Category: zerohedge

…and now the fun really begins…

 

Source: Ben Garrison

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Submitted by Eugen von Bohm-Bawerk via Bawerk.net,

As expected, PM Abadi was always going to come off worse in his last ditch attempt to try and regain some kind of political initiative by appointing a new look ‘technocratic’ government in Baghdad. But the ailing Prime Minister has managed to back himself into a particularly tight corner after being outplayed by Muqtada al Sadr, Iyad Allawi and even Nouri Al Maliki. Rather than sticking to his ‘technocratic guns’ Abadi blinked first on cabinet changes, by allowing more traditional ‘muhasasa’ (i.e. quota based) politics to play through, falling back on the so called ‘three presidencies’ agreement between himself, President Fuad Masum, and parliamentary speaker, Salim al-Jiburi. The move’s since been condemned as protecting ‘establishment’ interest compared to more ‘comprehensive change’ that Maliki, Sadr and Allawi are all pitching.

For those well versed in Iraqi politics, you’ll realise just how perverted that political situation is, but the key point to register is Mr. Abadi is now a totally lame duck PM. Whether he can stagger on to 2018 elections looks increasingly unlikely. If anything, the only thing keeping him in post right now is the simple issue that political factions aren’t in a credible position to decide on an instant successor. That, and the blunt fact that Iran is working behind the scenes to line up a far more ‘client orientated’ PM next time round at the political level, with exactly the same Persian positioning for the next Grand Ayatollah at the ‘theocratic level’. For better or worse, Abadi is no more than an interim Iranian (and to some extent US) placeholder at this stage.

Obviously when we say ‘gamble’ everything is relative in Iraq. In reality things had got so bad for Mr. Abadi that he didn’t have any choice but to attempt a ‘technocratic coup’ amid a spate of public protests and simmering intra-Shia rivalries. That’s exactly the same political tiger Mr. Abadi’s been riding since 2014 to try and appease popular concerns on basic goods, power, water and jobs on the one hand, all retarded by inter-sectarian, and more notably, intra-sectarian divides in Iraq on the other. That was always a dangerous animal to ride, and especially with the likes of Sadr (Peace Brigades), Hakim (ISCI), Badr and the residual influence of Maliki (Dawa) all poised to go in for the intra-Shia kill as and when the time came. Unfortunately for Mr. Abadi, the clock has just stopped. He can’t rally support within the State of Law coalition, let alone more discrete ranks of Dawa to his cause at this late technocratic stage. Relations with the Kurds are similarly vexed, where vying factions within the KRG are using Abadi’s weakness to progress their own autonomous interests. That’s all the way down to operational control of Kirkuk Oil Company, prompting further supply cuts from Baghdad to choke off Northern revenues, and more importantly, keep some notion of a ‘unitary’ Iraq in place.

Needless to say that remains a losing long term battle, but from here, we expect Abadi to face more calls to resign to pave the way for fresh elections. On balance, those calls will be narrowly dismissed, not because Abadi has any political capital left to appoint a new cabinet, but because a dearth of consensus over who’d replace him. Iran is more than happy to keep Abadi in post to bring Iraq to its knees, while the US won’t want the horrifying nightmare of orchestrating an Iraqi election before US Presidential elections are out the way.

Fall short on the 2018 dates, and you’ll merely highlight the ingrained presence ISIS still has in Iraq, amid inexorable state collapse. What we’ll see instead is endless political crises, with far greater factionalism, with more violence between and within sectarian groups to protect respective turfs amid ongoing government quota debates, fiscal ‘challenges’ and opportunistic land grabs, either amongst themselves, or picking up new ‘real estate’ wherever ISIS sees temporal rolled back. For cynics (aka realists) that pretty much describes what’s happening around Abadi anyway, where ‘Popular Mobilisation Units’ are rapidly morphing into an Iraqi version of the Iranian Revolutionary Guards, while Badr and ISCI continue to cement control of Southern production when it comes to military hardware and boots on the Basra / Misan ground. Admittedly not everyone’s signed up to every Iranian edict, least of all Mr. Sadr who’s keen to carve out some form of ‘local autonomy’.

