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Becoming the latest European travel company to fail and leave its customers stranded (who can forget about the collapse of Iceland’s Wow Air back in March?), 178-year-old Thomas Cook collapsed after failing to secure a deal with its creditors, leaving the British government to step in and rescue the as many as 600,000 customers who are reportedly now looking for a ride home.

Thomas Cook CEO Peter Fankhauser apologized to customers “following a decision of the board late last night, a British government receiver has been appointed early this morning…we have not been able to secure a deal to save our business...I know that this outcome will cause a lot of anxiety, stress and disruption.”

Fankhauser explained that while a “deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable.” The company, weighed down by debt, said Friday that it was looking for $369 million in financing over the weekend to avoid going under on Monday.

At the time, the company had a debt burden of £1.25 billion and warned that Brexit-related uncertainties had hurt bookings for summer holiday travel. The firm has also struggled with increased competition from online travel-booking websites like Expedia.

Chinese conglomerate Fosun, Thomas Cook’s biggest shareholder, had considered contributing $560 million to bail out the company earlier this year, but ultimately demurred for reasons that aren’t clear.

All bookings made through the company have been invalidated, the company said. It typically runs hotels, resorts, airlines and cruises for 19 million customers a year in 16 countries.

BREAKING: “We have not been able to secure a deal to save our business” – Chief executive of Thomas Cook Group, Peter Fankhauser apologises to the company’s ‘heartbroken’ staff and customers.

Get the latest on the #ThomasCook collapse here: https://t.co/ZV1DhQ8LZJ pic.twitter.com/VlaT4Uoejf

— Sky News (@SkyNews) September 23, 2019

Shares in European airlines and tourism-related companies climbed on the news, with the Stoxx 600 Travel & Leisure Index becoming one of 3 sectors gaining as the broader European share gauge declined.

The UK government is now scrambling to get all of its citizens home safely in what some have called “the largest peacetime repatriation effort in British history,” according to the Sydney Morning Herald. The UK Civil Aviation Authority said Monday that it would be working with the government to bring more than 150,000 British customers home over the next couple of weeks. The UK government runs an insurance program that ensures travelers can return home if a British tour operator goes under while they’re traveling, which is exactly what’s happening with Thomas Cook.

CAA Chief Richard Moriarty told the FT that it had launched “what is effectively one of the UK’s largest airlines, involving a fleet of aircraft secured from around the world.”

“The nature and scale of the operation means that unfortunately some disruption will be inevitable.”

Though the company was reportedly still selling vacation packages late last night and assuring its customers that all flights would continue as normal, passengers waiting at the airport were the first to learn that all operations would be cancelled.

Set to depart from Gatwick Airport, Thomas Cook flight 508 to Dalaman, Turkey was abruptly cancelled early Monday, the first in a string of cancellations at UK and global airports that will ultimately impact one million vacationers, according to the Independent.

Thomas Cook’s collapse resembles that of UK carrier Monarch two years ago. but Thomas Cook is a much bigger firm, and cleaning up this mess will be a much bigger headache for the CAA. Meanwhile, analysts at Bernstein suspect other tour operators could collapse, which would put the market into a bind.

The modern Thomas Cook Group formed in 2007 when the UK’s MyTravel merged with the privately-held Germany-based Thomas Cook to create a tour-company behemoth and promising to hasten consolidation in the tour operating industry.

Authored by Mike Shedlock via MishTalk,

Last week, Denmark’s central bank cut its deposit rate to -0.75%. Banks will pass this on to large customers.

Please consider Denmark’s Jyske Bank Lowers its Negative Rates on Deposits.

Jyske Bank said on Friday people with more than $111,100 in their bank accounts will be charged more for their deposits as it seeks to pass on some of the costs of recent rate cuts by the European and Danish central bank.

Jyske Bank, Denmark’s second-largest bank, said it would introduce a negative interest rate of 0.75% for all corporate deposits and for private clients depositing more than 750,000 Danish crowns ($111,100) from Dec 1.

Last week, Denmark’s central bank cut its key deposit rate to minus 0.75%, a record low among developed economies. “It is a lot of money and we have to pass on part of this bill to our customers,” he said. “I don’t hope that we will have to go lower but I don’t dare to promise it.”.

Denmark’s largest bank, Danske Bank has said it has no plans to introduce negative interest rates on deposits. Switzerland’s UBS has said it will impose a negative rate of 0.75% on clients who deposit more than 2 million Swiss francs ($2 million). ($1 = 6.7559 Danish crowns)

Simple Question

If you live in Denmark and have a bank account in excess of $100,000 or so, why would you have it at Jyske Bank which charges 0.75% while Danske Bank, the country’s largest bank doesn’t?

