of the US economy. Four Hikes remains nailed on.

My stock picking chum Steve Previs (our chartist) reckons the current corrective uncertainty could drag on through the summer into August before the rally resumes. He points to the 79% of US companies that have posted estimate beating results as something the market likes, but had already priced in. Other point to the numbers as highlighting just how far the US is down this business cycle – we’re past the top and that means it can only get worse; witness last week Caterpillar warning of mounting pressures.

This week, I’m concerned with aftershocks from a couple of potential stock speedbumps. Tomorrow we’ve got Apple – which is unlikely to be as weak as some pundits expect in terms of slowing smartphone demand, but isn’t going to give us much reassurance the boys and girls at Mac are dreaming up in terms of a future stream of innovative consumer bright-shiny-white-things that will make all out lives soooo-much better. I am an Apple addict – I recent bought a home-pod, but its was hardly an innovative paradigm shift… just the Apple version of someone else’s product, and She-Who-Is-Now-Mrs-Blain doesn’t like it because its listening to everything we say, play and watch.

More problematic could be the Tesla numbers – they will no doubt be absolutely awful, but the degree of awfulness will be what matters. It’s become a curious binary stock where the enthusiasts can’t buy enough, and the analyst-realists are willing to short it to their hearts content. If hope continues to triumph over analyst expectations, then I’m money good on my remaining position. If not.. hey.. the world will have benefitted by Musk holding every other car company’s reproductive organs to the fire and forcing forward EV technology. I’m frankly more excited by Space X.. but have a feeling that’s not a delivery next week trade either..…  

The big question is how long the US recovery continues. With nearly 80% of companies posting reporting beats — but just what are they doing with their stronger than expected profits and tax windfalls? Building new plant and infrastructure? Upping the quality and value proposition to their staff? Nope.. they are giving it back to stock holders and boosting executive bonuses through stock buybacks.. I listened to one US CEO carefully explaining he had to meet shareholder expectations to increase the size of its buyback programme. He said precisely nothing about his company’s consumers, his products or how he was developing them. Short-termism always wins: damned if they do, damned if they dont. Have US corporates learnt anything over the last 10-years? I wonder how the next seven lean years might play out?

If the US is at the top of the cycle, what about the rest of the World? I don’t suppose anyone pays much attention to the UK anymore? Last week’s dismal numbers have killed expectations of recovery and higher rates, but I wonder just how much we’re underestimating weather effects. It’s been the strangest winter anyone can remember – why? I suspect we’re either not being told the truth (I so love a Monday morning conspiracy theory),  or maybe no one gets the significance of a colder North Atlantic, the slowing of the North Atlantic Drift (the Gulf Stream) and the shifting of the Jet Stream. If wetter, colder, snowier winters are going to become the norm, let’s prepare. I’m adapting – I’m buying snow Tyres! Changing weather is not necessarily a Bad Thing – the mini-Ice age in the Middle Ages drove the cooling of the Baltic, pulled in the Herring, and triggered the rise of the mercantile Hanseatic Ports….  

And what about Europe, where the numbers seem to suggest the European Economic Miracle has stalled. Oops. I read the spread between US and German bonds has never been so wide. QE into infinity? Rates to remain low for ever? All begs the question why isn’t the dollar much much stronger?

Again it’s a question of timing. Trump sits in a pretty good place – a strong economy and a weak currency – well done him! At some point the rest of the world catches up (although I harbour deep doubts Europe will ever really grow – its tired, exhausted, riven by rising bureaucracy and handicapped by ECB austerity that simply keeps the south from ever recovering..) at which point the dollar should weaken again. For the time being I’m a dollar bull! (More thoughts on Europe later this week – I need a good rant on the subject!)

Meanwhile – in my favourite alternatives markets, I’m looking for buyers of secondary UK energy infrastructure private placements, and guaranteed aviation senior assets. Schweet real asset yields.. what’s not to like?  

Finally, attached, a recent Blain painting – the view walking into Canary Wharf. Now wouldn’t that look nice on someone’s board-room wall?. And I few billion years its might be worth something.

via RSS https://ift.tt/2vYjU7V Tyler Durden

Authored by Rob Slane via TheBlogMire.com,

The Official Narrative on the poisoning of Sergei and Yulia Skripal is a collection of illogical claims and assertions that cannot be made to fit together, that make no rational sense, and which would require us to hold a mass of contradictory thoughts in our head if we were to accept it. It is in short a conspiracy theory, and a particularly bad one at that.

As I have pointed out before, I am not attempting to counter this conspiracy theory with one of my own. I make no claims to know what happened in the Skripal incident. I am merely stating that the story that the UK Government and media have so far asked the public to believe cannot be true, since it is full of discrepancies and claims that are impossible to reconcile with the known facts.

