“I Thought The Numbers Would Be Bad, But This Is Ugly” – Singapore Economy Unexpectedly Tumbles; Chinese Exports Slide

The latest confirmation that global trade is suffering its gloomiest period since the financial crisis came overnight from Asia, where first global trade hub Singapore delivered some shockingly bad news about the state of its economy, followed shortly by the latest disappointing Chinese exports report.

The first warning shot to the global economy came from Singapore, where Gross domestic product in the trade-reliant city state declined an annualized 3.4% in the second quarter, a plunge from 3.8% in Q1 and far below the 0.5% consensus estimate. This was the biggest drop since 2012.

“I thought the numbers would be bad, but this is ugly,” said Chua Hak Bin, an economist at Maybank Kim Eng Research Pte in Singapore. “The whiff of a technical recession is real. We thought it might be shallow, but the risks now is that it might be deeper.”

Singapore, which is one of the world’s most reliable trade proxies and due to its heavy reliance on commerce and its complicated integration in regional and global supply chains makes it vulnerable to a slowdown in world growth and tariff wars. Exports have already taken a big hit over the past few months, with shipments plunging in May by the most since early 2013; the latest report revealed that the plunge in GDP was largely due to a collapse in electronics shipments.

Manufacturing contracted an annualized 6% in the second quarter from the previous three months. Construction declined 7.6%, reversing a 13.3% expansion in the first quarter. The services industry shrank 1.5% in the second quarter.

“Singapore is the canary in the coal mine, being very open and sensitive to trade,” said Chua Hak Bin, an economist at Maybank Kim Eng Research Pte in Singapore. The data “points to the risk of a deepening slowdown for the rest of Asia.”

Despite the dismal numbers, the local government is still hopeful about the future, and sees the economy expanding 1.5%-2.5% this year, compared with 3.1% in 2018. Officials are set to revise that projection in August, Minister for Trade & Industry Chan Chun Sing told Parliament this week, adding that Singapore was “well-placed to weather the storm” given its sound economic fundamentals, strong fiscal position, and progress in restructuring the economy. Singapore isn’t expecting a full-year recession yet but the government is “monitoring the situation closely,” Finance Minister Heng Swee Keat said in a Facebook post.

Others are far more skeptical: “As weak as Singapore’s standstill in 2Q GDP was, 2H will probably be much worse without a rapprochement in U.S.-China trade relations. Our forecast for a 0.2% year-on-year contraction in 2019 remains on course” said Bloomberg economist Tamara Henderson.

* * *

Separately, in the second blow to global trade – and the latest confirmation that China will be forced to engage in even more aggressive stimulus – Beijing’s latest trade figures showed exports fell 1.3% in June from a year ago and imports shrank a more-than-expected 7.3%.

Exports were in line with consensus expectations, with imports slightly weaker. In sequential terms, exports were down by 1.0% mom sa non-annualized in June, partly reversing a gain of 2.2% in May which was boosted by the frontloading from exporters. Imports remained weak, down by 0.6% mom sa non-annualized in June, albeit to a lesser extent (-6.1% non-annualized in May). China’s trade surplus increased to US$50.4bn in June from US$41.7bn in May.

The main culprit for the latest disappointin data? Exports to the US contracted significantly by 7.8% yoy in June, down further from -4.1% yoy in May. Exports to the EU also decelerated to a decline of 3% yoy in June from +6.1% yoy in May, and exports to Japan increased modestly by 2.4% yoy (v.s. +0.5% yoy in May). In contrast, exports to ASEAN accelerated significantly to +12.9% yoy in June from +3.5% yoy in May.

Meanwhile, on the other side, imports of crude oil accelerated in June, while imports of steel products remained weak. Imports of iron ore continued to decline in volume terms, though increasing in value terms on higher prices. In value terms, crude oil imports accelerated to +8.2% yoy in June (vs. +5.5% yoy in May); steel products imports declined by 19.5% yoy in June (vs. -22.5% yoy in May); iron ore imports increased +34.6% yoy in June (vs. +24.0% yoy in May). In volume terms, crude oil imports were up by 15.2% yoy in June (vs. +3.0% yoy in May); steel products imports remained weak at 9.1% yoy in June (vs. -13.4% yoy in May); iron ore imports decreased by 9.7% yoy in June (vs. -11.0% yoy in May).

According to Goldman, “weaker global demand, higher tariffs from the US and smaller impacts from the frontloading (compared to May) may have contributed to the slowdown in exports momentum in June, though depreciation in RMB over the past several months may have been supportive.” As a result Goldman believes that exports momentum may remain modest in coming months, given moderate global economic growth, and combined with weak private demand, will result in easier domestic policy to maintain growth stability. The latest State Council meeting also announced measures to support exports (e.g., improving export tax rebate policies and lowering export insurance fees). And since China’s trade surplus jumped, if for all the wrong reasons (drop in exports, bigger drop in imports), expect a furious Trump to opine negatively any moment, putting a China deal further out of reach.

 

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British schoolteachers want price controls for vacation packages

Here’s our weekly roll-up of the most absurd and concerning articles we came across this week from both sides of the Atlantic.

8th grader gets 3-week suspension for picture of airsoft gun

Airsoft guns are toy guns which shoot little plastic BBs.

As long as kids are wearing safety glasses, these guns pose no actual threat of injury. And their painted red plastic tips make it obvious they are toy guns.

They are perfectly legal. So a 14-year-old boy thought nothing of goofing around with his friends, and posting a Snapchat picture which included airsoft guns.

But someone at his school saw the photo and reported it… and school administrators suspended him for the final three weeks of the school year.

The picture was not taken on school property, or during school hours. The school was not mentioned, and there was nothing in the Snaps that could have been construed as a threat.

But apparently someone at the school felt uncomfortable with the picture, and the school decided it had to respond with punishment.

So now perfectly normal behavior outside of school can get you in trouble with the meddling educators.

Click here for the full story.

British Officials consider price controls for vacation

Vacation prices are too high!

And as usual, British parents, politicians, and Teachers Unions think the problem is those greedy corporations.

So they have called on regulators to force vacation providers to lower their prices during school breaks.

They say it is unfair that vacation prices are higher during the summer while everyone is out of school. One sympathetic politician said, “It’s not right that children’s education is being used to exploit hard-working parents in this way.”

Of course, as a spokesman for the travel industry points out, this is simple supply and demand… a lot more people want to take their families on vacation while the kids are out of school.

They suggested staggering school breaks so that demand doesn’t spike so much at one time.

And it doesn’t help that parents can be fined up to £120 if their kids miss class for a vacation while school is in session.

Last year the Department of Education collected £10 million of fines for unexcused absences.

Who are the greedy ones?