Possibilities

1. There is something seriously wrong at Danske Bank and people don’t trust it.

2. Danske Bank welcomes deposits and can do something with the money. But if so, at what risk?

Any Danish readers care to answer?

Perhaps we have an answer from Bloomberg in the following discussion.

Jyske Shares Jump on Interest Rate Charge

Bloomberg reports Negative Rates Just Got Real for a Record Group of Bank Clients

Shares in Jyske closed more than 5% higher marking their best performance since December 2017, as investors calculated the impact that the new policy will have on the bank’s net interest income.

Jyske has “set the ball rolling,” said Per Hansen, an investment economist at broker Nordnet.

Other Bank Comments

• A Danske Bank spokesman said, “We cannot comment on competitors’ prices and have nothing new to add on the matter.” The bank has previously promised to protect retail depositors from negative rates.

• Nordea Bank Abp spokeswoman Tenna Schoer said the Danish unit is “monitoring the situation closely.” The bank’s CEO Frank Vang-Jensen has previously said Nordea can’t rule out imposing negative rates on retail depositors.

• Sydbank, which has already said it will impose negative rates on retail depositors with over 7.5 million kroner, is monitoring the situation. “We have taken note of developments in the market and have seen that interest rates have fallen further,” said Jan Svarre, deputy CEO at the bank. “We’ll investigate our options and where the limit should be, and then we will return and notify our customers directly.”

Per Hansen commented “imposing such a policy is politically difficult for Danske, given its recent history of financial scandals. The bank is being investigated for a $220 billion money-laundering affair, and has been reported to the police for a separate case in which it overcharged retail investors.”

Bonus Questions

1. What happens to Danske if all the Danish money flees to Jyske?

2. What happens if everybody takes their money and runs?

Regardless of the answers, I expect to see an increased demand for gold, the US dollar, US treasuries, and safes as these pass-through policies escalate.

Please recall what happened in Japan on far less negative rates: Safes Sold Out in Japan: Customers Hoard Cash in Response to Negative Rates

A week ago I commented on the ECB’s Counterproductive QE: Whatever It Takes Morphs Into “As Long As It Takes”

European banks are getting killed on these policies.

Ball is Rolling

Jyske has “set the ball rolling,” said Per Hansen.

Yes, and if Central Banks stick with their “as long as it takes” approach, the results are likely to be disastrous.

At the behest of the Communist Party leadership, Chinese conglomerates and investor groups have this year transformed from sometimes overeager spree buyers of foreign companies, real estate, and art, into net sellers of global assets for the first time since Chinese companies became big-time players on the global stage about a decade ago, the FT reports.

The shift comes as the Communist Party tries to tamp down on capital outflows as China’s economy weakens with reports suggesting that Beijing could report economic growth below 6% for 2019 and 2020.

Chinese companies have agreed to sell about $40 billion in overseas assets so far this year, up from $32 billion for the whole of last year, according to data from Dealogic. At the same time, Chinese groups have bought just $35 billion of overseas assets this year, making the country a global net seller.

Divestments in the US, where Chinese corporate buyers are now viewed with increased scrutiny, have soared to over $26 billion this year, up from just $8 billion for all of 2018.

The data from Dealogic goes back to 2015, when Chinese companies bought about $100 billion in overseas assets while selling only $10 billion to foreign buyers. However, an FT analysis of Dealogic’s data indicates that China has been a net buyer of overseas assets since at least 2009.

Many of the Chinese-owned assets hitting the market this year were purchased in 2016, the peak of Chinese firms’ off-shore shopping spree. That year, Chinese companies struck more than $200 billion in overseas deals, while taking on extremely high levels of debt.

“There was a crescendo of outbound Chinese deals – a few that lacked industrial logic,” said Raghu Narain, Asia Pacific head of investment banking at Natixis. “The deals that were either funded by too much debt, lacking logic or subsequent actual synergies are unwinding now.”

Two of the most high-profile Chinese acquirers during the boom have become the biggest sellers at the behest of their overlords in Beijing.

Airlines-to-finance group HNA, for example, which bought multibillion-dollar stakes in Hilton and Deutsche Bank in 2016 and 2017, has offloaded at least $20 billion in assets since late 2017 after facing a liquidity crunch in China. HNA sold Swiss air services company Gategroup to RRJ Capital for $1.4 billion earlier this year.

[…]

Serial acquirer Anbang Insurance, which was taken over by the government in 2017, has sold off much of its global portfolio, including a group of hotels sold last week to Korea’s Mirae Asset for $5.8 billion.