They are, of course, welcome at any time to show how those contradictions and improbable assertions can be reconciled, but until such time as they advance a compelling and coherent explanation, rational and objective observers shall just have to assume that these contradictions exist for a reason – namely that the official narrative of what happened in the Skripal case is not in fact what really happened in the Skripal case.

So what exactly are those contradictory elements and improbable assertions in the Official Narrative, which place it firmly in the territory of a Very Bad Conspiracy Theory? There are many, but below are 10 of the most obvious:

1. A lethal nerve agent followed by a drink and a meal

The Official Narrative requires you to believe not only that Sergei and Yulia Skripal were poisoned by the military grade nerve agent A-234, a substance which is said to be 5-8 ten times the toxicity of VX nerve agent (which itself has a median lethal dose of 10mg), and the effects of which are said to take place within 30 seconds to two minutes.

…But also that after coming into contact with this substance, they then spent the next four hours wining and dining in the City of Salisbury.

2. A deadly nerve agent without antidote, but where everyone is fine

The Official Narrative requires you not only to believe that Mr and Miss Skripal were poisoned by a deadly nerve agent with no known antidote (according to Gary Aitkenhead, Chief Executive of Porton Down), and for which treatment is “practically impossible”, according to The Handbook of Toxicology of Chemical Warfare Agents.

…But also that just a few weeks later, both were fine and one of them at least was fit to be discharged from hospital.

3. Symptoms that don’t match those produced by the substance allegedly used

The Official Narrative requires you to believe that the Skripals were poisoned by a substance which produces the following symptoms:

“Acetylcholine concentrations then increase at neuromuscular junctions to cause involuntary contraction of all skeletal muscles. This then leads to respiratory and cardiac arrest (as the victim’s heart and diaphragm muscles no longer function normally) and finally death from heart failure or suffocation as copious fluid secretions fill the victim’s lungs.”

…Yet according to witnesses at the bench in The Maltings, Mr Skripal was making “strange hand movements”, “looking up to the sky” and “looking out of it” – symptoms which strongly suggest poisoning by a hallucinogenic, such as BZ or Fentanyl, and not A-234, which tends to produce death, rather than hallucinations.

4. That Salisbury District Hospital mistook the symptoms of military grade nerve agent for opioid poisoning

The Official Narrative requires you to believe that the Skripals were the victims of poisoning by a lethal nerve agent, which produces the symptoms mentioned above, including “involuntary contraction of all skeletal muscles”, “respiratory and cardiac arrest” and “finally death from heart failure or suffocation.”

…Yet it also requires you to believe that Salisbury District Hospital completely mistook the symptoms of nerve agent poisoning for opioid poisoning — even though the symptoms are very different — since on the following day a press release was issued stating that they were treating the pair for exposure to Fentanyl:

(This, by the way, is extremely interesting. The screen shot above is the original report on the website of Clinical Services Journal, and it can now be found on the website, web.archive.org. The original piece, however, has since been updated on the Clinical Services Journal, not with a correction, but with the reference to Fentanyl being removed altogether (compare here with here h/t Dilyana Gaytandzhiev)

5. A lethal nerve agent that can be dealt with by water and baby wipes

The Official Narrative requires you not only to believe that the substance which poisoned the Skripals is so deadly that Mr Skripal’s house may need to be demolished and a multi-million pound clean-up of Salisbury with chaps in HazMats a necessity.

…But that the same substance can be treated with warm water, soap and baby wipes, as evidenced by the advice given by Public Health England (PHE) a week after the incident, to anyone who may have come into contact with it:

“Wash the clothing that you were wearing in an ordinary washing machine using your regular detergent at the temperature recommended for the clothing. Wipe personal items such as phones, handbags and other electronic items with cleansing or baby wipes and dispose of the wipes in the bin (ordinary domestic waste disposal)… Other items such as jewellery and spectacles which cannot go in the washing machine or be cleaned with cleansing or baby wipes, should be hand washed with warm water and detergent and then rinsed with clean cold water. Please thoroughly wash your hands with soap and water after cleaning any items.”

6. The nerve agent went undetected on a door handle for weeks

The Official Narrative requires you not only to believe that the assassins poured “military grade nerve agent”, in liquid form, on the handle of Mr Skripal’s front door, and that the British Government had possession of an FSB “assassin’s handbook” detailing this procedure.

…But that despite apparently having this handbook, the door handle theory was only mentioned more than three weeks after the incident, during which time many people (such as the unsuspecting policewoman at the top of this piece), came within a few feet of a door apparently smeared with lethal nerve agent, with no protective clothing, and suffered no ill effects.

