Month: February 2017

The pre-Brexit complacency – echoed by the polls, the media, and the establishment – is absolutely not being repeated ahead of France's looming election. While bond spreads have blown out, investor fear in the European equity options market is considerably worse than pre-Brexit.

As Bloomberg's Tanvir Sandhu notes, the spread between April and May Europe stock volatility futures has climbed on French election risks…

And is starting to outstrip the rally seen in the equivalent contracts heading into the U.K.’s EU referendum.

The vol spread has risen to about 5 from below 1 at start of February; that compares to pre-Brexit vote high of 8. Howeever, as the chart below shows, ahead of Brexit, the spread started to ease as polls consistently showed Remain would win… before exploding higher on the actual vote.

That complacency is very much not in evidence this time as Frexit fears mount. The question is – are equity investors over-anxious or bond investors still too complacent…

Notably, investors fear that polls underestimate the risk of a Le Pen win following last year’s Trump and Brexit outcomes, although the French election may have a lower probability of surprise vs polls.

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Submitted by Nick Kamran via LettersFromNorway.com,

Last week (18.2.2017), President Trump made the following comment:

“You look at what’s happening,” he told his supporters. “We have got to keep our country safe. You look at what’s happening in Germany; you look at what’s happening last night in Sweden. Sweden, who would believe this?”

Immediately after, he was mocked by Carl Bildt, the former Swedish Prime Minister:

Others responded with ignorance, demonstrating Stockholm Syndrome, blatantly trying to cover up the underlying arguments that are almost 20 years old.

Nevertheless, President Trump was, once again, vindicated. He only got the timing wrong but the not the underlying facts. Days later riots broke out in Rinkeby, one of Stockholm’s Northwest suburbs. Even a Left Wing Journalist from one of Sweden’s leading papers was attacked. Ignorantly, Robert Reich, former Labor Secretary under Bill Clinton, linked those attacks to Trump’s statement. He was completely ignorant to the fact that no-go zones existed long before Trump’s Presidency.

President Trump actually did some good, speaking for the Swedes, unable to speak for themselves, suppressed by a religious cult-like political correctness, impressed by a secretive establishment.

The Video that the President watched the night before.

When I lived in Stockholm in 1999-2000, Rinkeby already had a reputation as a dangerous place, especially at night for young girls. I worked for Ericsson and I resided in Huseby (now a “no go zone”), close to Akalla and Rinkeby. My Indian ethnic origin gifted me with a chameleon-like a superpower, helping conceal my inner American. My appearance, depending on hairstyle and exposure, helps me blend in among Latinos, Arabs, Persians and even Africans when I shaved my head and spent some time in the sun. (You should see me in a beard! I can practically walk through tribal lands in Afghanistan, Iran, and Syria, virtually unnoticed.)

When I first arrived in Sweden, taking a software engineering position, I was so happy with what I saw: an efficient and balanced society that put a high value on health and well-being. So much so, I had a Swedish flag sewn on my backpack, displaying my new “nationality” proudly. I quickly found out American pride and a sense of belonging for newcomers does not translate to other societies.

• One Swede of Turkish origin told me that I would never be Swedish. He furthered that he was born in Sweden, went to the army, carried a Swedish passport, and worked as a subway driver, paying taxes for the past 20 years, and still was not Swedish.
• A more traditional looking Swede, sitting next to me on the metro, told me that he could never put a Swedish flag on his backpack. It would be considered racist. He told me that a brown person brandishing a Swedish flag would be considered confused, in need of a doctor, and not a patriot.
• Just about everyone I met at parties, after a lot of drinking and removed inhibitions, told me that I was not really American, even if I was born there.

Another irony I witnessed in Huseby, a mostly Iranian suburb, was that the young people, born in Sweden, could neither speak Farsi nor Swedish that well. Instead, they spoke a hybrid language only understood in the Stockholm suburbs. Many of those, which I befriended, told me they did not belong in either Iran or Sweden.