The decision to divest foreign assets was handed down from the party leadership a few years back as the PBOC and China’s other economic authorities scrambled to shore up their dollar reserves and lower corporate debt. Now is a particularly precarious time for Beijing, which recently recorded the first default of a local government financing company, adding to concerns that the Chinese economy could crumble like a house of cards as it pumps credit back into the economy.

Authored by Jeff Deist via The Mises Institute,

Do central bankers really think negative interest rates are rational? 

“Calculation Error,” which Bloomberg terminals sometimes display, is an apt metaphor for the current state of central bank policy. Both Europe and Asia are now awash in $17 trillion worth of negative-yielding sovereign and corporate bonds, and Alan Greenspan suggests negative interest rates soon will arrive in the US. Despite claims by both Mr. Trump and Fed Chair Jerome Powell concerning the health of the American economy, the Fed’s Open Market Committee moved closer to negative territory today — with another quarter-point cut in the Fed Funds rate, below even a measly 2%. 

Negative interest rates are just the latest front in the post-2008 era of “extraordinary” monetary policy. They represent a Hail Mary pass from central bankers to stimulate more borrowing and more debt, though there is far more global debt today than in 2007. Stimulus is the assumed goal of all economic policy, both fiscal and monetary. Demand-side stimulus is the mania bequeathed to us by Keynes, or more accurately by his followers. It is the absurd idea, that an economy prospers by consuming and borrowing instead of producing and saving. Negative interest rates turn everything we know about economics upside down.

Under what scenario would anyone lend $1,000 to receive $900 in return at some point in the future? Only when the alternative is to receive $800 back instead, due to the predicted interventions of central banks and governments. Only then would locking in a set rate of capital loss make sense. By “capital loss” I mean just that; when there is no positive interest paid, the principal itself must be consumed. There is no “market” for negative rates. The future is uncertain, and there is always counterparty risk. The borrower might abscond, or default, or declare bankruptcy. Market conditions might change during the course of the loan, driving interest rates higher to the lender’s detriment. Inflation could rise higher and faster than the agreed-upon nominal interest rate. The lender might even die prior to repayment.

Positive interest rates compensate lenders for all of this risk and uncertainty. Interest, like all economics, ultimately can be explained by human nature and human action. 

If in fact negative interest rates can occur naturally, without central bank or state interventions, then economics textbooks need to be revised on the quick. Every theory of interest contemplates positive interest paid on borrowed capital. Classical economists and their “Real” theory say interest represents a “return” on capital, not a penalty. Capital available for lending, like any other good, is subject to real forces of supply and demand. But nobody would “sell” their capital by giving the buyer interest payments as well, they would simply hold onto it and avoid the risk of lending.

Marxists think interest payments represent exploitation by capital owners lending to needful workers. The amount of interest paid in addition to the capital returned was stolen from the debtor, because the lender did not work for it (ignoring, of course, the capitalist lender’s risk). But how could a borrower be exploited by receiving interest payments for borrowing, i.e., repaying less than they borrowed? I suppose Marxists may in fact cheer the development of negative rates, and perversely see them as a transfer of wealth from lenders to borrowers (when, in fact, we know cheap money and credit overwhelmingly benefit wealthy elites, per the Cantillon Effect). So negative rates require Marxists to drastically rethink their theory of interest.

Austrians stress the time element of interest rates, comparing the lender’s willingness to forego present consumption against the borrower’s desire to pay a premium for present consumption. In Austrian theory interest rates represent the price at which the relative time preferences of lenders and borrowers meet. But once again, negative interest rates cannot explain how or why anyone would ever defer consumption without payment — or in fact pay to do so!  

It should be noted that rational purchasers of negative-yield bonds hope to sell them before maturity, i.e., they hope bond prices rise as interest rates drop even lower. They hope to sell their bonds to a greater fool and generate a capital gain. They are not “buying” the obligation to pay interest, but the chance of reselling for a profit. So purchasing a negative-yield bond might make sense as an investment (vs.institutional and central bank bond buyers, which frequently hold bonds to maturity and thereby literally pay to lend money). But if and when interest rates rise, the losses to those left holding those $13 trillion of bonds could be staggering.

In the meantime, a huge artificial market for at least nominally positive US Treasury debt grows, strengthening the dollar and suppressing interest rates here at home. Once again, the dollar represents the least dirty shirt in the laundry. Congress loves this, of course, because even 5% rates would blow the federal budget to smithereens. Rising rates would cause debt service to be the largest annual line item in that budget, ahead of Social Security, Medicare, and defense. So we might say Congress and the Fed are in a symbiotic relationship at this point. The rest of the world might call it America’s “exorbitant privilege.”

Negative interest rates are the price we pay for central banks. The destruction of capital, economic and otherwise, is contrary to every human impulse. Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce. No society in human history previously entertained the idea of negative interest rates, so like central bankers we are all in uncharted territory now. 