Click here for the full story.

FBI and ICE are using state license-photo databases for facial recognition

Every month the FBI conducts about 4,000 facial recognition searches.

In America, your data is supposed to be private, only accessible to law enforcement if they have probable cause to think you have committed a crime.

So you might be surprised to find out that the databases used in these facial recognition checks are full of innocent Americans.

The FBI and Immigration & Customs Enforcement (ICE) have been accessing state Department of Motor Vehicle databases for years, to check a suspect’s photo against countless innocent citizens license photos.

The license holders didn’t consent. The state legislators, governors, and Congress didn’t give them permission.

Usually, all they need is a friendly email to a DMV bureaucrat, and they have access to treasure troves of biometric data.

Including the DMV and other state, local, and federal databases, the FBI has access to over 641 million face photos which they can scan using facial recognition technology.

Click here for the full story.

Amazon is liable for third party items sold on the website

Amazon sells some products directly, but it also provides a platform for other retailers to sell items.

Now an appeals court has ruled that Amazon can be held liable for the millions upon millions of products sold by third parties on its website.

They ruled that Amazon failed to properly warn customers about the dangers of defective products.

In some cases, the actual retailers could not be contacted or identified. And that left no one but Amazon to hold liable for the defective products.

When in doubt, blame the big corporation… even when they have nothing to do with it.

Click here for the full story.

UK Lawmakers scrutinize Amazon investment in food delivery company

The fun never stops for Amazon.

Obviously a huge part of their business is delivery, and Amazon has a history of investing in delivery companies.

But when Amazon bought a minority stake in British food delivery company Deliveroo, regulators pounced.

The government told Amazon to cease any plans to merge operations with the company until they have a chance to scrutinize the transaction.

Even though Amazon does not own a controlling share of the company, the regulators said it is reasonable to believe the two companies will cease to be separate entities.

And apparently that is all the excuse regulators need to intervene in a mutually beneficial and consensual transaction…

Click here for the full story.

Source

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Review: Stuber

Kumail Nanjiani and Dave Bautista are so appealing in Stuber—so personable and droll in their verbal parrying—that you can’t help wishing someone would put them in a buddy comedy someday. It wouldn’t even have to be a top-shelf buddy comedy—something, for example, that might have caught the attention of Eddie Murphy or Mel Gibson back in the day. No, it could be a middling piece of hackwork and Nanjiani and Bautista would probably keep it afloat. Hell, they keep this movie afloat—well, almost—and it’s not even middling hackwork.

Stuber is remarkably bad, even for a genre in which excellence rarely runs rampant. The story has a primordial familiarity. Bautista plays Vic, an LAPD detective obsessed with catching the bigshot drug dealer (Iko Uwais, of The Raid) who shot and killed his partner (a fleeting appearance by Bautista’s Guardians of the Galaxy associate Karen Gillan). Six months after that sad event, Vic still hasn’t captured this guy, and it looks like he won’t be doing so any time soon, because he just had laser eye surgery and then climbed behind the wheel of his car and promptly drove it into a ditch. Undeterred—there are still leads to pursue! —Vic summons an Uber. A driver named Stu (Nanjiani) heeds the call. (Here I think we can agree that combining “Stu” and “Uber” to create a title for this movie is an instance of shameless creative laziness.)

Now we meet Stu. He is of course the polar opposite of Vic. Where Vic is a raging bull and built like a double-wide refrigerator, Stu is mild of manner, reed-like in physique, and frustrated in his Uber job, which consists of ferrying morons around town all day and never getting a coveted five-star rating from any of them. He also has a second gig working at a sporting-goods store (a strained narrative invention). So Stu is ready for change, and he’s hoping to open a “spin gym for women” with his whiny sort-of-girlfriend Becca (Betty Gilpin). This pointless subplot has no payoff, and in an uncharitable mood one might suspect that it was shoehorned into the movie solely to pad it out to 93 minutes.

Stu arrives at Vic’s pickup site and is confronted by an angry, near-blind muscle mountain who commandeers his car until further notice. He then leads Stu off on a tour of the movie’s requisite assortment of kooky characters, with furious gun battles inserted along the way. There’s a stop at a gay strip club (where Steve Howey has a funny bit as one of the strippers) followed by a visit to a ghetto drug den, outside of which Stu accidentally shoots one of the dealers. This wounded lowlife then has to be transported for repair to a veterinary hospital that Vic patronizes in such legally shadowy situations. There are also low-impact plot complications provided by Vic’s needy daughter (Natalie Morales) and his boss, Captain McHenry (Mira Sorvino). And more gun battles, of course.

The movie fails in areas you might have thought it hard to screw up at this late date in action-flick history. To begin with, the action is incoherent—the uninventive fight choreography lacks detail and thus oomph, and the juddery camerawork keeps you wondering what’s going on at all times. Director Michael Dowse also mounts a car chase that consists just about entirely of car-chase clichés. And the script, by Tripper Clancy (whose resume consists of two previous German-language features), is hobbled by a pair of irritating implausibilities. One, why would a cop who can barely see insist on barging around with a gun in search of a suspect who will be, at best, only a blur if he somehow finds him? And two, why would Nanjiani’s Uber driver not bail on this rampaging rider at the first opportunity? A similar question will likely occur to any viewers who find themselves trapped in a theatre with this movie.

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Washington Weighing ‘Snapback’ Of UN Sanctions On Iran

Washington is about to squander whatever goodwill it gleaned from the series of mysterious tanker attacks that it blamed on Iran by leveraging its veto power at the UN Security Council to impose special ‘snapback’ sanctions on Tehran.

In the latest sign that the Trump Administration is planning to redouble its pressure campaign against the Islamic Republic in response to Tehran’s uranium enrichment, Bloomberg reports that senior US officials are debating whether to impose the ‘snapback’ sanctions – which would further elevate tensions between Washington and Tehran – in response to Iran’s breach of thresholds for the size of its uranium stockpile and the level of enrichment.

Tehra

Though the US formally withdrew from the treaty last year, officials believe Washington could still invoke the mechanism, which would ultimately trigger a return to UN Security Council sanctions beyond those the US is already imposing unilaterally.

A return to the sanctions straightjacket that first drove Tehran to the negotiating table would destroy whatever is left of the European signatories’ effort to salvage the deal. It would also seriously piss off the other signatories, particularly since the US has already quit the deal, and therefore shouldn’t have a say.

But ultimately, even Obama era officials agree that there’s “an argument to be maid” for triggering the snapback sanctions.

“Do I think there’s an argument to be made for snapping back? Sure,” said Richard Nephew, who was the lead sanctions expert for the Obama administration team that negotiated the 2015 accord. “Do I think the rest of the council agrees? No. It’s not clear people would stay in their chairs during discussions if we invoked this.”

