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Authored by Raul Ilargi Meijer via The Automatic Earth blog,

We had already been told that in the Ethiopian Airlines flight ET302 crash which killed all 157 people on board, the 4-month old 737 MAX 8’s anti-stall software reengaged itself four times in 6 minutes as the pilots struggled to straighten the plane post-takeoff. In the end, the anti-stall software won and pushed the plane nose-down towards the earth. Now, Ethiopia -finally?!- released its report in the March 10 crash:

Minister of Transport Dagmawit Moges said that the crew of the Ethiopian Airlines flight from Addis Ababa to Nairobi on 10 March “performed all the procedures repeatedly provided by the manufacturer but were not able to control the aircraft.” As result, investigations have concluded that Boeing should be required to review the so-called manoeuvring characteristics augmentation system on its 737 Max aircraft before the jets are permitted to fly again, she said.

The results of the preliminary investigation led by Ethiopia’s Accident Investigation Bureau and supported by European investigators were presented by Ms Moges at a press conference in Addis Ababa on Thursday morning.

Ethiopia is being kind to Boeing. However, though the anti-stall software played a big role in what happened, Boeing’s assertion (hope?!) that a software fix is all that is needed to get the 737MAX’s back in the air around the globe rests on very shaky ground (no pun intended whatsoever).

737 MAX 8. The angle-of- attack (AOA) sensor is the lower device below the cockpit windshield on both sides of the fuselage. (Mike Siegel/The Seattle Times)

The Seattle Times did an article on March 26 that explains a lot more than all other articles on the topic combined. The paper of course resides in Boeing’s backyard, but can that be the reason we haven’t seen the article quoted all over?

If the assertions in the article are correct, it would appear that a software fix is the least of Boeing’s problems. For one thing, it needs to address serious hardware, not software, issues with its planes. For another, the company better hire a thousand of the world’s best lawyers for all the lawsuits that will be filed against it.

Its cost-cutting endeavors may well be responsible for killing a combined 346 people in the October 29 Lion Air crash and the Ethiopian Airlines one. Get a class-action suit filed in the US and Boeing could be fighting for survival.

Here’s what the Seattle Times wrote 9 days ago:

Lack Of Redundancies On Boeing 737 MAX System Baffles Some Involved In Developing The Jet

Boeing has long embraced the power of redundancy to protect its jets and their passengers from a range of potential disruptions, from electrical faults to lightning strikes. The company typically uses two or even three separate components as fail-safes for crucial tasks to reduce the possibility of a disastrous failure. Its most advanced planes, for instance, have three flight computers that function independently, with each computer containing three different processors manufactured by different companies. So even some of the people who have worked on Boeing’s new 737 MAX airplane were baffled to learn that the company had designed an automated safety system that abandoned the principles of component redundancy, ultimately entrusting the automated decision-making to just one sensor — a type of sensor that was known to fail.

That one paragraph alone is so potentially damaging it’s hard to fathom why everyone’s still discussing a software glitch.

Boeing’s rival, Airbus, has typically depended on three such sensors. “A single point of failure is an absolute no-no,” said one former Boeing engineer who worked on the MAX, who requested anonymity to speak frankly about the program in an interview with The Seattle Times. “That is just a huge system engineering oversight. To just have missed it, I can’t imagine how.” Boeing’s design made the flight crew the fail-safe backup to the safety system known as the Maneuvering Characteristics Augmentation System, or MCAS. The Times has interviewed eight people in recent days who were involved in developing the MAX, which remains grounded around the globe in the wake of two crashes that killed a total of 346 people.

The Maneuvering Characteristics Augmentation System (MCAS) was already a late addition that Boeing had not planned for initially. They wanted a plane that was so like older ones that no training would be needed, but did put a much heavier engine in it, which was why MCAS was needed. As I wrote earlier today, they cut corners until there was no corner left. On hardware, on software, on pilot training (simulator), everything was done to be cheaper than Airbus.

The angle-of-attack (AOA) sensor of the 737 MAX is the bottom piece of equipment below just below the cockpit windshield. (Mike Siegel / The Seattle Times)

A faulty reading from an angle-of-attack sensor (AOA) — used to assess whether the plane is angled up so much that it is at risk of stalling — is now suspected in the October crash of a 737 MAX in Indonesia, with data suggesting that MCAS pushed the aircraft’s nose toward Earth to avoid a stall that wasn’t happening. Investigators have said another crash in Ethiopia this month has parallels to the first.