Our job, among many, is to bring the insights of Austrian economics on money and banking to widespread attention before something truly calamitous happens.

The latest global university ranking has been released by Times Higher Education, putting the UK’s Oxford University at the top of the pile.

You will find more infographics at Statista

Institutions are ranked based on five indicators: teaching, research, citations, international outlook and industry income.

On this basis, the UK and United States completely dominate the top ten, and indeed the top 15, with only one other country represented – Switzerland with ETH Zurich in 13th place.

Authored by David Macilwain via Off-Guardian.org,

This is the story of my challenge to Australia’s SBS TV over their role in passing on criminal disinformation about Syria, chemical weapons and the White Helmets.

On the 8th of April last year, SBS television broadcast a report claiming sixty people had died in a chemical weapons attack in Douma on their evening world news bulletin. It was substantially the same as reports in all Western and West-friendly countries, though with an SBS commentary added.

SBS – the “Special Broadcasting Service” was set up by the Australian government in the ‘70s to serve the many different ethnic communities here; it also broadcasts foreign language news bulletins from many countries, including Russia and Turkey but not Iran or Lebanon.

While SBS remains partly government funded, it claims editorial independence – including from its commercial sponsors. Its current promotional slogan is “We tell stories – with a difference”, supported by appealing testimonies from the story-tellers, who no doubt believe this delusional claim. Not only are SBS stories on the chief issues of contention no different, or even sourced from other Western media, they are mostly just stories, with a loose or non-existent relation to the truth.

Challenging the SBS narrative is therefore problematic, but SBS has a well-defined Code of Practice on balance and bias against which one can make complaints for up to six weeks following a broadcast. Complaints are assessed by the “SBS Ombudsman” Sally Begbie, and a verdict delivered within sixty days.

I have gone through this process a few times over the last decade, and the result has been the same regardless of the case – “SBS has found that the broadcast complied with the Code, etc. etc.”

So it was that at the time of the Douma Incident, complaining to SBS for spreading the same lies as everyone else was not the highest priority! I was also preparing to head off for a holiday starting in Syria and struggling with a visa.

In addition though, it was not until later that there was substantive evidence on which to build a case for a complaint that might succeed. It’s easy to forget this, and that people in Douma knew nothing about a “chemical weapon attack”.

The big story there was the Syrian-Russian liberation of this last terrorist stronghold, at least until a week later when the US coalition missile attack became the story. The idea that a chlorine attack had killed people was anyway innately unbelievable, and even on the mainstream news it was the story of the children being hosed and choked in the Douma Hospital ward that dominated the bulletins.

Ironically, the best news reports – not stories – from Syria were broadcast every morning on SBS in the Russian news from NTV.

The simple sight of their Syria correspondent was sufficient – crouching beside the gas cylinder on the roof, and then chatting to a Russian military policeman in the bedroom while the toxic gas container lay there amongst its entourage of unbroken light fittings on the bed beside them.

The Russian news also showed the film that Western audiences saw, of some guy in a full gas mask in the same place.

Given the ongoing disinformation about Syria and my focus on the closely connected Novichok story, it wasn’t until the appearance of the Intercept’s report on Douma in February 2019 that the question of what actually happened there became important once more. Released in advance of the OPCW’s final report, and likely in the knowledge of it, the Atlantic Council sponsored report looked like an exercise in damage control.

The slick video production succeeded in giving some very dubious characters the appearance of independent and unbiased judgement, and credibility to their conclusion that “on balance it seems likely there was a gas attack there”.

There was of course no ‘balance’ question involved, as it was extremely unlikely or impossible there would have been such an attack from the Syrian army, leave alone on the very civilians the army was trying to rescue from their terrorist oppressors.

It was however the deceptions in the lengthy written part of the Intercept’s Douma report that made it significant, and which formed the central point of my subsequent complaint to SBS. James Harkin who wrote the report didn’t attempt to hide the questionable allegiances of the White Helmets, detailing their funding by the UK and US and association with British Army advisors.

But by admitting to their already-exposed propaganda role, Harkin reframed this as well-motivated; the White Helmets “association” with Opposition Islamist militias could then be excused as part of “their unobjectionable and utterly necessary work rescuing civilians from buildings bombed by the Russian and Syrian air-forces.”

So I put together an elaborate complaint to SBS following the Intercept report, in anticipation of the release of the OPCW’s final report and a predicted SBS rehash of all the false claims made a year earlier. This included my own observations from visiting Douma in May 2018 which pointed out the subtle ways that Harkin and Mackey had distorted the picture to suit their story.