Nephew, now a senior research scholar at Columbia University, said the snapback was designed to give the U.S. unilateral privileges to restore sanctions through the Security Council. At the time, the provision was a major part of Secretary of State John Kerry’s pitch for Congress to acquiesce to the deal. It’s also something that an “America First” president like Trump would like.

Here’s how the US would pull it off: the whole process would take two months, and it may require the help of France or the UK, both of whom are trying to save the deal, but still might acquiesce as they worry that Tehran has failed to restrain itself.

Under the snapback clause, any of the signatories to the Iran accord can cite Iran for violating the accord in a complaint to a dispute resolution committee. The matter eventually could be brought before the Security Council, which could vote on a resolution to keep the previous sanctions from going back into force. But the U.S. could get its way by exercising its veto on the council.

It’s no easy fix: The process could take two months or longer. And in today’s circumstances, other participants in the deal would be likely to argue that the U.S. is no longer allowed to invoke the mechanism.

To get around a dispute over whether the U.S. has standing to initiate the snapback mechanism, American officials are leaning on France and the U.K. to consider exercising it. The Europeans are signaling they’re not at that point yet, but they are using the American threats to put pressure on Iran to restrain itself, according to Western diplomats at the UN.

Many of the signatories are still angry with the US for leaving and trashing the deal, and have criticized for aggravating tensions in the region.

A meeting in Vienna on Wednesday foreshadowed just how explosive any efforts for a snapback would be. The U.S. sought a special meeting of nuclear inspectors to increase pressure against Iran. Instead, the Americans drew pushback from Russia, China and Europe, all of whom blame the Trump administration for the crisis.

France, Germany and the U.K. issued a joint statement on the eve of the meeting saying that while they were concerned by Iran’s violations, it’s the job of the remaining participants in the deal, known as the Joint Comprehensive Plan of Action, to address disputes.

“The EU deeply regrets the U.S. withdrawal and calls on all countries to refrain from taking any actions that impede the implementation of the JCPOA commitments,” it said.

To be sure, US sanctions have done considerable damage to the Iranian economy, and it’s unclear whether the UN sanctions would add a significant amount of pressure. But the fact that this is being seriously considered shows that the Iran hawks are working to regain control of the agenda, despite President Trump’s insistence that he doesn’t “want a war” with Iran.

via ZeroHedge News https://ift.tt/2LK18Ya Tyler Durden

Review: Stuber

Kumail Nanjiani and Dave Bautista are so appealing in Stuber—so personable and droll in their verbal parrying—that you can’t help wishing someone would put them in a buddy comedy someday. It wouldn’t even have to be a top-shelf buddy comedy—something, for example, that might have caught the attention of Eddie Murphy or Mel Gibson back in the day. No, it could be a middling piece of hackwork and Nanjiani and Bautista would probably keep it afloat. Hell, they keep this movie afloat—well, almost—and it’s not even middling hackwork.

Stuber is remarkably bad, even for a genre in which excellence rarely runs rampant. The story has a primordial familiarity. Bautista plays Vic, an LAPD detective obsessed with catching the bigshot drug dealer (Iko Uwais, of The Raid) who shot and killed his partner (a fleeting appearance by Bautista’s Guardians of the Galaxy associate Karen Gillan). Six months after that sad event, Vic still hasn’t captured this guy, and it looks like he won’t be doing so any time soon, because he just had laser eye surgery and then climbed behind the wheel of his car and promptly drove it into a ditch. Undeterred—there are still leads to pursue! —Vic summons an Uber. A driver named Stu (Nanjiani) heeds the call. (Here I think we can agree that combining “Stu” and “Uber” to create a title for this movie is an instance of shameless creative laziness.)

Now we meet Stu. He is of course the polar opposite of Vic. Where Vic is a raging bull and built like a double-wide refrigerator, Stu is mild of manner, reed-like in physique, and frustrated in his Uber job, which consists of ferrying morons around town all day and never getting a coveted five-star rating from any of them. He also has a second gig working at a sporting-goods store (a strained narrative invention). So Stu is ready for change, and he’s hoping to open a “spin gym for women” with his whiny sort-of-girlfriend Becca (Betty Gilpin). This pointless subplot has no payoff, and in an uncharitable mood one might suspect that it was shoehorned into the movie solely to pad it out to 93 minutes.

Stu arrives at Vic’s pickup site and is confronted by an angry, near-blind muscle mountain who commandeers his car until further notice. He then leads Stu off on a tour of the movie’s requisite assortment of kooky characters, with furious gun battles inserted along the way. There’s a stop at a gay strip club (where Steve Howey has a funny bit as one of the strippers) followed by a visit to a ghetto drug den, outside of which Stu accidentally shoots one of the dealers. This wounded lowlife then has to be transported for repair to a veterinary hospital that Vic patronizes in such legally shadowy situations. There are also low-impact plot complications provided by Vic’s needy daughter (Natalie Morales) and his boss, Captain McHenry (Mira Sorvino). And more gun battles, of course.

The movie fails in areas you might have thought it hard to screw up at this late date in action-flick history. To begin with, the action is incoherent—the uninventive fight choreography lacks detail and thus oomph, and the juddery camerawork keeps you wondering what’s going on at all times. Director Michael Dowse also mounts a car chase that consists just about entirely of car-chase clichés. And the script, by Tripper Clancy (whose resume consists of two previous German-language features), is hobbled by a pair of irritating implausibilities. One, why would a cop who can barely see insist on barging around with a gun in search of a suspect who will be, at best, only a blur if he somehow finds him? And two, why would Nanjiani’s Uber driver not bail on this rampaging rider at the first opportunity? A similar question will likely occur to any viewers who find themselves trapped in a theatre with this movie.

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The End of the Free Internet Is Near

Not too long ago, conventional wisdom held that the internet should enjoy minimal government oversight precisely because it was a technology that enabled open and free speech for everyone. The remedy for hateful and offensive remarks, that 1990s-vintage argument went, was more speech—or logging off.

This principle, which can be traced back through the writings of St. Thomas Aquinas and John Stuart Mill, was nicely captured in the U.S. Supreme Court’s 1997 decision striking down certain speech-chilling provisions of the Communications Decency Act. “Through the use of chat rooms,” Justice John Paul Stevens wrote, “any person with a phone line can become a town crier with a voice that resonates farther than it could from any soapbox. Through the use of Web pages, mail exploders, and newsgroups, the same individual can become a pamphleteer.”

A generation later, Stevens’ argument has been not merely discarded. It has been inverted.

