According to Reuters, Virgin is planning an IPO as part of a deal with a special purpose acquisition company created by Social Capital CEO Chamath Palihapitiya.
SPAC’s typically have two years to raise money from investors and spend it to help take a company public.
The SPAC will reportedly invest about $800 million for a 49% stake in Virgin Galactic, according to the Wall Street Journal. That includes about $100 million that Palihapitiya is personally committing to the deal. Virgin’s existing investors will be left with a 51% stake, will retain control of the company.
Virgin has already collected some $80 million in deposits from customers who hope to be among the first tourists traveling to space, at a clip of $200,000 to $250,000 per seat. The company has raised $1 billion since 2004, mostly from Branson’s personal fortune.
Branson will be among the first travelers, and plans to be the first non-crew member to board the plane.
“Hopefully, in not many months’ time, I’ll fulfill my dream of going to space and others will soon follow,” Branson said earlier this year, according to CNN.
Meanwhile, Jeff Bezos’ Blue Origin expects to launch its first person into space by the end of the year.
SpaceX, which has focused more on launching satellites and resupply missions to the International Space Station, also plans to send tourists into space.
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At the end of the day, all of the frenzied whispers in the press about Deutsche Bank CEO Christian Sewing’s sweeping restructuring hardly did it justice. Instead of moving slowly, the bank started herding hundreds of employees into meetings with HR, first in its offices in Asia (Hong Kong, Sydney), then London (which got hit particularly hard) then New York City.
By some accounts, it was the largest mass banker firing since the collapse of Lehman, which left nearly 30,000 employees in New York City jobless. Although the American economy is doing comparatively well relative to Europe, across the world, DB employees might struggle to find work again in their same field.
According to Bloomberg, automation and cuts have left most investment banks much leaner than they were before the crisis, and the contracting hedge fund industry, which once poached employees from DB’s equities business, isn’t much help. Some employees will inevitably find their way to Evercore, Blackstone – boutique investment banks and private equity are two of the industry’s top growth areas – or family offices, which, thanks to the never-ending rally in asset prices (and the return of bitcoin), are also booming.
Oh, and of course, there’s always crypto. Some evidence has surfaced to suggest that many young bankers are already looking to make the leap.
For the highest-paid employees being let go this week, many will need to get used to lower pay. Some 1,100 ‘material risk takers’ have been let go. On average, they earned $1.25 million, with almost 60% of that in cash.
“A lot of these people are going to have to get used to less compensation,” said Richard Lipstein, managing director at recruiting firm Gilbert Tweed International, in a telephone interview. And “the percentage of compensation in cash is lower than it used to be.”
Many will need to leave the street, and possibly whatever city in which they are currently living, to find work elsewhere.
“A lot of the people coming out of DB are going to be very challenged to find jobs just because of the sheer change in the equity business,” said Michael Nelson, a senior recruiter at Quest Group. “When you are dispersing that many people globally, some of those people might have to leave the business.”
But although banking headcount has never returned to its pre-crisis levels…
…at least one major Wall Street institution is looking to hire some Deutsche people: Goldman Sachs.
While BBG’s piece on the layoffs focused on the difficulty these employees may face in finding new work, Reuters described the scene outside these offices, where one insider had warned about “Lehman-style” scenes.
Some presumably fired workers could be seen outside, taking photos with colleagues and splitting cabs, presumably to go to the nearest pub and quaff liquor, beer and prosecco.
Staff leaving in Hong Kong were holding envelopes with the bank’s logo. Three employees took a picture of themselves beside a Deutsche Bank sign outside, hugged and then hailed a taxi.
“They give you this packet and you are out of the building,” said one equities trader.
“The equities market is not that great so I may not find a similar job, but I have to deal with it,” said another.
After weeks of looming dread, employees were called into auditoriums, cafeterias and offices, handed an envelope with the details of their redundancy package, and shown the door.
It looks like Reuters’ reporters followed some of the employees at DB’s London office to the nearest pub.
Few staff wanted to speak outside the bank’s London office, but trade was picking up at the nearby Balls Brothers pub around lunchtime.
“I got laid off, where else would I go,” said a man who had just lost his job in equity sales.
Job cuts were limited to the offices in the bank’s main financial centers. Reuters discovered that even some employees in Bengaluru had received envelopes.
A Deutsche Bank employee in Bengaluru told Reuters that he and several colleagues were told first thing that their jobs were going.
“We were informed that our jobs have become redundant and handed over our letters and given approximately a month’s salary,” he said.
“The mood is pretty hopeless right now, especially (among)people who are single-earners or have big financial burdens such as loans to pay,” he added.
Sewing’s grand restructuring plan involves shutting down Deutsche’s entire lossmaking global equities business, cutting 18,000 jobs (roughly one-fifth of the bank’s total headcount) and hiving off €288 billion ($322 billion) of loss-making assets into a bad bank for sale or run-off. The goal of the restructuring is to reorient DB away from its troubled institutional business and more toward commercial banking and asset management.
As a JP Morgan analyst pointed out, questions linger over DB’s ability to grow, its “ability to operate a corporate franchise without a European equity business.”
Investors were also taken by surprise, which is probably why DB shares sold off again on Tuesday. Closing the bank’s European equity business as a radical step that few anticipated. Most of the leaks to the media seemed to suggest that the cuts would focus on its foreign business, particularly the troubled US equities unit.
But without an equities business, some clients might lose faith in DB’s ability to win business from large corporations. Then again, there’s also the sheer enormity of what the bank is trying to do: substantially grow revenues while cutting a huge chunk of its staff and closing whole businesses, some of which are synergistic with other businesses that will remain open.
As Daniele Brupbacher of UBS pointed out, the odds of success seem low: “Cutting costs by one-quarter while increasing revenues by 10 per cent over four years in the current market environment, while undergoing massive restructuring, could be seen as ‘challenging.'”
Restructuring costs are also probably weighing on shareholders’ minds: the restructuring is expected to produce a full-year loss.