But beyond day to day Shia spats, the overall direction of travel remains undeniably Persian in a weakened Iraq. On that note it’s going to be a very long summer for Abadi. Not only does he have to find some way of keeping his notional seat in pernicious Baghdad politics, he has to brace for major bouts of social unrest over failed reforms in the summer blaze when his same ‘political tiger’ will roar once more. Water and electricity will go into short supply, but not as short as Mr. Abadi’s political capital. What little he had left, is spent. The strange death of Mr. Abadi has happened.

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Just two days after Deutsche Bank fired the head of its “integrity committee”, Georg Thoma who had been originally tasked with clearing up the bank’s past scandals, because according to DB’s vice chairman Alfred Herling, Thoma had been “overzealous” and “goes too far when he demands ever wider investigations and more and more lawyers come marching up”, today the UK financial watchdog agency FCA announced that Germany’s biggest bank has “serious” and “systemic” failings in its controls against money laundering, terrorist financing and sanctions, the Financial Times reported.

The Financial Conduct Authority (FCA), has now ordered a separate independent review, the FT reported the letter as saying. The FCA declined to comment.

In other words instad of firing it “Chief Ethics Officer” (sic), Deutsche should have ideally hired a few more because as a result of this latest probe it is most likely looking at billions more in settlement charges over the next 6 – 12 months.

“Our overall conclusion was that Deutsche Bank UK had serious AML (anti-money laundering), terrorist financing and sanctions failings which were systemic in nature,” the FCA letter, dated March 2, reportedly said.

“Effective senior management engagement and leadership on financial crime had been lacking for a considerable period of time.” And where there is effective senior management, the board makes sure to get rid of said management, because if it actually followed the law how could this megabank ever make money in Europe’s monetary twilight zone.

Meanwhile, Deutsche Bank said it is cooperating with regulators to fundamentally reform its anti-financial crime program.

“We understand the importance of this issue and are committed to and engaged in fixing it”, a company spokesman said in an emailed statement on Sunday.

This is only the latest brush-up between DB and the FCA: in late 2014, the UK regulator put Deutsche Bank’s London office under enhanced supervision owing to concern about the bank’s governance and controls. Enhanced supervision procedures are normally kept private and can follow fines. Following its review, Reuters reports, the FCA ordered a so-called skilled persons report – also called a Section 166 report – to assess remedial work Deutsche must now carry out.

Deutsche Bank’s new chief executive, John Cryan, who took over in July, has embarked on a deep restructuring of the bank, which includes an overhaul of governance procedures.

Cryan announced in November a review of its know-your-client mechanisms and its vetting procedures when taking on new clients. It has also suspended taking on new customers from 109 countries which it has defined as high risk, compared with 30 countries it had earlier classified as too risky.

The report on the FCA letter comes not only days after the abovementioned acrimonious public squabble among members of Deutsche Bank’s supervisory board and the ejection of the man heading the supervisory board’s Integrity Committee, but also just weeks after Deutsche became the first bank to settle and admit to charges that it had manipulated the gold market, and had also agreed to expose other gold manipulation cartel members.

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Heiko Maas, the German Minister of Justice, was unable to finish his Labor Day celebration speech on the 1st of May as he was loudly booed and chased off the stage by the German people. The people repeatedly shouted “traitor”, “leftist rat”, “get out!”, “we are the people” and “Maas must go!”, eventually getting him to cancel his speech and flee to his armored Mercedes escorted by his armed bodyguards.

Maas is considered one of the biggest proponents of expanding censorship laws, demanding persecution, fines and jail-time for everybody posting “hate speech” on social media. Recently his party suffered a devastating loss in polls across the country, losing to the Alternative for Germany (AfD) by a landslide in the last state election of Saxony, where he held his speech.

In his speech he claimed that “the people shouting ‘traitor’ don’t even know what’s happening to them.” Many of the same people would disagree.  According to vidmax “the German people are confused and angry about why they’re told that they have to be frugal and avoid having children because of the immense cost while simultaneously working their fingers to the bones to fund a foreign invasion.”

Those in the audience in the audience ridiculed Maas for claiming that actual workers in the audience “hijack Labor Day.” He was ultimately chased offstage for what people in the audience said was the hypocrisy of celebrating Labor and fair wages while his party supports the import of millions of unskilled workers.