Politicians now insist that the internet should be subject to increased regulations precisely because it allows that hypothetical town crier to speak with a voice that resonates farther than it could from any physical soapbox. The possibility of freewheeling online discussions has been transformed, in other words, from virtue to vice. Platforms like Facebook and YouTube increasingly face demands that they restrict content. In some cases the demands are effected through public pressure, in others through outright government censorship.

The movement to stifle online expression is still in its early stages, but it represents a fundamental threat to the principles that have allowed the internet as we know it to grow and thrive. If these efforts continue, we may soon see the end of the free and open web.

Europe vs. Big Tech

At the vanguard of the efforts to restrict online speech are, ironically, Western nations that have historically prized free expression—in particular, the European Union.

In March, members of the European Parliament approved a Copyright Directive. What’s known as Article 13 of the measure (renumbered as Article 17 in the final version) will require technology companies to impose “upload filters” to scan user-provided content and remove material viewed as unlawful. If a service provider fails to delete “copyright-protected works and other subject matter,” the text says, it “shall be liable for unauthorized acts of communication.”

Internet pioneer Vint Cerf, World Wide Web inventor Tim Berners-Lee, Electronic Frontier Foundation co-founder John Gilmore, Wikipedia founder Jimmy Wales, and dozens of other prominent technologists denounced Article 13 as “an unprecedented step towards the transformation of the Internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users.”

Their arguments failed. An amendment that would have removed the upload filter requirement from the Copyright Directive was defeated by five votes.

In the short term, that will probably grant an unintended competitive advantage to large U.S.-based companies such as Facebook, Google, and Twitter, which possess the resources to devise, test, and implement automatic filtering technologies. Smaller startups will find compliance more of a challenge. Nonprofit efforts such as Wikipedia and websites run by individuals are likely to shoulder even greater burdens.

Other E.U. measures include last year’s General Data Protection Regulation (GDPR), which imposed new rules on how businesses can handle and use user data, and this year’s so-called platform-to-business rules, announced in draft form in February. The latter step is less known but arguably reaches further: Slated to take effect in February 2020, these regulations will control the business practices of “online platforms,” including search engines, voice assistants, app stores, online marketplaces, price comparison tools, and some social media applications. They will be subject to new rules, including a ban on such “unfair practices” as suspending a user’s account without explanation.

The French government applauded the draft rules in a statement, saying that the E.U. will now be able to “steer the market in the right direction”—though what the “right direction” is was left unsaid—while lamenting that they do not go further by regulating electronic devices too.

Privatizing Censorship

If Brexit actually happens and the U.K. manages to extricate itself from the European Union, Britain’s internet users and businesses will be fortunate to escape the full impact of these efforts. But Westminster’s elite have not been idle.

In April, the British government published a proposal, the “Online Harms White Paper,” that echoes the approach of the E.U. Copyright Directive by holding tech companies, in particular social media platforms, liable for what their users post or upload. Under such a legal regime, internet censorship would be effectively privatized, as businesses would have no choice but to monitor and restrict users.

Among the online “harms” the U.K. proposes to outlaw are “extremist content,” “disinformation,” “violent content,” and “trolling,” which could include anything from what a government agency decrees to be fake news to remarks critical of the Prophet Muhammad. Another offensive category is “glamorization of weapons,” which invites questions about how it may be applied to venerable British institutions like the National Museum of Arms and Armour, the nation’s oldest museum.

In an April op-ed for CNN, Jeremy Wright, the U.K.’s secretary of state for digital, culture, media, and sport, argued for this adventure in online censorship by likening, without irony, adult internet users to young children. “It is similar to the principle that when you take your child to a playground, you trust that the builder made sure the equipment was safe and that no harm will come to them,” Wright wrote.

The U.K.’s free market Adam Smith Institute calls the “Online Harms White Paper” illiberal and incompatible with English principles of freedom: “This proposal is about preventing Internet users from engaging in knowing and voluntary speech, and it’s about recruiting vast armies of private sector policemen to patrol their thoughts.”

Perhaps most problematic, the Adam Smith Institute points out, is that the U.K. proposes to restrict political speech that remains legal elsewhere in the English-speaking world. It is no exaggeration to say that “glamorization of weapons” is a popular hobby in the United States—and is fully protected by the American First and Second Amendments.

Other nations are edging in the same illiberal direction. Soon after the Christchurch, New Zealand, mosque massacre that killed 51 people, Australia enacted a new law punishing the publication or hosting of “abhorrent violent material” with up to three years in prison. According to the law, it “is immaterial whether the hosting service is provided within or outside Australia.”

Read broadly, this suggests that executives of U.S. and other foreign hosting services—at least those failing to strictly censor their services for Australian audiences—could face legal peril if they visited Sydney on vacation. The law also allows television stations to broadcast violent material while prohibiting Twitter users from posting an identical video online.

That was too much even for Australia’s Labor Party. “There needs to be proper consultation with not just the social media sector but also traditional media, who are also caught up by this bill and whose legitimate journalism and online news sites will also be impacted on by these laws,” said Mark Dreyfus, a Labor representative and former attorney general, during the parliamentary debate. Dreyfus warned the law was being rushed through Parliament for political reasons “as this chaotic and desperate government careen[ed] toward” an election this spring.

For his part, New Zealand’s Chief Censor David Shanks—yes, this is an actual government title—ruled that the video recorded by the Christchurch shooter and his accompanying manifesto both fell under the category of “objectionable” material and would be illegal to watch or read. The censorship office’s classification decision said the manifesto “promotes and encourages acts of terrorism in a way that is likely to be persuasive to its intended audience.” Merely viewing the document in electronic form, even if it is not downloaded to local storage, is punishable by up to 10 years in prison.

It is possible that New Zealand’s censorship will prevent further extremist violence. But it is more likely that a formal ban will turn the Christchurch shooter into a kind of free speech martyr, bringing more attention to his loathsome ideology. Forbidden ideas have a tendency to draw the curious and the untethered.

The United States of Deplatforming

So far, at least, the U.S. government has yet to appoint a chief censor. But Silicon Valley’s coastal elites have been eager to volunteer their services gratis.

The last year has marked a dispiriting new low in the “deplatforming,” or banning from various online channels, of dissident voices. The ax fell on Infowars’ Alex Jones, actor James Woods, the editorial director of AntiWar.com, the director of the Ron Paul Institute, and radio talk show host Jesse Kelly. (Some of these accounts have since been reinstated.)

Lawmakers have encouraged these social media bans. Congressional hearings have been called to interrogate tech execs on how their products are being used. Last August, Sen. Chris Murphy (D–Conn.) urged an even broader crackdown, proclaiming on Twitter that “the survival of our democracy depends on it.”

