News for progressives

Warren Slams Wall Street ‘Vampires’ in New Economic Plan

Truthdig - Fri, 2019-07-19 04:23

In the runup to the 2020 Democratic presidential primary, Massachusetts Sen. Elizabeth Warren has released her vision for tackling college debt, reducing the cost of child care and reforming immigration, but her latest plan involves the issue that first brought her to national prominence: Wall Street.

In a post published Thursday on Medium, Warren calls for the reinstatement of the Glass-Steagall Act, a Depression-era law separating commercial banks from their investment divisions, thereby preventing banks from using consumer deposits for risky investments.

The law was partially repealed in 1999, which, as a 2015 NPR analysis explained, “opened the floodgates for giant mergers” and allowed commercial banks to engage in such previously banned activities as investments and insurance.

Warren calls her latest proposal part of her “economic patriotism agenda,” which, in addition to reinstating Glass-Steagall, includes plans for postal banking and reining in executive compensation by tying pay to companies’ performance, and new rules for private equity firms, which make money by buying failing companies, restructuring (often by cutting budgets and laying off workers), and then reselling the companies for a profit.

“Sometimes the companies do well,” Warren notes. “But far too often, the private equity firms are like vampires—bleeding the company dry and walking away enriched even as the company succumbs.”

CNN called Warren’s new proposal “red meat for the Democratic Party’s liberal base, which has zeroed in on Wall Street speculation as a root cause of growing economic inequality.”

But Drew Maloney, president and CEO of the American Investment Council, a group representing the private equity industry, sees the proposal as harmful. “Extreme political plans only hurt workers, investment, and our economy,” he told CNN, adding that “[p]rivate equity is an engine for American growth and innovation—especially in Senator Warren’s home state of Massachusetts.”

Warren has long championed constraining Wall Street. “In the lead-up to the 2008 crisis,” even before she was a senator, she writes, “I rang the alarm bell as I saw the same tricks and traps emerging in mortgages.”

She continues: “And after I proposed a new federal agency to protect consumers—and President Obama signed that agency into law in 2010—I spent nearly a year setting up the new Consumer Financial Protection Bureau and helping write new rules to crack down on financial scams.”

During the last Democratic presidential primary, Warren pushed candidates to include a repeal of Glass-Steagall in their policy platforms. As CNN reported at the time, in a 2015 email, she warned supporters, “Wall Street spent decades—and millions of dollars—to repeal the original Glass-Steagall Act, and you can bet they’ll do whatever it takes to keep it from being reinstated. … We need grassroots support from all across the country if we’re going to fight back to make our financial institutions smaller and safer.”

Read Warren’s latest proposal here.

Chicago's Lightfoot Demands State-Taxpayer Bailout, Then Offers CTU A 5-year Contract, 14% Raise

Zerohedge (BFFBT) - Fri, 2019-07-19 04:05

Authored by Ted Dabrowski and John Klingner via,

You have to wonder whether Chicago Mayor Lori Lightfoot really thought she could get away with it. 

Just three weeks ago, she was demanding a state taxpayer bailout of her city’s nearly bankrupt pension funds. The problem was so big, she said, she’d risk her “re-election” over it. Eventually, Gov. J.B. Pritzker denied her bailout request for obvious reasons – the state is just one notch from a junk rating.

Now news reports confirm that Lightfoot has offered the Chicago Teachers’ Union a five-year contract that will cost taxpayers another $325 million. That includes guaranteed raises of more than 14 percent over the life of the contract. And that, of course, turns into more pension benefits and an even bigger pension hole for CPS.

That’s an expensive gift for a city that Lightfoot claims is in need of a multi-billion dollar bailout.

That about-face should infuriate every downstate Illinoisan. If the bailout had gone through, here’s what all Illinoisans would have been paying for: 

1. Chicago teachers are already highest paid vs. teachers in similar districts.

Chicago teachers are the nation’s highest paid when compared to the largest school districts with traditional salary schedules, according to data from the National Center on Teacher Quality.

For example, a Chicago teacher with a master’s degree receives $80,000 a year after ten years of work. In contrast, an equivalent teacher in New York City makes $70,000 and a Los Angeles teacher makes $60,000.

A big reason for that is due to how fast Chicago teacher salaries grow. The average new teacher with one to four years under her belt starts out with a salary just above $50,000. By the time that teacher reaches 10 to 14 years of service, her salary grows to more than $85,000 annually.