The booing public ultimately forced him to end his speech early; he was then forced into his armored Mercedes at which point he quickly fled.

Perhaps not surprisingly this took place just hours after Germany’s ascendant right-wing AfD party adopted an anti-Islam manifesto, according to which Muslims are no longer welcome in Germany.

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Authored by Ludwig von Mises via The Mises Institute,

Excerpted from Human Action

The director wants to build a house. Now, there are many methods that can be resorted to. Each of them offers, from the point of view of the director, certain advantages and disadvantages with regard to the utilization of the future building, and results in a different duration of the building's serviceableness; each of them requires other expenditures of building materials and labor and absorbs other periods of production. Which method should the director choose? He cannot reduce to a common denominator the items of various materials and various kinds of labor to be expended. Therefore he cannot compare them. He cannot attach either to the waiting time (period of production) or to the duration of serviceableness a definite numerical expression. In short, he cannot, in comparing costs to be expended and gains to be earned, resort to any arithmetical operation. The plans of his architects enumerate a vast multiplicity of various items in kind; they refer to the physical and chemical qualities of various materials and to the physical productivity of various machines, tools, and procedures. But all their statements remain unrelated to each other. There is no means of establishing any connection between them.

Imagine the plight of the director when faced with a project. What he needs to know is whether or not the execution of the project will increase well-being, that is, add something to the wealth available without impairing the satisfaction of wants which he considers more urgent. But none of the reports he receives give him any clue to the solution of this problem.

We may for the sake of argument at first disregard the dilemmas involved in the choice of consumers' goods to be produced. We may assume that this problem is settled. But there is the embarrassing multitude of producers' goods and the infinite variety of procedures that can be resorted to for manufacturing definite consumers' goods. The most advantageous location of each industry and the optimum size of each plant and of each piece of equipment must be determined. One must determine what kind of mechanical power should be employed in each of them, and which of the various formulas for the production of this energy should be applied. All these problems are raised daily in thousands and thousands of cases. Each case offers special conditions and requires an individual solution appropriate to these data. The number of elements with which the director's decision has to deal is much greater than would be indicated by a merely technological description of the available producers' goods in terms of physics and chemistry. The location of each of them must be taken into consideration as well as the serviceableness of the capital investments made in the past for their utilization. The director does not simply have to deal with coal as such, but with thousands and thousands of pits already in operation in various places, and with the possibilities for digging new pits, with the various methods of mining in each of them, with the various methods for utilizing the coal for the production of heat, power, and a great number of derivatives. It is permissible to say that the present state of technological knowledge makes it possible to produce almost anything out of almost everything. Our ancestors, for instance, knew only a limited number of employments for wood. Modern technology has added a multitude of possible new employments. Wood can be used for the production of paper, of various textile fibers, of foodstuffs, drugs, and many other synthetic products.

Today two methods are resorted to for providing a city with clean water. Either one brings the water over long distances in aqueducts, an ancient method long practiced, or one chemically purifies the water available in the city's neighborhood. Why does one not produce water synthetically in factories? Modern technology could easily solve the technological problems involved. The average man in his mental inertia is ready to ridicule such projects as sheer lunacy. However, the only reason why the synthetic production of drinking water today–perhaps not at a later day–is out of the question is that economic calculation in terms of money shows that it is a more expensive procedure than other methods. Eliminate economic calculation and you have no means of making a rational choice between the various alternatives.

The socialists, it is true, object that economic calculation is not infallible. They say that the capitalists sometimes make mistakes in their calculation. Of course, this happens and will always happen. For all human action points to the future and the future is always uncertain. The most carefully elaborated plans are frustrated if expectations concerning the future are dashed to the ground. However, this is quite a different problem. Today we calculate from the point of view of our present knowledge and of our present anticipation of future conditions. We do not deal with the problem of whether or not the director will be able to anticipate future conditions. What we have in mind is that the director cannot calculate from the point of view of his own present value judgments and his own present anticipations of future conditions, whatever they may be. If he invests today in the canning industry, it may happen that a change in consumers' tastes or in the hygienic opinions concerning the wholesomeness of canned food will one day turn his investment into a malinvestment. But how can he find out today how to build and equip a cannery most economically?