Will corporate bank head Stefan Hoops succeed in doubling GTB’s pretax earnings to €2 billion over the next 2 years, and make a tangible return on equity of 15% by 2022? We guess it’s possible. We suppose it’s possible. But is it likely
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The appointment of Christine Lagarde as president of the ECB has been greeted with euphoria by financial markets. That reaction in itself should be a warning signal.
When risky assets soar in the middle of a huge bubble due to a central bank appointment, the supervising entity should be concerned.
Lagarde is a lawyer, not an economist, and a great professional, but the market probably interprets correctly is that the European Central Bank will become even more dovish. Lagarde, for example, is a strong advocate of negative rates.
Lagarde and Vice President De Guindos have warned of the need to carry out measures to avoid a possible financial crisis, proposing different mechanisms to mitigate the shocks created by excess risk. Both are right, but that search for mechanisms to work as shock buffers runs the risk of being sterile when it is the monetary policy that encourages excess. When the central bank solves a financial crisis by absorbing the excess risk that the market once took it does not reduce it, it only disguises it.
Supervisors ignore the effect of risk accumulation because they perceive it as necessary collateral damage to the recovery. Risk accumulates precisely because it is encouraged.
Draghi said that monetary policy is not the correct instrument to deal with financial imbalances and macroprudential tools should be used. However, it is the monetary policy which is causing those imbalances when an extraordinary, conditional and limited measure becomes an eternal and unconditional one.
When monetary policy disguises and encourages risk, macroprudential measures are simply ineffective. There is no macroprudential measure that mitigates the risk created by negative rates and almost three trillion of asset purchases. More than half of European debt has negative returns and the ECB must maintain the repurchase of maturities, injections of liquidity and even announce a new program of quantitative easing in the face of the lack of sufficient demand in the secondary market for those negative yielding bonds. That is a bubble.
Risk builds up slowly and happens instantaneously. That is what the central planner does not seem to want to understand and the reason why stress tests and macroprudential measures fail in the midst of monetary stimuli. Because they start from a fallacious base: Ceteris paribus and that the already accumulated imbalances are manageable.
When most Eurozone countries finance themselves at negative rates for up to seven to ten years, there is no reason to maintain current rates and stimuli.
The central planner can say that bond yields are low due to market demand, but when the Central Bank supplants the market by injecting, repurchasing maturities and announcing more monetary stimuli, the placebo effect in the real economy is imperceptible and the risk in financial assets is huge. The huge injection of money supply goes to other risk assets in search of a diminishing yield.
The eurozone has been in stagnation for several months, with many leading indicators worsening, and it is not due to lack of stimulus, but due to excess.
64% of the sovereign debt of the eurozone hs negative yields. Five trillion euros . Completely unjustified looking at solvency, liquidity or growth ratios.
Junk bonds are at the lowest yield in thirty years, while the rating agencies warn that the solvency and liquidity ratios have not improved. The BIS warned of the increase of zombie companies, eternally refinanced at low rates despite not being able to cover their interest expenses with operating profit. Meanwhile, companies on the verge of bankruptcy are financed at rates of 3.5-4%.
The multiples paid for infrastructure assets have soared in little more than half a decade and now no one is surprised to see 19 times EBITDA paid for assets driven by low rates and cheap debt.
Excess liquidity reached 1.2 trillion euros. It has multiplied sevenfold since the launch of the repurchase program.
The debt of non-financial companies in the eurozone remains above 78% of GDP, according to Standard and Poor’s, above the cycle maximum of the fourth quarter of 2008.
Many say that nothing has happened yet, although it is more than debatable, according to bankruptcies of financial entities and increase of zombie companies. However, the fact that there has not been a massive financial crisis yet does not mean that the bubble is not being inflated. And when that bubble is in several assets at once, there are no macroprudential measures to cover the risk.
The problem of central planners is one of diagnosis. They think that if credit does not grow as much as they think it should grow and investment and growth are not what they estimated, it is because more stimulus is needed. Many ignore the effect of overcapacity, excess debt and demographics while carrying out the greatest transfer of wealth from savers and the productive economy to the indebted.
Calls for prudence and risk analysis measures would be much more effective if misallocation of capital was not encouraged by the policy itself. We must be aware that lower rates and more liquidity will not improve the economy, but they may generate a dangerous boomerang effect on risk assets.
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Facebook activity among Britons has crashed by more than one third over the past 12 months, according to the analytics firm Mixpanel, first reported by The Daily Telegraph.
Since June 2018, several months after news of the Cambridge Analytica scandal was revealed, activity on Facebook’s mobile app in the UK dropped 38% through June 2019.
User clicks on web links or adverts inside the Facebook app declined in seven of the last 12 months, with an average monthly drop of 2.6%.
The alternative data outlines an entirely different story from Mark Zuckerberg, the chief executive of Facebook, who recently said Europe’s monthly active users continued to rise.
Investors have traditionally viewed the total number of users as a reliable metric of the social media company’s health, but with millions of fake accounts, many have turned to alternative data that shows a mass exodus of users started in the UK.
Last July, $120 billion was wiped off Facebook’s market value after it reported an unexpected drop in European users and shifted guidance about future growth lower.
Zuckerberg said last October that users in the US have plateaued and that future growth for the company would come from emerging markets.
Mixpanel’s data, also, estimates how users open web pages or services on Facebook, provided another form of alternative data that serves as a proxy of user activity.
Matti Littunen, a social media expert at Enders Analysis, questioned the alternative data – didn’t believe the figures represented an accurate view of Facebook users’ activity across the UK, due to his belief that Facebook’s usage data showed an uptick. Instead, Mixpanel’s data could reflect changes in advertising tactics, he said.
Littunen said if usage does begin to fall – advertising prices will start to rise as firms compete for smaller audiences, leading advertisers to shift ad money elsewhere.
“Facebook has reached a very high level of user saturation in the core markets like the US and the UK, meaning that they have little margin for error before engagement drops from the peak,” he said.
“If Facebook usage were to drop by a third, Instagram would have to double in size to make up for it.
“No messaging app has supported a multi-billion dollar advertising business so far, so WhatsApp and Messenger would not be able to make up for a major shortfall.“
In a separate report, advertising research firm eMarketer said in May that users had spent an average of three minutes less on Facebook in 2018 than they did in 2017.