Central to this was the “disappearing” of Douma hospital, whose most obvious survival was something of an embarrassment for them – evidence that Syrian and Russian militaries had avoided hitting this hospital, which unlike so many health centres had not been completely taken over by terrorist fighters and was vital for the local community.

Harkin also “admitted” that the terrorist group controlling Douma, Jaish al Islam, “ruled with an iron fist”, and so could take the blame for video trickery, rather than the White Helmets who merely witnessed it. A close scrutiny of the Douma emergency room footage however revealed the truth, of the White Helmets’ intimate involvement in the “treatment” as well as it fabrication.

This was assisted by the uncovering of another video of the hospital scene distributed by Turkey’s Anadolu Agency. From detailed examination of this video I was able to conclude that it was an earlier “take” featuring the same four men and same young child as was depicted in the SBS TV report, where a near-naked child is forcibly given Ventolin and slapped “to get her breathing”.

It was easy to see why this video report got left on the cutting room floor, as the man-handling of the infant victim was so clearly fake; the child screaming and struggling while her clothes were pulled off by four men, including one wearing a White Helmets jacket and a “nurse” from “Medical Relief for Syria”. It was this child who then appeared white with fear after further Ventolin treatment and hosing down, as a credible “gas attack victim” in the SBS report.

The object of my complaint to SBS was to show that they were guilty of using footage of violent child abuse as a propaganda tool to facilitate illegal and lethal action, wittingly or unwittingly. Even when serious doubts were cast over the credibility of the event by the testimony of one victim Hassan Diab, SBS had continued to promote the false story with the same emotive footage.

“We cannot consider your complaint as the program in question occurred more than six weeks ago.” – was the response. And as SBS had never mentioned the OPCW final report with its insipid confirmation of a chlorine attack in Douma, there was no more recent report for me to reference.

At the time however, there were frequent warnings that the Syrian army was preparing to move in on Idlib, and Russia was reporting plans by the White Helmets to stage another “chemical attack”. In anticipation of this, I ended my complaint with a warning, that –

The Syrian and Russian move to finally take back control of Idlib from Al Qaeda linked forces must not be allowed to develop into yet another Western-created “humanitarian crisis” by yet another White Helmet facilitated propaganda offensive streamed through Western mainstream media, with SBS playing its part.”

Just after sending off that complaint, the OPCW Engineers’ report was leaked to the Working Group on Syria, Propaganda and Media by its team leader Ian Henderson.

This was the final nail in the coffin of the Syrian opposition claims, as well as evidence of White Helmet collusion in torture and murder of the “gas attack victims”. But it was only when the “worst humanitarian disaster this century” warning was issued, and swarms of child-carrying White Helmets filled the news bulletins again in May, that I could put together a new complaint to SBS.

Over a period of six weeks to mid-June, SBS ran reports on different aspects of the alleged Idlib offensive by the Syrian and Russian militaries. There was the humanitarian crisis, with 300,000 people fleeing the province. There were attacks on hospitals and schools.

There was the targeting of rescue workers, and then of journalists, with a cameo appearance of Channel 4’s Alex Crawford pointing out an approaching Syrian helicopter to an HTS commander. And of course there were “unconventional weapons, even chemical” and a sickening episode at the UN reminiscent of Samantha Power’s “have you no shame?” attack on Russia’s Vitaly Churkin.

And through it all, White Helmets running and digging and finding children, in the usual places.

I think my complaint made a good case, at least for exercising caution in presenting any more emotive White Helmet footage. Unlike almost every other news report where the faces of children are blurred out, these reports apparently depend on people seeing and being affected by such shocking images, while being issued with an obligatory warning that “some viewers may find these images upsetting”.

My second complaint, sent in late June, included copies of the video reports under review with a precis of their contents, but focused principally on the hugely significant investigations of the OPCW engineers’ team and the apparent attempt to suppress their findings.

It followed on and quoted from the WGSPM’s report with its unavoidable and logical conclusion – that the White Helmets had colluded in the torture and execution of civilians to make a propaganda film, on behalf of their paymasters in Whitehall and Washington.

SBS agreed to review my complaint, and respond “within 60 days” – as required by their charter. While the propaganda barrage that began on April 28th had fizzled out as attention turned to provocations in the Persian Gulf, it had just restarted on the day in mid-August that I received the SBS Ombudsman’s response, and with renewed and malignant vigour.

SBS played a Channel 4 report, where Lindsay Hilsum conjured up the spectre of Stalin in a stomach-turning concoction that included a long speech by an HTS commander, and a venomous attack on President Assad. And of course, White Helmets digging and running with children.