Some railroad lines constructed at the turn of the century would not have been built if people had at that time anticipated the impending advance of motoring and aviation. But those who at that time built railroads knew which of the various possible alternatives for the realization of their plans they had to choose from the point of view of their appraisements and anticipations and of the market prices of their day in which the valuations of the consumers were reflected. It is precisely this insight that the director will lack. He will be like a sailor on the high seas unfamiliar with the methods of navigation, or like a medieval scholar entrusted with the technical operation of a railroad engine.

We have assumed that the director has already made up his mind with regard to the construction of a definite plant or building. However, in order to make such a decision he already needs economic calculation. If a hydroelectric power station is to be built, one must know whether or not this is the most economical way to produce the energy needed. How can he know this if he cannot calculate costs and output?

We may admit that in its initial period a socialist regime could to some extent rely upon of the preceding age of capitalism. But what is to be done later, as conditions change more and more? Of what use could the prices of 1900 be for the director in 1949? And what use can the director in 1989 derive from the knowledge of the prices of 1949?

*  *  *

The paradox of "planning" is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark. There is no question of a rational choice of means for the best possible attainment of the ultimate ends sought. What is called conscious planning is precisely the elimination of conscious purposive action.

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Presented with no comment…

 

Source: @SOBL1

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With anti-establishmentarians on the rise in the US & Europe, it appears the neocons and their NATO proxy aren't wasting any time and are stepping up not just the words, but their deeds, against a so-called "resurgent Russia." NATO's European Command (EUCOM) "needs to change," blasts General Philip Breedlove, urging the military to get back to the business of war planning, a skill lost during the post-Cold War era saying his objective is to send a signal of deterrence to Russia. That signal was heard loud and clear as NATO is deploying an additional four battalions of 4,000 troops to the Russian border in Poland and the three Baltic States, according to a report citing US Deputy Secretary of Defense Robert Work.

"We have to be ready for a situation where we don't have Russia as a partner," warns EUCOM  Gen. Philip Breedlove, adding that the military here needs to get back to the business of war planning, a skill lost during the post-Cold War era and one needed again in the face of a resurgent Russia. As Military.com reports,

On Tuesday, Breedlove will walk a final time across the parade ground at EUCOM headquarters, handing off leadership of more than 60,000 troops to Gen. Curtis M. Scaparrotti.

 

Unlike when Breedlove assumed command in 2013, Scaparrotti arrives at a time of upheaval as the continent contends with Cold War-like tensions with Russia, a refugee crisis tearing at Europe's social fabric, and increased fears about terrorism because of war along NATO's southern flank.

 

Scaparrotti will lead a EUCOM headquarters that over the years has shrunk in size — it is the second-smallest of all combatant commands — even as the Pentagon attempts to boost its presence along NATO's eastern edge.

 

Breedlove said more work needs to be done to lift EUCOM out of its post-Cold War mindset, which resulted in "building partner capacity," military parlance for training missions. EUCOM is a "mere fraction" of what it was a generation ago, a downsizing that occurred when the U.S. was trying to make a partner out of Russia.

 

"I am very sure about how EUCOM needs to change," Breedlove said during a recent exit interview with Stars and Stripes. "This headquarters shrank and changed from a war-fighting headquarters to a building-partnership-capacity, engagement kind of headquarters."

 

"This headquarters needs to be a warfighting headquarters," he said.

 

Reorienting EUCOM into a warfighting headquarters likely would demand more resources, more troops and new contingency plans to conduct combat operations within Europe.

 

In the past three years, EUCOM has responded to new security concerns by boosting its presence in eastern Europe, mainly through rotational troops and pre-positioned tanks and other armor.

 

A $3.4 billion Pentagon proposal, prompted by what the West sees as a more aggressive and unpredictable Russia, seeks to build upon recent efforts in the year ahead.

 

Dealing with Russia's formidable capabilities around the Baltics, where NATO is outmanned and outgunned, is one obstacle allies will need to prepare for better, according to Breedlove.