Rep. Bennie Thompson (D–Miss.), chairman of the Homeland Security Committee, must have been listening. In March, Thompson sent a letter to Facebook, YouTube, Twitter, and Microsoft insisting that they remove “toxic and violent” content, even if it is legal to distribute in the United States. (The platforms already prohibit illegal content.) If the companies are “unwilling” to do so voluntarily, Thompson warned, Congress will “consider policies” to compel their cooperation. Left unexplained was how any such requirement could comply with the First Amendment.

The Fight Online Sex Trafficking Act, better known as FOSTA, ended the federal government’s laissez faire approach to internet companies when it was enacted in April 2018. Executives are now criminally liable if they own, manage, or operate a service “with the intent to promote or facilitate the prostitution of another person.” The Electronic Frontier Foundation has filed a lawsuit challenging the constitutionality of FOSTA, saying it muzzles constitutionally protected speech and is not tailored enough to comply with the First Amendment.

The World’s Most Effective Censor

Whatever threats from constitutionally challenged politicians the United States faces, it remains a beacon of freedom compared to China, which can claim the dubious honor of most effective internet censor in the world. Social media apps are blocked, political content is restricted, and activists and journalists who document human rights abuses may be arrested and held in lengthy pretrial detention. Anonymity is impeded, with real names required.

The country’s constitution says that “Citizens of the People’s Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession and of demonstration.” But the reality is that the internet in China is almost entirely subservient to government whims.

As Freedom House, a nonprofit group advocating for political freedom, reports, “websites and social media accounts are subject to deletion or closure at the request of censorship authorities, and Internet companies are required to proactively monitor and delete problematic content or face punishment.” In addition, “officials systematically instruct Internet outlets to amplify content from state media and downplay news, even from some state-affiliated media, that might generate public criticism of the government.” Hundreds of popular websites are blocked by the country, including Google, Facebook, Whats-App, YouTube, Flickr, Tumblr, Dropbox, Instagram, SoundCloud, WordPress, and Pinterest.

In 2017, China reinforced its control of the web with a law that increased censorship rules and, more worryingly, required that user data be stored on the Chinese mainland. “Data localization,” as it’s called, means that sensitive personal records will be easily available to police and intelligence agencies. U.S.-based companies such as Airbnb and Evernote dutifully moved Chinese user data to state-controlled companies. Last year Apple announced, without elaboration, that it was shifting iCloud operations for all its mainland Chinese customers to a government-owned local partner, Guizhou-Cloud Big Data Industry.

China is not alone in its efforts to control the internet. Instead, it is leading the way among authoritarian nations. Russia and Nigeria now have similar, though less comprehensive, data localization laws.

Getting Back to Our Roots

What nearly all of these extrusions of governmental interference have in common is that they focus their attention on the large internet companies that act as common platforms.

A small number of massive, slow-moving regulatory targets is a delightful state of affairs, at least from the perspective of Brussels or Beijing. It’s far easier to pressure a few huge multinationals equipped with risk-averse legal departments than it is to control millions of unpredictable internet users, some of whom are certain to ignore bureaucratic diktats—or to invent creative ways to circumvent them.

When the U.S. government decreed that encryption was a munition—essentially a dangerous weapon subject to federal rules for exporting arms and tanks—Microsoft and Netscape complied. But programmer-activists thumbed their noses at the rules by exporting the source code of popular PGP encryption protocols in book form. Others shrunk the RSA encryption algorithm to three lines of code in the Perl programming language, which they gleefully wore on T-shirts. The Justice Department declined to make an example of these scofflaws.

Today, there’s keen interest in homebrew gunsmithing, whether local laws permit it or not, thanks to online code repositories, such as GitHub and Defense Distributed’s DefCad. These sites offer design files that allow key components of working firearms to be manufactured at home using a 3D printer.

There is no natural law of computing that says search must be centralized in Google or Baidu, social networking must happen on Facebook or WeChat, auctions must go through eBay or Alibaba, and so on. What we’re accustomed to today represents a historic shift, one that’s difficult to overstate, from an earlier era of the internet. From the moment of its public release at 2:56 p.m. Greenwich Mean Time on August 6, 1991, the World Wide Web was meant to be decentralized. Anyone could browse from any connected device. Every person with the technological means could set up his or her own website. The gatekeepers were gone.

It’s true that centralized platforms have advantages, including improved security and better resistance to spam and abuse. They can also be quicker to build. But centralization brings costs with it, including providing a single convenient point of control for governments eager to experiment with censorship and surveillance.

There are some tantalizing hints that decentralization will return. Bitcoin and Ethereum, two blockchain-based computing platforms, are prominent examples. Solid—an open-source project backed by World Wide Web mastermind Berners-Lee—is intended to help you keep ownership of your own data by placing it under your control. The Internet Archive has hosted a pair of Decentralized Web Summits in San Francisco. Prototypes of distributed search engines, wikis, and Slack-like chat programs exist.

If a decentralized internet does return, it will likely arise only as a response to regulatory overreach by governments—and primarily because cryptonetworks provide developers and maintainers with economic incentives in the form of digital currency if they participate. A key advantage of open-source programming is developer friendliness: Twitter, especially, is notorious for disabling features that developers had relied on. Google’s feature killing is memorialized at KilledByGoogle.com. When no one owns a platform, that sort of thing is much less likely to happen.

Chris Dixon, an entrepreneur turned venture capitalist in Silicon Valley, wrote in a well-read February 2018 post on Medium: “Today, unaccountable groups of employees at large platforms decide how information gets ranked and filtered, which users get promoted and which get banned, and other important governance decisions. In cryptonetworks, these decisions are made by the community, using open and transparent mechanisms.”

Decentralization is hardly a perfect solution to the internet’s ills, but it’s likely to be better than the unhappy situation we find ourselves in today.

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The End of the Free Internet Is Near

Not too long ago, conventional wisdom held that the internet should enjoy minimal government oversight precisely because it was a technology that enabled open and free speech for everyone. The remedy for hateful and offensive remarks, that 1990s-vintage argument went, was more speech—or logging off.

This principle, which can be traced back through the writings of St. Thomas Aquinas and John Stuart Mill, was nicely captured in the U.S. Supreme Court’s 1997 decision striking down certain speech-chilling provisions of the Communications Decency Act. “Through the use of chat rooms,” Justice John Paul Stevens wrote, “any person with a phone line can become a town crier with a voice that resonates farther than it could from any soapbox. Through the use of Web pages, mail exploders, and newsgroups, the same individual can become a pamphleteer.”

A generation later, Stevens’ argument has been not merely discarded. It has been inverted.

