Month: March 2014

New IPCC Report: Cost of Unchecked Man-Made Climate Change Likely Minimal

IPCCThe
United Nations’ Intergovernmental Panel on Climate Change (IPCC)
has just issued the “Summary
for Policymakers” for its new report, Climate Change 2014:
Impacts, Adaptation, and Vulnerability. The report aims to sum
up what is known about the likely impacts of future climate change,
including more droughts, higher sea levels, greater risk of species
extinction, and so forth. But what will these changes cost humanity
in terms of economic output? Here is the relevant section from the
Summary:

Global economic impacts from climate change are
difficult to estimate.

Economic impact estimates completed over the past  20 years
vary in their coverage of subsets of economic sectors and depend on
a large number of assumptions, many of which are disputable, and
many estimates do not account for catastrophic changes, tipping
points, and many other factors. With these recognized limitations,
the incomplete estimates of global annual economic losses for
additional temperature increases of ~2°C are between 0.2
and 2.0% of income (emphasis added) (±1 standard deviation
around the mean)(medium evidence, medium agreement). Losses are
more likely than not to be greater, rather than smaller, than this
range (limited evidence, high agreement). Additionally, there are
large differences between and within countries. Losses accelerate
with greater warming (limited evidence, high agreement), but few
quantitative estimates have been completed for additional warming
around 3°C or above. Estimates of the incremental economic impact
of emitting carbon dioxide lie between a few dollars and several
hundreds of dollars per tonne of carbon (robust evidence, medium
agreement). Estimates vary strongly with the assumed damage
function and discount rate.

Let’s assume that the increase in future global average
temperature is below 2°C. Gross world product (GWP) in 2012 was
about $72 trillion. That divvied up between 7.2 billion people
yields an average per capita income of around $10,000. Now assume
that world economy grows at 2.5 percent annually over the next 85
years and world population reaches 10 billion. GWP in 2100 would be
about $590 trillion and per capita GDP would $59,000. If climate
change lowered income by 2 percent by 2100, that would mean GWP
would be $578 trillion and per capita GWP would be $57,800. How
much should people living now on $10,000 per year sacrifice so that
people making six times more in 2100 have an extra $1,200 in
income?

Now let’s assume that the high climate change damage estimate
promulgated in the
Stern Review: The Economics of Climate Change (2006)
reduces incomes in 2100 by as much as 20 percent below what they
would otherwise have been. Average income in 2100 would then be
just $47,500—still nearly five times more than current global per
capita income.

Over at The Telegraph, economist Andrew Lilico provides
this
interesting analysis:

The new report will apparently tell us that the global GDP costs
of an expected global average temperature increase of 2.5
 degrees Celsius over the 21st century will be between 0.2 and
2 per cent. To place that in context, the well-known Stern Review
of 2006 estimated the costs as 5-20 per cent of GDP.
Stern estimates the costs of his recommended policies for
mitigating climate change at 2 per cent of GDP – and his estimates
are widely regarded as relatively optimistic (others estimate
mitigation costs as high as 10 per cent of global GDP). Achieving
material mitigation, at a cost of 2 per cent and more of global
GDP, would require international co-ordination that we have known
since the failure of the Copenhagen conference on climate change
simply was not going to happen. Even if it did happen, and were
conducted optimally, it would mitigate only a fraction of the total
rise, and might create its own risks.

And to add to all this, now we are told that the cost might be
as low as 0.2 per cent of GDP. At a 2.4 per cent annual GDP growth
rate, the global economy increases 0.2 per cent every month.

So the mitigation deal has become this: Accept enormous
inconvenience, placing authoritarian control into the hands of
global agencies,
at huge costs that in some cases exceed 17 times the benefits
even on the Government’s own evaluation criteria, with a global
cost of 2 per cent of GDP at the low end and the risk that the cost
will be vastly greater, and do all of this for an entire century,
and then maybe – just maybe – we might save between one and ten
months of global GDP growth.