Some critics, particularly in Berlin, have said Breedlove's rhetoric sometimes has been too hawkish. The general rejects such criticism, saying his objective is to send a signal of deterrence to Russia; and as RT reports, NATO's deployment of an additional 4,000 troops to the Russian border signals their intent loud and clear…

Work confirmed the number of troops to be sent to the border with Russia, The Wall Street Journal reports. He said the reason for the deployment is Russia’s multiple snap military exercises near the Baltics States.

 

“The Russians have been doing a lot of snap exercises right up against the borders, with a lot of troops,” Work said as cited by the Wall Street Journal. “From our perspective, we could argue this is extraordinarily provocative behavior.”

Moscow has been unhappy with the NATO military buildup at Russia’s borders for some time now; and with this latest move, The Russians, as expected, are displeased…

“NATO military infrastructure is inching closer and closer to Russia’s borders. But when Russia takes action to ensure its security, we are told that Russia is engaging in dangerous maneuvers near NATO borders. In fact, NATO borders are getting closer to Russia, not the opposite,” Russian Foreign Minister Sergey Lavrov told Sweden’s Dagens Nyheter daily.

 

Poland and the Baltic States of Lithuania, Latvia and Estonia have regularly pressed NATO headquarters to beef up the alliance’s presence on their territory.

 

According to the 1997 NATO-Russia Founding Act, the permanent presence of large NATO formations at the Russian border is prohibited. Yet some voices in Brussels are saying that since the NATO troops stationed next to Russia are going to rotate, this kind of military buildup cannot be regarded as a permanent presence.

 

Russia’s Defense Ministry says it’s ready for a tit-for-tat response to any NATO military activity near Russia’s borders. As Russia’s envoy to NATO Aleksandr Grushko put it, there are no “passive observes” in the Russian armed forces and Moscow would definitely compensate militarily for an “absolutely unjustified military presence.”

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Authored by Mark St.Cyr,

Let me be clear right from the outset: this is not an article about politics when it comes to whose guy or gal is currently seated or running. This is about the current state of affairs as it pertains to business; how they seem to be in motion; and, how it may affect one’s business, or, business in general. As for the “who’s in,” or “who’s out” – that’s for others to debate.

So, with that said, I want to outline a few developing issues that have the potential (true potential, not the hyperbolic) for outright disruption of all business as we know it. And no – not the type of “disruption” that emanates from the tech world. No, this one is far more disruptive, and, has implications for not only the business world, but the citizenry as well. After all: if you don’t think a business disruption can wreak havoc quickly – watch how fast calamity ensues once it’s realized a lowly roll of toilet paper will no longer be available.

Back in October of last year I penned an article titled: A Perilous Possibility: Weaponizing The Fed. In it I made a few arguments about both the dangers, as well as, how differing circumstances may implement such a scenario. Whether intentional, or not.

As always the so-called “smart crowd” within media circles balked at the idea. However, I heard from quite a few in the business community that shared the same concerns once they understood precisely what “the game afoot” and its ramifications just might entail. And, I am of the opinion that “game” is not only afoot, but rather, blindly running at full speed in search of a cliff. The real problem for the rest of us is this: games that end with cliffs don’t bode well for either the 1st place finisher – or last. Below is an excerpt from that article. To wit:

“One of the real reasons for my concern stems from the players involved. I’m far more concerned and have a greater sense of foreboding when it appears the “intellectual” set are the one’s playing against adversaries or circumstances they themselves only understand through textbooks or debate. i.e., A relative example could be the proverbial college professor that teaches business theory and application yet, has never been outside the walls of academia.”

Why is such a concern I had then more alarming now? Well, for starters, here are a few excerpts from a recent meeting with Japanese officials and Paul Krugman. Supposedly this was an “off the record” meeting. Yet, it seems to have been made public/released by none other than Mr. Krugman himself via his Twitter™ account.

I would advise you to read the entire discussion and draw your own conclusions. But for me, there were two distinct references that if I were, ohhh let’s say, a leader of a communist country whose economy was faltering and was looking for a possible scapegoat to finger wave? You couldn’t provide better fodder even within your own ministry of propaganda. To wit:

“There is a special issue involving China. China is in big trouble. China which seemed to be a source of strength but also not very long ago we were accusing China I think correctly of manipulating its currency to keep it down. China is now in fact intervening to support its currency in the face of huge capital outflows. We believe that the capital flight in 2015 was about one trillion dollars. China has immense reserves but not infinite reserves, which mean that depreciation of the renminbi becomes a real prospect and that will make life very difficult for the rest of us. So, all of this interdependence is there.”