Boeing has been working to rejigger its MAX software in recent months, and that includes a plan to have MCAS consider input from both of the plane’s angle-of-attack sensors, according to officials familiar with the new design. “Our proposed software update incorporates additional limits and safeguards to the system and reduces crew workload,” Boeing said in a statement. But one problem with two-point redundancies is that if one sensor goes haywire, the plane may not be able to automatically determine which of the two readings is correct, so Boeing has indicated that the MCAS safety system will not function when the sensors record substantial disagreement.

The underlying idea is so basic and simple it hurts: safety come in groups of three: three flight computers that function independently, with each computer containing three different processors manufactured by different companies, and three sensors. The logic behind this is so overwhelming it’s hard to see how anyone but a sociopathic accountant can even ponder ditching it.

And then here come the clinchers:

Some observers, including the former Boeing engineer, think the safest option would be for Boeing to have a third sensor to help ferret out an erroneous reading, much like the three-sensor systems on the airplanes at rival Airbus. Adding that option, however, could require a physical retrofit of the MAX.

See? It’s not a software issue. It’s hardware, and in all likelihood not just computer hardware either.

Clincher no. 2:

Andrew Kornecki, a former professor at Embry-Riddle Aeronautical University who has studied redundancy systems in Airbus and Boeing planes, said operating the automated system with one or two sensors would be fine if all the pilots were sufficiently trained in how to assess and handle the plane in the event of a problem. But, he said, if he were designing the system from scratch, he would emphasize the training while also building the plane with three sensors.

The professor is not 100% honest, I would think. There is zero reason to opt for a two-sensor system, and 1001 reasons not to. It’s all just about cost being more important than people. That last bit explains why Boeing went there against better judgment:

[..] Boeing had been exploring the construction of an all-new airplane earlier this decade. But after American Airlines began discussing orders for a new plane from Airbus in 2011, Boeing abruptly changed course, settling on the faster alternative of modifying its popular 737 into a new MAX model. Rick Ludtke, a former Boeing engineer who worked on designing the interfaces on the MAX’s flight deck, said managers mandated that any differences from the previous 737 had to be small enough that they wouldn’t trigger the need for pilots to undergo new simulator training.

That left the team working on an old architecture and layers of different design philosophies that had piled on over the years, all to serve an international pilot community that was increasingly expecting automation. “It’s become such a kludge, that we started to speculate and wonder whether it was safe to do the MAX,” Ludtke said. Ludtke didn’t work directly on the MCAS, but he worked with those who did. He said that if the group had built the MCAS in a way that would depend on two sensors, and would shut the system off if one fails, he thinks the company would have needed to install an alert in the cockpit to make the pilots aware that the safety system was off.

There you go: A two-sensor system is fundamentally unsound, and it’s therefore bonkers to even discuss, let alone contemplate it.

And if that happens, Ludtke said, the pilots would potentially need training on the new alert and the underlying system. That could mean simulator time, which was off the table. “The decision path they made with MCAS is probably the wrong one,” Ludtke said. “It shows how the airplane is a bridge too far.”

Kudos to the Seattle Times for their research. And yeah, we get it, at over 5000 orders for the plane, which costs $121 million each, there’s big money involved. Here’s hoping that Boeing will find out in the courts just how much.

via ZeroHedge News https://ift.tt/2IcB85W Tyler Durden

The Baltimore Brew has learned that Baltimore City auditor Audrey Askew resigned from her post after officials told her to cook the books.

The numbers in question are federal grants to city agencies as well as cash and investments, which Askew pressed officials for a “qualified” opinion to the Comprehensive Annual Financial Report (CAFR).

The Brew said that such an opinion would damage Baltimore’s credit rating and result in investigations by federal agencies over the distribution of grant monies.

Askew told The Brew that top officials told her to “go easy” on city finances.

Askew’s sudden departure five weeks ago was never publicized by the city or her boss, Comptroller Joan Pratt.

The Brew spoke with Askew who said, “I am a person of integrity,” which essentially implies that she wasn’t willing to commit fraud.

Sources say Askew’s “qualified” audit proposal was challenged by Finance Department officials and by SB & Co., the Baltimore County firm contracted by Mayor Catherine Pugh to review the CAFR report.

The Brew said SB founding partner Graylin Smith and Finance Director Henry Raymond pressured Askew to “write-off” federal grant money to balance the books.

After Askew asked Pratt to side against the fraud, she faced “interference” by Deputy Comptroller Harriette Taylor, who began attending CAFR meetings.

The Brew said friction between Askew and Taylor spiraled out of control several weeks before she resigned.