The IPCC Summary does additionally warn that warming higher than
2°C might shove the climate system over tipping points that
would produce substantially more losses. The Summary asserts that
“low-probability outcomes with large consequences, is central to
understanding the benefits and tradeoffs of alternative risk
management actions.” The chance of total catastrophe warrants some
action be taken to avoid it, but how much and at what cost?

For a discussion of that issue, see my article, “Wagging
the ‘Fat Tail’ of Climate Catastrophe.”

Note: Ronald Bailey is on book leave and should not be
blogging, but he couldn’t resist this time.

from Hit & Run http://ift.tt/1jQAjyE
via IFTTT

Top Obama Advisor Travels to Hollywood to Encourage “Obamacare” Mentions in Movie Scripts and TV Shows

Just when you thought the Truman Show that is the U.S. these days couldn’t get any more ridiculous, a headline like this comes along to shock you back into dazed incredulity.

Hollywood shenanigans aren’t a focus of this website, but I have covered them previously. The most recent example was almost exactly a year ago with my post: How Hollywood Became “Propagandist in Chief” by John Pilger.

Now from the Weekly Standard:

A top of advisor to President Barack Obama is in Los Angeles to try to get Obamacare written into scripts of TV shows and movies. Valerie Jarrett explained in an appearance on Top That! on PopSugar.com:

“That’s the cool thing,” a host said to the presidential advisor. “You’ve been reaching out to people that are, you know, outside of the norm of what the president might work with. Who else are you working with? Like celebrities, personalities, things like that?”

“You name it,” said Jarrett. “That’s part of why I’m in L.A. I’m meeting with writers of various TV shows and movies to try to get it into the scripts.” When Jarrett says “it into the scripts,” she’s referring to getting references to Obamacare, the president’s signature legislation, into the scripts of TV shows and movies.

This is what America has devolved into. Now watch the clip itself.

Full article here.

In Liberty,
Michael Krieger

 

Like this post?
Donate bitcoins: 1LefuVV2eCnW9VKjJGJzgZWa9vHg7Rc3r1

 Follow me on Twitter.

Top Obama Advisor Travels to Hollywood to Encourage “Obamacare” Mentions in Movie Scripts and TV Shows originally appeared on A Lightning War for Liberty on March 31, 2014.

continue reading

from A Lightning War for Liberty http://ift.tt/O97kHs
via IFTTT

Former Chinese President Asks Current One To Curb Crackdown On Criminals And Corruption

When one reads stories such as the following report from the FT, in which we learn that former Chinese president Jiang Zemin “has urged the current leadership to rein in an anti-corruption campaign that is proving the harshest in decades and is seen as threatening the interests and networks of some Communist party elders“, or said otherwise – his cronies, aside from being utterly speechless at the rapid unravelling of the bizarro world, all one can say is – expect such developments in the US in a few years time, when then former president Obama asks Clinton, Christie or whoever the then-reigning dictator of the totalitarian states of America is, to take it easy on the Corzines of the world.

From the FT:

Mr Jiang, who stepped down as president of China in 2003 but retained control of the military for a further two years, has sent a clear signal in the past month to Xi Jinping, the president, according to three people familiar with the matter. Mr Jiang sent a message saying “the footprint of this anti-corruption campaign cannot get too big” in a warning to Mr Xi not to take on too many of the powerful families or patronage networks at the top of the party hierarchy.

 

Former President Hu Jintao, who was replaced by Mr Xi a year ago, has also expressed reservations about the anti-corruption drive and warned his successor not to expand it too far, according to one person involved in executing the campaign.

 

President Xi has made tackling corruption and official largesse the centrepiece of his presidency, vowing to tackle powerful “tigers” (high-ranking officials) as well as “flies” at lower levels in the bureaucracy.

 

…

 

Apart from concerns about attacks on their patronage networks, Mr Hu and Mr Jiang are worried that a campaign that lasted too long and was too harsh could erode support among the Communist party’s rank and file and threaten the stability of its rule.

 

Using corruption allegations to purge a high-ranking official is a time-honoured tradition for new presidents in China.