7. The highly volatile nerve agent that was still highly pure weeks later

The Official Narrative requires you not only to believe that the substance examined in blood and environmental samples by the OPCW, weeks after the incident was:

“…of high purity. The latter is concluded from the almost complete absence of impurities.”

…But also that the substance used is known to be both unstable and vulnerable to water – and Salisbury definitely had plenteous rain and even snow between the incident and the coming of the OPCW!

8. That the substance used is proof of Russian state culpability

The Official Narrative requires you to believe that because the substance allegedly used was first developed in Russia (actually Soviet Union), there are only two explanations for the poisoning:

1. It was an act of the Russian state
2. That the Russian state lost control of its stocks

…Yet it requires you to believe this in the full knowledge that not only have other countries produced it (the United States has been patenting “Novichok” products for years; Iran produced it in 2016; and the United Kingdom possesses samples of it), but according to the chairman of the OPCW, Ahmet Uzumcu, A-234 could be produced:

“…in any country where there would be some chemical expertise.”

9. That the movements of Detective Sergeant Bailey on 4th March cannot be officially confirmed

The Official Narrative requires you to believe not only that Detective Sergeant Nick Bailey, who is a member of Wiltshire Criminal Intelligence Department (CID), was poisoned with the same substance as the Skripals.

…But that his movements cannot be established, since it has still not been officially confirmed whether he was at the bench in The Maltings or at Mr Skripal’s house (and in point of fact, either scenario is remarkably odd, since D.S. Bailey is a member of CID, and there was no suggestion until at least 24 hours after the incident that a crime may have been committed).

10. The cleansing of Salisbury hotspots, but not all Salisbury hotspots  

The Official Narrative requires you to believe not only that there are parts of Salisbury that may be contaminated with a lethal substance, and that this will require a clean up operation involving thousands of man hours, costing millions, and taking months to complete.

…But that some of these areas were no danger to the public for a month-and-a-half, when they were cordoned off with nothing more than police tape. In addition, some of the areas that the Skripals were known to have walked down after apparently coming into contact with the substance, such as the Market Walk, have been free to the public to walk through since the start of the incident and remain completely open (I know this personally, because as a Salisbury resident, I have walked through the Market Walk in the last few days).

*  *  *

Put all these things together — and this is not to even mention the current condition and whereabouts of the Skripals — and what you have is a theory in which claims are flatly contradicted by basic facts, many so-called facts are simply not facts at all, and assertions are made without any recourse to the reality on the ground. It is abundantly clear that the Official Narrative not only did not happen; it cannot have happened. As things stand it is “highly likely” that what we have been told is a conspiracy theory of “high purity”, “of a type developed by Whitehall.”

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

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

Submitted by Stefan Frank of the Gatestone Institute

• Marlene Weise was banned from Facebook for 30 days, for posting a set of two pictures: One showed the Iranian women’s national volleyball team from the 1970s, wearing t-shirts and shorts; the other, the current Iranian team, wearing hijabs and clothes that cover arms and legs. 
• “Does a law- and contract-abiding user have to acquiesce to companies like Facebook or Twitter deleting his content or banning him for it? The ruling is an important stage victory for the freedom of speech.” — Joachim Nikolaus Steinhöfel, attorney and anti-censorship activist.

A court in Berlin has issued a temporary restraining order against Facebook. Under the threat of a fine of 250,000 euros (roughly $300,000 USD) or a jail term, Facebook was obliged to restore a user’s comment that it had deleted. Moreover, the ruling prohibited the company from banning the user because of this comment.

This is the first time a German court has dealt with the consequences of Germany’s internet censorship law, which came into effect on October 1, 2017. The law stipulates that social media companies have to delete or block “apparent” criminal offenses, such as libel, slander, defamation or incitement, within 24 hours of receipt of a user complaint.

As many critics pointed out, this state censorship makes freedom of speech subject to the arbitrary decisions of corporate entities that are likely to censor more than absolutely necessary, rather than risk a crushing fine of up to 50 million euros ($65 million USD). According to a newspaper report, Facebook’s censors have just ten seconds to decide whether to delete a comment or not.

The case with which the court in Berlin had to deal was that on January 8, 2018, the Swiss daily Basler Zeitung posted an article with the title “Viktor Orban speaks of Muslim ‘invasion'” on its Facebook site. The blurb read:

“Viktor Orban wonders how in a country like Germany… chaos, anarchy and illegal crossing of borders can be celebrated as something good.”