“On top of that, Facebook has continued to lose younger users, who are spreading their time and attention across other social platforms and digital activities,” eMarketer said.
Another Mixpanel report shows likes, shares, and posts have fallen 20% since April 2018.
The decline in Facebook activity by Brits coincided with privacy and hate speech scandals throughout 2018. In September, the company disclosed that a security breach exposed 50 million accounts – further deterring users from using the social media platform.
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Authored by Raju Huidrom, Carlos Mulas-Granados, Laura Papi, and Emil Stavrev of the IMF Blog
The Czech Republic exports only a small number of cars and car parts directly to the United States, but it’s likely to suffer significant economic damage if that country were to impose tariffs on auto imports. The reason: the Czech Republic supplies parts that are used to build cars exported by other European countries.
Europe’s auto industry is one of many that are part of global value chains, in which different stages of manufacturing are dispersed among several countries. Because almost 70 percent of European exports are linked to value chains, tariffs imposed on products shipped by one country can affect many others. That is why, as we explain in a recent study, it’s important to view manufacturing through the prism of value chains when assessing the potential economic impact of tariffs or other economic shocks.
Two yardsticks
To do that, we need to distinguish between two yardsticks: gross value and value added. When a German resident buys a Volkswagen shipped from a factory in Bratislava, the purchase is recorded in gross terms as a Slovak export to Germany. But though that car was assembled in Slovakia, engine parts and other components came from third countries that provide a higher share of the value added to the final product than assembly does.
Distinguishing between traditional gross export measures and valued-added exports is especially important for Europe because the difference between the two is large; exports of other European countries to Germany are 8.3 percent of GDP in gross terms but only 2.9 percent of GDP in value-added terms.
To understand the importance of value-added measures, consider a scenario in which the United States imposes a 25 percent tariff on imports of cars and car parts. Gross exports of cars and parts from the European Union to the United States are 0.3 percent of EU GDP. The subsequent output loss for the EU is estimated at 0.1 percent of GDP, taking supply chain linkages into account. But only half the impact is in sectors and countries directly affected. The rest is transmitted via other sectors and trading partners along supply chains. Losses are distributed across more European countries than gross export data would suggest.
Let’s return to the case of the Czech Republic. Its direct exports of cars and parts to the United States are negligible in gross value terms. But in value added terms, the Czech Republic would rank fourth among European economies most hurt by car tariffs.
Our study also looked at how a big change in the pace of growth in the United States, China, or Germany—the three world trade hubs—would affect Europe through value chains. Our main conclusion was that growth spillovers from the United States and China are sizable, with larger effects on economies that are more exposed to them in terms of value-added exports.
On the other hand, we estimated that a growth shock that originates in Germany would have a smaller impact. This probably reflects the German economy’s smaller size relative to the United States and China. Also, Germany’s open and diverse economy is relatively resilient, so it was not a major source of independent shocks in the post-1995 period that we analyzed. Still, Germany could transmit shocks originating elsewhere, and its impact might be larger if growth were to be driven more by domestic demand. That was the case during the period around the reunification of East and West Germany in 1990.
These findings could be helpful for policymakers: measuring exports through value-added indicators gives a more precise picture of the distributional impact of potential trade shocks. And a better understanding of how trade shocks propagate through value chains could help formulate offsetting measures as well as policies to help the people who most likely to be affected.
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After White House Senior Advisor Jared Kushner unveiled his highly anticipated plan for peace in the Middle East during a two-day economic workshop in Bahrain, it was greeted with derision and exasperation by Arab leaders. The Palestinian leadership boycotted the event while a long list of commentators from Arab countries described the plan as “a colossal waste of time” and “dead on arrival”.
Instead of focusing on the deadlocked political situation, Kushner instead focused on economics, intending to invest $50 billion to fund 179 regional infrastructure projects over the coming decade. $27.6 billion would go to the West Bank and Gaza with the remainder going to Jordan, Egypt and Lebanon.
The primary goal of the plan is to allow the Palestinian territories to better access international markets while simultaneously improving key infrastructure such as electricity, water and telecommunications. That would see Palestinian GDP double over the next ten years, generate an estimated one million jobs and halve the poverty rate. The U.S. and Israel would not be responsible for the funding – the Bahrain workshop aimed to raise capital from across the Arab world. As the polling shows, however, an economic plan totally lacking a political dimension is certainly not being viewed as realistic by Palestinians.
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German Defense Minister Ursula von der Leyen, nominated to be the next President of the European Commission, has called for the creation of a European superstate. “My aim is the United States of Europe…” she said in an interview with Der Spiegel. She has also called for the creation of a European Army.
Belgian Prime Minister Charles Michel, nominated to be the next President of the European Council, has said that Eastern European countries opposed to burden-sharing on migration should lose some of their EU rights. He is also a strong proponent of the Iran nuclear deal.
Spanish Foreign Minister Josep Borrell, nominated to replace Federica Mogherini as High Representative of the Union for Foreign Affairs and Security Policy, is a well-known supporter of the mullahs in Iran. Borrell has also said that he hopes Britain will leave the EU because it is an impediment to the creation of a European superstate.
International Monetary Fund Managing Director Christine Lagarde, nominated to be the next President of the European Central Bank, has supported U.S. President Donald J. Trump’s trade war with China. “President Trump has a point on intellectual property. It is correct that nobody should be stealing intellectual property to move ahead…. On these points clearly the game has to change, the rules have to be respected.”
“The best cure for Europhilia is always to observe the EU’s big beasts at their unguarded worst… unencumbered by any attachment to democracy, accountability or even basic morality… [W]e witnessed rare footage of the secretive process that propels so many retreads and second-rate apparatchiks into positions of immense power in Brussels and Frankfurt, utterly disregarding public opinion…. Everything that is wrong with the EU was shamelessly on display.” — Allister Heath, The Telegraph.