I reached a conclusion that Swedes are happy to bring people in, offering a place to live and a stipend. However, that is where it stops, failing to integrate and succeeding at stagnation. The phenomenon may further explain why you see so many ethnic doctors and scientists driving taxis. It almost felt like foreigners who could not stand yourself up and, moreover, did not want to, were more accepted than dark-skinned skilled immigrants with a strong work ethic, drive, and determination. The latter, we concluded among friends, were not a threat to establishment whereas we could be perceived as threating someone’s position. That goes to perhaps the core difference between American and European values. We always believed in abundance: plenty for everyone and the frontier. In Europe, the resources and frontiers are exhausted, making people think that in order for one to win, another must lose.

Therefore, Nordic society, to function properly, requires that “Maslow’s Hierarchy of Needs” be disregarded. That is the only way “to keep everyone in place,” maintaining the status quo and balance.

That is how racism happens in Sweden: immigrants are just supposed to be happy. But not everyone can be happy with “lagom” (Swedish for just enough). It is looked down upon socially (but not banned), harboring aspirations to improve yourself: getting an education, finding a steady job and climbing the corporate ladder. In short, the Jantelagen (the philosophical basis of the social democracy) dictates something quite the opposite of the American dream: STFU and stay put!

Nevertheless, when reasonably intelligent people without a job and formal education start stirring for 12+ waking hours per day, nothing good usually happens. The one in four-hundred, possessing the IQ of a doctor, engineer, military leader or investment banker, but lacking in formal education and worldly experience, start to cook up schemes. More often than not, they exploit their own people.

Hence, the government and media instituted self-loathing on the native population, using white guilt as a premise, combined with the immigrant’s lack of identity, drives Sweden’s societal breakdown, not Donald Trump.

Sweden’s Suppression of Free Speech When Police Officer Peter Springare accurately stated the facts about perpetrators in a Facebook post, citing that they were mostly immigrants, the Government and mainstream media immediately branded him as a racist. Without even considering the facts, which the police veteran who served 47-years conveyed, could have been a cry for help, the Swedish Government assigned a special prosecutor.

While living in Huseby, I witnessed a fair amount of domestic violence and bar room brawls among the foreigners. Putting correctness over righteousness is having serious consequences. The Liberal Swedish government, in essence, are ignoring the people they are trying to protect.

Springare summarizes that thought: “If you cannot discuss the problem of crime among immigrants without somebody attributing it to racist propaganda, we are in deep trouble,” “The problem is that nobody wants to talk about this.”

Conclusions: Sweden’s once incredible wealth came from the fact they were untouched during World War II. Having all their industry intact, they were the winners in the rebuilding of Europe. SAAB, SKF, ABB, Volvo, Skanska and many other industrial companies were either born or grew substantially during reconstruction. Later this firms evolved into formidable global players. With the newfound wealth, they built a social welfare state to take care of their own people as well as other from abroad, fleeing war and oppression. Somewhere along the line, a perplexing culture evolved.

Life here is counterintuitive. Nordic countries, considered the most democratic, makes one think that they are ready to hear all points of view. It is far from the truth. People became uneasy and stressed very easily when talking about difficult topics, especially in a direct manner.

When one lives and works in Sweden, there is an obvious and unspoken tension beneath the polite surface. The prevailing social etiquette does not allow anyone to talk about obvious problems. A friend, who is also a female police officer, once told me that Swedish national identity depends on naivety and aloofness.

Source: StrangePolitics.com

Economies are an extension of the individual people’s drive, ambition, soul, and spirit. Until the culture, built on sticking one’s head in the sand and listening to their own bluster, changes, it is all downhill.  Let’s hope that President Trump calls more attention to these “elephants in the living room.”

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Two weeks after David Stockman warned that "the market is apparently pricing in a huge Trump stimulus. But if you just look at the real world out there, the only thing that's going to happen is a fiscal bloodbath and a White House train wreck like never before in U.S. history" and exclaimed that, when looking at markets, "what's going on today is complete insanity" he is back with another interview, this time with Greg Hunter of USAWatchdog in which he, once again warns, that a giant fiscal bloodbatch is coming soon, and urges listeners to pay especially close attention to the March 15, 2017 debt ceiling deadling, at which point everything could "grind to a halt."

As Greg Hunter writes, former Reagan Administration White House Budget Director David Stockman says financial pain is a mathematical certainty. Stockman explains, “I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus.  Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme.  People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America.  Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.”

