Tag: news

Authored by Tom Luongo,

Russia’s economy has been a sore spot for more than two years now. Since the ruble crisis of late 2014 the role of the Bank of Russia has been to apply IMF-style counter-cyclical tightening to stabilize the situation in the wake of the decision to allow the ruble to float freely on the open market.

That was the right decision then. It was the move the US did not expect President Vladimir Putin to make. It was expected Putin would hold to his natural conservatism and keep the ruble trading in the 30’s versus the US dollar as opposed to risking a collapse in exchange rate in the face of an historic drop in oil prices over the eighteen months between July 2014 and the low made in late January 2016.

Oil dropped from $120+ per barrels to around $28 during that period. And if Putin hadn’t proactively allowed the ruble to fall from RUB32 to a high of RUB85 in early 2016 Russia would have been bankrupted completely.

During that time Bank of Russia President Elvira Nabullina raised the benchmark lending rate to 17.00% and Russia began the slow, painful process of de-dollarizing its economy.

It’s been five years since those dramatic times. But a lot of damage was done, not just to the Russian people and their savings but also to the mindset of those in charge at the Bank of Russia.

Nabullina has always been a controversial figure because she is western trained and because the banking system in Russia is still staffed by those who operate along IMF prescriptions on how to deal with crises.

But those IMF rules are there to protect the IMF making the loans to the troubled nation, not to assist the troubled nation actually recover. To explain this, I have to get a bit technical, so bear with me.

The fundamental problem is a miseducation about what interest rates are, and how they interact with inflation and capital flow. Because of this, the medicine for saving an economy in trouble is, more often than not, worse than the disease itself.

If Argentina’s fourth default in twenty years doesn’t prove that to you, nothing will.

Nabullina still believes that her job is to get inflation down to 4%. Inflation targeting, as central bank policy, is a disease that needs to be placed next to smallpox at the CDC in Atlanta.

It seems I have to write this article once every few months just to remind people what the problem is.

When inflation is above the target an austerity mindset dominates at the central bank who keeps interest rates above the market rate in the vain hope they can wring the last bits of inflation out of the economy, because sufficient confidence hasn’t returned to the banking system after the crisis.

This is Russia’s problem today. Nabullina still believes there’s work to be done before allowing the economy to grow.

When inflation is below the target, like in the ECB and the US, then to the miseducated central banker growth is sluggish and demands stimulus in the form of cheap money to create a virtuous credit cycle. It hasn’t worked and it won’t work.

Because both of these theories about the effects of inflation targeting are dead wrong.

They haven’t worked in the US and Europe because there is no more capacity within their economies to take on more debt to stimulate demand and increase spending. All they are doing is, as described by Mises and others, “pushing on a string” offering money no one wants at interest rates the market cannot sustain.

That cheap money inflates asset prices like stocks and bonds while diverting capital to long time-horizon projects like fracking in Texas, and housing and car loans, but it thieves working capital from the future by mispricing the risk of those projects in the form of the interest rate.

The net effect is enriching the already obscenely rich and powerful, through wealth transfer which feeds leftist and Marxist criticisms of the ‘free market’ while they proclaim the end of capitalism.

But central bank inflation targeting and control is the height of a centrally-planned economy. Control the value and cost of money and you control the means of production. So, capitalism this ain’t folks.

Miseducation on matters economic are commonplace today from the commanding heights to the lowest barrios.

Eventually, you reach the point we’ve arrived at in the west where no amount of forcing the market, through punitive negative rates, can stimulate growth. This is simply arrogant men praying at the altar of math torturing equations which have no resemblance to reality and turning it into policy.

On the other hand, we have Nabullina trained in this world of econometrics and its econo-babble, holding back the Russian economy with interest rates set above the market. She is either overly-cautious, if I’m being generous, or a full on fifth-columnist stifling growth to support Russia’s enemies, if I’m being cynical.

I think the truth lies somewhere in the middle, if I’m being fair. Today I’ll be fair.

The Russian economy, structurally, is in excellent shape. John Hellevig at the Awara group recently published an excellent report explaining the guts of what’s going on there. And John notes, like I have been for more than a year (here and here), that the Bank of Russia has interest rates too high given what the market is telling it.

It’s not that tough really, just look at the Russian yield curve and you can see what I’m talking about.

The current benchmark rate in Russia is 7.25%, down from 7.75% just two months ago (and that I’ll get to in a minute). The entire interbank market and short-term deposit market is trading below that benchmark rate.

This means the central bank is holding back a market that wants to trade at lower rates. This is keeping liquidity low and access to loans in the domestic and commercial market low as well.

Meanwhile, the demand for Russian debt, because as a country Russia’s balance sheet is so clean, in part due to Nabullina’s stewardship of the 2014-16 crisis period, is pushing rates lower. And for the first time in close to 5 years Russia has a normal positively-sloping yield curve from 1 year to 20 years, with no humps or flat spots.

