Steve Bull's Blog, page 1187
February 18, 2018
Opinion: Fearless Adversarial Journalism Doesn’t Work When You Are Funded By A Billionaire
Disobedient Media previously opined on the dagger-in-the-back publication of a hit piece against Wikileaks’ Julian Assange just one day after a UK magistrate, with blatant conflict of interest in the matter, shot down his legal representatives’ attempt to finally free him from the confines of the Ecuadorian embassy.
What that article did not address was the patently obvious terminal illness suffered by The Intercept. That is, the outlet claims to publish “fearless, adversarial” reporting, while it is funded by a billionaire. Ken Silverstein, formerly employed at The Intercept and by Omidyar’s First Look Media, has described endemic problems at the outlet that have risen directly out of Omidyar’s leadership or lack thereof.
The fundamental problem facing The Intercept is not ultimately about how or why the outlet published a smear specifically timed to cut support away from Assange, even though that is in and of itself despicable. It’s that doing so acts in support of the very deep state and moneyed, military interests that The Intercept purports to critique “fearlessly.”
Adding to a sense of betrayal of The Intercept’s principals in the wake of the outlet’s hit-piece is the fact that a number of writers at the publication are by all accounts on good terms with Assange, and have worked with mutual supporters including the superb Italian journalist Stefania Maurizi. Maurizi collaborated with Wikileaks on the verification of documents for many years, and worked with Glenn Greenwald on preparation for the disclosure of the Snowden files.
Adding to the years of support Greenwald has shown Assange, the Wikileaks co-founder also sent Wikileaks’ own Sarah Harrison to the aid of Snowden after he was marooned in Hong Kong in 2013, an act which Stefania Maurizi revealed very likely cost the publisher his freedom.
…click on the above link to read the rest of the article…
February 17, 2018
Brazil’s Largest Newspaper Abandons Facebook; Says News Feed is “Banning Professional Journalism”
São Paulo, Brazil— The largest newspaper in Brazil, Folha de S Paulo, announced late last week that due to Facebook’s recent changes to their news feed algorithm resulting in what the paper claims is “effectively banning professional journalism,” it would cease publishing content on the social media platform.
The Guardian reported that the popular Brazilian newspaper has an online and print subscription base of nearly 285,000 subscribers and had roughly 204 million page impressions last December, according to the Communication Verification Institute, a non-profit media auditor. The company’s Facebook page has nearly 6 million Facebook followers.
The executive editor of Fohla, Sérgio Dávila, told The Guardian that the paper’s decision reflected “the declining importance of Facebook to our readers,” but added that the recent algorithm changes to Facebook’s Newsfeed had precipitated the decision. The paper claimed the new algorithm “privilege[s] personal interaction contents, to the detriment of those distributed by companies, such as those that produce professional journalism.”
Only weeks ago, Mark Zuckerberg, Facebook’s co-founder and CEO, announced that the company would be changing the algorithm used to determine what shows up in an individual’s Newsfeed to prioritize “meaningful social interactions” and posts by friends, and “trusted” news sources.
Folha noted that the choice to abandon Facebook was “a reflection of internal discussions about the best ways to get the content of the newspaper to reach its readers. The disadvantages of using Facebook as a path to this distribution became more evident after the social network’s decision to reduce the visibility of professional journalism on its users’ pages.”
A separate report in Folha noted that the newspaper’s own analysis found that “fake news pages received five times the number of engagements that professional journalism received” during the month of January.
…click on the above link to read the rest of the article…
This Year’s Stock Buybacks Are Already Bigger Than All Of 2009’s
While there is still some fringe debate what companies will do with the hundreds of billions in offshore funds repatriated to the US as part of the recently passed Trump tax reform, the discussion is largely over, especially after last week’s Cisco results. The company, which has $68 billion of overseas cash, third after AAPL and MSFT, announced that it would raise its buyback authorization by $25 billion, and revealed plans to repurchase its entire authorization of $31 billion during the next 6-8 quarters, equal to roughly 15% of its current market cap.
Call it a partial LBO, courtesy of Donald Trump.