German Defense Minister Ursula von der Leyen, nominated to be the next President of the European Commission, has called for the creation of a European superstate. “My aim is the United States of Europe…” she said in an interview with Der Spiegel. She has also called for the creation of a European Army. Pictured: Von der Leyen (left) is welcomed by outgoing European Commission President Jean-Claude Juncker at the Commission’s headquarters on July 4, 2019 in Brussels, Belgium. (Photo by Thierry Monasse/Getty Images)
After weeks of frenzied backroom wrangling, European leaders on July 2 nominated four federalists to fill the top jobs of the European Union. The nominations — which must be approved by the European Parliament — send a clear signal that the pro-EU establishment has no intention of slowing its relentless march toward a European superstate, a “United States of Europe,” despite a surge of anti-EU sentiment across the continent.
Following are brief profiles of the nominees for the top four positions in the next European Commission, which begins on November 1, 2019 for a period of five years.
Ursula von der Leyen, President of the European Commission
German Defense Minister Ursula von der Leyen, the daughter of a prominent EU official, has been nominated to replace Jean-Claude Juncker as the next president of the European Commission, the powerful bureaucratic arm of the European Union. Von der Leyen, of the center-right Christian Democratic Union (CDU), was a compromise choice after the candidacy of Manfred Weber, a favorite of German Chancellor Angela Merkel, was rejected by critics, led by French President Emmanuel Macron.
Macron had favored the candidacy of European Commission Vice President Frans Timmermans, a Dutch Social Democrat. Timmermans, however, was rejected by the Visegrád Group — the Czech Republic, Hungary, Poland and Slovakia — due to his frequent criticism of their stance against mass migration and judicial reforms.
Von der Leyen has called for the creation of a European superstate. “My aim is the United States of Europe — on the model of federal states such as Switzerland, Germany or the U.S.,” she said in an interview with Der Spiegel. She has also called for the creation of a European Army.
At the same time, however, von der Leyen has been roundly criticized at home and abroad for her performance as German defense minister. During her tenure, Germany’s military has deteriorated due to budget cuts and poor management, according to Parliamentary Armed Forces Commissioner Hans-Peter Bartels.
“The Bundeswehr’s condition is catastrophic,” wrote Rupert Scholz, who served as defense minister under Chancellor Helmut Kohl, days before von der Leyen was nominated to the EU’s top post. “The entire defense capability of the Federal Republic is suffering, which is totally irresponsible.”
Writing for the Munich-based newspaper Süddeutsche Zeitung, commentator Stefan Ulrich opined that von der Leyen is an “unsuitable” choice:
“Von der Leyen is unsuitable because after six years as defense minister the Bundeswehr is still in such a deplorable state. She should have resigned a long time ago. As President of the European Commission, she will be overwhelmed.”
In March 2016, von der Leyen was cleared of allegations of plagiarism in her doctoral thesis. In September 2015, the newsmagazine Der Spiegelreported that plagiarized material had been found on 27 pages of her 62-page dissertation. The president of the Hanover Medical School, Christopher Baum, said that although von der Leyen’s thesis did contain plagiarized material, the school decided against revoking her title because there had been no intent to deceive. “It’s about mistake, not misconduct,” he said.
Von der Leyen is currently being investigated by the Berlin Public Prosecutor’s Office for nepotism in connection with the allocation of contracts worth hundreds of millions of euros to outside consultants. One such firm is McKinsey & Company, where her son David works as an associate.
Former European Parliament President Martin Schulz tweeted: “Von der Leyen is our weakest minister. That’s apparently enough to become Commission president.”
A Deutschlandtrend survey published on July 4 found that 56% of Germans believe that von der Leyen is not a good choice to lead the European Commission; 33% said that she is a good choice.
The European Parliament will vote on her nomination in Strasbourg on July 16. If approved, she will take over from Jean-Claude Juncker on November 1.
Charles Michel, President of the European Council
Belgian Prime Minister Charles Michel, the son of a prominent EU official, has been nominated to succeed Poland’s Donald Tusk as President of the European Council. The European Council defines the EU’s overall political direction and priorities. The members of the European Council are the heads of state or government of the 28 EU member states, the European Council President and the President of the European Commission.
Michel became Belgium’s youngest prime minister in 2014 at the age of 38. In December 2018, he resigned after losing a no-confidence motion over his support for the UN Global Compact for Safe, Orderly and Regular Migration. It proclaimed basic rights for migrants, but critics said it would blur the line between legal and illegal immigration. He now heads a caretaker government after an inconclusive general election in May 2019.
Michel has said that Eastern European countries opposed to burden-sharing on migration should lose some of their EU rights. “The European Union is not only an ATM when you need support,” he said. “Cooperation means solidarity and responsibility.”
Michel is a strong proponent of the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA). He has criticized the Trump administration for withdrawing from the agreement: “No #IranDeal means more instability or war in the Middle East. I deeply regret the withdrawal by @realDonaldTrump from #JCPOA. EU & its international partners must remain committed and Iran must continue to fulfil its obligations.”
Michel has also condemned the Trump administration’s recognition of Jerusalem as the capital of Israel. “We know that tensions in Israel and Palestine are feeding a form of hatred and violence that is felt everywhere in the world. That’s why we have unequivocally condemned Donald Trump’s statement. It was oil on fire, we do not need it.”
Josep Borrell, EU Foreign Policy Chief
Spanish Foreign Minister Josep Borrell has been nominated to replace Federica Mogherini as High Representative of the Union for Foreign Affairs and Security Policy. Like Mogherini, Borrell is a well-known supporter of the mullahs in Iran and is likely to clash with the United States and Israel over the nuclear deal with Tehran.
In a February 19 interview with Politico, Borrell, a Socialist, declared that Israel would have to live with the existential threat of an Iranian nuclear bomb:
“The Americans decided to kill [the Iran nuclear deal], unilaterally as they do things without any kind of previous consultation, without taking care of what interests the Europeans have. We are not children following what they say. We have our own prospects, interests and strategy and we will continue working with Iran. It would be very bad for us if it goes on to develop a nuclear weapon…. Iran wants to wipe out Israel; nothing new about that. You have to live with it.”