So, can the Trump bump in the stock market keep going? Stockman, who wrote a book titled “Trumped” predicting a Trump victory in 2016, says, “I don’t think there is a snowball’s chance in the hot place that’s going to happen. This is delusional.  This is the greatest suckers’ rally of all time.  It is based on pure hopium and not any analysis at all as what it will take to push through a big tax cut.  Donald Trump is in a trap.  Today the debt is $20 trillion.  It’s 106% of GDP. . . .Trump is inheriting a built-in deficit of $10 trillion over the next decade under current policies that are built in.  Yet, he wants more defense spending, not less.  He wants drastic sweeping tax cuts for corporations and individuals.  He wants to spend more money on border security and law enforcement.  He’s going to do more for the veterans.  He wants this big trillion dollar infrastructure program.  You put all that together and it’s madness.  It doesn’t even begin to add up, and it won’t happen when you are struggling with the $10 trillion of debt that’s coming down the pike and the $20 trillion that’s already on the books.”

Then, Stockman drops this bomb and says:

“I think what people are missing is this date, March 15^th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash.  Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity.

There is much more in the video interview below in which Greg Hunter goes One-on-One with David Stockman.

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By EconMatters

We discuss the oil market in a comprehensive manner in this video, and lay out why the economics of the oil market are not correctly aligned right now. The world Oil Market was not set up for both the Middle East and the United States to be pumping at Record Levels!

Conclusion:

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle    

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This might’ve been the last invitation to CNN for Ben Stein — the former speechwriter for Richard Nixon, media pundit, and legendary actor in pop culture classics Ferris Bueller’s Day off and American Pie.

Defending Trump’s decision to boycott the correspondents’ dinner, Stein laid into the media for their unrelenting assault on the President — trying, in what he said, to do to him what they did to Nixon.

Stein critiqued the media’s portrayal of Trump was an antisemitic, white supremacist as entirely without merit — deriding them as being seen by the American public as an ‘unelected aristocracy, ‘impudent snobs.’

When defending Nixon’s accomplishments, as ‘bringing more peace to the world than any president in the 20th century,’ it was humoring to see the young CNN host recoil — because MUH Watergate. Nixon is evil incarnate to leftards, as they view him as nothing more than a head in a jar, spewing hateful things — plotting and scheming to undermine civility — when in fact the true record of Nixon is the exact opposite.

Content originally generated at iBankCoin.com

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Submitted by Mike Shedlock via MishTalk.com,

Eurozone Target2 imbalances have touched or exceeded the crisis levels hit in 2012 when Greece was on the verge of leaving the Eurozone. Others have noted the growing imbalances as well.

I had a couple of questions for the ECB regarding Target2, which they have answered, I believe disingenuously.

First, we will explain Target2, then we will take a look at various charts, viewpoints, and the email exchange with the ECB.

Target2 Background

Target2 stands for Trans-European Automated Real-time Gross Settlement System. It is a reflection of capital flight from the “Club-Med” countries in Southern Europe (Greece, Spain, and Italy) to banks in Northern Europe.

Pater Tenebrarum at the Acting Man blog provides this easy to understand example: “Spain imports German goods, but no Spanish goods or capital have been acquired by any private party in Germany in return. The only thing that has been ‘acquired’ is an IOU issued by the Spanish commercial bank to the Bank of Spain in return for funding the payment.”

This is not the same as an auto loan from a dealer or a bank. In the case of Target2, central banks are guaranteeing the IOU.

Target2 also encompasses people yanking deposits from a bank in their country and parking them in a bank in another country. Greece is a nice example, and the result was capital controls.

If Italy or Greece (any country) were to leave the Eurozone and default on the target2 balance, the rest of the countries would have to make up the default according to their percentage weight in the Eurozone.

Target2 Imbalances

Those numbers are as of December 2016. A check of the Bundesbank Target2 Balance as of January 31, 2017 shows a new record high of €797 billion.

As of December 2016, if Italy were to exit the Eurozone, Italy would owe €356.6 billion to Germany, Luxembourg, and a couple other small creditors.