2. The average career Chicago teacher will get $2 million in total pension benefits, far more than ordinary Illinoisans.

High salaries translate into big pension benefits for career teachers. The average CPS teacher who retired in 2018 with 30-34 years of service had a final average salary of nearly $98,000 and a starting pension of over $70,000. Their average retirement age was 61.

That pension will increase automatically by 3 percent each year and by year 25 of retirement, the pension will be double its starting amount. In all, the average retired career Chicago teacher will collect over $2.1 million in benefits over the course of her retirement.

In contrast, an ordinary Illinoisan at retirement would need to have around $1.5 million in his or her account at retirement to collect the same amount of benefits as a career Chicago teacher. Most Illinoisans will never save that amount of money.

3. Taxpayers still “pick up” a majority of Chicago teacher pension contributions.

Not only do Chicago teachers receive millions in pension benefits, they contribute almost nothing towards them over the course of their careers.

Chicago teachers are supposed to contribute 9 percent of their salary every year towards their pensions. But every year since 1981, CPS has paid for, or “picked up” 7 of that 9 percent.

That means Chicago teachers only have to pay 2 percent of their salary towards their own pensions every year. That costs Chicagoans over $100 million a year.

Rahm tried to reform pickups in 2016, but he was rebuffed by the union. Only new workers lost the pickup. And even then, the district gave out extra 3.5 percent raises in exchange.

4. CPS is losing students but spending more on them than ever before.

One of the CTU’s contract demands calls on CPS to spend money to hire more teachers and even more support staff. That might make sense in a dynamic, rapidly growing city with a growing school population.

But CPS is losing students and has been for nearly 20 years. At the same time, the district’s spending per student has jumped.

In all, CPS’ per student spending has doubled since 2000 according to ISBE, even as the district’s enrollment has fallen by nearly 75,000 students, or 17 percent, over the same time period.

5. Near empty, failing schools should be closed and their resources redirected.

Declining enrollment is hitting some Chicago schools particularly hard.

In 2017, the Chicago Tribune examined the demographics of some of the most underpopulated schools in Chicago. It found the enrollment of the 17 worst schools has dropped from nearly 20,000 in 2008 to just over 4,600 today. Their buildings are, on average, filled to just 20 percent capacity. 

And the few students that do attend aren’t getting a good education. In those schools, no more than 8 percent of students are ready for college. Despite that, the CPS hasn’t closed the nearly-empty, failing schools. 

*  *  *

Lightfoot has landed some great punches when taking on corruption in City Hall, but when it comes to finances, she’s acting just like any other Chicago politician.

She said she’d “risk her political career” to tackle pensions. Making downstate taxpayers foot the city’s pension bills is hardly a “risk.”

Piracy or War?

New Eastern Outlook - Fri, 2019-07-19 03:59

Article 22 of the Convention On The High Seas of 1958, states:

‘1. Except where acts of interference derive from powers conferred by treaty, a warship which encounters a foreign merchant ship on the high seas is not justified in boarding her unless there is reasonable ground for suspecting:

  1. (a)  That the ship is engaged in piracy; or

  2. (b)  That the ship is engaged in the slave trade; or

  3. (c)  That though flying a foreign flag or refusing to show its flag, the ship is, in reality, of the same nationality as the warship.’

It goes on to state that the naval vessels of one nation can stop the ship of a foreign nation if that ship has violated any laws or regulations of the nation to which the naval vessel belongs if it is found in that nation’s territorial waters.

It is clear that in the case of the boarding and detention of the Iranian oil tanker Grace 1, registered in Panama, as many ships are, off the Spanish coast, near Gibraltar, that Britain had no legal right to order its marines to board the Iranian ship which was either in international waters as the Iranians claim or in Spanish waters near Gibraltar. It is in flagrant violation of the Convention on the High seas to which it is a party and which therefore is also a part of the domestic law of the United Kingdom.

The pretext offered by the British for this act of war against Iran, and Syria if their claim is to be believed that the oil was being delivered to Syria, in violation of a claimed European Union embargo against Syria, is manifestly bogus since the European Union has no legal right to impose “sanctions” or any type of embargo, or naval blockade against Syria or any other nation. That right remains in the sole jurisdiction of the United Nations Security Council which has not authorized any such blockade. The EU edicts against Syria are therefore illegal and in international law do not exist.