Demand for Russian debt is finally market driven in a way that is predictable and can allow banks to make money paying short and lending long. This is how banks are supposed to make their money, not speculating on stocks and currencies!

Moreover, domestic savings rates at all maturities in the CD and money markets are below the benchmark rate, so Russian banks are under zero stress. High savings offer rates indicate a need to shore up reserves by attracting savings. It’s a bad sign.

Non-performing mortgage loans stand at less than 1%…. 1% !!

The only worry is the outstanding dollar-denominated debt, but that makes up around 1% of the total Russian mortgage market. It’s literally chump change.

I mean, for pity’s sake, what on god’s green earth is Nabullina waiting for? An engraved invitation from the Fed to the next convocation at Jackson Hole? She’s done her job, now let the Russian people do theirs.

Nabullina has kept rates high out of fear of inflation returning due to a rising US dollar and falling oil prices which is putting upward pressure on the ruble. She made an egregious policy error hiking rates in response to Trump’s crazy aluminum tariffs last year. And then held that level until June.

She’s only now just beginning to lower rates after the policy became ludicrous and Russian GDP growth has stalled. Again, incompetence and treason look very similar from a distance.

She keeps jumping at the shadows of a dollar-induced crisis. But the Russian economy of 2019 is not the Russian economy of 2015. Dollar lending has all but evaporated and the major source of demand for dollars domestically are legacy corporate loans not converted to rubles or euros.

So, the Russian economy is so much more insulated from a rise in the dollar than it was before.

The fundamental flaw in the thinking behind most central bankers, especially those trained by the IMF, is that lowering the cost of money stimulates growth and raising it reins it in. It’s an overly simplistic model to explain why we need philosopher kings like Nabullina, Mario Draghi and Jerome Powell to tinker with the economy and engineer growth and stability.

The reality is it’s more complicated than that, because access to capital means different things at different parts of the business cycle to different economies. And Russia’s role in the global economy is changing.

Russia is becoming an independent node in the global economy. Shut out of the US dollar markets, Russia now has to lead the part of the world it dominates – the EAEU, Turkey, Iran, the CSTO states – and show confidence by making the ruble more accessible to foreign investment.

Projecting confidence comes in the form of lowering rates to reflect a healthy domestic market, not keeping rates high because you’re afraid of the US.

That yield curve I posted above is a picture of a central bank scared of the future, like Jerome Powell at the Fed, and not one sanguine about Russia’s future prospects. Powell has problems Nabullina doesn’t have, like hundreds of trillions in unfunded future liabilities that require much higher rates to stabilize.

Lowering interest rates in Russia from 7.25% to 6.5% or even 6% is likely all she needs to do and then let the markets take care of things from there. That’s what the market’s actually telling her.

And I believe Vladimir Putin has had enough of Nabullina’s fears. He’s getting more and more impatient with his central bank president. He sees the lack of growth of the Russian economy and wonders why capital formation is locked up behind a wall of overly-high interest rates.

Recently Putin sat down with Nabullina and right after that interest rates dropped 0.25%. The same thing happened in 2015 when she had rates stuck at 10% and Putin had to finally forced her to justify herself.

It’s clear that there is something wrong at the Bank of Russia; whether it’s Nabullina herself, her staff or the legacy of insipid and dangerous Western economic theories refusing to die, is beyond my knowledge.

The cynic in me says the foot-dragging by the Bank of Russia is the final vestige of US infiltration in Russia’s institutions rearing its ugly head. That fight is ongoing, but the recent drops in the benchmark rate are a good start.

*  *  *

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Over the next three years, 120 million workers in the world’s 12 biggest economies may need to be retrained as a result of widespread adoption of artificial intelligence (AI) and automation in the workplace, according to a new IBM Institute for Business Value (IBV) study.

Only 41% of CEOs surveyed have the resources in place to close the skills gap brought on by new emerging technologies. That means 59% of the CEOs surveyed have no skills development strategies in place for their employees in the early 2020s.

“Organizations are facing mounting concerns over the widening skills gap and tightened labor markets with the potential to impact their futures as well as worldwide economies,” said Amy Wright, Managing Partner, IBM Talent & Transformation, IBM.

“Yet while executives recognize the severity of the problem, half of those surveyed admit that they do not have any skills development strategies in place to address their largest gaps. And the tactics the study found were most likely to close the skills gap the fastest are the tactics companies are using the least. New strategies are emerging to help companies reskill their people and build the culture of continuous learning required to succeed in the era of AI.”

The IBV study, “The Enterprise Guide to Closing the Skills Gap,” includes input from 5,670 CEOs located in 48 countries, points to challenges that companies will face in the early 2020s with managing their workforce through the technological shift.