On Monday night, Councilman Ryan Dorsey provided more details about Askew’s resignation:

“As I understand it, the auditor wanted to release audits of the Finance Department, who didn’t want them released. The auditor believed it was wrong not to. The Comptroller threatened to fire the auditor if she did (for legal if petty reasons). The auditor resigned,” Dorsey tweeted.

Pratt told The Brew, “I have never threatened the city auditor regarding the issuance of financial statement.” She added, “The city auditor voluntarily resigned on February 27, 2019 and thanked me for the opportunity to work with the City of Baltimore.”

“I was not aware that she resigned because of the CAFR,” She admitted that “there are isolated incidences of grant reporting issues by grant-funded agencies due to long-term decentralization of the grant process.”

Raymond didn’t respond to any questions from The Brew.

In March, Raymond declined to discuss the CAFR audit. “You need to talk to the comptroller. She is responsible for the audit report,” he said.

Askew refused to answer exactly why she resigned.

“Baltimore will never know why, but they know why,” Askew said.

She added, “I am a person of integrity, and I am honest. Anything that alters that, I don’t do.”

Hired two years ago as deputy auditor, she was named city auditor by Pratt last summer. Askew has been critical of expenditures by Mayor Pugh’s staff for using a city-issued credit card to pay for dubious expenses.

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US Futures spiked (along with Treasury yields)…

Along with the Chinese Yuan…

After Xinhua reports that Chinese President Xi Jinping calls for an early conclusion of negotiations on text of China-U.S. economic and trade and agreement.

Via Xinhuanet’s Weibo site (google translation):

Liu He, the Chinese leader of the China-US comprehensive economic dialogue. Liu He first conveyed President Xi Jinping’s sincere regards to President Trump and his message to President Trump.

In his oral letter, Xi Jinping pointed out that over the past month or so, the economic and trade teams of the two sides have conducted intensive consultations in various forms and made new substantive progress on the key issues of the texts of the economic and trade agreements between the two countries.

It is hoped that the economic and trade teams of the two sides will continue to resolve the concerns of both sides in the spirit of mutual respect, equality and mutual benefit, and complete the negotiation of the text of the Sino-US economic and trade agreement as soon as possible.

Under the current situation, the healthy and stable development of Sino-US relations is related to the interests of the Chinese and American peoples and to the interests of the people of all countries in the world.

In particular, we need to play our strategic leadership. I would like to maintain close ties with the President through various means. I believe that under the joint guidance of Mr. and President, China-US relations will surely achieve new and greater progress.

Liu He said that in the past two days, the economic and trade teams of the two sides have conducted fruitful consultations, especially on important issues such as the text of economic and trade agreements. Under the guidance of the consensus of the two heads of state, the two sides will continue to work hard, hold close consultations, make more progress on issues of mutual concern, live up to the major responsibilities of the two heads of state and the people, complete negotiations on economic and trade agreements between the two countries as soon as possible, and promote the two country’s economic and trade relations have developed in a healthy and stable manner.

Trump thanked President Xi Jinping for his oral message and asked Liu He to convey his cordial greetings to President Xi. Trump said that the current US-China relationship is developing well, strong and powerful, and at a historically high level. I am very happy to see that the economic and trade consultations between the two sides have made great progress.

I hope that the economic and trade teams of the two sides will make persistent efforts to solve the remaining problems and strive for an early and comprehensive agreement. This will not only benefit the United States and China but also the whole world. . I look forward to meeting with President Xi after the two sides reached an agreement to witness this great moment. I would also like to pay a special tribute to President Xi for making an important decision on the entire class of fentanyl substances in China. This matter is of great significance to the American people and the US-China anti-drug cooperation.

U.S. trade representatives Wright Hize, Finance Minister Mnuchin, Agriculture Minister Perdue, Commerce Secretary Ross, Presidential Senior Advisor Kushner and other US officials attended the meeting.

This comes just a few short hours after President Trump remarked that the trade deal was not done and would liekly need an additional two weeks over the remaining four weeks already scheduled for negotiation.

…still no deal though!

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With ‘collusion’ and ‘obstruction’ now off the table for all but the most cognitively dissonant leftist, attorneys for Michael Cohen are leveraging the desperation of several members of Congress to try and keep President Trump’s former lawyer out of prison.

In a letter sent to lawmakers Thursday, The New York Times reports that the lawyers said Cohen is still sorting through documents that might be of interest to House Democrats investigating his former boss, President Donald Trump, and that Mr. Cohen can best help their oversight inquiries if he remains out of prison to sift through the rest of the millions of his documents.