Facebook user Gabor B. posted a comment:

“Germans are becoming increasingly stupid. No wonder, since the left-wing media litters them every day with fake news about ‘skilled workers,’ declining unemployment figures or Trump.”

This comment quickly received the most “likes”, until Facebook deleted it, due to an alleged infringement of Facebook’s “community standards.” In addition, Gabor B. was banned from Facebook for 30 days.

“One may share the commenter’s opinion or may deem it polemic or unobjective”, Gabor B.’s attorney Joachim Nikolaus Steinhöfel told Gatestone. “The important thing is: The comment is covered by the right to freedom of speech.” He added that before going to court, his law office had sent a written warning to Facebook.

“Facebook partly gave in and lifted the ban but did not restore the comment. Facebook’s lawyers notified us that ‘a thorough reexamination came to the result that the community standards had been applied correctly and that therefore the content could not be restored’ — an assessment we cannot share.”

Steinhöfel, besides being a lawyer, is a renowned journalist, blogger and anti-censorship activist. He runs a website where he has documented countless cases in which Facebook deleted content or banned users; sometimes both. Facebook apparently often bans users because of comments that are critical of mass immigration or certain aspects of Islamic culture. For example, in March 2018, Frank Bormann was banned after he had quipped: “Muslim men are taking a second wife. To finance their lives, Germans are taking a second job.”

Sometimes, Facebook seems to object even to implicit criticism of terror organizations. In April 2018, Christian Horst was banned for three days after he had posted a picture of members of the Palestinian terror organization DFLP delivering the Hitler salute.

Sometimes, users are banned for no apparent reason at all. In March 2018, Marlene Weise was banned from Facebook for 30 days, for posting a set of two pictures: One showed the Iranian women’s national volleyball team from the 1970s, wearing t-shirts and shorts; the other, the current Iranian team, wearing hijabs and clothes that cover arms and legs.

Steinhöfel explains that courts usually do not give reasons for a restraining order. The court could, however, grant a claim if the deleted content in question was deemed lawful and legitimate after all:

“This is a landmark decision and the first such court ruling in Germany… Eventually, users can act against the untransparent business practices of a corporation that assumes its responsibility as if it were dealing with second-hand bicycles.”

Steinhöfel says that, given Facebook’s dominant market position, the outcome of this legal battle will have far-reaching repercussions for communicating and exchanging opinions on social media: “Does a law and contract-abiding user have to acquiesce to companies like Facebook or Twitter deleting his content or banning him for it? The ruling is an important stage victory for the freedom of speech.”

via RSS https://ift.tt/2KpLC0s Tyler Durden

For the so-called ‘Generation Rent’, the dream of buying a house is usually a distant and unrealistic one.

And, as Statista’s Martin Armstrong notes, figures from the Office for National Statistics show the dream is only moving further away, too.

You will find more infographics at Statista

Furthermore, when comparing the ratio of median house prices in England and Wales to the average earnings, the gap is only moving in the wrong direction.

In 1997, the rate was 3.54 in England and 3.00 in Wales. In 2016, this had jumped up to 7.72 and 5.79.

via RSS https://ift.tt/2FteW2d Tyler Durden

Authored by John Laforge of CounterPunch

The radiation dispersed into the environment by the three reactor meltdowns at Fukushima-Daiichi in Japan has exceeded that of the April 26, 1986 Chernobyl catastrophe, so we may stop calling it the “second worst” nuclear power disaster in history. Total atmospheric releases from Fukushima are estimated to be between 5.6 and 8.1 times that of Chernobyl, according to the 2013 World Nuclear Industry Status Report. Professor Komei Hosokawa, who wrote the report’s Fukushima section, told London’s Channel 4 News then, “Almost every day new things happen, and there is no sign that they will control the situation in the next few months or years.”

Tokyo Electric Power Co. has estimated that about 900 peta-becquerels have spewed from Fukushima, and the updated 2016 TORCH Report estimates that Chernobyl dispersed 110 peta-becquerels. [1] (A Becquerel is one atomic disintegration per second. The “peta-becquerel” is a quadrillion, or a thousand trillion Becquerels.)

Chernobyl’s reactor No. 4 in Ukraine suffered several explosions, blew apart and burned for 40 days, sending clouds of radioactive materials high into the atmosphere, and spreading fallout across the whole of the Northern Hemisphere — depositing cesium-137 in Minnesota’s milk.[2]

The likelihood of similar or worse reactor disasters was estimated by James Asselstine of the Nuclear Regulatory Commission (NRC), who testified to Congress in 1986: “We can expect to see a core meltdown accident within the next 20 years, and it … could result in off-site releases of radiation … as large as or larger than the releases … at Chernobyl. [3] Fukushima-Daiichi came 25 years later.