IBM said, the “era of AI” will be a transformative period for the global economy as the skill gap through employee training will take time to close. The company’s study indicates new skill requirements for jobs will be required due to the fast pace of AI and automation adoption, while other skills become out-of-date.

The study lays out a guide for businesses to better foster talent and close the skills gap in a timely fashion.

IBM said companies could use AI to determine what skills are already available throughout their business and share that info with employees to drive a culture of “continuous learning.”

Last month, Tesla CEO Elon Musk said AI impact on the workforce could be devastating.

Musk said, “AI will make jobs kind of pointless.”

One of our reports from June describes how automation, engineering, energy storage, artificial intelligence, and machine learning have the potential to reshape the world in the next decade, could result in at least 20 million job losses across the globe.

There is no doubt that the collision of AI and automation in the workplace will trigger economic disruption far more significant than what was seen during the agriculture revolution (1900 to 1940) when farmers retooled their skills to work in cities in industrial factories.

Authored by Mark Hanna via The American Thinker blog,

As of Friday, September 6, an extension of three months to prevent the U.K. leaving the E.U. without a deal passed the Houses of Commons and Lords.  In order for that legislation to become law, there must be consent by the monarch – in this case, Queen Elizabeth II.  Once she assents, the bill becomes law.

While most everyone is considering her assent a formality on Monday, it should not quite yet be considered a fait accompli.  The queen can lawfully refuse assent or delay her approval, which would effectively veto the bill and keep it from becoming law, thereby paving the way to a No Deal Brexit on October 31.

There are two occasions when the monarch can and should, according to most academic experts in the matter, refuse assent.

According to Anne Twomey, professor of constitutional law at the the University of Sydney in her book The Veiled Sceptre, the first occasion is that where a “serious error is discovered in the bill.”  No one is arguing that there is an error in the Remainers’ meticulously crafted bill of extension.

But the second occasion in relation to royal assent, “the predominant academic view … is that the Sovereign … must act upon the advice of responsible ministers.”

Professor of public law at the University of Glasgow School of Law Adam Tomkins concurs.  From his book Public Law:

“If the monarch were given clear and firm Prime Ministerial advice that she should withhold her royal assent to a Bill which had passed through the Houses of Parliament, it seems to be the case that the monarch should follow that advice.”

As Robert Craig noted, Twomey uses the example of where a new government that has the confidence of the House and “objects to a bill passed … by a defeated predecessor … then its advice to refuse assent to a bill should be accepted.”

While this is not the exact set of circumstances the U.K. is facing, Boris Johnson has demonstrated he has the confidence of the House, triumphantly pointing outthat “this is the first time in history that the opposition has voted to show confidence in Her Majesty’s government” by refusing to allow an election and refusing to table a vote of no confidence.  Now all that’s left is for Johnson to give clear and firm advice to the queen, who should then refuse to assent to the opposition’s legislation to stop a No Deal Brexit.

If this is indeed BoJo’s strategy, the U.K. Parliament has cut off its nose to spite its face.  Hyper-leftist and self-avowed Marxist Jeremy Corbyn, opposition leader of the Labor Party, has gleefully led this self-mutilation, stating, “When No Deal is off the table, once and for all, we should go back to the people in a public vote or a General Election to decide our country’s future.”

When No Deal is off the table, once and for all, we should go back to the people in a public vote or a General Election to decide our country’s future. pic.twitter.com/yFwkiMysGn

— Jeremy Corbyn (@jeremycorbyn) September 6, 2019

Using the limited time the U.K. Parliament had to address the possibility of a No Deal Brexit, Corbyn, the other opposition parties, and 21 Tories clearly decided to spend their few days left in Parliament obsessed with passing a law that demands that BoJo, against his own will and government, ask the E.U. for an extension of Article 50 until January 31, 2020.

But Johnson may have been way ahead of them.  He launched the epic play by proroguing parliament, which is basically closing the current Parliament session, until mid-October with the queen’s approval.  This means that all Parliament business must be concluded by Monday (or at latest Thursday).  Once proroguing had occurred, the Remainers went into a Boris-induced tizzy to make sure a law was passed to stop him from taking the U.K. out of the E.U. without a deal on October 31, as long as no deal had been reached with the E.U. by October 19.

This is precisely where the PM has likely wanted them all along.  Employing a “rope a dope” strategy, Johnson has effectively forced Parliament to use all the time left, now that the proroguing has occurred and been declared legal by the U.K. courts, to mire itself in passing the Article 50 extension law.  Like the boxer Muhammad Ali, who made rope-a-dope famous, BoJo leaned back into parliament’s ropes and took hit after hit, causing the opponents to not only wear themselves out, but provide time for him to get ready for his final counter-punch.