What’s the likelihood Italy could ever pay back €356.6 billion?

Unpayable debts

Ambrose Evans-Pritchard at the Telegraph notes the unpayable debts then asks Are Eurozone Central Banks Still Solvent?

Vast liabilities are being switched quietly from private banks and investment funds onto the shoulders of taxpayers across southern Europe. It is a variant of the tragic episode in Greece, but this time on a far larger scale, and with systemic global implications.

 

There has been no democratic decision by any parliament to take on these fiscal debts, rapidly approaching €1 trillion. They are the unintended side-effect of quantitative easing by the European Central Bank, which has degenerated into a conduit for capital flight from the Club Med bloc to Germany, Luxembourg, and The Netherlands.

 

This ‘socialization of risk’ is happening by stealth, a mechanical effect of the ECB’s Target2 payments system. If a political upset in France or Italy triggers an existential euro crisis over coming months, citizens from both the eurozone’s debtor and creditor countries will discover to their horror what has been done to them.

 

As always, the debt markets are the barometer of stress. Yields on two-year German debt fell to an all-time low of minus 0.92pc on Wednesday, a sign that something very strange is happening. “Alarm bells are starting to ring again. Our flow data is picking up serious capital flight into German safe-haven assets. It feels like the build-up to the eurozone crisis in 2011,” said Simon Derrick from BNY Mellon.

 

The Target2 system is designed to adjust accounts automatically between the branches of the ECB’s family of central banks, self-correcting with each ebb and flow. In reality, it has become a cloak for chronic one-way capital outflows.

 

Private investors sell their holdings of Italian or Portuguese sovereign debt to the ECB at a profit, and rotate the proceeds into mutual funds Germany or Luxembourg. “What it basically shows is that monetary union is slowly disintegrating despite the best efforts of Mario Draghi,” said a former ECB governor.

The Banca d’Italia alone now owes a record €364bn to the ECB – 22pc of GDP – and the figure keeps rising.

 

Spain’s Target2 liabilities are €328bn, almost 30pc of GDP.  Portugal and Greece are both at €72bn. All are either insolvent or dangerously close if these debts are crystallized.

 

On the other side of the ledger, the German Bundesbank has built up Target2 credits of €796bn. Luxembourg has credits of €187bn, reflecting its role as a financial hub. This is roughly 350pc of the tiny Duchy’s GDP, and fourteen times the annual budget.

Mish Questions for the ECB – January 27, 2017

Many media reports suggest the growing target2 imbalance in Italy is a sign of capital flight. ECB president Mario Draghi said it was a function of ECB asset purchases. Can you explain why Draghi is right or wrong?

 

Please also explain the growing target2 imbalance at the ECB itself.

 

Thanks
Mish

ECB Response – February 15, 2017

Dear Mr. Shedlock,

Thank you for your email and please accept our apologies for the late reply.

 

The implementation of the APP affects TARGET balances through cross-border settlement of our purchases. For more information on this particular mechanism, please see ECB Economic Bulletin, Issue 7 / 2016 – Box 2: TARGET balances and the asset purchase programme (pages 21-24).

 

As regards the ECB’s own Target balance, when the ECB purchases securities under the APP, the ECB credits the account of the respective counterparty. Such counterparties are credit institutions, which cannot hold accounts with the ECB, but instead, hold accounts with national central banks. Therefore, payment for a security by the ECB automatically increases the ECB’s TARGET liability (but not necessarily the overall TARGET balance). This is discussed in the Bundesbank’s March 2016 Monthly Report (pages 53-55).

 

With best regards,

TARGET Hotline
EUROPEAN CENTRAL BANK

Disingenuous ECB Response

I have been talking about Target2 imbalances for years, and I do not accept ECB’s response straight up.

Euro intelligence also discussed this very question recently. They have it correct, as follows, emphasis mine:

One of the barometers of tension in the Eurozone is the number of articles in the German press questioning the euro’s advantages to the country. The publication of the latest Target2 imbalances is not helping soothe nerves. As of end January, the German surplus was at an all-time record of €796 billion, while Italy’s deficit was at a record €364 billion. The ECB argues that the reason for the gap is not the same as it was during the Eurozone crisis when the imbalances reflected capital flight.