Contamination of soil, vegetation and water is so widespread in Japan that evacuating all the at-risk populations could collapse the economy, much as Chernobyl did to the former Soviet Union. For this reason, the Japanese government standard for decontaminating soil there is far less stringent than the standard used in Ukraine after Chernobyl.

Fukushima’s Cesium-137 Release Tops Chernobyl’s

The Korea Atomic Energy Research (KAER) Institute outside of Seoul reported in July 2014 that Fukushima-Daiichi’s three reactor meltdowns may have emitted two to four times as much cesium-137 as the reactor catastrophe at Chernobyl. [4]

To determine its estimate of the cesium-137 that was released into the environment from Fukushima, the Cesium-137 release fraction (4% to the atmosphere, 16% to the ocean) was multiplied by the cesium-137 inventory in the uranium fuel inside the three melted reactors (760 to 820 quadrillion Becquerel, or Bq), with these results:

Ocean release of cesium-137 from Fukushima (the worst ever recorded): 121.6 to 131.2 quadrillion Becquerel (16% x 760 to 820 quadrillion Bq). Atmospheric release of Cesium-137 from Fukushima: 30.4 to 32.8 quadrillion Becquerel (4% x 760 to 820 quadrillion Bq).

Total release of Cesium-137 to the environment from Fukushima: 152 to 164 quadrillion Becquerel. Total release of Cesium-137 into the environment from Chernobyl: between 70 and 110 quadrillion Bq.

The Fukushima-Daiichi reactors’ estimated inventory of 760 to 820 quadrillion Bq (petabecquerels) of Cesium-137 used by the KAER Institute is significantly lower than the US Department of Energy’s estimate of 1,300 quadrillion Bq. It is possible the Korean institute’s estimates of radioactive releases are low.

In Chernobyl, 30 years after its explosions and fire, what the Wall St. Journal last year called “the $2.45 billion shelter implementation plan” was finally completed in November 2016. A huge metal cover was moved into place over the wreckage of the reactor and its crumbling, hastily erected cement tomb. The giant new cover is 350 feet high, and engineers say it should last 100 years — far short of the 250,000-year radiation hazard underneath.

The first cover was going to work for a century too, but by 1996 was riddled with cracks and in danger of collapsing. Designers went to work then engineering a cover-for-the-cover, and after 20 years of work, the smoking radioactive waste monstrosity of Chernobyl has a new “tin chapeau.” But with extreme weather, tornadoes, earth tremors, corrosion and radiation-induced embrittlement it could need replacing about 2,500 times.

John Laforge’s field guide to the new generation of nuclear weapons is featured in the March/April 2018 issue of CounterPunch magazine.

Notes.

[1] Duluth News-Tribune & Herald, “Slight rise in radioactivity found again in state milk,” May 22, 1986; St. Paul Pioneer Press & Dispatch, “Radiation kills Chernobyl firemen,” May 17, 1986; Minneapolis StarTribune, “Low radiation dose found in area milk,” May 17, 1986.

[2] Ian Fairlie, “TORCH-2016: An independent scientific evaluation of the health-related effects of the Chernobyl nuclear disaster,” March 2016 (https://www.global2000.at/sites/global/files/GLOBAL_TORCH%202016_rz_WEB…).

[3] James K. Asselstine, Commissioner, US Nuclear Regulatory Commission, Testimony in Nuclear Reactor Safety: Hearings before the Subcommittee on Energy Conservation and Power of the Committee on Energy and Commerce, House of Representatives, May 22 and July 16, 1986, Serial No. 99-177, Washington, DC: Government Printing Office, 1987.

[4] Progress in Nuclear Energy, Vol. 74, July 2014, pp. 61-70; ENENews.org, Oct. 20, 2014.

via RSS https://ift.tt/2I3ztQr Tyler Durden

Since the historic triumph of President Trump over Hillary Clinton in the 2016 US presidential election, political analysts have pontificated about how the rise of Trumpism was a direct repudiation of a popular idea advanced by Francis Fukuyama in his 1992 book: “The End of History and the Last Man”. That book, published shortly after the collapse of the Soviet Union, speculated that liberal Western democracy had categorically defeated Communism to become the world’s de fact dominant ideology. It was only a matter of time, Fukuyama posited, before the rest of the world embraces democracy, and, once this happens, the world will settle into an enduring peace.

For better or worse, the events of the last few years have eroded the credibility of liberal democracies to the point that their continued dominance no longer looks assured even in the west. For evidence of this, one need look no further than Hungary, Poland and Russia, “illiberal democracies” – a term coined by popular Hungarian Prime Minister Viktor Orban – that have won the popular support of the people.