If the above analysis is correct, Johnson’s knockout blow is happening now, as he met the queen this weekend in order to clearly and firmly advise the queen to withhold assent.

Beautifully orchestrating and executing his stratagem, BoJo will have outwitted his opponents again in this well thought out fight plan by:

1) forcing the opposition to spend the very short time they had to stop a No Deal Brexit mired in creating the extension legislation, then…

2) sifting out the twenty-one traitors within his own Tory Party who voted against him, while at the same time…

3) casually scheduling a meeting with the queen this weekend in order that…

4) he can quietly advise the Queen not to assent to the bill he has called the “surrender” bill.

His opponents were so busy patting themselves on the back for their seemingly witty and unstoppable legislative efforts to thwart the will of the U.K.’s people (who voted 52% to 48% to leave the E.U. in 2016), heaping insults, lies, and half-truths on the prime minister and arguing among themselves how to take power, that they failed to see that Boris was, like any great boxer, simply setting them up.

His arguments to the queen are strong.  

First, a group of disingenuous Tory traitors betrayed the government by voting with the non-government opposition.  The U.K. system is a parliamentary government, not a system of parliamentary rule.  The queen can reinforce this distinction by refusing assent upon receiving the P.M.’s advice, proving that the government elected by the people ultimately has the power.

Second, extensions have been passed before under Theresa May, but to no avail in bringing the U.K. to a better deal with the E.U.  What good would another extension to January 31, 2020 bring?  Even France’s President Macron agrees here and has indicated he’ll veto an extension anyway.  Germany’s Chancellor Angela Merkel is also under pressure to veto any request for an extension.  Any one of the 27 E.U. member-leaders can veto an extension, thereby virtually assuring a No Deal Brexit on October 31.

Finally, the current House of Commons has tacitly given its vote of confidence to Boris Johnson as prime minister by not agreeing to an election and not tabling a motion of no confidence.  The Commons chose instead to focus on creating legislation that is opposed by the government, thereby giving Johnson an effective argument that the government was defied, not rejected.

And so we’ll know in the next few days if this was the plan all along.  For if the prime minister is truly committed to his promise to bring the U.K. out of the E.U. on October 31, he’ll advise the queen to refuse the bill.  In accordance with the unwritten constitution of the U.K., the queen will agree with her prime minister’s advice.

If the queen agrees, Boris Johnson will have turned the Remainers’ nightmarish Halloween Day extension ploy into a historic Reformation Day, indeed.

Authored by Pepe Escobar via The Saker blog,

Modi and Putin discuss business and joint ventures at an economic conference in the Far East.

Indian Prime Minister Narendra Modi, left, and Russian President Vladimir Putin review a Kamov KA-226T helicopter painted in Indian Army colors at the Eastern Economic Forum in Vladivostok, Russia on Wednesday. Photo: Grigory Sysoev / Sputnik / AFP

There’s no way to follow the complex inner workings of the Eurasia integration process without considering what takes place annually at the Eastern Economic Forum in Vladivostok.

BRICS for the moment may be dead – considering the nasty cocktail of economic brutalism and social intolerance delivered by the incendiary “Captain” Bolsonaro in Brazil. Yet RIC – Russia-India-China – is alive, well and thriving.

That was more than evident after the Putin-Modi bilateral summit in Vladivostok.

A vast menu was on the table, from aviation to energy. It included the “possibility of setting up joint ventures in India that would design and build passenger aircraft,” defense technologies and military cooperation as the basis for “an especially privileged strategic partnership,” and a long-term agreement to import Russian crude, possibly using the Northern Sea Route and a pipeline system.”

Indian Prime Minister Narendra Modi, right, and Russian leader Vladimir Putin, center right, tour an exhibition at the 5th Eastern Economic Forum in Vladivostok on Sept 4. Photo: Grigory Sysoev / Sputnik / AFP

All that seems to spell out a delightful revival of the notorious Soviet-era motto Rusi-Hindi bhai bhai (Russians and Indians are brothers).

And all that would be complemented by what may be described as a new push for a Russia-India Maritime Silk Road – revival of the Chennai-Vladivostok maritime corridor.

Arctic to the Indian Ocean

Chennai-Vladivostok may easily interlock with the Chinese-driven Maritime Silk Road from the South China Sea to the Indian Ocean and beyond, part of the Belt and Road Initiative. Simultaneously, it may add another layer to Russia’s “pivot to Asia”.

The “pivot to Asia” was inevitably discussed in detail in Vladivostok. How is it interpreted across Asia? What do Asians want to buy from Russia? How can we integrate the Russian Far East into the pan-Asian economy?

As energy or trade corridors, the fact is both Chennai-Vladivostok and Belt and Road spell out Eurasia integration. India in this particular case will profit from Russian resources traveling all the way from the Arctic and the Russian Far East, while Russia will profit from more Indian energy companies investing in the Russian Far East.