The lawyers sought the help of the Democrats in convincing federal prosecutors in Manhattan of “the need for Mr. Cohen to be readily available to Congress and to prosecutors conducting these investigations, such that his date to report for incarceration about four weeks from now will be substantially postponed while he is fully cooperating with prosecutors and Congress.”

The lawyers cited the potential for his cooperation in the investigations to lead to a “reduced term” for Mr. Cohen.

“There is no doubt that Mr. Cohen’s testimony, both public and private, has contributed substantially, with documents and other evidence, to triggering additional areas for investigation by law enforcement authorities and the Congress,” the lawyers wrote.

“He has done so despite intense personal pressures and stresses he faces for himself and his family. However, with 30 days left before he surrenders to prison, time is no longer a luxury he is capable of.”

As a reminder, Cohen pleaded guilty to tax evasion, fraud, lying to Congress and campaign finance violations.

The lawyers begged that the members of Congress write letters stating that the “substantial trove of new information” that Mr. Cohen can share “requires substantial time with him and ready access to him by congressional committees and staff to complete their investigations and to fulfill their oversight responsibilities required under the Constitution as the Article I independent branch of government.”

Mr. Trump, his lawyers and their Republican allies have denounced Mr. Cohen as a liar and have accused him of manufacturing information to reduce his prison sentence.

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New York City is set to become the litmus test for the rest of the nation whether or not a “congestion toll” will help stop gridlock and raise money for certain cities, according to the Wall Street Journal.

With this weekend’s passage of a New York mansion tax, platic bag ban and congestion toll, drivers in the Big Apple will now pay a fee to enter a zone in Manhattan’s business district with the expectation that it could reduce traffic in a highly congested area. At the same time, the toll is expected to generate much needed cash for the city that it will use to fund bureaucratic redtape and corruption to help restore its infrastructure. The toll, whose terms have yet to be determined, is set to be implemented in 2021.

Lawmakers have established the congestion zone in Manhattan’s business district, south of 60th Street. The MTA will be responsible for operating and maintaining the system, as well as setting pricing. Last year, Governor Andrew Cuomo suggested a flat, per day fee of $11.52 for cars and $25.34 for trucks. However, the budget has directed that these numbers be variable and the specifics are still up in the air.

The congestion in Manhattan is so notoriously bad that walking and riding bikes is often quicker than catching a bus or driving. Between construction, illegally parked vehicles, delivery vehicles and 80,000 new Uber and Lyft vehicles, it’s near impossible to get around Manhattan.

More importantly, Corinne Kisner, executive director of the National Association of City Transportation Officials said: “New York City’s experience will be an important precedent for the conversations happening in other U.S. cities.”

The method for implementation of the toll may also be something new. Traditional tollbooths may be left behind in favor of transponders and license plate readers. Incidentally, despite being the first city in the United States to implement such a tax, New York is still “more than a decade” behind cities like London and Stockholm, who use these types of congestion tolls.

Although several U.S. cities and states are exploring pricing proposals, they remain years behind New York. Some officials say a lack of familiarity with the concept of charging vehicles to enter a city zone as well as a lack of political will remain stumbling blocks

Earlier this year, an environmental working group set up by Boston’s mayor also recommended a $5 fee for every trip that ended or started in a certain zone in Boston’s most congested area. Chris Osgood, Boston’s chief of streets, said that cordon pricing wasn’t an option. “We’ve been really focused on the levers we have at hand,” he said. 

Traffic gridlock is not unique to NYC: other U.S. cities are dealing with similar reasons for their traffic snarls, according to several studies that show “a booming economy and low gas prices have spurred higher employment, increased car ownership and greater demand for goods and services that create yet more backups.”

As the WSJ notes, while congestion dipped nationwide after the 2008 financial crisis, by 2014 almost every town and city suffered longer travel times than pre-2008 levels, according to a 2015 urban mobility report from Texas A&M Transportation Institute. It has worsened since then, said the report’s author David Schrank: “It’s all relative,” he said. “Whether you’re in Poughkeepsie or Manhattan, you think you have congestion.”

Although congestion may be widespread, its severity differs greatly from city to city, said Trevor Reed, an analyst for transportation analytics firm INRIX. America’s most heavily congested cities tend to be among its oldest and most densely populated, Mr. Reed said.

Boston and Washington, D.C., logged the most time wasted in traffic last year, at 164 hours and 155 hours per driver respectively, according to an analysis published by INRIX in February. New York City had the slowest downtown business district speeds, clocking in at 9 mph, followed by San Francisco and Philadelphia, both at 10 mph.