In other words, those who said that companies will use virtually all repatriated proceeds for buybacks, congratulations, you were right, or as the FT humorously put it:
Flush with cash after the Republican tax cuts, Cisco announced on Wednesday that it was building gleaming factories across the US, employing hundreds of thousands of workers to make the latest cutting-edge routers.
Sorry, of course not. The money is going back to shareholders.
Don’t believe it? Here’s what Goldman’s David Kostin said in his latest Weekly Kickstart report:
Since December, S&P 500 firms have announced buybacks totaling $171 bn. YTD announcements of $67 bn represent a 22% increase versus the same period in 2017. The buyback window has re-opened and firms are taking advantage of the recent correction; the GS Buyback Desk reported that last week was the most active week in its history.
The $171 billion in YTD stock buyback announcements is the most ever for this early in the year. In fact, it is more than double the prior 10 year average of $77 billion in YTD buyback announcements.
…click on the above link to read the rest of the article…
Swan Song Of The Central Bankers, Part 4: The Folly Of 2.00% Inflation Targeting
The dirty secret of Keynesian central banking is that under current circumstances its interventions have almost no impact on its famous dual mandate—-stable prices and full employment on main street.
That’s because goods and services inflation is a melded consequence of global central banking. The capital, trade, financial and exchange rate movements which result from the tug-and-haul of worldwide central banking policies generate incessant shape-shifting impacts on the CPI; and the ebb and flow of these forces completely dwarfs FOMC actions in the New York money and bond markets.
In today’s world, there is no such thing as inflation in one country. In that regard, the traditional Fed tool of pegging the funds rate is especially obsolete, impotent and ritualistically mindless. After all, if the 2.00% inflation target is meant as a long haul objective, it was achieved long ago. The CPI index for January 2018 at 249.2 compared to a level of 169.3 back in January 2000, thereby representing exactly a 2.17% compound annual gain over the 18 year period.
So where’s the Eccles Building beef about missing its target from below—even if that wasn’t one of the more ludicrous notions of “failure” ever to arise from the central banking fraternity?
On the other hand, if 2.00% is meant as a short-run target, how much more evidence do we need? Since the Fed shifted to deep pegging at or near the zero bound in December 2008, there has been no inflation rate correlation with the funds rate whatsoever.
In the sections below we will resolve the inflation matter once and for all by demonstrating that the very idea of 2.00% inflation targeting (or any other target) is singularly stupid and destructive.
…click on the above link to read the rest of the article…
When Budget Deficits Will Really Go Vertical
Mnuchin Gets It
United States Secretary of Treasury Steven Mnuchin has a sweet gig. He writes rubber checks to pay the nation’s bills. Yet, somehow, the rubber checks don’t bounce. Instead, like magic, they clear. How this all works, considering the nation’s technically insolvent, we don’t quite understand. But Mnuchin gets it. He knows exactly how full faith and credit works – and he knows plenty more.
Master of the Mint and economy wizard Steven Mnuchin and his wife at the annual ritual greenback burning festival. [PT]
In fact, Mnuchin’s wife, Louise Linton, says she admires him because “he understands the economy.” And Mnuchin, no doubt, admires Linton, a Scottish actress 18 years younger, because “she loves SoulCycle Snapchat filters that make people look like puppies and piglets.” Naturally, Mnuchin gets the importance of puppy and piglet filters and how this bizarre fad fits into the big picture of the economy.
Unlike Mnuchin, we find the economy, and its infinite and dynamic relationships, to be beyond comprehension. But that doesn’t deter us from attempting to make some sense of it each week. When it comes to Snapchat filters we know nothing – and we could care less. Still, who are we to question Snap Inc.’s $24 billion market capitalization?
What we do understand is simple arithmetic. So, too, we care a great deal about the increasingly precarious predicament the 115th U.S. Congress is putting the American people in. As far as we can tell, the approaching disaster is much closer than Mnuchin will publicly recognize.
US public debtberg-to-GDP ratio – cruising for a bruising. The growth in public debt in recent years is unprecedented in peace time (arguably, the term “peace time” is not an accurate description of the current era). Lettuce not forget, this is just the debt they actually admit to, so to speak.
…click on the above link to read the rest of the article…
Why Are We In Afghanistan?