 

Philip Plickert writes in FAZ that this argument does not tell the full story. It is true, of course, that international banks based in London sell bonds to the Bank of Italy from their Frankfurt-based branches – so that the asset purchases result in transfers of central bank money from Italy to Germany. But why do the sellers not replenish their portfolios with purchases of Italian bonds, shares or other assets? Instead, they take the money and invest in Germany. So this is still capital flight – except that it works indirectly through the asset purchase programme.

Simple Target2 Explanation

Reader Lars writes: “Target 2 is a settlement system. When imbalances arise it’s because transactions are not settled. For example, Luigi in Italy transfers his €1 million from his Monte dei Paschi (MdP) account to his new Deutsche Bank account. MdP does not have the €1 million and has to borrow it from Bank of Italy. The Bank of Italy has to borrow the €1 million from Bundesbank. So at the end of the day, Luigi gets the €1 million into his account in DB but the Bank of Italy now owes €1 million to Bundesbank.”

Do that long enough and this is what happens:

1. The Banca d’Italia, Italy’s central bank, owes a record €364 billion to creditors, 22 percent of GDPand rising.
2. The Banco de España, Spain’s central bank owes €328 billion to creditors, almost 30 percent of GDP.
3. Other nations owe smaller amounts.

Pater Tenebrarum at the Acting Man blog commented via Email “I agree with the eurointelligence view that the steep Italian and Spanish deficits are still a testament to capital shunning various countries. To put it very simply: people managing large sums of Other People’s Money for institutions subject to fiduciary duty continue to have doubts about the euro’s survival, and rightly so.

Reader Lars replied: “It seems to me that the ECB is trying to complicate matters and kick the ball into the tall grass. In regards to the ECBs €160 billion Target2 deficit, it might be the case that the ECB has borrowed from Bundesbank and then lent the money to other national central banks (NCBs) because the Bundesbank has not been willing to do all the heavy lifting itself. Is the Bundesbank shunning risk at local NCBs?”

Rating Agencies Where Art Thou?

The rating agencies should be all over this issue but they are not. Here are two possible explanations.

1. The rating agencies are in bed with central banks or creditors
2. They do not understand Target2

Huge Insurmountable Problem

Target 2 is one of the least discussed and least understood problems in the Eurozone.

Jens Weidmann, Bundesbank president, allowed nearly €800 billion in credit to build on his watch. One has to wonder: Is Weidmann moving into illegal territory?

Egon von Greyerz, Founder & Managing Partner, Matterhorn Asset Management AG, made a comment similar to what I have stated many times: “Germany is in bigger trouble than Italy, Spain, or Portugal. Those countries can’t pay so Germany will have to foot the bill.”

Alternatively, the Bundesbank and the ECB are going to print money to cover those losses!

Greece alone is unlikely to trigger a crisis now, but Italy, Spain, or France could.

Fuse is Lit

The fuse is lit, multiple fuses actually.

1. Italy Increasingly Likely to Abandon the Euro
2. “Italeave” Odds Increase: Rebellion in Italy, Matteo Renzi’s PD Party to Split
3. French Elections: Another “Unthinkable” Result Coming Up?

Gold’s Reaction

Recent strength in gold is likely based on increasing doubts central banks are once again out of control.

Of course, central banks were never really in control, but appearances matter.

For further discussion, please consider Rate Hike Cycles vs. the US Dollar: Rate Hikes Bad for Gold?

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'Good cop' Mnuchin appeared to play expectations-manager this morning in an interview with FOX's Maria Bartiromo. After confirming the Trump administration is "not touching" entitlement programs, and having said this week that tax reform is expected by August,  he appeared to walk back that hype by saying that President Trump "will be touching on tax reform" during his speech to Congress this week, which Reuters notes, is not an official "State of the Union" address.

On Thursday, Mnuchin promised tax reform before August…

But speaking today to Fox's Maria Bartiromo, he seemed less optimistic on the timeline…

The Trump administration is "not touching" entitlement programs such as Social Security and Medicare "for now," Treasury Secretary Steven Mnuchin says.