Obivously China’s oligarchs, or at least those among them who were true to Zemin if not so much to Jinping, are starting to sweat bullets if they have resorted to such an unprecedented appeal in public media which naturally will reflect as weakness on the current president if he relents, which probably means the crackdown will only accelerate in the coming months.

This is important because as we have reported previously, as a result of Xi’s “anti-corruption” campaign, Chinese domestic demand has fallen precipitously in recent months, and has gone so far as to reverberate across the global economy where the Chinese have become the de facto marginal consumer of luxury goods and services.d

[T]he length and severity of the current campaign has had more of an impact on behaviour than in the past, according to business people and officials, who say that conspicuous consumption is off the agenda these days.

 

Most global luxury companies have reported declining Chinese sales of their products, which have been favoured as gifts and bribes for officials for years.

 

In the past few weeks, producers of high-end spirits like Diageo, Pernod Ricard and Rémy Cointreau have reported double-digit first-half collapses in sales in China and have explicitly blamed Beijing’s austerity drive for their woes.

In other words, please tolerate China’s criminals otherwise who else will buy overpriced Chanel bags, while wearing just as overpriced Louboutin shoes and chugging Cristal.

And since in the US it’s increasingly “only fair” to redistribute wealth, the Chinese definition of “fairness” increasingly involves the stretching of the term justice, which is applicable to most… just not the uber wealthy criminals that built up their stolen wealth during some previous administration.


    



via Zero Hedge http://ift.tt/Qzh5AM Tyler Durden

Dear Unnamed “Significant Financial Institution”: The DOJ Has Some Very Bad News For You

Looks like someone didn’t pay their annual “cost of conducting criminal business” bribe:

Fox Business’ Charlie Gasparino leaks a hint that it may be, surprise, an HFT firm (not really, considering Goldman is now actively bashing HFT itself and promoting its own-supported IEX exchange, a move that has left many stunned)”

So who is it?  And please free Jon Corzine already!


    



via Zero Hedge http://ift.tt/1fGVDiE Tyler Durden

Resurgent French Right Wing Claims First Target With Prime Minister Resignation

While French finance minister Moscovici embarrassingly losing his council seat in this weekend’s muni elections is bad enough, we we warned earlier, the dismal loss for Hollande has claimed its first victim. As WSJ reports, French Prime Minister Jean-Marc Ayrault tendered his resignation and that of his government to President Hollande.

As WSJ reports,

French Prime Minister Jean-Marc Ayrault tendered his resignation and that of his government to President François Hollande on Monday, a day after the ruling Socialist Party suffered a stinging setback in the final round of nationwide local elections.

 

In an effort to bolster his agenda, Mr. Hollande is expected to select Manuel Valls, a Socialist heavyweight and France’s popular Interior Minister, as his new premier.

 

Mr. Hollande is expected to confirm his choice of a new prime minister when he delivers a brief address on national television later Monday.

Perhaps, as we noted last night, socialism is not all its cracked up to be…

 

Perhaps Hollande should have banned Twitter and YouTube also (for the last 2 years)…


    



via Zero Hedge http://ift.tt/1hbZHqB Tyler Durden

Why Bother With Drug-Sniffing Dogs If a Cop’s Nose Can Authorize a Search?

Is a Colorado
license plate the new “Legalize It” bumper sticker? According to a

federal lawsuit  filed last week, an Idaho state trooper
stopped a motorist on Interstate 84 near the Oregon border and
searched his Honda Ridgeline truck for marijuana because the
vehicle carried tags from Colorado, which had legalized possession
and cultivation for recreational use the previous November. The
Denver Post
reports that police searched the truck for hours but found
nothing illegal. Although press coverage of the case so far has
focused on the license plate angle, the justification for the
search is at least as troubling as the alleged motivation for the
stop, since it seems to give cops carte blanche to search a vehicle
whenever they claim to smell something funny.