It is long past time for someone in the shithole known as Washington to tell us why Americans have been killing and dying in Afghanistan for 17 years. Is it to steal the country’s minerals? Is it to control the location of pipelines? Is it to keep American taxpayers money flowing to the US military/security complex? Is it to finance the CIA’s black operations with drug profits? Or is it to prove that the neoconservatives’ dream of US world hegemony is a chimera?
Here are some questions for you from a voice you never have heard:
Letter of the Islamic Emirate to the American people!
The American people, officials of independent non-governmental organizations and the peace loving Congressmen!
With the hope that you will read this letter prudently and will evaluate the future of American forces and your profit and loss inside Afghanistan in light of the prevailing realities alluded to in the following lines!
The American people!
You realize that your political leadership launched a military invasion of our country 17 years ago. This invasion was not only contrary to the legal and national norms of our own sovereign country but also a violation of all international rules and regulations, but still the following three main points were put forward by your authorities to justify this illegitimate invasion:
Establishing security by eliminating the so called terrorists inside Afghanistan.
Restoring law and order by establishing a legal government.
Eradicating narcotics.
However let us analyze how successful your war-monger leaders were in achieving the above three slogans in this illegitimate war?
Increased insecurity and fighting:
In 2001 when your ex-president George W. Bush ordered the invasion of Afghanistan, his justification for that felonious act was the elimination the Islamic Emirate (Taliban) and Al-Qaeda.
…click on the above link to read the rest of the article…
How much do we have to pay people to NOT use electricity – up to 30 times more?
To understand the real value of electricity, consider the price at which people will give it up. “Demand Response” is the nice euphemism for a voluntary blackout. At what point do people volunteer to go without? For most of the market, apparently, it’s more than $7500/MWh.
If I read this graph correctly, look how fast the prices rise, and how small the response is. For example, in South Australia there is only about 10MW available at less than $300/MWh? (From this AEMO report). For reference the total SA demand is around 1500MW. So 10MW is less than 1%.
(See below for the
Consider how few people are willing to turn the electricity off:
AEMO expects there to be approximately 50 MW of demand response in NSW when the price reaches $1,000/MWh.
The total size of the NSW state market is about 10,000MW. Retail electricity sells for $250 — $470MWh (and only $100/MWh in the US). Hence when the price hits two to four times the normal retail cost of electricity, only about 5% of the market say they will willingly stop using it. When the price hits $7500MWh another 2% will give it up. We can’t take this reasoning too far, but the message is clear that the pain of giving up electricity costs a lot more than generating it. Demand is “inelastic”.
Electricity generation creates wealth. People value the product far above the cost of production.
We could raise prices but business locations are “elastic”….
Here’s the text to go with the graph from that report:
Demand response observed to date
A 2016 survey for the AEMC suggested that there is at least 235 MW of demand response capability under contract to retailers, mostly involving exposure to the wholesale market spot price, with more demand response contracted to specialist demand side-management companies.
…click on the above link to read the rest of the article…
The Worst Threat We Face Is Right Here At Home
The Worst Threat We Face Is Right Here At Home
The Federal Reserve is ruining us
Last week, volatility made a long-overdue return to the US and global equity markets.
It began with a 2-day back-to-back violent drop. Day 3 saw a big rebound, swiftly followed by two more days of gut-wrentching losses. And then finally, last Friday, the day saw massive swings both high and low, ending with a huge upside run.
During this period the S&P 500 lost more than 300 points. Since then, though, the market has been steadily rising.
Is the danger past? Are the markets safe once more?
And if so, did the markets recover organically? Or were they rescued by The Plunge Protection Team (PPT)?
The answer matters.
If such intervention was rare we could almost justify it, if it took the form of simple, pre-arranged circuit breakers that shut the market down for a “cooling off” after they’ve moved too far, too fast. Indeed, these already exist, and are sufficient in our view.
But if such market interventions are routine, persistent, and generally depended on by the major market participants, then they’re highly destructive over the long term.
Sadly, we live with the latter.
Insiders get stinking rich by front-running the scheme (check). Normal adjustments are prevented (check), allowing dangerous bubbles of extreme overvaluation to form (check), while fostering malinvestment (check).