Some cities, such as Philadelphia, have tried to tackle congestion with parking violation blitzes. States such as Florida, Texas and Virginia, have instituted demand-based tolls on highways that rise during busy times of the day. But so far none have come as close as New York to implementing a cordon-based toll.

As such, the city’s ongoing experiment will become a benchmark for the rest of the nation: if “successful” – however one defines success in this case – expect most other major US metro areas to jump on board. Already several California groups are studying congestion pricing among a raft of measures to reduce traffic in and around Los Angeles and San Francisco.

The Southern California Association of Governments, a metropolitan planning organization, released a report March 28, suggesting a $4 fee for cars to enter part of West Los Angeles during peak periods in the morning and evening.

Tilly Chang, executive director of the San Francisco County Transportation Authority, which is also studying congestion pricing, said west coast cities don’t have a transit crisis on the same scale as New York’s.

The urgency behind the NY experiment is driven by a secondary consideration: boosting municipal revenue collections: although NYC traffic has grown worse in recent years, the congestion-pricing debate has been dominated by the need to raise revenue for the subway, which has suffered a steep decline in reliability despite rising prices.

“The subway crisis creates an acute sense of need,” said Bruce Schaller, a transportation consultant and a veteran of previous New York City congestion pricing battles. ”The timing is everything to politics and having a good economy and a bad problem is a good time to try and solve it.”

via ZeroHedge News https://ift.tt/2UiKbcA Tyler Durden

For somebody who has a dedicated speaking gig at Davos every year, Ray Dalio is sure is starting to sound a lot like a socialist (the technical term is champaign socialist, we think). For a little over a year now, Dalio has been warning any journalist who will listen that the looming market crash and economic downturn, which always seems to be between a year or two years away, will stress the fraying fabric of our disintegrating capitalist system to the point where it simply breaks apart. Central banks, already out of ammo from their pre-crisis stimulus programs will be powerless to pull us back from the precipice, and with our federal debt burden already so heavy, Congress will have little wiggle room to spend us out of the mess (that is, unless they finally cave to the MMTers).

But in his latest 18-page treatise entitled “Why and How Capitalism Needs To Be Reformed (Part 1)”, published – as per usual – on LinkedIn, Dalio kicks his fearmongering approach up to ’11’, surpassing redistributive rhetoric of Bernie Sanders and Alexandria Ocasio-Cortez and going straight for Vladimir Lenin.

According to Dalio, the flaws in the American capitalist system are breeding such horrific inequality between the wealthy and the poor that at some point in the not-too-distant future, the only sensible recourse for the unwashed masses will be a bloody revolution.

To support this theory, Dalio points to statistics showing that the bottom 60% of Americans are lagging further and further behind the top 40% in the areas of education, social mobility, assets, income and – crucially – health. American men earning the least will likely die ten years earlier than those making the most.

In previous essays, Dalio has warned about the threat of economic populism (the anti-establishment trend that helped deliver both Brexit and President Trump’s stunning upset victory over Hillary Clinton). Now, he’s apparently identifying with populists of a different stripe (namely, those on the left).

All of these sources of inequality, Dalio argues, represent an “existential threat” to the American economy, that will only be exacerbated by falling competitiveness relative to other nations and the “high risk of bad conflict.”

“Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another,” Dalio writes.

Here are some highlights from the essay, courtesy of Bloomberg:

• Wages for most Americans have been stagnant for decades, those who grow up in the middle class increasingly earn less than their parents and the income gap between the richest and poorest is as wide as ever.
• Wealth increasingly determines the quality of education kids receive and systemic failings at schools in poor neighborhoods are “the equivalent of child abuse.”
• Americans who earn less being in worse health and dying earlier has direct consequences for the economy.

Conveniently absolving himself and his fellow billionaires of any blame for this sad state of affairs, Dalio claimed that the cause of this sad state of affairs was simply a poorly designed system that can, with a little effort, be corrected.

“These unacceptable outcomes aren’t due to either a) evil rich people doing bad things to poor people or b) lazy poor people and bureaucratic inefficiencies, as much as they are due to how the capitalist system is now working,” Dalio said.

At this point, Dalio starts to sound more like his fellow Wall Street titan Jamie Dimon, who slammed socialism in his annual shareholder letter and insisted instead that a program of practical bipartisan reforms to solve some of the worst excesses of inequality could be achieved. Though to be sure, Dalios policy prescriptions go beyond “raise taxes on the wealthy.”