"Don't expect to see that as part of this budget, OK," Mnuchin says of entitlements. "We are very focused on other aspects and that's what's very important to us. And that's the president's priority."

Donald Trump "will be touching on tax reform" in Tuesday's speech to Congress. "The President is very, very focused on us getting back to sustained, long-term economic growth," Mnuchin says. As Reuters notes,

The plan will reduce the number of tax brackets for individuals and offer a "middle income tax cut," Mnuchin said. On the business side, Trump wants to "create a level playing field for U.S. companies to be able to compete in the world."

 

Mnuchin said Trump was looking at a "reciprocal tax" that would help create more parity with other countries. Trump administration officials have complained that many countries charge value-added taxes on imports while exempting exports from taxation. The United States mainly taxes corporate income.

 

But Mnuchin again said he was only studying a House Republican border tax adjustment plan that would levy a 20 percent tax on imports to encourage more U.S.-based production and exports. That plan aims to raise more than $1 trillion in revenue over a decade to offset lower tax rates for businesses.

 

"So let me just say this is something we are studying very carefully," Mnuchin said. "There are certain aspects that the president likes about the concept of a border-adjusted tax, there are certain aspects that he's very concerned about."

 

He added that the Trump administration would work with the House of Representatives and Senate to craft "a combined plan that takes the best of all of this when we bring it forward."

Mnuchin says the "absolute lower tax rate" favored by the Trump administration "doesn’t necessarily mean" a corresponding drop in revenues.

Mnuchin did not back off from the Obamacare plan as a priority over tax reform but stated "they are both big priorities" noting that "we need some more time to get tax reform done," suggesting his more aggressive August deadline was perhaps a little optimistic.

As Barclays notes, this week's first major policy speech should provide clarity on whether the US administration’s lack of detail on potential changes to trade and fiscal policies is a reflection of changing policy priorities. Elsewhere, growth outlooks in Europe and Japan remain positive.

US: distraction or policy choice?

The US administration appears to be in no hurry to introduce tariffs or other restrictive trade policies on China or Mexico; together, these countries account for about 30% of US imports. Likewise, on the other major policy items – the government’s public investment programme and tax reform – specificity is lacking. While there have been some hints about the type of corporate income tax reform that the administration might deliver – a broadening of the base and cuts to the tax rates – markets are still waiting for the 2017 key draft fiscal budget. Markets will be attentively watching next week’s State of the Union address (28 Feb). We think that the presentation to Congress will be a good opportunity for the President to more clearly flesh out his policy priorities and goals, especially on trade, taxes, and public investment.

We believe that the policy focus needs to move away from immigration and health care toward fiscal policies if the administration wants to deliver on tax and spending policies that could boost economic activity in the current calendar year. Absent any re-prioritisation of policy in the very near term, we believe investors should re-orient their view on tax reform to 2018. Delays in a possible fiscal boost would make the 2017 government’s growth target of c. 3% challenging (Barclays forecast: 2.5%). For now, our policy baseline remains a combination of anti-trade policies in the form of tariffs against Mexico and China and expansionary fiscal policy that provides a boost to economic activity later this year, but we acknowledge that the probability of our baseline materialising has fallen substantially in recent weeks.

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Submitted by Zainab Calcuttawala via OilPrice.com,

Online marketplaces are just for buying and selling the everyday consumer goods anymore – think bigger: The Chinese government has just auctioned off a nearly US$12-million oil tanker on Taobao, its version of eBay or Alibaba.

A Maltese company just purchased an $11.8 million oil tanker from the Chinese online sales website Taobao, according to the Xinhua news service.

The oil tanker – The Varada Blessing – sold on what is best described as the Chinese version of eBay, attracted 33,000 views and 19 offers from six different bidders before ultimately being sold to Natalia Shipping. The vendor was Guangzhou Maritime Court, which struck the deal on the site’s Paimai judicial auction platform.

The court had attempted to sell the 327-meter-long decommissioned ship on Taobao twice before, without any luck in meeting the minimum desired reserve to trigger a sale. But the third time was a charm.