Somehow I thought this time SBS would have to concede some fault. The case was indisputable; even the Atlantic Council’s staff agreed the hospital scenes had been staged, and the claim the gas bottles had fallen from the sky had been completely trashed. And there were 35 bodies of women and children showing signs of violent death in another location.

Most importantly, the White Helmets were implicated by their own admission, but this is why my complaint was dismissed:

“For the reasons below, the SBS News coverage that concerned you was found to be in line with the Code” – on “balance and impartiality”.

SBS considered that: “your overall concern seems to be that SBS does not cover the Russian or Syrian perspective adequately in reporting the Syrian Civil War.”

SBS identified my other apparent “concerns”, including:

You feel SBS did not place adequate weight or provide balanced coverage that supports your view that “Not only are the Syrian Army and Russian air-force not responsible for such attacks against civilian targets and infrastructure, the actions they are taking are in defence of the local civilian population under constant attack by terrorist militias.”

And:

You feel that “there was an almost complete absence of opinion from genuine Syrian sources or Syrian government officials in SBS reports.”

And that:

You were also concerned that SBS presents the White Helmets as “Civil Defence”, “rescue workers” and “volunteers” when in fact they have “staged” attacks and made “false claims.”

To support its defence, of reports with which we are all too familiar – whether broadcast on Al Jazeera or the BBC, Deutsche Welle, France 24, or CNN, the Ombudsman had to make some extraordinary claims.

Picking through the bones of all eight bulletins I had cited, Sally Begbie found half a dozen mentions of a Russian or Syrian viewpoint, such as this:

Syrian ally Russia, which has veto power at the Security Council, claims it is working with President Assad to fight terrorists.

“Russia claims” is reporting a “Russian viewpoint”, apparently. SBS then offered this general excuse for its failure:

SBS has no journalists based in the Middle East, and its coverage is based on material received by the world’s major news agencies on which SBS relies including Reuters, APTN, Al Jazeera, and the BBC. This material provides a comprehensive range of sources, ensuring coverage that is as balanced as possible within the circumstances.

When possible SBS uses official Russian and Syrian spokespeople to provide their views, however such people were often not available able to SBS on the standard news feeds.

When they are available they are used in the evening’s news coverage. This included on 18 May when Syria’s Ambassador to the UN, Bashar Jaafari, said “The terrorist organisations use hundreds of thousands of civilians as human shields” and on the 29 May when the Russian Deputy Minister of Foreign Affairs, Sergei Vershinin, said “The fighters from HTS are terrorising civilians and they are using civilian infrastructure for military ends and are also using civilians as human shields.”

Far from acknowledging that the eminent representatives of Syria and Russia at the UN “support my view” – that their armies are fighting a war against Western-backed and armed terrorists besieging Idlib the way that they besieged Aleppo and Ghouta – Begbie used the exchange at the UN to support the view of Mark Lowcock and the White Helmets.

Jaafari and Vershinin were actually reacting to Lowcock’s claims of an unprecedented humanitarian disaster, itself based on activist claims and White Helmet propaganda rescue videos. SBS broadcast Lowcock’s whole tirade so the responses in Russian and Syrian with subtitles had little impact. I don’t honestly know how SBS dared to present this travesty as “as balanced as possible”.

But it was SBS’ response to my White Helmets accusations that really left me dumb:

In relation specifically to the White Helmets, SBS’s coverage from 18 May to 17 June was not “propaganda” as you assert but consistent with widely held views about the role of this group.

First Begbie cited the New York Magazine from July 2018:

In 2016 and 2017, the White Helmets—Syrian volunteers who have risked their lives to rescue civilians trapped in rubble following air strikes, barrel bombings, and chemical-weapons attacks—were among the front-runners for the Nobel Peace Prize. A collection of bakers, tailors, engineers, pharmacists, painters, carpenters, and students nicknamed for their protective hats, they have saved more than a hundred thousand people in Syria’s vicious civil war.”

And then Wikipedia:

As of April 2018, the organisation said it had saved over 114,000 lives, with 204 White Helmet volunteers losing their lives in the process. They assert impartiality in the Syrian conflict, though only operate in rebel held areas. The organisation has been the target of a disinformation campaign by supporters of Syrian President Bashar al-Assad and Russian-sponsored media organisations such as RT, with false claims of close ties with terrorist activities and other conspiracy theories.

But finally SBS came up with this master stroke – unwittingly finding one of the Guardian’s most egregious pieces of “journalism” on the Syrian conflict that also betrayed its own active role in assisting the FCO-supported White Helmets:

This disinformation campaign was recently detailed in The Guardian, in an article titled ‘How Syria’s White Helmet’s become victims of an online propaganda machine’.