In his complaint, Darien E. Roseen, a 70-year-old retiree who
lives in Washington state and has a second home in Colorado, says
Idaho Trooper Justin Klitch was parked in the median of I-84,
watching eastbound traffic, on the morning of January 25, 2013.
“Immediately after Mr. Roseen passed his location,” the complaint
says, “Trooper Klitch pulled out from the Interstate median,
rapidly accelerating to catch up with Mr. Roseen’s vehicle.” Klitch
followed Roseen into a rest stop, where he “activated his overhead
lights only after Mr. Roseen had come to a complete stop in the
rest area parking space.”

At first Klitch did
not say why he was detaining Roseen. Later he claimed that Roseen
had failed to signal as he left the highway (which Roseen denies)
and that his tires had bumped the curb in the rest area as he
parked (which Roseen admits and attributes to snow accumulation
that made the curb difficult to see). Roseen says Klitch accused
him of pulling into the rest area to avoid police contact—strange
if true, since by Klitch’s account there was no justification for
police contact until Roseen left the highway.

After claiming that Roseen’s eyes looked “glassy,” the trooper
accused him of carrying contraband and threatened to bring in a
drug-detecting dog if Roseen did not consent to a search of his
truck. After repeated accusations and requests for permission to
search the truck, Roseen said Klitch could look in the trunk,
hoping he could get back on the road sooner if he allayed the
trooper’s suspicions. “When Mr. Roseen opened the trunk
compartment, and despite the strong gusts of wind and
precipitation that day,” the complaint says, “Trooper Klitch
claimed he could smell the odor of marijuana.” Based on that
alleged odor, Klitch proceeded to search the entire truck. He
called for assistance from local police, who drove Roseen’s truck
to the Payette County Sheriff’s Sally Port, where the search
continued. After thoroughly rifling Roseen’s belongings, the cops
let him go with a citation for careless/inattentive driving.

Roseen’s lawyer

told The Denver Post that Roseen “does not use
marijuana and never has.” So where did this mysterious,
search-justifying odor come from? When a police dog alerts to a
vehicle in which no drugs can be found, police
claim the canine’s superhuman olfactory sense must have
detected molecules left behind by contraband that used to be in the
vehicle. Are courts prepared to accept similar claims about smells
allegedly detected by mere humans? Maybe a pot smoker gave one of
the presents Roseen was carrying from his daughter’s baby shower,
and Klitch smelled the remnants of smoke that had wafted by the
gift as it was wrapped. Or maybe a pot-smoking mechanic worked on
the truck.

Courts are not as skeptical of such claims as fan of the Fourth
Amendment might like. The day after Roseen filed his lawsuit, a
Virginia judge deemed it “quite believable” that a Norfolk
police officer could smell marijuana emanating from a car he was
following on city streets, even though the car’s windows were
closed and even though the car did not in fact contain marijuana.
Officer Robert Frenier testified that he pulled the car over solely
because of the alleged cannabis odor. A search of the car found a
handgun illegally possessed by a passenger with a felony record—but
no marijuana. According to The Virginian-Pilot, Frenier
said “the driver told police occupants had previously smoked pot in
the car.”

The newspaper first reported on this
practice of sniffing out contraband while driving down the
street a couple of years ago. It says police have had mixed success
in defending searches based on such remote sensing.

If such unfalsifiable assertions qualify as probable cause for a
search, cops do not need to bother with drug-sniffing dogs. They
can search any vehicle at will simply by saying they themselves
detected a whiff of cannabis. 

from Hit & Run http://ift.tt/1hUYuoA
via IFTTT

Imported Deflation and a New Currency War?

The lowest euro area CPI print in four years has not spurred investors to reconsider the outlook for this week’s ECB meeting.   Most recognize the ECB is likely to shrug off today’s preliminary report.

It is not clean, in the sense of the base effect of lower oil prices and that distortions caused by Easter (last year Good Friday was on March 29, so holidays were booked in March, which exaggerate the drop as such booking will be concentrated in April this year).   Some economists are forecasting that this will be the trough in euro area CPI.

The Wall Street Journal asks, “Is Abenomics pushing Europe toward deflation?”  The reporter answers in the affirmative:  “…Deflation pressures in the euro zone are also being driven by the monetary policy elsewhere, not least in Japan.”