The tanker was built in 1993 and previously sailed under the flag of Comoros, according to MarineTraffic.com, a site that logs international shipping data. The Varada Blessing carries a gross tonnage of 156,539 tons and had been owned by Varada One Ptd. Ltd. before it was confiscated by the Guangzhou Maritime Court over an admiralty dispute. Ship traffic data says the vessel still sits at the mouth of the Pearl River in between Macau and Hong Kong.

It’s not the first time the Chinese courts have begun selling seized property online. More than 120 courts in the state of Guangdong connected with Taobao's judicial sales program, with the value of the courts’ total earnings in auctions jumping from 100 million yuan in 2014 to 10 billion yuan last year.

Last week, Splash reported the sale of five vessels belonging to Wenzhou Shipping on Taobao for a grand total of $22 million. The Alibaba-owned site also recently facilitated the sale of a newbuild bulker of Nantong Minde Heavy Industry for $14 million.

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George W. Bush invaded Iraq to remove its – ultimately nonexistent – weapons of mass destruction. Barack Obama used cyber weaponry and sanctions to deter Iran from building its own atomic bomb. Now Donald Trump faces North Korea, but stopping its nuclear and missile program may prove impossible, creating what may be his first and perhaps defining international crisis. -Reuters

Trump is being urged to confront North Korea and also to build up the army which, some say, has been neglected in the Obama years and even before.

He needs to do this as well because North Korea is supposedly getting close to having a usable nuclear force.

This is a crisis everyone has seen coming. That’s why Japanese Prime Minister Shinzo Abe has been so desperate to court Trump, visiting him even before the inauguration. As North Korea launched an intermediate medium-range ballistic missile on Sunday, Abe was once again with the president – this time on a golf and bonding trip to Mar-a-Lago, Trump’s Florida retreat.

 

… Pyongyang first demonstrated its ability to detonate a crude nuclear device in 2006 – becoming the only Iraq- or Iran-style “rogue state” to ever get that far. Since then, it has continued to develop not just the bombs but also the missiles to deliver them.

 

Ultimately, the regime would love to have the ability to strike the continental United States – a prospect Trump has tweeted to say “won’t happen”. For now, however, there are few signs anyone has a plan to stop it.

The article goes on about North Korea’s land-based “nuclear rockets” and the progress it is making in creating and distributing them.

But who is making these claims other than North Korea. One of the only ways to know is to measure earth quakes. America is doing that, but the Pentagon has nearly as many reasons to exaggerate the North Korean threat as North Korea itself.

We don’t believe that North Korea has much in the way of nuclear weapons. It may have none at all. Not even the “mini-nuke” that you can pick up in both hands. But with Trump banging the drums for more armament, North Korea has suddenly become a big threat to the United States.

There is no real evidence for North Korea having a large nuclear force. But because we are told it is so, we should believe it. These are the same kind of observations that go back some 75 years to Hiroshima and Nagasaki even though its fairly clear that both cities were firebombed.

Some sort of nuclear device may have been dropped as well, but if it was nuclear device it wasn’t a very effective one. Crawford, who ran the post-war nuclear program in Japan has said,

When the bomb went off, about 2 thousand people out of 250 thousand got killed [in Hiroshima] – by blast, by thermal radiation, or by intense x-ray, gamma radiation … You see, it wasn’t “Bing” like the publicity here [said]: a bomb went off and a city disappeared. No such thing happened. That was the propaganda for deterrent …

 

When I came back to this country, I was appalled, from a military standpoint, to find that our major planners in the War Department were using their own propaganda, 100 thousand deaths, Bing! …

 

You don’t hear much about the effects of Nagasaki because actually it was pretty ineffective. That was a narrow corridor from the hospital … down to the port, and the effects were very limited as far as the fire spread and all that stuff. So you don’t hear much about Nagasaki.

It makes very little sense that nuclear weapons have been around for 75 years but never have been used. Never as in not once. Except for the supposed uses in Hiroshima and Nagasaki. And there is a good deal of doubt they were actually used then.

Trump seems determined to build up the military to a size never before seen. In this he may agree with Republican chairmen of the House and Senate Armed Services Committees, Rep. Mac Thornberry of Texas and Sen. John McCain of Arizona. These two have asked for base military budget of $640 billion in 2018. That would be $100 billion more than in 2017.