Politicians now insist that the internet should be subject to increased regulations precisely because it allows that hypothetical town crier to speak with a voice that resonates farther than it could from any physical soapbox. The possibility of freewheeling online discussions has been transformed, in other words, from virtue to vice. Platforms like Facebook and YouTube increasingly face demands that they restrict content. In some cases the demands are effected through public pressure, in others through outright government censorship.

The movement to stifle online expression is still in its early stages, but it represents a fundamental threat to the principles that have allowed the internet as we know it to grow and thrive. If these efforts continue, we may soon see the end of the free and open web.

Europe vs. Big Tech

At the vanguard of the efforts to restrict online speech are, ironically, Western nations that have historically prized free expression—in particular, the European Union.

In March, members of the European Parliament approved a Copyright Directive. What’s known as Article 13 of the measure (renumbered as Article 17 in the final version) will require technology companies to impose “upload filters” to scan user-provided content and remove material viewed as unlawful. If a service provider fails to delete “copyright-protected works and other subject matter,” the text says, it “shall be liable for unauthorized acts of communication.”

Internet pioneer Vint Cerf, World Wide Web inventor Tim Berners-Lee, Electronic Frontier Foundation co-founder John Gilmore, Wikipedia founder Jimmy Wales, and dozens of other prominent technologists denounced Article 13 as “an unprecedented step towards the transformation of the Internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users.”

Their arguments failed. An amendment that would have removed the upload filter requirement from the Copyright Directive was defeated by five votes.

In the short term, that will probably grant an unintended competitive advantage to large U.S.-based companies such as Facebook, Google, and Twitter, which possess the resources to devise, test, and implement automatic filtering technologies. Smaller startups will find compliance more of a challenge. Nonprofit efforts such as Wikipedia and websites run by individuals are likely to shoulder even greater burdens.

Other E.U. measures include last year’s General Data Protection Regulation (GDPR), which imposed new rules on how businesses can handle and use user data, and this year’s so-called platform-to-business rules, announced in draft form in February. The latter step is less known but arguably reaches further: Slated to take effect in February 2020, these regulations will control the business practices of “online platforms,” including search engines, voice assistants, app stores, online marketplaces, price comparison tools, and some social media applications. They will be subject to new rules, including a ban on such “unfair practices” as suspending a user’s account without explanation.

The French government applauded the draft rules in a statement, saying that the E.U. will now be able to “steer the market in the right direction”—though what the “right direction” is was left unsaid—while lamenting that they do not go further by regulating electronic devices too.

Privatizing Censorship

If Brexit actually happens and the U.K. manages to extricate itself from the European Union, Britain’s internet users and businesses will be fortunate to escape the full impact of these efforts. But Westminster’s elite have not been idle.

In April, the British government published a proposal, the “Online Harms White Paper,” that echoes the approach of the E.U. Copyright Directive by holding tech companies, in particular social media platforms, liable for what their users post or upload. Under such a legal regime, internet censorship would be effectively privatized, as businesses would have no choice but to monitor and restrict users.

Among the online “harms” the U.K. proposes to outlaw are “extremist content,” “disinformation,” “violent content,” and “trolling,” which could include anything from what a government agency decrees to be fake news to remarks critical of the Prophet Muhammad. Another offensive category is “glamorization of weapons,” which invites questions about how it may be applied to venerable British institutions like the National Museum of Arms and Armour, the nation’s oldest museum.

In an April op-ed for CNN, Jeremy Wright, the U.K.’s secretary of state for digital, culture, media, and sport, argued for this adventure in online censorship by likening, without irony, adult internet users to young children. “It is similar to the principle that when you take your child to a playground, you trust that the builder made sure the equipment was safe and that no harm will come to them,” Wright wrote.

The U.K.’s free market Adam Smith Institute calls the “Online Harms White Paper” illiberal and incompatible with English principles of freedom: “This proposal is about preventing Internet users from engaging in knowing and voluntary speech, and it’s about recruiting vast armies of private sector policemen to patrol their thoughts.”

Perhaps most problematic, the Adam Smith Institute points out, is that the U.K. proposes to restrict political speech that remains legal elsewhere in the English-speaking world. It is no exaggeration to say that “glamorization of weapons” is a popular hobby in the United States—and is fully protected by the American First and Second Amendments.

Other nations are edging in the same illiberal direction. Soon after the Christchurch, New Zealand, mosque massacre that killed 51 people, Australia enacted a new law punishing the publication or hosting of “abhorrent violent material” with up to three years in prison. According to the law, it “is immaterial whether the hosting service is provided within or outside Australia.”

Read broadly, this suggests that executives of U.S. and other foreign hosting services—at least those failing to strictly censor their services for Australian audiences—could face legal peril if they visited Sydney on vacation. The law also allows television stations to broadcast violent material while prohibiting Twitter users from posting an identical video online.

That was too much even for Australia’s Labor Party. “There needs to be proper consultation with not just the social media sector but also traditional media, who are also caught up by this bill and whose legitimate journalism and online news sites will also be impacted on by these laws,” said Mark Dreyfus, a Labor representative and former attorney general, during the parliamentary debate. Dreyfus warned the law was being rushed through Parliament for political reasons “as this chaotic and desperate government careen[ed] toward” an election this spring.

For his part, New Zealand’s Chief Censor David Shanks—yes, this is an actual government title—ruled that the video recorded by the Christchurch shooter and his accompanying manifesto both fell under the category of “objectionable” material and would be illegal to watch or read. The censorship office’s classification decision said the manifesto “promotes and encourages acts of terrorism in a way that is likely to be persuasive to its intended audience.” Merely viewing the document in electronic form, even if it is not downloaded to local storage, is punishable by up to 10 years in prison.

It is possible that New Zealand’s censorship will prevent further extremist violence. But it is more likely that a formal ban will turn the Christchurch shooter into a kind of free speech martyr, bringing more attention to his loathsome ideology. Forbidden ideas have a tendency to draw the curious and the untethered.

The United States of Deplatforming

So far, at least, the U.S. government has yet to appoint a chief censor. But Silicon Valley’s coastal elites have been eager to volunteer their services gratis.

The last year has marked a dispiriting new low in the “deplatforming,” or banning from various online channels, of dissident voices. The ax fell on Infowars’ Alex Jones, actor James Woods, the editorial director of AntiWar.com, the director of the Ron Paul Institute, and radio talk show host Jesse Kelly. (Some of these accounts have since been reinstated.)

Lawmakers have encouraged these social media bans. Congressional hearings have been called to interrogate tech execs on how their products are being used. Last August, Sen. Chris Murphy (D–Conn.) urged an even broader crackdown, proclaiming on Twitter that “the survival of our democracy depends on it.”