But by far the biggest threat to US-style democracy is, of course, China – which is already the world’s most populous country and will soon surpass the US as the world’s largest economy, too.

China’s model of pragmatic authoritarianism has succeeded in delivering sustained benefits to even the poorest Chinese – the country’s middle class is growing at a rate unmatched anywhere in the developing world.

One need only compare its political system to India’s shambolic democracy to see the stark difference in outcomes. India has failed to implement the reforms it needs to maximize its growth potential, while China has proven itself capable of radical and muscular policy changes like doubling the number of solar panels in use over the course of a single year (2016).

Cambridge Professor David Runciman examined these issues in greater detail in an essay that’s essentially a condensed version of his upcoming book “How Democracy Ends”. It was published as this week’s “Saturday Essay” in the Wall Street Journal.

Read it in full below:

In his 1992 book “The End of History and the Last Man,” Francis Fukuyama famously declared the triumph of liberal democracy as the model of governance toward which all of humankind was heading. It was a victory on two fronts. The Western democracies held the clear advantage over their ideological rivals in material terms, thanks to their proven ability to deliver general prosperity and a rising standard of living for most citizens. At the same time, to live in a modern democracy was to be given certain guarantees that you would be respected as a person. Everyone got to have a say, so democracy delivered personal dignity as well.

Results plus respect is a formidable political mix. The word “dignity” appears 118 times in “The End of History,” slightly more often than the words “peace” and “prosperity” combined. For Mr. Fukuyama, that is what made democracy unassailable: Only it could meet the basic human need for material comfort and the basic human desire for what he called “recognition” (a concept borrowed from Hegel, emphasizing the social dimension of respect and dignity). Set against the lumbering, oppressive, impoverished regimes of the Soviet era, it was no contest.

Yet today, barely two decades into the 21st century, the contest has been renewed. It is no longer a clash of ideologies, as during the Cold War. Western democracy is now confronted by a form of authoritarianism that is far more pragmatic than its communist predecessors. A new generation of autocrats, most notably in China, have sought to learn the lessons of the 20th century just like everyone else. They too are in the business of trying to offer results plus respect. It is the familiar package, only now it comes in a nondemocratic form.

Since the 1980s, the Chinese regime has had remarkable success in raising the material condition of its population. Over that period, nondemocratic China has made strikingly greater progress in reducing poverty and increasing life expectancy than democratic India: People in China live on average nearly a decade longer than their Indian counterparts and per capita GDP is four times higher. The poverty rate in China is now well below 10% and still falling fast, whereas in India it remains at around 20%. The benefits of rapid economic growth have been made tangible for many hundreds of millions of Chinese citizens, and the regime understands that its survival depends on the economic success story continuing.

But China’s rise has been underpinned by more than just improved living standards. There has been a simultaneous drive for greater dignity for the Chinese people. This is not, however, the dignity of the individual citizen as we’ve come to know it in the West. It is collective national dignity, and it comes in the form of demanding greater respect for China itself: Make China great again! The self-assertion of the nation, not the individual, is what completes the other half of the pragmatic authoritarian package.

Chinese citizens do not have the same opportunities for democratic self-expression as do citizens in the West or India. Personal political dignity is hard to come by in a society that stifles freedom of speech and allows for the arbitrary exercise of power. Nationalism is offered as some compensation, but this only works for individuals who are Han Chinese, the majority national group. It does not help in Tibet or among Muslim Uighurs in Xinjiang.

On the material side of the equation, China’s pragmatic authoritarians have certain advantages. They can target and manage the benefits of breakneck growth to ensure that they are relatively widely shared. Like other developed economies, China is experiencing rising inequality between the very richest and the rest. But the rest are never far from their rulers’ minds. The Chinese middle class is continuing to expand at a dramatic pace. In the West, by contrast, it is the middle class, whose wages and standard of living have been squeezed in recent decades, who feel like they are being left behind.

The material benefits of democracy are much more haphazardly distributed. At any given moment, plenty of people feel excluded from them, and the constant changing of course in democratic politics—“We zig and we zag,” as Barack Obama said after Donald Trump’s victory—is a reflection of these persistent frustrations. Democracies, because they give everyone a say, are bound to be fickle. Pragmatic authoritarianism has shown itself more capable of planning for the long-term.

This is revealed not only by the massive recent Chinese investment in infrastructure projects—in transport, in industrial production, in new cities that spring up seemingly from nowhere—but also by the growing concern of China’s rulers with environmental sustainability. China is now the world’s leading greenhouse gas emitter, but it is also at the forefront of attempts to tackle the issue. Only in China would it be possible to double solar capacity in a single year, as happened in 2016.