This sounds reasonable.    The yen has depreciated by about 29% against the euro since the start of November 2012, when it become clear that Abe would likely be given a second try as Japan’s Prime Minister.   To attribute much of the disinflationary (if not deflation) headwinds in Europe to Japan is an exaggeration.

First, the bulk of the yen’s weakness occurred before the end of H1 2013.  Since then the yen has depreciated about 9% against the euro.  Headline euro area CPI was 1.6% in June and July 2013.  It now stands at just less than a third of that.   If with unpredictable lags and lead times, there does not look to be much of a smoking gun here.

Second, and more importantly, the euro area does not trade that much with Japan, making the impact of the currency fluctuations less significant.  According to the ECB, Japan’s exports account for about 3.2% of the euro area imports.    On a trade-weighed basis, looking at the euro area’s largest trading partners, the yen’s weight is about 7%.

Third, when the ECB hiked rates with inflation above 4.0%, the euro was trading near JPY170.   This month it has averaged about JPY141.50.  This is to suggest, that knowing where the euro-yen cross is trading does not allow one to forecast euro area CPI.

Fourth, the Wall Street Journal argues that the rise in the euro drives down imported prices within the euro area and makes euro area producers less competitive.    This is true in theory, but not in fact.  On a trade-weighted basis, the euro has risen less than 2% since the beginning of H2 13.   The 6, 12 and 24 month average merchandise exports have converged between 155-158 bln euros a month.

Lastly, we note that those countries that are experiencing outright deflation in the euro area, like Greece and Spain, do not trade more with Japan than say Germany and France.  Attributing the euro area’s low inflation to Abenomics distracts investors and policy makers from the real culprit, which is primarily home grown.

Indeed this report and others in the traditional and social media space play up renewed currency wars.    The depreciation of the Chinese yuan, some suggest, is to boost exports and arrest the economic slowdown.  Other see the recent agreements that allow the UK and Germany to clear and settle yuan transactions as another attempt to undermine the role of the dollar.

The dollar has appreciated about 3.2% against the yuan since the multi-year low was set in mid-January just below CNY6.04.   This was of course sanctioned by the PBOC.  However, the goal was not to boost exports, but squeeze out the speculative excesses in the financial sector.  Studies suggest that the value-added being done by Chinese workers, or yuan-denominated incurred in the production process ranges from about 12% to 20%.   That means that the minor adjustment in the bilateral exchange rate is unlikely to have any impact on trade flows.

China did reach preliminary understandings with Germany and the UK to clear and settle yuan transactions.  The permission that China granted is itself predicated on the restrictions the PRC has imposed on the yuan.  Given the increasing importance of the yuan, this is the only way countries can participate directly.   German and UK memorandums of understanding with China says nothing about the US or the role of the dollar in the world economy.

Separately, the BIS head of its banking department opined over the weekend that the dollar’s share of reserves could fall 10%-15% in the coming years, without threatening its role as the world’s primary reserve currency.   Peter Zoellner also suggested that the role of the yuan would continue to grow (it is after all presently all but inconsequential as a reserve asset), but did not anticipate it replacing the dollar over the next couple of decades.

The economic literature is littered with forecasts of the dollar’s demise as a reserve currency.  As recently as 2008, for example, prominent economists Harvard’s Jeff Frankel and the University of Wisconsin’s Menzi Chinn suggested the euro could overtake the dollar as the world’s primary reserve currency by 2015.  

While the dollar’s share of world reserves may indeed decline in the coming years, it is hardly a foregone conclusion.  Indeed outside of the run-up to EMU, when the dollar’s share of reserves rose to around 70%, the dollar’s share of global reserves appears fairly steady.   That is probably the best guess of what is going to happen in the coming years.