Rep. Bennie Thompson (D–Miss.), chairman of the Homeland Security Committee, must have been listening. In March, Thompson sent a letter to Facebook, YouTube, Twitter, and Microsoft insisting that they remove “toxic and violent” content, even if it is legal to distribute in the United States. (The platforms already prohibit illegal content.) If the companies are “unwilling” to do so voluntarily, Thompson warned, Congress will “consider policies” to compel their cooperation. Left unexplained was how any such requirement could comply with the First Amendment.

The Fight Online Sex Trafficking Act, better known as FOSTA, ended the federal government’s laissez faire approach to internet companies when it was enacted in April 2018. Executives are now criminally liable if they own, manage, or operate a service “with the intent to promote or facilitate the prostitution of another person.” The Electronic Frontier Foundation has filed a lawsuit challenging the constitutionality of FOSTA, saying it muzzles constitutionally protected speech and is not tailored enough to comply with the First Amendment.

The World’s Most Effective Censor

Whatever threats from constitutionally challenged politicians the United States faces, it remains a beacon of freedom compared to China, which can claim the dubious honor of most effective internet censor in the world. Social media apps are blocked, political content is restricted, and activists and journalists who document human rights abuses may be arrested and held in lengthy pretrial detention. Anonymity is impeded, with real names required.

The country’s constitution says that “Citizens of the People’s Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession and of demonstration.” But the reality is that the internet in China is almost entirely subservient to government whims.

As Freedom House, a nonprofit group advocating for political freedom, reports, “websites and social media accounts are subject to deletion or closure at the request of censorship authorities, and Internet companies are required to proactively monitor and delete problematic content or face punishment.” In addition, “officials systematically instruct Internet outlets to amplify content from state media and downplay news, even from some state-affiliated media, that might generate public criticism of the government.” Hundreds of popular websites are blocked by the country, including Google, Facebook, Whats-App, YouTube, Flickr, Tumblr, Dropbox, Instagram, SoundCloud, WordPress, and Pinterest.

In 2017, China reinforced its control of the web with a law that increased censorship rules and, more worryingly, required that user data be stored on the Chinese mainland. “Data localization,” as it’s called, means that sensitive personal records will be easily available to police and intelligence agencies. U.S.-based companies such as Airbnb and Evernote dutifully moved Chinese user data to state-controlled companies. Last year Apple announced, without elaboration, that it was shifting iCloud operations for all its mainland Chinese customers to a government-owned local partner, Guizhou-Cloud Big Data Industry.

China is not alone in its efforts to control the internet. Instead, it is leading the way among authoritarian nations. Russia and Nigeria now have similar, though less comprehensive, data localization laws.

Getting Back to Our Roots

What nearly all of these extrusions of governmental interference have in common is that they focus their attention on the large internet companies that act as common platforms.

A small number of massive, slow-moving regulatory targets is a delightful state of affairs, at least from the perspective of Brussels or Beijing. It’s far easier to pressure a few huge multinationals equipped with risk-averse legal departments than it is to control millions of unpredictable internet users, some of whom are certain to ignore bureaucratic diktats—or to invent creative ways to circumvent them.

When the U.S. government decreed that encryption was a munition—essentially a dangerous weapon subject to federal rules for exporting arms and tanks—Microsoft and Netscape complied. But programmer-activists thumbed their noses at the rules by exporting the source code of popular PGP encryption protocols in book form. Others shrunk the RSA encryption algorithm to three lines of code in the Perl programming language, which they gleefully wore on T-shirts. The Justice Department declined to make an example of these scofflaws.

Today, there’s keen interest in homebrew gunsmithing, whether local laws permit it or not, thanks to online code repositories, such as GitHub and Defense Distributed’s DefCad. These sites offer design files that allow key components of working firearms to be manufactured at home using a 3D printer.

There is no natural law of computing that says search must be centralized in Google or Baidu, social networking must happen on Facebook or WeChat, auctions must go through eBay or Alibaba, and so on. What we’re accustomed to today represents a historic shift, one that’s difficult to overstate, from an earlier era of the internet. From the moment of its public release at 2:56 p.m. Greenwich Mean Time on August 6, 1991, the World Wide Web was meant to be decentralized. Anyone could browse from any connected device. Every person with the technological means could set up his or her own website. The gatekeepers were gone.

It’s true that centralized platforms have advantages, including improved security and better resistance to spam and abuse. They can also be quicker to build. But centralization brings costs with it, including providing a single convenient point of control for governments eager to experiment with censorship and surveillance.

There are some tantalizing hints that decentralization will return. Bitcoin and Ethereum, two blockchain-based computing platforms, are prominent examples. Solid—an open-source project backed by World Wide Web mastermind Berners-Lee—is intended to help you keep ownership of your own data by placing it under your control. The Internet Archive has hosted a pair of Decentralized Web Summits in San Francisco. Prototypes of distributed search engines, wikis, and Slack-like chat programs exist.

If a decentralized internet does return, it will likely arise only as a response to regulatory overreach by governments—and primarily because cryptonetworks provide developers and maintainers with economic incentives in the form of digital currency if they participate. A key advantage of open-source programming is developer friendliness: Twitter, especially, is notorious for disabling features that developers had relied on. Google’s feature killing is memorialized at KilledByGoogle.com. When no one owns a platform, that sort of thing is much less likely to happen.

Chris Dixon, an entrepreneur turned venture capitalist in Silicon Valley, wrote in a well-read February 2018 post on Medium: “Today, unaccountable groups of employees at large platforms decide how information gets ranked and filtered, which users get promoted and which get banned, and other important governance decisions. In cryptonetworks, these decisions are made by the community, using open and transparent mechanisms.”

Decentralization is hardly a perfect solution to the internet’s ills, but it’s likely to be better than the unhappy situation we find ourselves in today.

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US Presses For Rollback Of Indian Tariffs As Trade Tensions Simmer

US trade reps are about to meet with their Indian counterparts on Friday for the first time just days after President Trump hinted that he might open up a new front in the trade war by calling India’s tariffs “unacceptable.”

According to Reuters, a delegation led by Christopher Wilson, assistant US trade representative for South and Central Asia, will meet Indian officials to try to re-start negotiations on the tariffs, which were imposed in retaliation for Washington removing some trade privileges from Indian products not long after Narendra Modi, India’s prime minister, secured his re-election.

India

The agenda for the talks looks something like this: The US will seek a rollback of some of those tariffs, and India will, in return, seek better access to the US market for Indian farm products, according to an Indian official.

It’s unlikely that India will immediately commit to any changes to foreign investment rules for foreign e-commerce firms such as Walmart’s Flipkart and Amazon, a major goal for the American side.

India’s strict rules have forced both companies to rework their business strategies for serving the world’s most populous market.