On February 11, Borrell marked the 40th anniversary of the Iranian revolution by praising the achievements made by women in the country since Ayatollah Ruhollah Khomeini swept to power in 1979. The rights and status of Iranian women have, in fact, been severely restricted since the Islamic Revolution. In a Twitter thread, Borrell also encouraged the Iranian regime to wait out American sanctions in case U.S. President Donald J. Trump is not reelected in 2020.
In May 2019, Spain withdrew a warship, the frigate Méndez Núñez, from the USS Abraham Lincoln Carrier Strike Group, because of rising tensions between Washington and Tehran.
Also in May 2019, Borrell accused the United States of acting “like a western cowboy” after the Trump administration recognized the president of Venezuela’s National Assembly, Juan Guaidó, as interim president of the country. Borrell said that Spain “will continue to reject pressures that border on military interventions” to remove from power Venezuelan President Nicolás Maduro. The Spanish Socialist Party has a long history of promoting the Marxist revolutionaries led by Maduro and his predecessor, Hugo Chávez.
In November 2018, Borrell explained why the United States is more politically integrated than the European Union: “The United States has very little previous history. They were born to independence with practically no history; the only thing they had done was to kill four Indians.” He later apologized for the “excessively colloquial manner” in which he downplayed the “quasi annihilation” of Native Americans. Borrell made no mention of the destruction of the native populations of Central and South America at the hands of Spanish conquerors.
Borrell has said that “Europe needs a new leitmotiv” and that the fight against climate change “should be one of the great engines of Europe’s rebirth.”
Borrell has also stated that he hopes Britain will leave the EU because it is an impediment to the creation of a European superstate:
“I belong to the school which believes that with the UK in the EU we will never have a political union. Personally, because I do want a political union, I don’t care whether the United Kingdom leaves because I know that to date, it has been an obstacle to further integration.”
In April 2012, Borrell was forced to resign as president of the European University Institute (EUI) due to a conflict of interest after it emerged that he was simultaneously being paid €300,000 a year as a board member of the Spanish sustainable-energy company Abengoa.
In October 2016, Borrell was fined €30,000 ($34,000) by the National Securities Market Commission (CNMV) for insider trading after selling 10,000 shares in Abengoa in November 2015.
Christine Lagarde, President of the European Central Bank
Christine Lagarde, a former French finance minister the current managing director of the International Monetary Fund, has been nominated to succeed Mario Draghi as president of the European Central Bank (ECB). Lagarde’s nomination has received mixed reviews. As the head of the IMF, she brings strong credentials in leadership, management and communications. She is, however, a lawyer, not an economist, and she has no experience in monetary policy.
During an interview with the Daily Show, Lagarde said that President Donald Trump “has a point” in his trade war with China:
“President Trump has a point on intellectual property. It is correct that nobody should be stealing intellectual property to move ahead. He has a point on subsidies, you cannot just go about competing with others out there that are heavily subsidized. On these points clearly, the game has to change, the rules have to be respected.”
Financial reporter Bjarke Smith-Meyer noted that Lagarde’s nomination came as something of a surprise and “pushes the European Central Bank toward an area it’s tried to avoid in its 21-year history: politics.”
“Central banking is rocket science. If you don’t get it right, the consequences can be tragic.
“That’s why EU leaders are taking a huge gamble in their decision to entrust the leadership of the European Central Bank to Christine Lagarde, a political rock star with no economic training and no practical experience of monetary policy.
“At a time when the ECB is running low on options for jolting the economy, Lagarde may have the acumen and authority needed to persuade reluctant, conservative Germany and the Netherlands of the urgent need to provide more fiscal stimulus….
“But by nominating the former French minister to succeed Italy’s Mario Draghi — the bold president of the bank who rescued the European economy in 2012 with a promise to do ‘whatever it takes to preserve the euro’ — the EU’s leaders have effectively decided that they don’t need a central banker to run their central bank….
“The surprise choice of Lagarde, 64, was part of a Franco-German trade-off under which conservative German Defense Minister Ursula von der Leyen, 60, was nominated to head the European Commission, breaking a political deadlock in which all the original candidates fell by the wayside….
“The main reason why Lagarde got the nod, instead of the experienced French central bank chief François Villeroy de Galhau, appeared to be gender.
“For the first time, the sensitive choice of ECB chief was the adjustment variable in political horse-trading over other top EU jobs — even though the bank is meant to be strictly independent of politics.”
In December 2016, France’s Court of Justice of the Republic found Lagarde guilty of negligence for not seeking to block a fraudulent 2008 arbitration award to a politically connected tycoon when she was finance minister. The court ruled that Lagarde’s negligence in her management of a long-running arbitration case involving tycoon Bernard Tapie helped open the door for the fraudulent misappropriation of €403 million ($450 million) of public funds in a settlement given to Tapie in 2008 over the botched sale of sportswear giant Adidas in the 1990s.
Reflections on European “Democracy”
Writing for The Telegraph, columnist Allister Heath, in an essay titled, “The EU is a Sham Democracy,” noted:
“Thank you, Eurocrats, for being yourselves. The best cure for Europhilia is always to observe the EU’s big beasts at their unguarded worst, wheeling and dealing in their natural habitat, unencumbered by any attachment to democracy, accountability or even basic morality.
“The spectacle of the past few days made for compulsive watching: we witnessed rare footage of the secretive process that propels so many retreads and second-rate apparatchiks into positions of immense power in Brussels and Frankfurt, utterly disregarding public opinion.
“Peeking into Europe’s dystopia was certainly the right medicine for pre-Brexit Britain, guaranteed to convert erstwhile moderates into raging Brexiteers as they looked on, aghast, at the shocking disconnect between elites and people.
“Everything that is wrong with the EU was shamelessly on display: a Franco-German stitch-up; smaller countries being bulldozed, especially Eastern Europeans; a constitutional coup which sidelined the (useless) European Parliament; the fact that so many of the new generation of EU leaders have had brushes with the law that would have terminated their careers in the US or UK; their explicit commitment to a ‘United States of Europe’ and a ‘European army’ (about which we keep being lied to); and the singing of a national anthem we were promised wouldn’t exist when the European constitution was voted down….