    



via Zero Hedge http://ift.tt/1jQpIUh Marc To Market

US ‘Sacrifices’ India Ambassador To Appease Modi’s Resurgence

The surprising surge in popularity of Narendra Modi’s party ahead of India’s elections (another apparent ‘miss’ by US intelligence) has left the Obama administration needing to “clean the slate.” Only a year after taking office, US ambassador to India Nancy Powell has suddenly resigned her post (following press speculation) as the administration explained “was planned for some time, she will retire to her home in Delaware before the end of May.” This appears a clear recognition that a Modi government is likely and a problem for the US who cancelled Modi’s visa in 2005 over “severe violations of religious freedom.” Another red line coming up?

 

Via PTI,

In a sudden development, US Ambassador to India Nancy Powell has resigned from her post, days after media speculation that she may be shipped out.

 

“US Ambassador to India Nancy J Powerll announced in a US MIssion Town Hall meeting March 31 that she has submitted her resignation to President Obama and, as planned for some time, will retire to her home in Delaware before the end of May,” an announcement in the US Embassy website said tonight.

 

US Embassy sources did not want to hazard a guess on the decision of the 67-year-old career service officer to quit her post and return home at a time when India is in an election process and Washington is also deeply interested in its outcome.

 

There was media speculation a week ago that Powell would be replaced with a political appointment as an attempt by the Obama administration to “clean the state” with India.

 

The report had said Powell had dragged her heels on meeting Gujarat Chief Minister Andra Modi and was perceived as being “too close” to the UPA’s foreign policy establishment.

 

However, when Washington decided to warm up to Modi, perceived as one of the front runners for the prime minister’s post, Powell met Modi on  February 13, ending a nine-year-old boycott of the Gujarat leader on the issue of 2002 riots.

 

The US move  marked a u-turn in its earlier stand of having nothing to do with Modi, whose visa it cancelled in 2005 under a domestic law on the issue  of “severe violations of religious freedom”. Ever since it had refused to review its policy.

The US is making friends and influencing people everywhere…

As The Hindustan Times noted,

Moving the ambassador would be an easy way to preempt calls from Modi’s circle that, as PM, he should cold shoulder the US. “Being sacrificed for political ends is part of a career diplomat’s job,” said a diplomatic source.

 

The second front is the arrest and strip-search of Indian diplomat Devyani Khobragade. Powell has been privately criticised within US and Indian officialdoms for failing to pre-empt the crisis. But others argue the Khobragade incident was more a consequence of systemic problems than any individual’s failure. Either way, replacing a diplomat is an easy way for Washington to signal it wants to look beyond the crisis.


    



via Zero Hedge http://ift.tt/1pzDwBL Tyler Durden

Campus Police Fatally Shoot Young Man in Columbus State University Chase

Campus police at Georgia’s Columbus State
University
fatally shot 20-year-old Zikarious Jaquan Flint on Sunday
afternoon. Flint was alleged to have been seen loading a gun
outside of a campus apartment complex, but reports are unclear on
whether he actually had a gun, while being chased by police or at
all.

From
the Columbus Ledger-Enquirer:

CSU spokesman John Lester said campus police at 2:35 p.m. were
told a man at the Courtyard 1 North apartment complex was putting
bullets into a gun, and officers confronted the suspect minutes
later.

They chased him to where he turned the corner of a building,
faced the officers and raised his arm, so they shot him, Lester
said.

But
according to the Flint family, three witnesses said they saw
Zikarious running away from the police when he was shot.
And none of the witnesses reported seeing a weapon in his
hands.

Stacey Jackson, an attorney for the Flint family, said Zikarious
was shot twice, once in the back (with an exit wound on the
stomach) and another time in the jaw area. He was declared dead
Sunday afternoon by the Muscogee County Coroner’s Office. The
Georgia Bureau of Investigation has been called in to investigate
the shooting.

A
statement put out by CSU says Flint was not a student, and it
also asserts that he had a gun.