The fine-print details of the Russia-China “comprehensive strategic partnership” as well as Russia’s push for Greater Eurasia were also discussed at length in Vladivostok. A crucial factor is that as well as China, Russia and India have made sure their trade and economic relationship with Iran – a key node of the ongoing, complex Eurasian integration project – remains.

As Russia and India stressed: “The sides acknowledge the importance of full and efficient implementation of the Joint Comprehensive Plan of Action on the Iranian nuclear program for ensuring regional and international peace, security and stability. They confirm full commitment to Resolution 2231 of the UN Security Council.”

Most of all, Russia and India reaffirmed an essential commitment since BRICS was set up over a decade ago. They will continue to “promote a system of mutual transactions in national currencies,” bypassing the US dollar.

One can easily imagine how this will go down among Washington sectors bent on luring India into the Trump administration’s Indo-Pacific strategy, which is a de facto China containment mechanism.

Luring Chinese capital

In terms of Eurasian integration, what’s happening in the Russian Far East totally interlocks with a special report on China’s grand strategy across the Eurasian heartland presented in Moscow earlier this week.

Vladivostock harbor. Photo: Wikimedia Commons

As for Russia’s own “pivot to Asia,” an essential plank of which is integration of the Russian Far East, inevitably it’s bound to remain a complex issue.

A sobering report by the Valdai club meticulously details the pitfalls. Here are the highlights:

• A depopulation phenomenon: “Many well-educated and ambitious young people go to Moscow, St. Petersburg or Shanghai in the hope of finding opportunities for career advancement and personal fulfillment, which they still do not see at home. The overwhelming majority of them do not come back.”

• Who’s benefitting? “The federal mega projects, such as the Eastern Siberia-Pacific Ocean oil pipeline, the Power of Siberia gas pipeline or the Vostochny Cosmodrome produce an increase in gross regional product but have little effect on the living standards of the majority of Far Easterners.”

• What else is new? “Oil and gas projects on Sakhalin account for the lion’s share of FDI. And these are not new investments either – they were made in the late 1990s-2000s, before the proclaimed “turn to the East.”

• The role of Chinese capital: There’s no rush towards the Far East yet, “in part because Chinese companies would like to mine natural resources there on similarly liberal terms as in Third World countries, such as Angola or Laos where they bring their own workforce and do not overly concern themselves with environmental regulations.”

• The raw material trap: Resources in the Russian Far East “are by no means unique, probably with the exception of Yakutian diamonds. They can be imported from many other countries: coal from Australia, iron ore from Brazil, copper from Chile and wood from New Zealand, all the more so since the costs of maritime shipping are relatively low today.”

• Sanctions: “Many potential investors are scared off by US sanctions on Russia.”

The bottom line is that for all the pledges in the “comprehensive strategic partnership,“ the Russian Far East has not yet built an effective model for cooperation with China.

That will certainly change in the medium term as Beijing is bound to turbo-charge its “escape from Malacca” strategy, to “build up mainland exports of resources from Eurasian countries along its border, including the Russian Far East. The two recently built bridges across the Amur River obviously could be of help in this respect.”

What this means is that Vladivostok may well end up as a major hub for Russia and India after all.

The world economy is in a never-ending state of flux.

The fact is that, as Visual Cpiatlists’ Jeff Desjardins notes, billions of variables – both big and small – factor into any calculation of overall economic productivity, and these inputs are changing all of the time.

Buying this week’s groceries or filling up your car with gas may seem like a rounding error when we are talking about trillions of dollars, but every microeconomic decision or set of preferences can add up in aggregate.

And as consumer preferences, technology, trade relationships, interest rates, and currency valuations change — so does the final composition of the world’s $86 trillion economy.

Country GDPs, by Size

Today’s visualization comes to us from HowMuch.net, and it charts the most recent composition of the global economic landscape.

It should be noted that the diagram uses nominal GDP to measure economic output, which is different than using GDP adjusted for purchasing power parity (PPP). The data in the diagram and table below come from the World Bank’s latest update, published in July 2019.

The Top 15 Economies, by GDP

The above 15 economies represent a whopping 75% of total global GDP, which added up to $85.8 trillion in 2018 according to the World Bank.

Most interestingly, the gap between China and the United States is narrowing — and in nominal terms, China’s economy is now 66.4% the size.

A Higher Level Look

The World Bank also provides a regional breakdown of global GDP, which we helps to give additional perspective:

The organization breaks it down by income levels, as well:

The low income countries — which have a combined population of about 705 million people — add up to only 0.6% of global GDP.

Looking Towards the Future

For more on the world economy and predictions on country GDPs on a forward-looking basis, we suggest looking at our animation on the Biggest Economies in 2030.