For anyone concerned enough to reach the end of my complaint, it will be seen that I specifically detailed the work of Eva Bartlett and Vanessa Beeley that Olivia Solon, technology reporter from San Francisco deigns to dismiss as nonsense. Although she took over fifty days to do it, it doesn’t seem that the SBS Ombudsman got that far, nor realised just how insulting her suggestion was.

In fact I am left wondering whether Ms Begbie properly read any of my complaint, or examined the video clips I shot in Douma, or consulted any of the links that supported my case. She seems unaware that I am a vocal supporter of President Assad and an active participant in the campaign to expose the White Helmets’ criminal conduct and propaganda, despite this being the subject of my complaint.

Even more astonishingly, Begbie completely ignored my detailed dissection of the OPCW reports that constitutes the actual evidence for my claims the White Helmets are a criminal organisation and that Russia and Syria are fighting a war against foreign-backed terrorists. Just as the OPCW reports were missing from SBS news and so provided no basis for complaint, so their absence from the SBS response fails to address this central issue – the broadcasting of false news.

Were it a relatively trivial matter, the exclusion of some information could be called “white lies”, but it is not. The failure to acknowledge the truth of what happened at Douma is a “black lie”, because it facilitates further lethal and criminal actions by the White Helmets and their takfiri comrades, which were taking place at the same time SBS was broadcasting their sham videos.

So where to now? Have we lost the battle for the hearts and minds of the victims of the disinformation super-highway?

Authored by Patrick Armstrong via The Strategic Culture Foundation,

We have resolved to pave the way for a grand peace for all the generations to come by enduring the unendurable and suffering what is insufferable.

– The Showa Emperor, August 1945

A couple of months ago Putin observed that the time of modern day liberalism had passed.

There is also the so-called liberal idea, which has outlived its purpose. Our Western partners have admitted that some elements of the liberal idea, such as multiculturalism, are no longer tenable.

Liberalism, in its current manifestation, he suggested, was failing its people. The remarks were happily seized on to bolster the meme that Putin is the enemy. We were assured that liberalism was just fine and criticism was just what you’d expect from “a bloody dictator“. No, Mr. Putin, liberalism is not dead. Martin Wolf: why Vladimir Putin is wrong to claim liberalism is dead. Putin is wrong. Liberalism is more important than ever. So there the issue sat: Putin had been slapped down and any deviations from happy complacency – maillots jaunes, Brexit, Trump – were his fault. His attempts to wreck us would fail because “Defences have proven stronger; citizens are getting wiser“. In any case, Russia won’t be around much longer; the end was coming soon in 2001, 2009, 2011, 2014, 2014, 2019. Well… someday soon.

And then, out of the blue, appears this (my emphases):

We experience this world all together and you know that better than I, but the international order is being disrupted in an unprecedented way, with massive upheaval, probably for the first time in our history, in almost all areas and on a historic scale. Above all, a transformation, a geopolitical and strategic reconfiguration. We are probably in the process of experiencing the end of Western hegemony over the world. We were used to an international order that had been based on Western hegemony since the 18th century… Things change. And they have been deeply affected by the mistakes made by Westerners in certain crises, by American decisions over the last several years which did not start with this administration, but have led us to re-examine certain involvements in conflicts in the Middle East and elsewhere, and to re-think fundamental diplomatic and military strategy and on occasion elements of solidarity which we thought were forever inalienable… And it is also the emergence of new powers whose impact we have probably underestimated for far too long.

China first and foremost as well as Russia’s strategy that has, let’s face it, been pursued with greater success over the last few years.

Putin’s gone over the top here: End of Western hegemony? Mistakes? Reconsider? Russia‘s success? Well isn’t that just what he would want you to think? The sower of divisions, doubts and chaos just wants us to give up.

Except that the speaker is French President Emmanuel Macron

English transcript here.

Macron understands that things have got worse for many in the West and says so – maybe the maillots jaunes have got their message though. The market economy, that used to work well, today produces serious inequalities:

When the middle classes, which form the basis of our democracies, no longer have a fair share in it, they start to express doubts and are legitimately tempted by authoritarian regimes or illiberal democracies, or are tempted to question this economic system.

if we continue as before, then we will definitely lose control. And that would mean obliteration. (l’effacement).

He even (!) has a kind word for Orbán in Hungary.

(I don’t think he’s fully thought it out: if, as he thinks, the proper role for France and Europe is to balance between the USA and China, then that will require an independent position: Beijing could never regard an ally of Washington as a “balancer”. So… out of NATO. But he hasn’t got there yet.)