“While the EU apes some of the rituals of democracy, they are a sinister sham, and will always be. The EU is a technocratic empire, and can be nothing else.”
Writing for the European media platform, Euractiv, Jorge Valero lamented:
“After five summit days and hundreds of hours of phone calls, meetings and backroom chats, the EU conclave agreed on its new leadership. But the ‘white smoke’ that emerged from the Council building preludes storm clouds for the nominees and the European demos.
“Few winners came out of the distribution of the top posts sealed on July 2, and the European democracy was hardly one of them.
“Ursula von der Leyen, Charles Michel, Josep Borrell, and Christine Lagarde have good reasons to pop the champagne and toast their unexpected elevation to Commission president, European Council chair, High Representative and ECB chief, respectively.
“But it was a high price to pay for the badly needed gender balance….
“The fresh leadership will stand in the shadow of old scandals, legal cases and malpractice. Lagarde was found guilty of negligence in the Bernard Tapie scandal. Borrell was sanctioned by the Spanish market authority for using insider information in the sale of some shares.
“The German parliament launched an investigation into von der Leyen for nepotism and irregularities in allocating expensive contracts. And Michel’s career would hardly be the same if his father hadn’t been a Belgian minister and EU Commissioner.”
The British Conservative MEP Daniel Hannon, in a tweet, summarized: “Can anyone look at the people who will be running the EU for the next five years and then try to claim that the high tide of federalism has passed?”
via ZeroHedge News https://ift.tt/2XF6kyY Tyler Durden
Canadian Foreign Minister Chrystia Freeland has become a bit of a living parody of everything wrong with the detached technocratic neo-liberal order which has driven the world through 50 years of post-industrial decay. Now, two years into the Trump presidency, and five years into the growth of a new system shaped by the Russia-China alliance, the world has become a very different place from the one which Freeland and her controllers wish it to be.
Chrystia Freeland
Having been set up as a counterpart to the steely Hillary Clinton who was supposed to win the 2016 election, Freeland and her ilk have demonstrated their outdated thinking in everything they have set out to achieve since the 2014 coup in Ukraine. Certainly before that, everything seemed to be going smoothly enough for End of History disciples promoting a script that was supposed to culminate in a long-sought for “New World Order”.
The Script up until Now
Things were going especially well since the collapse of the Soviet system in the early 1990s. The collapse ushered in a unipolar world order with the European Union and NAFTA, followed soon thereafter by the World Trade Organization and the 1999 destruction of Glass-Steagall. The trans-Atlantic at last was converted into a cage of “post-sovereign nations” that no longer had actual control of their own powers of credit generation. Under NATO, even national militaries were subject to technocratic control. This cage was perfect for the governing elite “scientifically managing” from above while the little people bickered over their diminishing employment and standards of living from below.
Even though the former Soviet bloc nations were in tatters by 1992, their sovereign powers could only be undone by applying the liberalization process which took 30 years in the west in a short space of only a decade. This was done under the direction of such monetarist “reformers” such as Anatoly Chubais and Yegor Gaidar under Yeltsin. Similar privatization and liberalization reforms were applied viciously to Ukraine and other Warsaw pact countries during the same period. Those pirates that became the “nouveau riche” of the west were joined by such contemporary modern oligarchs such as Oleg Deripaska, Boris Berezovksy, Mikhail Fridman, Roman Abramovich in Russia, alongside Petro Poroshenko, Rinat Akhmetov, Mikhail Khodorkovsky and Viktor Pinchuk of Ukraine (to name a few). Not to forget their spiritual roots, many of these oligarchs soon purchased houses in the swank upmarket sections of London which has come to be known as “Moscow on Thames.”
By the end of the 1990s a new phase of this de-nationalization was unleashed with the unveiling of the Blair doctrine explicitly calling for a “post-Westphalia” world order which unleashed a wave of hellish regime change wars in the Arab World beginning with 9-11, and with a long term intention to target Libya, Syria, Iran, and Lebanon while expanding NATO’s hegemony against the potential re-emergence of Russia and China.
The Economic Meltdown Was Always the Intention
Let’s be clear: the whole point of the post-1971 world was directed with the intention of destroying the moral-political and economic foundations for western society. The belief in scientific progress and industrial growth was the cause of all true progress from the 15th century Golden Renaissance to the assassinations of the 1960s. The intended consequences of this post-1971 (zero growth) policy were:
1) The destruction of the productive forces of labor vis a vis outsourcing to “cheap labour markets” driven by shareholder profit.
2) The consolidation of wealth into an ever smaller array of private multi-billionaire owners under a logic of Darwinian survival of the fittest.
3) The creation of a vast speculative bubble supported by ever greater rates of unpayable debt and totally detached from the physically productive forces of reality.
Just like 1929, after years of speculation known as the roaring twenties, the “plug could be pulled” on the bubble in order to impose a bit of shock therapy onto a sleeping population who would beg for fascism as a solution if only it would put bread on their tables. Though this plan failed 80 years ago due to the American rejection of fascism under President Roosevelt, the belief that the formula could succeed in the 21st century was adhered to most closely as long as America was brought firmly under control of the City of London and their Wall Street lackies.
Although the fascist “solution” to their manufactured crisis was put down during WWII, this new attempt was premised upon the policy that a new system of Global Government managed by draconian regulation would be imposed under a “Green New Deal” framework whereby the instruments of banking regulation, state directed capital and centralized government (not evils unto themselves), would be directed only to green, low energy flux density forms of energy which inherently lower the population of the earth. This is very different from the protectionism, bank regulation, state credit and central authority exerted by America during the 1930s New Deal (or Eurasian New Silk Road policy today). The difference is that one system empowers sovereign nations, and increases the productive powers of labor and energy flux density of humanity while increasing quality of life, the other “Green” agenda has the opposite effect whereby monetary incentives are tied to decreasing the “carbon footprint” of the earth. The image of a drug addict getting paid heroine as an incentive to bleed himself to death is useful here.
With the slow collapse of first world economies after the assassination of nationalist leaders in the 1960s, the plan for depopulation and global government seemed to be unfolding without serious opposition.