On the college’s Facebook page, updated with the news Sunday
evening, multiple students expressed outrage that they hadn’t been
alerted earlier about the shooting. “This is the second shooting
that has happened on campus without the students being notified,”
commented Christopher Whitlock. “It’s a big safety
concern.” 

from Hit & Run http://ift.tt/1ggYfmN
via IFTTT

PITCHFORKS COME OUT AS CHINESE BUST KLEPTOCRATS

PITCHFORKS COME OUT AS CHINESE BUST KLEPTOCRATS

By 

Unlike in the West, being a kleptocratic crook in China is now becoming a higher risk proposition. One gets the sense that as the credit monster collapses in China, and as auntie’s wealth management product is shown to be a loss, out will come the pitch forks. Seizures, arrests and even executions will become the order of the day.  

It is not too difficult to understand how these kleptocrats stuffed an estimated $1 to 4 trillion into overseas banking accounts, which I’ve dubbed “the ratline.” In the real estate part of the equation, first corrupt local officials seize the land of farmers. The windfall extraction occurs when the land is effectively rezoned for constructing ghost buildings and cities. Then, in an greatly expanded version of the U.S. savings and loan fraud of the 1980s, cronies in Chinese banks make shady loans to “developers.” In turn, the developers throw up pie-in-the-sky projects. It’s a facade to collect fees and soft dollars, leaving the largely unsecured debt to be dealt with by other cronies and friends in government. The end result of this loot and extraction is aptly described by David Stockman in ”China’s Monumental Ponzi.”

The story around the Zhou racket is illustrative: “Chinese authorities have seized assets worth at least $14.5bn from family members and associates of retired domestic security chief Zhou Yongkang, who is at the centre of China’s biggest corruption scandal in more than six decades, according to Reuters news agency. More than 300 of Zhou’s relatives, political allies, proteges and staff have also been taken into custody or questioned in the past four months.”

As some examples, such as Li Peiying, are executed and the Chinese economy implodes, it is even more imperative for kleptocrats to get their ill-gotten gains and banal personas into the global offshore ratlines.

In recent years, one of those ratlines was in Canada, but that country has grown weary of the inflated, high-end real estate bubble prices and the behavior endemic of kleptocratic criminals and decided to pull the plug [see South China Morning Post] on its investor visa scheme. More than 45,500 waiting in the queue will need to seek other destinations aka refuge.

One of those new locales is the U.S., where wealthy Chinese are lined up for green cards. One of the planted promotional ploys that these Chinese kleptocrats are using is a scam making the rounds that they “are investing in Detroit.”  To the average American, that sounds like a prospect for urban renaissance. However, the reality indicates this is a falsehood and a red herring [see NPR’s “Chinese Investors are Not Snatching Up Detroit Property“].

Until recently, details surrounding the secretive Chinese offshore ratline story have been widely speculated upon but remained largely unknown. Files obtained by the International Consortium of Investigative Journalists (ICIJ) reveals that nearly 22,000 offshore clients with addresses in mainland China and Hong Kong appear in a cache of 2.5 million leaked files.

Among them are some of China’s most powerful men and women — including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies entangled in corruption scandals.

ICIJ has the details on a number of Chinese ratliners in its highly revealing article. In my view, this investigative journalism is right up there with Edward Snowden’s revelations. In some cases, these corrupt players are already serving jail time in China as their loot sits in offshore accounts. The case of Zhou Zhengyi is illustrative.

Pricewaterhouse Coopers, UBS and other western banks and accounting firms play a key role as middlemen in helping Chinese ratline clients set up trusts and companies in the British Virgin Islands (BVI), Samoa and other offshore centers. ICIJ report states: “Tax Justice Network, an advocacy group, says BVI offshore entities have been linked to ‘scandal after scandal after scandal’ — the result of a corporate secrecy regime that creates an ‘effective carte blanche for BVI companies to hide and facilitate all manner of crimes and abuses.”

The BVI, in turn, ties in as a money source for international banking cartels operating out of the City of London in particular.  That cozy arrangement between Chinese kleptocrats and offshore bankers thereby germinates other loots and speculative bubble-blowing activities. Who says crime doesn’t pay.

For more from Russ, subscribe to Winter Actionables here. 


    



via Zero Hedge http://ift.tt/1rYBm0y ilene