Instead, Dalio recommends treating the wealth and income gap as a national emergency, forming a bipartisan commission to re-engineer the economic system, pass laws to create more accountability in government and institute minimum standards for health care and education. Sounding a bit liker an MMTer (which we wouldn’t be surprised to learn is actually the case), Dalio also recommended more coordination between monetary and fiscal policy.

Then again, with his more than $15 billion net worth amassed from running the world’s largest and arguably most successful hedge fund, if Dalio thinks a radical redistribution of wealth will save our society, and he really wants to win over the hearts and minds, he could start with leading by example.

Read the full essay here.

via ZeroHedge News https://ift.tt/2VoICGC Tyler Durden

In a world where government are either totally broke – if they have to rely on organic revenues to offset soaring expenses – or about to unleash hyperinflation – thanks to the “Magic Money Tree” theory which is rapidly gaining acceptance among western socialists everywhere, the IMF has a simple solution how governments around the world can save up to $1 trillion every year: just eliminate corruption (because apparently nobody ever thought of this brilliant idea before).

Corruption, which the IMF defined as “the abuse of public office for private gain” distorts the activities of the state and “ultimately takes a toll on economic growth and the quality of people’s lives.” It weakens key functions of the public sector, including the ability to collect taxes or to make expenditure choices in a fair and efficient way, the IMF warned.

Corruption is bad, the IMF further notes, because if in exchange for bribes, “civil servants facilitate tax evasion or corrupt politicians provide ad hoc tax breaks for some people or firms, others will end up facing higher tax rates, and the government may be unable to generate enough revenue to pay for productive spending.”

In what appears to be a lesson in civics for idiots, the IMF said that in addition to increasing government revenue, fighting corruption can also reduce waste and even – in the aftermath of the recent college admissions scandal – help to lift test scores among public school students (although it wasn’t clear just what the connection between government corruption and pod-eating children is at first). It also improves overall public trust in the government, although in a time when populism is all the rage this may well be a lost cause.

“Less corruption means lower revenue leakage and less waste in expenditures, and higher quality of public education and infrastructure,” said the report, pointing out something so blindingly obvious the San Francisco Fed must be green with envy how it didn’t spend $100,000 in taxpayer funds to research it first.

The totally insightful observations continued, with the IMF “data” showing that the pattern of lower corruption perception and higher revenues is maintained across developed, emerging and low-income countries.

“Among advanced economies, a country in the top 25% in terms of control of corruption collects 4.5% of GDP more in revenues, on average, than a country in the lowest 25%. The gap in revenue collection is 2.75% of GDP among emerging market economies and 4% of GDP among low-income countries,” said the report.

While the bulk of the report confirms what should have been blindingly obvious to all, it did have some insightful observations, for example pointing out that extractive industries like mining and oil drilling are hotbeds for corruption, as are procurement and the administration of state-owned enterprises.

So how can the world curb corruption in those areas? the Fund focused on transparency and oversight as key corruption deterrents noting that a strong, free press was instrumental as a catalyst (the IMF probably envisions FaceBook as an example of the latter).

“We expected transparency would go together with good fiscal outcomes, but what surprised us is that the effect of transparency is much stronger in countries that have a free press or a (strong) civil society,” said Paolo Mauro, deputy director in the IMF’s Fiscal Affairs department. “And when you have those two together the effect is even stronger.”

Mauro did not comment on recent allegations that some of the biggest distributors of news in the world such as Facebook and Google, are themselves part of the problem in terms of inherent bias and selective filtering of information the company’s principals disagree with.

Mauro and Paulo Medas, a deputy division chief in the same IMF department, co-authored the study, a chapter of the Fund’s Fiscal Monitor, which is being published in parts this week ahead of the IMF’s spring meetings scheduled next week in Washington.

Among other recommendations to curb corruption summarized by Reuters, the Fund calls for the professionalization of civil service, including merit-based hiring, as well as the need for simple tax rules and business codes to avoid the temptation of bribes to navigate them.

The report also recommended technology that can fight corruption. For instance, it said, taking procurement on line is seen as a rapid and inexpensive part of the “anti-corruption puzzle.”

So-called e-procurement “is a relatively cheap initiative that can open competition, so you can have bidders from any place in the country or the world and it makes it very cheap and transparent for companies to bid,” said Medas. Chile and South Korea are cited as examples in the effectiveness of e-procurement, while Rwanda and Georgia show some of the highest increases in revenue collection relative to GDP.