It is worth mentioning, however, that the animation uses GDP (PPP) calculations instead of the nominal ones above.

If the US-China trade war is supposed to be in a ceasefire phase following last week’s main news that trade talks will resume in October, Beijing may not have gotten the memo, because late on Sunday futures slipped and Treasury futures jumped after a Bloomberg report that Apple, and its Taiwanese manufacturing partner, Foxconn, had violated a Chinese labor rule by using too many temporary staff in the world’s largest iPhone factory; the Chinese report also alleged – wait for it – harsh working conditions.

For all those whose heads are shaking, stunning if what they read is true, let us help you – yes, China – that global paragon of equitable labor laws – is accusing the US and Taiwan of substandard labor practices. The claims came from China Labor Watch, which picked a great time to issued its report: just ahead of Apple’s upcoming iPhone reveal slated for Tuesday. The non-profit advocacy group investigates conditions in Chinese factories, and says it has uncovered other alleged labor rights violations by Apple partners in the past.

“Our recent findings on working conditions at Zhengzhou Foxconn highlights several issues which are in violation of Apple’s own code of conduct,” CLW wrote in its report. “Apple has the responsibility and capacity to make fundamental improvements to the working conditions along its supply chain, however, Apple is now transferring costs from the trade war through their suppliers to workers and profiting from the exploitation of Chinese workers.”

CLW said undercover investigators worked in Foxconn’s Zhengzhou plant in China, including one who was employed there for four years. One of the main findings: Temporary staff, known as dispatch workers, made up about 50% the workforce in August. Chinese labor law stipulates a maximum of 10%, CLW noted according to Bloomberg.

The biggest surprise, however, is that China appears to be right. When contacted by Bloomberg, Apple said that, after conducting an investigation, it found the “percentage of dispatch workers exceeded our standards” and that it is “working closely with Foxconn to resolve this issue.” It added that when it finds issues, it works with suppliers to “take immediate corrective action.” Foxconn Technology Group also confirmed the dispatch worker violation following an operational review.

To be sure, this isn’t the first time Apple’s supply chain has faced criticism over poor labor standards for years. While Apple has pushed manufacturing partners such as Foxconn – the world’s largest contract electronics manufacturer, best known perhaps for the sudden propensity of its underage workers to commit suicide – to improve factory conditions or risk losing business, suppliers and assemblers have constantly trying to churn out more handsets. Foxconn, officially known as Hon Hai Precision Industry Co., hires tens of thousands of temporary workers to ramp up production and meet iPhone demand ahead of key holiday season each year.

Like now.

While the report said 55% of factory staff were dispatch workers in 2018, and about 50% in August, this included student interns. Because many of these students returned to school at the end of August, that number is now closer to 30%, which is still a violation, the CLW said.

In response, Apple issued a statement saying “we believe everyone in our supply chain should be treated with dignity and respect,” adding that “to make sure our high standards are being adhered to, we have robust management systems in place beginning with training on workplace rights, on-site worker interviews, anonymous grievance channels and ongoing audits.”

Likewise, Foxconn also admitted to skirting China’s labor regulations: the Taiwanese fabrication giant said it found “evidence that the use of dispatch workers and the number of hours of overtime work carried out by employees, which we have confirmed was always voluntary, was not consistent with company guidelines.”

It added that its “work to address the issues identified in our Zhengzhou facility continues and we will closely monitor the situation. We will not hesitate to take any additional steps that might be required to meet the high standards we set for our operations.”

As Bloomberg notes, in late 2017, Apple found Foxconn had employed high school students who worked illegal overtime to assemble the iPhone X. Apple sent specialists to the facility to work with management on systems that ensured appropriate standards were followed.

In retrospect, it looks like they failed to do that.

Just like US employers relying increasingly more on part-time workers, so Foxconn, which typically operates on wafer-thin margins, employs millions of mostly migrant and temporary workers because activity tends to wax and wane with shopping seasons and fluctuations in demand.

Dispatch workers don’t receive benefits that full-time employees get, such as paid sick leave, paid vacations and social insurance, which provides medical, unemployment and pension coverage, according to CLW. While base wages can be higher for dispatch workers, they are paid by third-party firms on a short-term basis and are not employed directly by Foxconn, CLW says. Dispatch workers can become official factory workers after an initial three-month period, according to the group’s report.

Most factory workers are paid about 4,000 yuan ($562) a month, one CLW investigator found. After taxes and mandatory fees, they get roughly 3,000 yuan a month, according to the CLW report. China’s per capita disposable income was 28,228 yuan in 2018, or 2,352 yuan a month, China Daily reported earlier this year, citing government data.