Western visitors often come back from China astonished by the pace of change and the lack of obstacles in its path. Things appear to get done almost overnight. That is what happens when you don’t have to worry about the democratic dignity of anyone who might stand in the way.

Beijing’s reliance on the continuation of rapid economic growth comes with significant risks. The great long-term strength of modern democracies is precisely their ability to change course when things go wrong. They are flexible. The danger of the pragmatic authoritarian alternative is that when the immediate benefits start to dry up, it may be difficult to find another basis for political legitimacy. Pragmatism may not be enough. Nor, in the end, will national self-assertion, if it increases the dangers of geopolitical instability.

The central political contests of the 20th century were between rival and bitterly opposed worldviews. In the 21st century, the contest is between competing versions of the same fundamental underlying goals. Both sides promise economic growth and widespread prosperity—tangible results in terms of material well-being. But they differ on the question of dignity: The West offers it to individual citizens, while China offers it more diffusely, to the nation as a whole.

The remarkable rise of China shows that this constitutes a genuine alternative. But is it a genuine rival in the West? Might democratic voters be tempted by this offer?

One of the striking features of the last century’s battle of ideologies was that the rivals to liberal democracy always had their vocal supporters within democratic states. Marxism-Leninism had its fellow-travelers right to the bitter end, and such people can still be found in Western politics ( Jeremy Corbyn and John McDonnell, potentially the next prime minister and finance minister of the United Kingdom, have never given up the struggle). By contrast, the Chinese approach has almost no one in the West actively advocating its merits. That does not mean, however, that it is without appeal.

Mr. Trump’s electoral pitch in 2016 came straight out of the pragmatic authoritarian playbook. He promised to deliver collective dignity, at least for the majority group of white Americans: Make America great again! Stop letting other people push us around! At the same time, he promised to use the state much more directly and forcefully to improve the material circumstances of his supporters. He would bring the jobs back, triple the growth rate and protect everyone’s welfare benefits. What Mr. Trump did not offer was much by way of personal dignity: not in his own conduct, not in his treatment of the people around him, and not in his contemptuous attitude toward the basic democratic values of tolerance and respect.

But there are serious limits in the West to the appeal of the Chinese model. First, unlike his counterparts in Beijing, Mr. Trump has shown little capacity to deliver real benefits to the Americans who elected him. He is hamstrung by his own lack of pragmatism and impulse control. He has also been constrained by the checks and balances that democratic politics puts in his way. For now, he looks more like a familiar type of democratic huckster than a harbinger of future authoritarianism in the U.S.: He has over-promised and under-delivered.

More fundamentally, it is still very hard to imagine the citizens of Western democracies acquiescing in the loss of personal dignity that would come with abandoning their rights of democratic dissent. We are far too attached to our continuing capacity to throw the scoundrels out of office when we get the chance. Voters in Europe and the U.S. have been attracted lately by novel-sounding promises to kick over the traces of mainstream democracy, but they have not endorsed anyone threatening to take away their democratic rights. The authoritarian reflex has been limited to threats to take away the rights of others—people who supposedly “don’t belong.”

All of these movements in the West are populist distortions of democracy, not alternatives to it. Democratic authoritarians like the recently re-elected Viktor Orban in Hungary, who describes himself as an “illiberal democrat,” take their inspiration from Vladimir Putin rather than from the Chinese Communist Party. Pragmatism in countries like Hungary and Russia comes a distant second place to scapegoating and elaborate conspiracy theories. Democracy is still talked up, but stripped of its commitment to democratic rights. Elections take place, but the choice is often an empty one.

Chinese politics is far from immune to scapegoating and conspiracy theories. Its leaders pose as strongmen, and Xi Jinping has recently cemented his tight hold on power by being installed as leader for life. But as a viable alternative to democracy, Beijing has something to offer that Moscow and Budapest, to say nothing of today’s Washington, can only gesture toward: Consistent, practical results for the majority.

The ongoing appeal of the Chinese model will vary from place to place. It may just stretch to include the edges of our own politics, though it will struggle to reach its heart. It is more immediately appealing in those parts of Africa and Asia where breakneck economic growth is both a realistic prospect and a pressing need. Rapid economic development, coupled with national self-assertion, has an obvious attraction for states that need to deliver results in a relatively short period of time. In these places, democracy often looks like the riskier bet.

In Western societies, the Chinese alternative is unlikely to capture voters’ imaginations, even as it shows them what they might be missing. Still, the triumph of liberal democracy appears a lot more contingent than it did three decades ago. The temptations to try something different are real, even if the most successful current alternative remains a distant prospect for most voters.