The EU itself claims to justify its illegal oil embargo of Syria on Security Council Resolution 2254, and the 2012 Geneva Communique, both of which have the objective of seeking a peaceful political solution in Syria and do not give any EU states individually or the EU as a whole, the right to impose sanctions or any other type of warfare on Syria nor the right to enforce them against other nations such as Iran. Therefore, the British had no justification whatsoever for their actions.

The question then becomes was this an act of piracy or an act of war and the answer is, act of war, for it is not considered piracy under the Convention if a naval vessel of one nation boards and seizes the ship of another nation. Piracy exists where the boarding is for private purposes by private individuals acting in their own interest.

Article 15 of the Convention states,

(1) Any illegal acts of violence, detention or any act of depredation, committed for private ends by the crew or the passengers of a private ship or a private aircraft, and directed:

(a) On the high seas, against another ship or aircraft, or against persons or property on board such ship or aircraft;

(b) Against a ship, aircraft, persons or property in a place outside the jurisdiction of any State;

So the British action cannot be called “piracy” in a legal sense, though the term does fit the sense of what they have done and the Iranians like to use the term in their protestations against the British action. It is instead an act of war against Iran by Britain and in reality by the United States of America since it was admitted by the Brtish government that the seizure was conducted on orders from Washington as the Iranian foreign minister, Mr. Zarif, stated on July 17th

“The UK by confiscating our ship is helping the US in imposing its illegal oil sanctions against Iran.”

Christopher Black is an international criminal lawyer based in Toronto. He is known for a number of high-profile war crimes cases and recently published his novel “Beneath the Clouds. He writes essays on international law, politics and world events, especially for the online magazine “New Eastern Outlook.”

The Precog Fed: Vice Chair Clarida Says Fed Shouldn't Wait For Economy To Turn Down To Cut Rates

Zerohedge (BFFBT) - Fri, 2019-07-19 03:47

There was something bizarre in yesterday's latest Beige Book: it painted an unexpectedly strong picture of the economy. Here, again, are the key points we pulled from the summary of various regional Feds' takes on the current state of the US economy:

  • In most Districts, sales of retail goods increased slightly overall,
  • Activity in the nonfinancial services sector rose further
  • Tourism activity was broadly solid, with Atlanta and Richmond recording robust growth in this sector,
  • Some Districts continued to report healthy expansion in the transportation sector.
  • Home sales picked up somewhat, but residential construction activity was flat.
  • Nonresidential construction activity increased or remained strong in most re-porting Districts, and commercial rents rose
  • A modest pickup in manufacturing activity since the last reporting period was observed in a few Districts
  • Increased demand for loans was broad-based, with all but two Districts noting some growth in financing activity
  • Employment grew at a modest pace, as labor markets remained tight; contacts across the country experiencing difficulties filling open positions.
    • The reports noted continued worker shortages across most sectors, especially in construction, information technology, and health care.
  • Compensation grew at a modest-to-moderate pace, similar to the last reporting period, although some contacts emphasized significant increases in entry-level wages.
  • Rate of price inflation was stable to down slightly from the prior reporting period. Districts generally saw some increases in input costs, stemming from higher tariffs and rising labor costs.
  • Reduced supply boosted prices for some agricultural goods; some Districts noted increased upward transportation pricing pressures, while others highlighted price declines due to reduced demand for shipping services.

But why good news bizarre? Because as NY Fed president John Williams made clear today, not only is the Fed cutting in July, but the Fed will likely continue cutting until we get back to ZIRP again:

"First, take swift action when faced with adverse economic conditions. Second, keep interest rates lower for longer. And third, adapt monetary policy strategies to succeed in the context of low r-star and the ZLB."

Williams' comment resulted in market odds for two rate cuts in July surging from the low 20s to 65%!

But the big surprise isn't what Williams said - after all he is a well-known dove. What we found even more interesting is what Fed Vice Chair and former Pimco employee, Richard Clarida - once known as a centrist - said during a Fox Business interview.

Indeed, Clarida shocked markets when he buried the Fed's "data dependent" protocol, by saying that the Fed should not respond to data, but to what the Fed believes the data will be (ignoring for a minute that the Fed's track record at predicting the future is far worse than even that of Wall Street). When asked to define his take on the economy and what optimal monetary policy should be, Clarida said that the U.S. economy is in a good place but uncertainties about the outlook have increased, and “under ideal monetary policy you adjust policy to keep the economy on an even keel.”