Back in January, Walmart told the Trump Administration that India’s new investment rules for e-commerce could potentially hurt the bilateral trading relationship because of their regressive nature.

Meanwhile, tensions with Pakistan remain elevated. Despite pleas from India’s government to reopen its airspace, which it closed in February following one of the most intense diplomatic crises in recent memory, Pakistan has refused, saying it won’t reopen its airspace until India withdraws its foreward-positioned fighter jets.

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Are Yanks And Brits Going Their Separate Ways?

Authored by Patrick Buchanan via The Unz Review,

When Sir Kim Darroch’s secret cable to London was leaked to the Daily Mail, wherein he called the Trump administration “dysfunctional … unpredictable … faction-riven … diplomatically clumsy and inept,” the odds on his survival as U.K. ambassador plummeted.

When President Donald Trump’s tweeted retort called Darroch “wacky,” a “stupid guy” and “pompous fool” who had been “foisted on the US,” the countdown to the end began.

The fatal blow came when, in a debate with his rival for prime minister, Boris Johnson, who will likely replace Theresa May before the end of July, left Darroch twisting in the wind.

All in all, a bad week for the British Foreign Office when one of its principle diplomats is virtually declared persona non grata in country that is Great Britain’s foremost ally. All the goodwill from Trump’s state visit in June was torched in 72 hours.

Still, Darroch’s departure is far from the most egregious or grave episode of a leaked missive in U.S. diplomatic history.

In December 1897, Spanish ambassador Enrique Dupuy de Lome sent a letter to a friend in Cuba describing President William McKinley as “weak and catering to the rabble … a low politician who desires … to stand well with the jingos of his party.”

The De Lome letter fell into the hands of Cuban rebels who ensured that it was leaked to the U.S. Secretary of State. New York Journal owner William Randolph Hearst published the letter, Feb. 9, 1898, under the flaming headline: “Worst Insult to the United States in Its History.”

Americans were outraged, McKinley demanded an apology, the Spanish ambassador resigned. Coming six days before the battleship USS Maine blew up in Havana harbor, the De Lome letter helped to push America into a war with Spain that McKinley had not wanted.

On March 1, 1917, U.S. headlines erupted with news of a secret cable from German Foreign Minister Arthur Zimmermann to his minister in Mexico City. The minister was instructed to offer Mexico a return of “lost territories in Texas, New Mexico and Arizona,” should war break out with the United States and Mexico enter the war on the side of Germany.

British intelligence had intercepted the “Zimmermann telegram” and helpfully made it public. Americans were enraged. Six weeks later, we were at war with the Kaiser’s Germany.

Sir Kim’s cable, which caused his resignation, was not of that caliber. Yet the “special relationship” between the United States and Great Britain is no longer what it was during the 20th century.

Back in the 19th century, there was no special relationship, but almost a special hostility. The U.S. declared war on Great Britain in 1812, and the British arrived in 1814 to burn down the Capitol and the White House and all the major public buildings in the city.

Gen. Andrew Jackson settled accounts in New Orleans in 1815.

During the war of 1861-1865, the British tilted to the Confederacy and built the legendary raider CSS Alabama that wrought devastation on Union shipping before being sunk off Cherbourg in 1864.

We almost went to war with Britain in 1895, when Grover Cleveland and Secretary of State Richard Olney brashly intruded in a border dispute between British Guiana and Venezuela, and Lord Salisbury told us to butt out. “I rather hope that the fight will come soon,” yelped Theodore Roosevelt.

Cooler heads prevailed and Britain’s Arthur Balfour said the time would come when a statesman even greater than Monroe “will lay down the doctrine that between English-speaking peoples, war is impossible.”

So it came to be in the 20th century.

In 1917 and 1941, America came to the rescue of a Britain which had declared war, first on the Kaiser’s Germany, and then on Hitler’s. During 45 years of the Cold War, America had no stronger or more reliable ally.

But the world has changed in the post-Cold War era, and even more for Britain than for the United States.

Among London’s elites today, many see their future in the EU. U.S. trade with Britain is far less than U.S. trade with Canada, Mexico, China or Japan. Britain’s economy is a diminished share of the world economy. The British Empire upon which the sun never set, holding a fifth of the world’s territory and people, has been history for over half a century. The U.S. population is now five times that of Great Britain. And London is as much a Third World city as it is an English city.

Scores of thousands of Americans and Brits are no longer standing together on the Elbe river across from the Red Army, an army that no longer exists, as the Soviet Empire and the Soviet Union no longer exist.

Yet, in terms of language, culture, ethnicity, history, geography, America has no more natural ally across the sea. And the unfortunate circumstances of Sir Kim’s departure do not cancel out that American interest.

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DHL Sounds Alarm On Collapsing World Trade: “Significant Downturn” Underway 

A new quarterly report from logistics company DHL, measured global air and sea cargo trade volumes between March and June, found trade data continues to deteriorate in the US and China as there is still no resolution to end the trade war, reported South China Morning Post (SCMP).

Chinese imports were “losing significant momentum,” the report stated, indicating the epicenter of the slowdown was situated in basic raw materials, capital equipment and machinery, and consumer fashion goods. The loss of momentum in DHL trade data has also been confirmed in official Chinese import data releases.

The report indicated that the US trade outlook is more dangerous than China: DHL expected a “significant downturn, driven by heavy losses in exports outlook.” DHL said both air and sea freight have plunged into negative territory in 2Q19, with extreme weakness in basic raw materials, chemicals, and technology.

“The declining outlook for US exports indicates that, so far, the US is missing its goal of strengthening its export economy with a harsher trade course against China,” DHL said.

DHL’s Global Trade Barometer measured air and sea container freight for seven countries, which together accounted for more than 75% of world trade

The report focused on early-cycle commodities to detect turning points in global trade flows — goods such as automobile bumpers, touch screens for smartphones, and brand labels for clothes.

If shipments of early-cycle commodities edged down, DHL was able to forecast lower demand finished goods.

“The data is expressed as a figure, with a reading above 50 indicating a positive outlook over the three month period, and below 50 a negative. For the US, air trade fell from 53 in March to 45 in June, while sea trade fell from 57 to 43. In the case of China, air trade fell from 57 to 51 over the same period, while sea trade fell from 55 to 47,” said SCMP.

During the observed period, there was a tremendous escalation of the trade war when President Trump raised tariffs on $200 billion of Chinese goods from 10% to 25%, while China retaliated with 25% tariffs on $60 billion of US goods.

A synchronized decline in global trade has also sent JPMorgan’s Global Manufacturing PMI to its lowest level for over six-and-a-half years and posted back-to-back sub-50.0 readings for the first time since the second half of 2012.

So, like the two other times, when macro matters again global stocks will crash.  

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