There’s reason to worry about the weaknesses of our democracies. The kind of respect they provide may prove insufficient for 21st-century citizens. The premium that democracy places on personal dignity has traditionally been expressed through extensions of the franchise. Giving people the vote is the best way to let them know that they count. But when almost all adults are able to vote—in theory, if not in practice—citizens inevitably look for fresh ways to secure greater respect.

The rise of identity politics in the West is an indication that the right to take part in elections is not enough anymore. Individuals seek the dignity that comes with being recognized for who they are. They don’t just want to be listened to; they want to be heard. Social networks have provided a new forum through which these demands can be voiced. Democracies are struggling to work out how to meet them.

Elected politicians increasingly tiptoe around the minefield of identity politics, unsure which way to turn, terrified of giving offense, except when they deliberately court it. At the same time, they have grown dependent on technical knowledge—from bankers, scientists, doctors, software engineers—to deliver continuing practical benefits. As citizens find less personal dignity in politics and politicians become less able to manage prosperity, the attraction that has held democracy together for so long will start to dissipate. Respect plus results is a formidable combination. When they come apart, democracy loses its unique advantage.

The Chinese model faces serious challenges, too. There, personal dignity remains the unrealized option, and the untried temptation is to extend rights of political expression and choice. The use by the Chinese state of social networks to manage and monitor its citizens represents a concerted attempt to resist the pull of democratic dignity and to hold fast to the appeal of pragmatic authoritarian control. Just as the strains in the Western trade-off between dignity and material benefits may not be sustainable over time, the same is true of the Chinese version.

That sweet spot, where the two come together, which Mr. Fukuyama identified as the end of history, looks increasingly remote. No one has the monopoly on respect plus results any more.

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

If recent history is any guide, crypto traders should be bracing for some serious volatility in the price of bitcoin and bitcoin cash during the coming days and weeks.

And no, it won’t be David Tepper’s “tepid” (no pun intended) assessment of crypto’s value. Rather, as The Next Web’s crypto vertical pointed out, the Mt. Gox bankruptcy trustee (who has in the past denied that his trades had ANY impact on the price of bitcoin even though his trades almost exactly correspond to some of the largest dips in recent months), has moved 16,000 bitcoin and 16,000 bitcoin cash to two separate wallets – a decision that TNW says is a sign of another impending dump.

The 16,000 BTC have been transferred to the address below…

…While 16,000 BCH have been sent to this address:

For what it’s worth, TNW wasn’t able to confirm that the accounts are attached to an exchange – something that would firm up its thesis that more sales are imminent. However, it did point out that this is the first time that Mt. Gox trustee Nobuaki Kobayashi has moved any coins from the Mt. Gox wallet since February…

…Of course, crypto bulls will likely wince when they recall how THAT turned out.

In a report released back in March,  the so-called Tokyo Whale (no, not that Tokyo Whale) revealed that he had sold roughly $400 million worth of bitcoin and bitcoin cash beginning late last year and ending in February. But despite the unprecedented crash that bitcoin experienced during the first quarter, Kobayashi insisted in the report that his selling had nothing to do with the negative price activity.

But describing that claim as “specious” would be almost too charitable. Instead, by offering this explanation, Kobayashi, pictured below, is probably engaging in some badly needed CYA – given that he’s obligated to sell the coins at the best price possible to help reimburse Mt. Gox customers who lost everything when the exchange collapsed back in February 2014.

Those same customers should at least have some hope that they might soon be made whole (or at least partly whole) after years of waiting. Now that Kobayashi has finally realized some cash gains, the trustee has recently recently started making some payouts.

But one crypto trader said during a conference appearance this past week that the wallet does appear to belong to an exchange desk , which would signal that another dump will follow in the coming weeks.

“It appears that the Mt. Gox trustees have moved the funds to a wallet belonging to an exchange desk,” cryptocurrency trader and speaker Ivo Jonkers told Hard Fork. “The last time this happened, Mt. Gox proceeded to sell the funds at market rate, practically sending the entire market in the red.”

“I wouldn’t be surprized if this happens again,” he speculated.

Bitcoin has been climbing in April, but has recently run into some resistance around the $9,000 level – a level around which it has been fluctuating in recent days.

But if this ominous indicator proves correct, early May could be a bloodbath. So, instead of “Sell in May and Go Away”, bitcoin traders should keep a watchful eye out for opportunities to “buy the Mt. Gox crypto dip”.

via RSS https://ift.tt/2r94sRp Tyler Durden