In other words, "You don’t want to wait" for the economy to turn down, Clarida said, adding that "when interest rates are close to zero, it's important to act preemptively, shocking traders because his framing immediately brought up the thought experiment of what should happen if there is a recession, or depression, in 10, 20, 50, or even 100 years from now. Well, according to Clarida, it is now the Fed's job to not only be data-dependent, but pre-data dependent, and even though the economy is firing on all cylinders now, the fact that at some arbitrary point in the future the economy may contract and a recession ensue, is now a sufficient reason for the Fed to cut rates as much as it wants at any given moment.

Richard Clarida

And in his latest attempt to cover for the upcoming rate cut, Clarida said that while recent U.S. indicators have been mixed - actually they have been quite strong - but just because "global data has been disappointing” and inflation has been coming in on the “soft side", the Fed has room to act.

To summarize: the US central bank is now not only the world's central bank, but like Tom Cruise, it has the liberty to act and do anything it sees appropriate to prevent some event from killing the US economy.

And just like that not only ZIRP, but also NIRP and stock market QE is virtually assured. Because since some time, in the distant future, a depression awaits, so the Fed has full liberty to act now and prevent it, clearly oblivious that by intervening preemptively, the Fed is assuring that the buildup of imbalances will be staggering and the next depression will be unlike anything the world has ever seen.

The Three 'D's Of Doom: Debt, Default, Depression

Zerohedge (BFFBT) - Fri, 2019-07-19 03:25

Authored by Charles Hugh Smith via OfTwoMinds blog,

"Borrowing our way out of debt" generates the three Ds of Doom: debt leads to default which ushers in Depression.

Let's start by defining Economic Depression: a Depression is a Recession that isn't fixed by conventional fiscal and monetary stimulus. In other words, when a recession drags on despite massive fiscal and monetary stimulus being thrown into the economy, then the stimulus-resistant stagnation is called a Depression.

Here's why we're heading into a Depression: debt exhaustion. As the charts below illustrate, the U.S. (and global) economy has only "grown" in the 21st century by expanding debt roughly four times faster than GDP or earned income.

Costs for big-ticket essentials such as housing, healthcare and government services are soaring while wages stagnate or decline in purchasing power.What's purchasing power? Rather than get caught in the endless thicket of defining inflation, ask yourself this: how much of X does one hour of labor buy now compared to 20 years ago? For example, how much healthcare does an hour of labor buy now? How many days of rent does an hour of labor buy now compared to 1999? How many hours of labor are required to pay a parking ticket now compared to 1999?

Our earnings are buying less of every big-ticket expense that's essential, and we've covered the gigantic hole in our budget with debt. The only way the status quo could continue conjuring an illusion of "prosperity" is by borrowing fantastic sums of money, all to be paid with future earnings and taxes.

At some point, the borrower is unable to borrow more. Even at 0.1% rate of interest, borrowers can't borrow more because they can't even manage the principal payment, never mind the interest. That's debt exhaustion: borrowers can't borrow more without ramping up the risk of default.

When wages are stagnant and big-ticket items are soaring in cost, that leaves less available to service more debt. We can cover expenses by borrowing more for a while, but there's an endgame to this trick: even at zero interest, servicing the debt exceeds income.

Marginal borrowers default, and the resulting losses collapse marginal lenders.Recall that every debt is somebody else's asset and income stream. When a student defaults on a student loan, that erases the asset and income stream of a mutual fund, pension fund, etc.

In other words, defaults are not cost free. They wipe out assets and income streams, never to return.

For the past 20 years, the trick to escaping recessions has been to lower interest rates and flood the financial system with new credit. If everyone would just borrow more and spend every cent of the new money, the economy will start "growing" again.

But we've reached the point where most wage earners can't borrow more, corporations shouldn't borrow more and the top tier of earners no longer want to borrow more. Governments can always borrow more, but eventually servicing the ballooning debt starts crowding out other spending, and the solution--borrowing more to cover the interest payments--spirals out of control.

Lowering interest rates and giving banks and financiers "free money" doesn't increase wages or household incomes or corporate profits. Nor do these monetary tricks magically turn marginal borrowers into creditworthy risks.