Emerging countries’ dependence on extraction of raw materials for economic development gives them an added incentive to curb corruption and makes success even more important, the IMF cautioned.

The report’s conclusion: “Against this backdrop, and by contributing to growing inequality, corruption undermines trust in government and can lead to social and political instability.”

Ok, brilliant. And now we patiently wait to find which country in a world filled with cronyism, special interests and of course, easy monetary policy, as corruption is better known in polite circles, will take the lead in this noble venture to rid the world of all social and governance evils. And since none will, perhaps what the IMF is really petitioning is for a real life Batman to finally take control of the situation.

via ZeroHedge News https://ift.tt/2WPromh Tyler Durden

Authored by Mike Shedlock via MishTalk,

The weak keep getting weaker. Another 3,000 stores will bite the dust and mall vacancies are at an 8-year high.

“In the post-digital era, only the strong will survive. Darwin would love this,” said one retail analyst as JCPenney, Payless, LifeWay Announce 3,000+ Combined Store Closures.

Retail job cuts for January and February total 41,201, said research firm Challenger, Gray & Christmas in a new survey, including nationwide retailers such as Payless and Charlotte Russe.

“This is significant, and marks an acceleration of store closures and job cuts in the near term,” said Mark Hamrick, a senior economic analyst at Bankrate.

“Retail is ground zero for seeing the shifts of change in our lives.”

Lifeway Christian Bookstores announced last week it would be closing the doors of all 170 brick and mortar stores, in a pivot to focusing on digital and e-commerce.

“The decision to close our local stores is a difficult one,” said Lifeway Chief Executive Officer Brad Waggoner.

“While we had hoped to keep some stores open, current market projections show this is no longer a viable option.”

“In the post-digital era, only the strong will survive,” Ron Johnson, CEO of Enjoy, a retail technology company, told NBC News.

“You need a great brand, a strong balance sheet, and a vision for experience that commences digitally. Darwin would love this.”

Mall Vacancies on the Rise

The Financial Times notes US Shopping Centre Vacancies Rise to Eight-Year High

“US retailers have set out plans to close 5,480 stores, according to Coresight Research — almost as many as the 5,730 announced in all of 2018.”

Trump Sounds Like the French

 

Donald J. Trump✔@realDonaldTrump

States and Cities throughout our Country are being cheated and treated so badly by online retailers. Very unfair to traditional tax paying stores!

65.6K

3:59 PM – Apr 17, 2018

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Save the local bookstores was the cry in France. Here’s reality.

 

Lexi Beach@lexiatwork

Ok, bookstore loving friends, here is the truth:
At a certain point, buying books from the store you love is not going to be enough to keep it open.

145

7:45 AM – Oct 9, 2018

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Lexi then goes off the deep end with anti-capitalist nonsense.

 

Lexi Beach@lexiatwork

 · Oct 9, 2018

Replying to @lexiatwork

I promise you, there is no volume of business that McJ could have feasibly been doing such that, when the initial sweet deal of a 15-yr lease expired, they’d magically be able to pay market rent in that neighborhood.

Lexi Beach@lexiatwork

The problem is not the sustainability of bookstores. It’s the immoral capitalist (is that redundant?) system we’ve all accepted as normal wherein the composition of your neighborhood is dictated by people who do not actually live there.

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8:09 AM – Oct 9, 2018

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Unfair Competition

Businesses that cannot compete always complain about fairness.

They want subsidies at taxpayer expense, higher prices for consumers, or both.

Pathetic Hooey

What a pathetic bunch of hooey from Trump.

via ZeroHedge News https://ift.tt/2WPwyyH Tyler Durden

A federal counterintelligence investigation is looking into possible Chinese intelligence operations targeting President Trump, after Secret Service agents arrested a Chinese woman, Yujing Zhang, who infiltrated Trump’s Mar-a-Lago club in Palm Beach, Florida.

Zhang gave employees differing accounts of why she was there, and was found with four cell phones, two passports, electronic devices and a thumb-drive containing malware. 

What’s more, the Miami Herald reports that federal investigators are looking into possible connections between Zhang and South Florida massage parlor entrepreneur Li “Cindy” Yang – who has been accused of selling access to President Trump. Of note, Yang previously owned the Jupiter, FL day spa where authorities conducted a high-profile prostitution bust which netted New England Patriots owner Robert Kraft. 