The larger picture according to Pentagon budgets is up to one trillion over the next ten years or so to dramatically hike the Pentagon’s nuclear forces.

But the  entire history of nuclear warfare is muddied by a lack of real reporting and credible eye witnesses. The New York Times had only one reporter assigned to nuclear weapons during their formative years. That person turned out to be on the Pentagon payroll as well.

Conclusion: There are a good many questions as to how nuclear weapons work – and if they work and when they work. Before we spend another $1 trillion adding to such weapons, we should ask some hard questions about them. We shouldn’t believe everything we hear. When it comes to America’s “nuclear program” we should be consistently skeptical.

via http://ift.tt/2mk1skC TDB

Another day, another skirmish between Donald Trump and the “failing” New York Times.

It started early on Saturday morning, when in a tweet Trump slammed the Times’ new ad campaign set to air during the Oscars on Sunday night: “For first time the failing @nytimes will take an ad (a bad one) to help save its failing reputation,” the president tweeted.”

For first time the failing @nytimes will take an ad (a bad one) to help save its failing reputation. Try reporting accurately & fairly!

— Donald J. Trump (@realDonaldTrump) February 26, 2017

The ad in question is the following:

Appearing several hours later on CNN – another media outlet bashed by Donald Trump as “fake news” – the executive editor of the New York Times said that Trump’s attempts to smear the publication have instead encouraged more people to read it.

“Trump is the best thing to happen to the Times’ subscription strategy,” Dean Baquet said during an interview with CNN’s “Reliable Sources.” “Every time he tweets it drives subscriptions wildly.”

The NYT executive added that Trump has revitalized reporters who may have been pessimistic about the future of the industry.

“Every time Trump tweets it drives @nytimes subscriptions wildly” says Executive Editor @deanbaquet https://t.co/rQusXDhP6r

— CNN (@CNN) February 26, 2017

“There was a long time when the press wondered about its place in society, the last several years as newspaper subscriptions dwindled, as particularly local newspapers worried about their future.”

“What’s happened in the last couple of months I have to say has been tremendous for news organizations.”

“Our mission is clearer than it’s ever been — we’re covering a dramatic revolution in government and how the country is governed, and it feels like all of the things that sort of bothered us and made us lose a little bit of confidence in the last few months have sort of gone away.”

While the NYT has often repeated that Trump’s bashing has resulted in a boost to its subscriptions (without elaborating on new subscriber churn) confirmation will only be available when the NYT reports it first quarter results in over a month. Meanwhile, however, a more troubling trend for the news paper which was recently forced to lease space in its landmark NYC headquarters to boost cash flow, is the decline in advertising – mostly print – revenue, which in Q4 tumbled by 10%. In fact, while circulation/subscription revenue rose by $10 million in Q4, ad revenue declined by double the amount or $20 million.

That, coupled with a 3% rise in operating costs, has led to a continued decline in operating profits, even when excluding one-time charges.

This is what the NYT said in its public filing on what to expect in the coming quarter:

Total circulation revenues in the first quarter of 2017 are expected to increase approximately 6 percent compared to the first quarter of 2016.

 

Total advertising revenues in the first quarter of 2017 are expected to decrease in the high-single digits compared to the first quarter of 2016.

Ultimately, for the NYT to be viable as a going concern, it will need to stem the plunge in ad revenue which may also be adversely impacted by Trump’s relentless bashing.

And then there is the question of overall traffic, which brings up another curious observation.

Three weeks ago we showed that, inexplicably, according to Alexa a whopping 49% of the NYT’s readers were out of China, which was impossible since the US publication is firewalled in China.

49% of NYT visitors come from China? https://t.co/bojHgYExfe http://pic.twitter.com/XbRrqmdLpO

— zerohedge (@zerohedge) February 9, 2017

Since our public observation, the NYT’s Chinese “traffic” has crashed to just 3.5%, which while still improbable, is far more reasonable.

As a consequence of this, the public-facing NYT traffic has tumbled to the lowest level in a year. It is this, more so than Trump’s twitter feed, that advertisers will be closely looking at when making future ad campaign decisions.

via http://ift.tt/2ldGIFP Tyler Durden