The Role of Chrystia Freeland
Freeland’s bizarre role in this whole affair was to do what every good Rhodes Scholar is conditioned to do upon their completion of their indoctrination at Oxford: facilitate the tough transition of the “pre-collapse” world economy into a new operating system that was meant to be the “green post-collapse” world economy. It wasn’t going to be easy to tell a new “pirate class” of billionaires that they would have to accept losing much of their wealth (less population equals less money), and operate under a strict new global operating system of regulation necessary to contract the society. The Rhodes Scholarship program begun in 1902 to advance a re-organized British Empire and had worked alongside the Fabian Society for over a century producing more than 7000 scholars who have permeated across all fields of society (media, education, government, military and corporate).
In his 1877 will, Cecil Rhodes said this group should be “a society which should have its members in every part of the British Empire working with one object and one idea we should have its members placed at our universities and our schools and should watch the English youth passing through their hands just one perhaps in every thousand would have the mind and feelings for such an object, he should be tried in every way, he should be tested whether he is endurant, possessed of eloquence, disregardful of the petty details of life, and if found to be such, then elected and bound by oath to serve for the rest of his life in his Country. He should then be supported if without means by the Society and sent to that part of the Empire where it was felt he was needed.”
After leaving Oxford in 1993, Chrystia Freeland learned the ropes of “perception management” by working for the London Economist, Washington Post, Financial times and Globe and Mail and Reuters. After serving a stint as editor-at-large of Reuters, the time had come for her to play the role of Valery Jarrett to the “Barack Obama” of Canada then being prepped for Prime Ministership of Justin Trudeau.
She was perfect.
As an asset of the global propaganda system, Freeland had made high level contacts with those Ukrainian, Russian, and Western oligarchs mentioned above including Viktor Pinchuk and Mikhail Khodorkovsky. Larry Summers, George Soros and Al Gore, were just a few players in the west whom she considered her “close friends” and whom she was happy to bring into Canada during the period of re-organization of the Liberal Party (2011-2014) as it prepared to take power under the banner of the Canada 2020 think tank. What made Freeland even more special was that she was bred from a zealous family of Ukrainian nationalists under the patriarchy of her Nazi grandfather Michael Chomiak. This network was brought to Canada after WWII by Anglo-American intelligence and cultivated as a force with ties to pro-Nazi Ukrainian counterparts ever since.
Freeland’s admission into politics was managed by another Rhodes Scholar named Bob Rae who served as interim controller of the Liberal Party during several of the Harper years and was a major player in Canada 2020. Rae, who had been the NDP Premier of Ontario from 1990-1995 was happy to abdicate his seat to Freeland ensuring her entry into Trudeau’s inner circle and thus becoming his official handler.
Freeland Promotes the New Global Elite
Freeland has made it clear that she understands well that there is a fundamental difference in cultural identities of the “new rich” relative to the older oligarchic families which she serves. In the 2011 Rise of the New Global Elite, she describes it as follows:
“To grasp the difference between today’s plutocrats and the hereditary elite, who “grow rich in their sleep” one need merely glance at the events that now fill high-end social calendars.”
Freeland then breaks down the categories of “new plutocrats” into two subcategories: the good, technocratic friendly plutocrats who are ideologically compatible with the New World Order of depopulation, such as Bill Gates, Warren Buffet, George Soros, et al and the “bad” plutocrats who tend not to conform to the British Empire’s program of global governance and depopulation under the green agenda. In Freeland’s world “good oligarchs” are those who adhere to this agenda, while “bad oligarchs” are those who do not. Trump is a terrible Plutocrat, and – Viktor Yanukovych was a good plutocrat until he decided to not sacrifice Ukraine on the altar of the collapsing European Union and chose to throw Ukraine’s destiny into the Eurasian Economic Union in October 2013.
In the same paper, Freeland wrote:
“if the plutocrats’ opposition to increases in their taxes and tighter regulation of their economic activities is understandable, it is also a mistake. The real threat facing the super-elite, at home and abroad, isn’t modestly higher taxes, but rather the possibility that inchoate public rage could cohere into a more concrete populist agenda– that, for instance, middle-class Americans could conclude that the world economy isn’t working for them and decide that protectionism… is preferable to incremental measures.” Quoting billionaire Mohamed El-Erian, the CEO of Pimco she wrote: “one of the big surprises of 2010 is that the protectionist dog didn’t bark.”
Freeland ended her article with this message:
“The lesson of history is that, in the long run, super-elites have two ways to survive: by suppressing dissent or by sharing their wealth… Let us hope the plutocrats aren’t already too isolated to recognize this”.
But what does Freeland really think of the technocratic management under a plutocratic governance of society? In Plutocrats vs. Populists (Nov. 2013), Freeland lets her pro-plutocratic worldview out of the bag when she gushes:
“At its best, this form of plutocratic political power offers the tantalizing possibility of policy practiced at the highest professional level with none of the messiness and deal making and venality of traditional politics… a technocratic, data-based, objective search for solutions to our problems”
Since a technocratic managerial class committed to a common ideology must be solidified for this system to work, Freeland goes on to make the case to recruit young people to the imperial civil service:
“Smart, publicly minded technocrats go to work for plutocrats whose values they share. The technocrats get to focus full time on the policy issues they love, without the tedium of building, rallying– and serving– a permanent mass membership. They can be pretty well paid to boot.”
The End of a Delusion?
Now that Russia and China’s new operating system shaped by the Belt and Road Initiative has created a force of opposition to this British-run Deep State design, nothing which those would-be gods of Olympus have attempted to achieve has succeeded. Syria stands strong and the Arab nations are increasingly joining China’s Belt and Road Initiative. Venezuela has failed to fall the way so many regimes have done before 2014 and NAFTA has been seriously challenged by a nationalistic president in the USA who has also totally rejected the Malthusian agenda with the killing of COP21 and the Green New Deal. Trudeau’s usefulness has withered away quicker than you can say “SNC Lavalin” and now the decision appears to be seriously humored whether Freeland will take the reins of Canada after Trudeau is eliminated in order to “preserve the dying British Empire” and the dream of Cecil Rhodes. While the universe may be organized by a principle of reason, no one can say the same applies to the mind of an oligarchic.
via ZeroHedge News https://ift.tt/2Jvh3XA Tyler Durden
In an unexpected, if not outright bizarre concession by Beijing to protesters, on Tuesday morning Hong Kong leader Carrie Lam gave her strongest pledge yet when she declared the highly unpopular extradition bill that sparked several mass protests was “dead”, changing from an earlier script that it “will die” in 2020, according to the SCMP.