The ongoing investigation has also recently focused on Li “Cindy” Yang, the sources told the Herald. Yang is a South Florida massage parlor entrepreneur who has promoted events at Mar-a-Lago with ads targeting Chinese business executives hoping to gain access to Trump and his family. The investigation — spearheaded by the FBI — began before the Herald revealed Yang’s business of selling access last month and focused on other Chinese nationals doing business in the region.

Before her arrest, Zhang was unknown to federal authorities. Now, investigators with the FBI Counterintelligence Division in South Florida are trying to figure out who Zhang is, whether she is involved in a possible Chinese intelligence mission and whether there are links to Yang’s social events at Trump’s Mar-a-Lago. –Miami Herald

Zhang initially told a Mar-a-Lago employee that she was a member who simply wanted to use the pool – and was admitted amid confusion over whether she was a member’s daughter.  

Once she got inside, Zhang changed her story – telling a front desk receptionist that she was there to attend the United Nations Chinese Friendship Association event scheduled for that evening, which had been promoted by Cindy Yang, only to be cancelled. 

Zhang, born in 1986 according to court documents, has not been charged with any crimes related to espionage, according to The Herald. Yang, meanwhile, said in a Wednesday statement that she has no ties to China’s government, and says she doesn’t personally know or sell access to President Trump. 

Congressional Democrats have sounded the alarm over Zhang’s ability to penetrate Trump’s Florida club. 

“The apparent ease with which Ms. Zhang gained access to the facility during the president’s weekend visit raises concerns about the system for screening visitors, including the reliance on determinations made by Mar-a-Lago employees,” reads a joint letter from Senate Intelligence Committee ranking member Mark Warner (D-VA), Senate Judiciary Committee ranking member Dianne Feinstein, (D-CA), and Senate Minority Leader Chuck Schumer (D-NY).

“As the White House Communications Agency and Secret Service continue to establish several secure areas at Mar-a-Lago for handling classified information when the president travels there, these potential vulnerabilities have serious national security implications,” continues the letter – which requests that the FBI and Director of National Intelligence coordinate with Secret Service to establish what needs to be done to “As the White House Communications Agency and Secret Service continue to establish several secure areas at Mar-a-Lago for handling classified information when the president travels there, these potential vulnerabilities have serious national security implications.” 

The Democrats also requested an immediate response to a previous letter, dated March 15, that called for a counterintelligence investigation into Yang’s connections to Chinese government officials and the risks her activities could pose to U.S. national security interests.

Sen. Marco Rubio, a Florida Republican, said it’s too early for Congress to consider specific action in response to Zhang’s arrest at Mar-a-Lago.

“The FBI will be looking into it, that’s their job, that’s it,” Rubio said. “But I would hate to speculate based on what we know so far.”

Rubio, who has criticized Chinese telecom company Huawei over concerns that its equipment could be used for Chinese government surveillance, said Zhang’s arrest is a piece of a larger threat posed by foreign nationals to all executive and legislative branch employees, as well as defense contractors.

“That’s always a threat, but I don’t know enough about this person or this case to make a bold pronouncement on what happened here or what this is about,” Rubio said. –Miami Herald

In a Wednesday CNN interview, President Trump said he’s not worried about Chinese espionage at Mar-a-Lago, saying “I think that was just a fluke situation.” 

President Trump, asked if he’s concerned the Chinese are trying to spy on his Mar-a-Lago resort: “No, I’m not concerned at all.” pic.twitter.com/6A7paeKjzI

— Josh Campbell (@joshscampbell) April 3, 2019

Possible connection to Yang…

As The Herald reports, Zhang traveled from Shanghai, China to South Floida for a “United Nations Friendship Event,” as a guest of a person known only as “Charles.” An associate of Yang named Charles Lee, meanwhile, pushed out advertisements on Chinese social media for various events. He’s also the founder of the for-profit United Nations Chinese Friendship Association. 

Although authorities pointed out there was no event occurring by that exact name, Yang had previously been promoting two Mar-a-Lago events that day: an “International Leaders Elite Forum,” and a Safari Night gala, a fundraiser for a youth charity. The events were canceled after intense news coverage of Yang and her activities, something Zhang might not have realized.

Yang pitched the combination of March 30 events as a “once-in-a-lifetime opportunity” for overseas Chinese clients to meet members of the Trump family and other top politicians in her Chinese-language ads targeting overseas buyers.

An associate of Yang named Charles Lee also pushed out the advertisements on Chinese social media. –Miami Herald

 Read the rest of the Herald‘s report, which includes their extensive research on Yang and the alleged access scheme, here. 

via ZeroHedge News https://ift.tt/2UqWiUx Tyler Durden