* * *

It’s not just Apple that has been implicated; the working conditions for Amazon too leave something to be desired: as Bloomberg reveals, last month Foxconn said it fired two executives at one of its Chinese plants after another CLW investigation found the company was relying heavily on temporary workers and teenage interns to assemble Amazon.com Inc. Echo speakers. Foxconn reviewed the Hengyang facility and found the proportion of contract workers and student interns had on occasion exceeded legal thresholds, and that some interns had been allowed to work overtime or nights.

The CLW report also detailed various other findings, such as the following, via Bloomberg:

• During peak production periods, resignations are not approved.
• Some dispatch workers have not received promised bonuses.
• Student workers do overtime during peak production season, even though regulations on student internships prohibit this.
• Some workers put in at least 100 overtime hours each month, during busy production periods. Chinese labor law limits monthly overtime to 36 hours.
• Workers must get approval to not do overtime. If requests are denied and staff still choose not to work overtime, they are admonished by managers and miss out on future overtime opportunities.
• Workers sometimes have to stay at the factory for unpaid meetings at night.
• The factory doesn’t provide adequate protective equipment for staff.
• Work injuries are not reported by the factory, and verbal abuse is common there.
• While overtime is allegedly often required, most workers want to work overtime to make more money, according to an anonymous diary written by a CLW investigator in the factory.

So with a critical iPhone release event in just 48 hours, will Apple’s reputation be hurt by China’s report exposing it as nothing but a virtue signaling sweatshop laser-focused on the bottom line?

“We looked into the claims by China Labor Watch and most of the allegations are false,” Apple said. “We have confirmed all workers are being compensated appropriately, including any overtime wages and bonuses, all overtime work was voluntary and there was no evidence of forced labor.”

China disagrees.

Authored by Sarah Cowgill via LibertyNation.com,

“I am here not because I wanted to be. I am here because I believe it is my civic duty.” This was the tearful, shaking-voice testimony of Dr. Christine Blasey-Ford during last year’s hearing in front of the Senate Judiciary Committee. It was an 11th hour attempt to derail the confirmation of now Supreme Court Justice Brett Kavanaugh.

Christine Blasey-Ford

But according to Blasey-Ford’s uncharacteristically chatty lawyer, Debra Katz, her real motivation in accusing Justice Kavanaugh had more to do with how she thought he might rule on any future abortion cases.  Any free-thinking person who watched the chaos unfold in the contentious Senate hearing knew there was much more to the backstory as Blasey-Ford’s testimony had more holes than Swiss cheese and was uncorroborated by any other named witnesses.

But heck, the lawyer is milking her 15 minutes of fame.  And as we now know – thanks to a video recently released by the Daily Caller – she’s using her former client as a platform for speaking engagements with feminists. In a March speech at the University of Baltimore’s 11th Feminist Legal Theory Conference, entitled “Applied Feminism and #MeToo,” Katz dropped a truth bomb that directly contradicts Dr. Blasey-Ford’s stated reasons for accusing Kavanaugh. She revealed:

“He will always have an asterisk next to his name. When he takes a scalpel to Roe v. Wade, we will know who he is, we know his character, and we know what motivates him, and that is important. It is important that we know, and that is part of what motivated Christine.”

Irony and a poor choice of words aside, didn’t Katz just out her own client for ulterior motives in coming forward and accusing Kavanaugh of sexual assault at a high school party that no one else can recall? Blasey-Ford insisted it was her “civic duty,” not an attempt to ensure the protection of abortion rights. There was no mention of Roe v. Wade at the time.

Birds Of A Feather

Debra Katz has made a name for herself in the #MeToo era, and with a client on the national stage, why wouldn’t she make hay while the sun still shines? She is a major donor in Democratic circles, pops up at anti-Trump rallies, and rails on cable news: “We are going to resist. We will not be silenced.”

Well, unless you are a conservative female and the accused is a Democrat – such as former Sen. Al Franken (D-MN) – that is.  In a New Yorker article, Katz explained why Franken shouldn’t have caved to pressure to resign after sexual assault allegations by several women came to light:

“The allegations levelled against Senator Franken did not warrant his forced expulsion from the Senate, particularly given the context in which most of the behavior occurred, which was in his capacity as a comedian.”

So, it’s funny to be the sleeping object of a Democrat’s groping? Come on, now. Remember, we believe all women.  Oh, except Paula Jones, the former State of Arkansas employee who sued her old boss, Bill Clinton, for sexual harassment.

Debra Katz

According to Katz, “Paula Jones’ suit is very, very, very weak. She’s alleged one incident that took place in a hotel room that, by her own testimony, lasted 10 to 12 minutes. She suffered no repercussions in the workplace.”

Weak. Whereas Blasey-Ford couldn’t even keep her tenuous accounts straight and unraveled in front of America as her witness list denied nearly every claim she made.