“I have almost immediately put a stop to the (bill) amendment exercise, but there are still lingering doubts about the government’s sincerity, or worries whether the government will restart the process in the legislative council, so I reiterate here: There is no such plan, the bill is dead.”
Addressing the month-long drama during a news conference, she reiterated that there is no plan to restart the legislation, describing the work to amend the bill as a “total failure.” Meanwhile, she said she would take full responsibility for what has happened in the city, according to a translation of her address.
However, just like Erdogan’s surprisingly muted reaction to the loss of Istanbul in the local election re-run two weeks ago was a Trojan horse to the leader’s true intentions, unveiled this past weekend with his sacking of the central bank chief, confirming that nothing has changed and the Turkish “executive president” is digging himself even deeper as the country’s unchecked, executive power, we would urge readers not to read too much into this soundbite: as the SCMP notes, whether the bill was effectively withdrawn – as demanded by protesters – remained unclear, as Lam did not say that she is officially withdrawing the bill, raising questions about to what extent the measure could be revived in the future. Additionally, Lam stood firm on not setting up a top-level probe into clashes between police and protesters. Meanwhile, an independent study will be looking into police behavior during the protests, she said, asking for some time to “improve the current situation.”
Lam noted those concerns in Cantonese remarks, via CNBC.
“What I’m saying today is nothing really different from what I said before. But maybe the citizens need to hear a definitive saying (from me),” Lam said, according to a translation of those comments. “So saying that the extradition bill is now in the coffin is the more definitive way of saying it, which means, the bill is dead. Hence, everyone doesn’t need to worry whether there will be any tactics that the discussion of the bill will resume in this Legislative Council term.”
Yet in a hint that a wave of “behind the scenes” retaliation was coming, Lam said the Independent Police Complaints Council would be launching an investigation, and that all parties involved in the demonstrations, including protesters, police, media and onlookers, could provide information.
Ever the Beijing-trained bureaucrat, the chief executive, speaking before meeting her advisers in the Executive Council, reiterated that the government did not call a protest on June 12, during which there were violent clashes between police and mostly young protesters, a “riot”. And even as she suggested that all those who had “rioted” may be facing penalties, Lam also said she was “willing to engage in an open dialogue with students without any preconditions”, sending a barrage of mixed messages.
Whether this is just a gambit to ease tension in the town where just yesterday a fresh round of protests shut down the main shopping area, or a genuine gesture, student leaders from eight universities balked, and turned down her request for a small-scale and closed-door meeting on Friday, and said they would only talk to Lam if she agreed to their two preconditions: meet them in a town hall-style open meeting and promise to exonerate protesters.
At the same time, protesters have been urging the government to respond to other demands: withdraw the bill completely, retract all references to the protest on June 12 as a riot; set up a commission of inquiry to examine police use of force; and launch democratic reforms. A demand for Lam to resign appears to have gradually faded away.
Lam admitted the public’s trust in the government was fragile, yet said she is “proud of the quality of the Hong Kong people” as demonstrated by the peaceful behavior of the vast majority of protesters. She, however, said “a very small minority of protesters have used the occasion to resort to violent acts and vandalism.”
“We are sad to see these violent acts because they undermine the rule of law in Hong Kong,” she said. “So I make a very sincere plea here, that in the future, if anyone in Hong Kong have any different views — especially those about the Hong Kong government’s policies — please continue to uphold the value of expressing it in a peaceful and orderly manner.”
As the SCMP adds, the weekly Exco meeting is the first at the Chief Executive’s Office since June 11. Last week’s meeting was held at Government House as the administrative headquarters were closed because of the protests. The previous two Exco meetings were cancelled.
Had the bill passed, it would have allowed Hong Kong to transfer suspects to jurisdictions it lacks extradition agreements with, including mainland China. Critics feared it would remove the legal firewall between the city and the mainland, exposing suspects to opaque trials across the border.
Tuesday marks exactly a month since the first mass protest against the bill brought an estimated 1 million people onto the streets on June 9, followed by about 2 million the following weekend.
via ZeroHedge News https://ift.tt/2NKm2sE Tyler Durden
A new report by Yahoo Finance, using Occupational Employment Statistics from the Bureau of Labor Statistics (BLS), shows the lowest-paying jobs in all 50 states pay an annual wage between $18,000 and $26,000 per year.
Most of these low-paying jobs were in the restaurant industry. The report discovered the most common low-paying jobs were cooking, prepping, and serving food. On a geographical basis, the lowest paying jobs were situated in the Rust Belt, Deep South, and Midwest.
Ticket takers, ushers, and lobby attendants were the second-most common low-paying jobs across the country.
“Jobs are low-paying for one of two reasons,” David Neumark, professor of economics at the University of California, Irvine told Yahoo Finance. “There’s a lot of supply and not much demand. And they’re very low-skilled. I mean, how much skill does it take to collect movies at the movie theater, right?”
Yahoo Finance points out that workers in the restaurant industry from Alabama to Washington were paid poorly, but there were exceptional variations in wages for the same jobs. Food preparation and servers made an annual wage of $18,680 in Alabama, the same position in Washington paid $25,550.
The reason for the pay gap in both states is due to the cost of living. Alabama was ranked as the 11th cheapest state to live while Washington was 38th, according to the Cost of Living Index by the Missouri Department of Economic Development.
The lowest-paid job was in Louisiana, where gaming and sports book writers and runners made $17,820.
A little more than 60% of the workforce is paid at hourly rates, according to the BLS, and out of that, 1.3 million earned less than the federal minimum wage.