Or how about this gem?

“It could be that things are even worse than I am portraying, that China is going to experience an explosive collapse, or simply that demand is going to be weaker than even my rather downbeat projections. The consequences in those two circumstances are very different. If the world economy starts growing and inflation picks up, we know what to do. Mr. Kuroda, Mrs. Yellen, Mr. Draghi have had the tools to deal with that, no problem.”

Innocuous you might think at first blush. However, if we are to finish that “train” out to its logical conclusion, the inference is? Hint: China doesn’t.

And what of that should concern us? No, it’s not that they may, or may not, have the tools. That’s irrelevant. What’s pertinent in my opinion is this:

Mr. Krugman (today’s dean of Keynesian thought and advisor for implementation) is openly suggesting in any immediate economic chaos The West can win – China not so much.  And although Japan is of course Asian – it’s economy and monetary philosophy is by all measures Western. And what’s another point that should not be lost? They’re China’s #1 economic adversary.

So why are things such as this something to watch intensely? Well, I am of the opinion doors are being opened (again: whether intentionally or not) for the possibility of those with their economic backs against the walls, ways to exploit those openings in approach, and timing, equivalent to how we once viewed outright war.  Let me make the argument proposing the following…

In a communist run nation, as well as, economy, if one so desired: you can make the hard, as well as, immediate choices to devalue, and/or de-$Dollarize your economy simultaneously sending economic panic and upheaval globally (especially to your adversaries) – all while you have both the ability (via their military) and (don’t let this point be lost) the wherewithal to use it as to control any civil unrest. All while having the perfect “in their own words” evidence concurrently for that “first response” to any provocation. Militarily or economically. For in today’s world of interconnections/dependence – monetary/trade warfare may yield the same results as kinetic.

It seems far more onerous when put into this frame of reasoning, no?

And if one wants further “framing” I would ask that one remember the timing of all this, and how it’s been increasingly unfolding lately.

First: The meeting and subsequent release of the ideas discussed via Mr. Krugman with Japan’s leadership.

 

Second: Suddenly the timing of Russian warplanes brazenly buzzing U.S. ships and more. Along with China’s outright refusal (remember the timing) to allow the U.S. a port-of-call exercise in Hong Kong.

 

And thirdly: Remember what happened just a few days ago? Hint: Suddenly the U.S. Treasury has a new “list.”  It seems “currency manipulation” is now an issue. (I know, but don’t laugh, because this is where things really begin to get dangerous in my view.)

Want to throw in a wildcard in this house-of-cards? The Saudi’s have now (there’s that timing thing again) openly, as well as, explicitly threatened to dump U.S. Treasury Notes. And not just a few, but all. Add too that an almost in-your-face cozy-ing up to China with oil for Yuan – and you have a possible unraveling of everything once thought of as “stable” or “insulated” from geopolitical events.

So interconnected has the economy of today become as to just a few years hence the financial crisis – ATM’s at a U.S. mid-western small bank can be halted just as fast, and with the same expediency, as a letter of credit can be rescinded to cargo vessels laden with much-needed products from medicine to toilet paper. Everything can grind to a halt in hours, never mind days or weeks.

So why the use of “launch codes” in my title and how does this all fit in you might ask? Fair point. All I can point to is the “Emergency Meeting” that took place a few weeks ago between the President and the Fed. Chair. You know, “To discuss the economy” and “exchange notes” we’re told. Again, fair enough. However…

In light of what has taken place right before, during, and since that “meeting.” Along with what has recently been released for public consumption (and especially by other governments and officials) capped off with the sudden declaration via Treasury of “warnings” Is it really that much of a stretch to think that just one wrong move whether intentional or not – can set everything we’ve come to know as “business” into complete and utter disarray? If not worse? As in much worse?

Some will call it conspiracy thinking. Personally, I just think of it as prudent business contemplation.