Dr. Christine Blasey-Ford seems to have been little more than a pawn in the war against Trump. And it now appears her lawyer found an easy break into the national spotlight and is still making public appearances. But just as Blasey-Ford faded from the spotlight, so will Katz when the light of truth breaks through the Kavanaugh hearing like a sunny day dissipates the fog of deception.

President Trump’s decision to abruptly cancel Afghan peace talks will cost more American lives, the Taliban warned on Sunday while the United States promised to keep up military pressure on the militants, in a stunning reversal of efforts to forge a deal ending nearly 20 years of war in Afghanistan.

The Islamist group issued a statement after Trump announced late on Saturday that he had unexpectedly canceled secret talks planned for Sunday with the Taliban’s major leaders at the presidential compound in Camp David, Maryland, Reuters reported. He broke off the talks on Saturday after the Taliban claimed responsibility for an attack in Kabul last week that killed an American soldier and 11 others.

Zabihullah Mujahid, a Taliban spokesman, criticized Trump for calling off the dialogue and said U.S. forces have been pounding Afghanistan with attacks at the same time.

“This will lead to more losses to the U.S.,” he said. “Its credibility will be affected, its anti-peace stance will be exposed to the world, losses to lives and assets will increase.”

It wasn’t initially clear who in the world would be “surprised” when the US anti-peace stance is “exposed”, but we look forward to upcoming Taliban 8-K’s for further information on this topic.

Meanwhile, back in Washington, Secretary of State and the former head of the CIA, Mike Pompeo, said that Afghan peace talks were on hold and Washington would not reduce U.S. military support for Afghan troops until it was convinced the Taliban could follow through on significant commitments. Additionally, Pompeo said on Sunday TV news shows that the US has recalled U.S. special envoy for Afghanistan Zalmay Khalilzad to chart the path forward. Asked on “Fox News Sunday” whether Afghan talks were dead, Pompeo said, “For the time being they are.”

The development is a major setback for Trump, who has long stated his intention to end U.S. involvement in Afghanistan – since his days as a candidate – and American diplomats have been talking with Taliban representatives for months about a plan to withdraw thousands of U.S. troops in exchange for security guarantees by the Taliban.

And then it all fell apart shortly after US and Taliban negotiators struck a draft peace deal last week, that would have led to a drawdown of troops from America’s longest war. There are currently 14,000 U.S. forces as well as thousands of other NATO troops in the country, 18 years after its invasion by a U.S.-led coalition following the Sept. 11, 2001, Saudi al Qaeda attacks on the United States.

Amid the ongoing peace talks, fighting in Afghanistan had continued and recent assaults by the Taliban cast doubts over the draft deal. As violence escalated, Afghan leaders including President Ashraf Ghani have been increasingly critical of the deal and encouraged the Taliban to enter direct talks.

Asked whether the collapse of talks put a U.S. troop pullout on hold as well, Pompeo said the issue would be discussed. “The president hasn’t yet made a decision on that,” he said on ABC’s “This Week.”

According to Pompeo, Trump decided to get personally involved to get the agreement to the finish line at Camp David after “real progress” had been made in talks: “President Trump ultimately made the decision,” Pompeo told Fox. “He said, ‘I want to talk to (President) Ashraf Ghani. I want to talk to these Taliban negotiators. I want to look them in the eye. I want to see if we can get to the final outcome we needed.’”

In the end, the answer was no.

Meanwhile, Trump’s secret plans have already unleashed a firestorm of criticism, with the 18th anniversary of Sept 11 just days away.

“Camp David is where America’s leaders met to plan our response after al Qaeda, supported by the Taliban, killed 3000 Americans on 9/11,” Republican Representative Liz Cheney, daughter of Dick Cheney who was U.S. vice president at the time of the attacks, wrote on Twitter on Sunday. “No member of the Taliban should set foot there. Ever.”

Half a world away, US involvement in Afghanistan has been nothing short of a disaster, with Taliban fighters now controling more territory than at any time since 2001 – some have said this is with the blessing of the CIA in exchange for the US maintaining control of the “opium” trade, and launching assaults over the past week that included a suicide attack in Kabul on Thursday that killed U.S. Army Sergeant Elis Barreto Ortiz, 34, from Puerto Rico.

Needless the say, the deep state would not be delighted if the US leave Afghanistan: nine former U.S. ambassadors warned on Tuesday that Afghanistan could collapse in a “total civil war” if Trump withdraws all U.S. forces before the Kabul government and the Taliban conclude a peace settlement.

Not surprisingly, Pompeo downplayed chances of a premature withdrawal.

“President Trump made clear we’re not just going to withdraw because there’s a timeline. We’re only going to reduce our forces when certain conditions are met,” he said on CNN’s “State of the Union.”

Finally, for all those wondering what US presence if Afghanistan is really all about, here is the answer.