Do this long enough and you end up with a deformed economy, an eroded social structure, and markets that no longer function as appropriate mechanisms for capital distribution and economic signaling.
This is where we find ourselves today.
Modern-Day Soviet Crop Reports
In the former Soviet Union, the communist method of assuring economic progress was to set targets for production. Famous among them were the crop reports.
…click on the above link to read the rest of the article…
Weekly Commentary: Permanent Market Support Operations
U.S. stocks posted the strongest week of gains since 2013 (would have been 2011 if not for late-day selling). The S&P500 surged 4.3%, and the Nasdaq Composite jumped 5.3%. The small cap Russell 2000 rallied 4.4%. After closing last Friday at 29.06, the VIX settled back down to a still elevated 19.46. Foreign markets recovered as well. Germany’s DAX rose 2.8%, and France’s CAC 40 gained 4.0%. The Shanghai Composite was closed for the lunar new year. The dollar index was back under pressure this week, sinking 1.5%, giving a boost to commodities prices. Price instability abounds.
While stocks rather quickly recovered a chunk of recent losses, the same cannot be said for corporate bonds. Notably, investment-grade bonds (LQD) rallied little after recent declines.
February 16 – Bloomberg (Cecile Gutscher and Cormac Mullen): “Corporate bond funds succumbed to rate fears that have gripped stocks to Treasuries. Investors pulled $14.1 billion from debt funds, the fifth-largest stretch of redemptions in the week through Feb. 14, according to a Bank of America Merrill Lynch report, citing EPFR data. High-yield bonds lost $10.9 billion alone, the second highest outflow on record. As benchmark Treasury yields traded at a four-year high, it shook the foundations of a key support for risk assets — low rates. ‘Investors don’t sell their cash bonds in a big way until they are forced to, which happens when the outflows start picking up more sustainably,’ Morgan Stanley strategists led by Adam Richmond wrote…”
U.S. junk bond funds suffered outflows of $6.3 billion (from Lipper), the second highest ever. IShares’ high-yield ETF saw outflows of $760 million. U.S. investment-grade bond funds had outflows of $790 million (Lipper), the first outflows since September. This was a big reversal from last week’s $4.73 billion inflow. The iShares investment-grade ETF had outflows of $921 million, the “largest outflow in its 15-year history.” Even muni funds posted outflows ($443 million), along with mortgage and loan funds.
…click on the above link to read the rest of the article…
Exacerbation of Tensions in Syria: Who Stands to Gain?
Exacerbation of Tensions in Syria: Who Stands to Gain?
French President Emmanuel Macron has said he would order airstrikes against Syria if the rumors that its government has used chemical weapons (CW) against civilians are confirmed. Never backed up with any solid evidence, such reports crop up from time to time in the Western media. In some cases the Organization for the Prohibition of Chemical Weapons (OPCW) has claimed that the traces actually led to the rebels, not the Syrian government. More of the CW stories have been published recently. Why now? A bit of background information can offer some clues.
The situation in Syria has been greatly aggravated. France is not the only actor threatening an incursion. Israel has just attacked some sites in Syria, as well as what it called “Iranian forces in Syria” and said that it would not hesitate to do so again. It hit an Iranian drone and lost an F-16 fighter. A direct confrontation between Israel and Iran is highly likely. Israel has beefed up its defenses at the Syrian border.
The Trump administration, which has taken a hard line on Iran, strongly supports Israel. It says the US will not allow Iran to entrench itself in Syria so close to Israel’s border. A conflict between Israel and Iran will jeopardize US forces all over the Middle East. Iran’s mobile missiles have a range of 2,000 kilometers (1,200 miles), which puts every American base in the region within their reach, including the ones in Qatar, Kuwait, the UAE, and the US Fifth Fleet based in Bahrain. A strike range like that is enough to make the US outposts in Syria and Afghanistan vulnerable as well. Israel is also within the missiles’ reach. Iran’s ballistic missiles are not covered by the 2015 “nuclear deal,” but nonetheless the US has slapped sanctions against Tehran because of its missile program.
…click on the above link to read the rest of the article…