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Several weeks ago we learned that not all is well in the ongoing negotiations to impose Obama’s landmark Transatlantic Free Trade Agreement, also known as the TTIP, when unexpectedly Europe threatened to impose visas on Americans and Canadians.

As we commented at the time, this latest tension may have been driven “by the fact that the United States hasn’t yet lifted visa requirements for some EU member countries such as Romania, Bulgaria, and Poland. But more likely, this is just a bit of gamesmanship on the part of the EU. The US and European Union are in ongoing negotiation regarding the Transatlantic Trade and Investment Partnership, and there appear to be some sticking points that the two sides can’t quite come to an agreement on – namely labor, environmental, and regulatory standards.”

As Reuters added, “trade negotiations between Brussels and Washington are at a crucial point since both sides believe their transatlantic agreement, known as TTIP, stands a better chance of passing before President Barack Obama leaves the White House in January.”

Now, according to leaked negotiating drafts and internal positions, which were obtained by Greenpeace and seen by the Guardian, it seems the stumbling blocks ahead of the TTIP’s implementation are indeed substantial, and potentially dealbreaking. As the Guardian reports, talks for a free trade deal between Europe and the US face a serious impasse with “irreconcilable” differences in some areas.

The leaked texts also show that the two sides are at odds “over US demands that would require the EU to break promises it has made on environmental protection.“

As Obama said last week during his whirlwind tour of Europe, and especially his visit to Hanover where thousands of Germans were protesting the TTRIP at the same time, he was confident a deal could be reached. “But the leaked negotiating drafts and internal positions, which were obtained by Greenpeace and seen by the Guardian, paint a very different picture.”

Protesters wear masks of Barack Obama and Angela Merkel
as they demonstrate against TTIP free trade agreement

“Discussions on cosmetics remain very difficult and the scope of common objectives fairly limited,” says one internal note by EU trade negotiators. Because of a European ban on animal testing, “the EU and US approaches remain irreconcilable and EU market access problems will therefore remain,” the note says. Guardian adds that according to the confidential briefing, talks on engineering were also “characterised by continuous reluctance on the part of the US to engage in this sector.”

The biggest concern appears to be the hypocritical stance by both sides on environmental protections: while both US and European public officials have railed for the need to safeguard the environment, the note presents a starkly different reality dictated by the corporations that are the key beneficiaries from the TTIP.

Jorgo Riss, the director of Greenpeace EU, said: “These leaked documents give us an unparalleled look at the scope of US demands to lower or circumvent EU protections for environment and public health as part of TTIP. The EU position is very bad, and the US position is terrible. The prospect of a TTIP compromising within that range is an awful one. The way is being cleared for a race to the bottom in environmental, consumer protection and public health standards.”

More details from the Guardian:

US proposals include an obligation on the EU to inform its industries of any planned regulations in advance, and to allow them the same input into EU regulatory processes as European firms. American firms could influence the content of EU laws at several points along the regulatory line, including through a plethora of proposed technical working groups and committees.

 

“Before the EU could even pass a regulation, it would have to go through a gruelling impact assessment process in which the bloc would have to show interested US parties that no voluntary measures, or less exacting regulatory ones, were possible,” Riss said.

Not surprisingly, environmentalists are concerned by the undue influence afforded to corporations. They say the body has loose rules on corporate influence, allowing employees of companies such as BASF, Nestle and Coca Cola to sit on – and sometimes lead – national delegations. Some 44% of its decisions on pesticides residues have been less stringent than EU ones, with 40% of rough equivalence and 16% being more demanding, according to Greenpeace.

Another cause of concern is genetically modified foods because as the Guardian writes, “GM foods could also find a widening window into Europe, with the US pushing for a working group to adopt a “low level presence initiative”. This would allow the import of cargo containing traces of unauthorised GM strains. The EU currently blocks these because of food safety and cross-pollination concerns.” That won’t be the case should the TTIP pass.

More importantly, it appears that the EU has not yet accepted the US demands, but they are uncontested in the negotiators’ note, and no counter-proposals have been made in these areas suggesting that far from its official stance, Europe may simply roll over on most US (and corporate) demands. 