But what he says about Russia is more interesting: the West made mistakes (no counterfeit modesty of allowing that, perhaps, we’re in there for one or two percent of the blame):

We are part of Europe; so is Russia. And if we are unable to accomplish anything useful with Russia at any given time, we will remain in a state of deeply unproductive tension. We will continue to be stuck in conflicts throughout Europe. Europe will continue to be the theatre of a strategic battle between the United States and Russia, with the consequences of the Cold War still visible on our soil. And we will not lay the groundwork for the profound re-creation of European civilization that I mentioned earlier. Because we cannot do that without reassessing in depth, in great depth, our relationship with Russia. I also think that pushing Russia away from Europe is a major strategic error, because we are pushing it either toward isolation, which heightens tensions, or toward alliances with other great powers such as China, which would not at all be in our interest. At the same time, it must be said that while our relations have been based on mistrust, there are documented reasons for it. We’ve witnessed cyber-attacks, the destabilization of democracies, and a Russian project that is deeply conservative and opposed to the EU project. And all that basically developed in the 1990s and 2000s when a series of misunderstandings took place, and when Europe no doubt did not enact its own strategy [l’Europe n’a pas joué une stratégie propre] and gave the impression of being a Trojan Horse for the West, whose final aim was to destroy Russia, and when Russia built a fantasy around the destruction of the West and the weakening of the EU. That is the situation. We can deplore it, we can continue to jockey for position, but it is not in our best interest to do so. Nor is it in our interest to show a guilty weakness toward Russia and to believe that we should forget all the disagreements and past conflicts, and fall into each other’s arms. No. But I believe we must very carefully rethink the fundamentals. I believe we must build a new architecture based on trust and security in Europe, because the European continent will never be stable, will never be secure, if we do not ease and clarify our relations with Russia. That is not in the interest of some of our allies, let’s be clear about that. Some of them will urge us to impose more sanctions on Russia because it is in their interest.

The end of the INF Treaty requires us to have this dialogue [with Russia], because the missiles would return to our territory.

He’s not entirely free from delusion:

that great power [Russia], which invests a great deal in arming itself and frightens us so much, has the gross domestic product of Spain, a declining demographic, an ageing population and growing political tension.

(If it were declining it wouldn’t be as successful as he said it was earlier, would it? And the GDP argument is nonsense.) And “cyber-attacks, the destabilization of democracies, and a Russian project that is deeply conservative and opposed to the EU project” is the usual unexamined twaddle. And if Russia dreamed of destroying an entity which was giving “the impression” that its “final aim” was to “destroy” it, it would just have been defending itself, wouldn’t it? But every journey begins with a single step and this is very far from the usual “if Russia would behave ‘like a normal country‘ we might let it back into the club on probation”.

What really struck me was this:

Take India, Russia and China for example. They have a lot more political inspiration than Europeans today. They take a logical approach to the world, they have a genuine philosophy, a resourcefulness that we have to a certain extent lost.

So the West is not “logical”, has a “shallow philosophy” and no ingenuity. (You know it’s true, don’t you?)

One of the major players in the Western World’s ancien régime is saying:

Our day is coming to an end

and the other guys have a better take on things than we do.

We at Strategic Culture Foundation and other alternative outlets may take pleasure that when we said the world was changing, that the Western establishment was dangerously unaware, when we said that Russia and China were stronger and more resilient than complacent op-ed writers thought they were, that the West was fragile, that Western leaders had failed their people, we were not just crazy people shouting at lamp-posts: a principal of the ancien régime agrees with us. Maybe they do read us in the Elysée.

(Meanwhile, across the Atlantic, they haven’t got the memo:

We don’t always get it right. Not always perfect. But our efforts are noble and important, and we try to make America secure and at the same time [improve] the lives of people in every country … to improve their capacity for freedom and liberty in their own nation.)

But, when all is said and done, it’s just a speech. Will we see actions that prove intent? Suggestions: Crimea is Russian; the fighting in Ukraine is a civil war; Assad’s future is up to Syrians; Maduro’s of Venezuelans; everybody out of Afghanistan, Iraq, Syria ASAP; stop arming the killers in Yemen. Lots to admit to; lots to stop doing.

We may have a clue soon: a Normandy Format meeting on Ukraine to which Macron has invited Putin. If it’s more claptrap about how Moscow must honour its commitments under the Minsk agreement (there are none – the word “Russia” does not appear) then we’ll know that it was just words.

Western media coverage will be interesting to watch – not much at the moment in the Anglophone world and what there is misses the big points; several times it’s presented as just a “turn away” from Trump (which it is – more evidence for my Gordian Knot theory). But what he’s saying is hard to take in if you’ve been cruising along, confident that what is “really obsolete” is not liberalism but “authoritarianism, personality cults and the rule of oligarchs”; it will take time before it sinks in that one of the prominent figures of the Western establishment is pretty close to agreement with Putin.