Europeans will likely see this as an act of betrayal by the negotiators: in January, the EU trade commissioner Cecilia Malmström said [pdf] the precautionary principle, obliging regulatory caution where there is scientific doubt, was a core and non-negotiable EU principle. She said: “We will defend the precautionary approach to regulation in Europe, in TTIP and in all our other agreements.” But the principle is not mentioned in the 248 pages of TTIP negotiating texts.

The European commission has also promised to safeguard environmental laws, defend international standards and protect the EU’s right to set high green benchmarks in future.

The new leak will not placate critics of the deal, who have pointed to attempts by fossil fuel firms and others to influence its outcome, as a sign of things to come.

Finally, if there was any doubt as to who the true negotiators behind the deal are, this should clear it up: the EU negotiators internal note says “the US expressed that it would have to consult with its chemical industry on how to position itself” on issues of market access for non-agricultural goods. Where industry lobbying in regulatory processes is concerned, the US also “insisted” that the EU be “required” to involve US experts in its development of electrotechnical standards.

Finally, recall that having started off with majority public support on both sides of the Atlantic, as 55% of Germans and 53% of Americans thought the TTIP deals was beneficial for the two respective countries as recently as 2014, a recent YouGov poll found that support for the deal had tumbled to just 17% and 15% respectively…

… while those who think the TTIP is bad for Germany and the US, are now well ahead.

We doubt today’s revelations will change this dire trajectory, and as a result the TTIP – which will surely be implemented due to its overwhelming corporate support – will demonstrate even more vividly just how “undemocratic” trade treaties have become in the New Normal, when they are designed to serve a handful of very special (and wealthy) interests.

via http://ift.tt/1QLdvKE Tyler Durden

Submitted by Noble Group Research

Noble Group’s Cliffhanger

2010:  Harry Banga split… most of Noble problems start here.¹

2015:  Noble Group, one of the biggest traders of commodities from coal to iron ore is melting from its base.

Script writers have devised the solution of telling us a story but leaving it at a cliffhanger, thus forcing the market to postpone their execution to hear the rest of the tale.

A villain was designed and a lawsuit with an injunction was filed with the Hong Kong High Court asking to ban his research, hoping to ensure the audience will return to see how the characters would resolve the dilemma.

Behind the scenes, the legally aggressive stance of Noble Group Ltd is rapidly becoming known in the financial analysts’ community as analysts and media organizations are threatened one after another by the troubled SGX-listed trader.

The censorship and its lawyers used to claim full control of the situation with the hope that its critics and the market would be “reset”—akin to being lobotomized.

The company has left us with its cliffhanger: even the most egregious comments made by Iceberg on the trader happened to be entirely correct.

“The Hong Kong High Court has recently ordered that Noble pays a substantial amount of money to Iceberg after an unreasonable application made by Noble was once again rejected by the Court”.

The futility of Noble’s claims has been remarkable.

“For example, Noble has defended that Yancoal was not overstated (although it was valued 48 times its market value)  and that saying otherwise would be defamation.” ²

It has not paid off.

Plainly, it’s Iceberg who was right.

Noble Group, the SGX listed trader is insolvent based on liquidation value (a write-off of its commodity contracts or the asset value).

Noble recorded $465m negative OCF in full year 2015, stressing it generates positive cash flow in the second part of the year ($580m after interest) but has never given any detail on how the short hedges supporting this cash generation in Q3 and Q4…

Noble has never turned the page on 2015…

Its Management has a ludicrous coal forward projectio , pricing 60 to 70% above the current curve (and with a deteriorating coal market outlook).

Neither, Noble Group or its public relation firms have enjoyed huge credence or the control of the script lately, and one can fully expect them to be irrational until they either blow up or magically emerge unscathed…

We are prognosticating the likelihood of the former.

Using the same adjusted financials used by financial institutions and rating agencies, we can see who is without trunks as the sea ebbs. The time clock is running.

We are now entering May, with things becoming more loose: why is Noble so late in securing financing?

<sup>1. “Back with a Banga”, South China Morning Post
2. ICEBERG RESEARCH QUESTIONS TO NOBLE’S MANAGEMENT AHEAD OF ITS APRIL 14TH AGM</sup>

via http://ift.tt/1NMW41u Tyler Durden