Borrowing more to fill the hole left by declining purchasing power only works in the short-term. We've burned the 20 years that this trickery can work, and now we face the endgame: borrowing more only increases defaults, which trigger losses in wealth and income that will be measured in the trillions.

Take a look at systemwide debt in the U.S. Does this look remotely sustainable? If the answer is yes, you might want to dial back your Ibogaine consumption.

Here's student loans. One trillion here and one trillion there, and pretty soon you're talking about entire generations of debt-serfs and a bunch of pension funds that are going to suffer catastrophic losses when the student borrowers default.

Meanwhile, labor's share of the economy (wages and salaries) has been in structural decline the entire 21st century. Lowering interest rates to zero doesn't mean it's free to borrow more; the principal payments loom large in every student loan, auto loan, mortgage, etc.

There's less--a lot less--available to fund more borrowing after those stagnating wages pay for rent or a mortgage/property taxes, healthcare, childcare, student loans, etc. This chart depicts healthcare costs, but rent, childcare, higher education, etc. all mirror similar increases.

"Borrowing our way out of debt" generates the three Ds of Doom: debt leads to default which ushers in Depression.

*  *  *

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Fed Hints At Rapid Return To ZIRP, Sends Everything Soaring As Dollar Plunges

Zerohedge (BFFBT) - Fri, 2019-07-19 03:01

NYFed Williams basically implied ZIRP is coming back and soon and that sent the market's expectations for July rate cuts soaring (50bps now at 65%!)...

2019 rate-change expectations now back above 50bps...

Piling on, Fed's Clarida added that research suggests acting preemptively when rates are low.

Gold, Bonds, & Stocks soared as the dollar dumped...

Seriously!! At record high stock prices!!!!

And all of that silliness sent stocks soaring... The Dow scrambled back to unchanged at the bell


With Nasdaq ripping back from its Netlfix-ing (even if NFLX didn't budge - NFLX lost "A Deutsche Bank" in market cap today)...


S&P 500 desperately pushed higher to try and regain 3,000...


Trannies were tempestuous this week but remain entirely decoupled from global growth...


FANG Stocks (thanks to NFLX) reversed as expected at serious resistance...


IG and HY credit have notably decoupled...


Stocks and bonds remain drastically decoupled...


Treasury yields tumbled after Fed's Williams comments..

10Y Yield is heading back towards 2.0%...


The (3m10Y) yield curve was steepening intraday (heading back towards 0) until Williams spoke...


Debt Ceiling Anxiety is building fast in the Bills curve...


The Dollar collapsed after Fed's Williams ZIRP comments...


Yuan spiked...


USDJPY plunged to near 1-month lows, decoupling from stocks...


After more ugliness overnight, Cryptos surged today...


With Bitcoin blasting back above $10k...


Silver extended its huge week as crude crashed...


Gold surged on Williams comments...


Silver spiked over 2%...


Silver continues to outperform gold (off 26 year lows relative to the yellow metal)...


WTI continued its rapid decline, accelerating further on Iran nuclear deal headlines...


HY Energy credit has widened dramatically...


Oil's slide has been largely ignored by stocks...


Finally, what do you want to hold here? Stocks or Silver?


And as far as the ridiculous spike in Philly Fed (the biggest jump in a decade), Gluskin-Sheff's David Rosenberg clarifies:

Philly Fed should get its story straight. The index soared but Beige Book said "manufacturers reported slight growth in activity - a slower pace than in the prior period" and "...expectations of activity over the next six months changed little and remained subdued."

— David Rosenberg (@EconguyRosie) July 18, 2019

Trade accordingly...

And before we leave, is noone else somewhat worried about what exactly it is that The Fed is panicking about that prompts them to jawbone the odds of a 50bps rate cut this aggressively with stocks at record highs?

Trump rally chants show the link between racist tweets and the march towards fascism

Canary, The Other - Fri, 2019-07-19 02:56

On 14 July, Donald Trump sent out a series of menacing tweets telling progressive Democratic congress members to “go back” to their home countries. His targets – Alexandria Ocasio-Cortez, Ilhan Omar, Rashida Tlaib and Ayanna Pressley – are all US citizens. Only Omar was not born in the US.

The tweets added yet another thread to the rich tapestry of Trump’s fascist credentials. And he has not only refused to retract or apologize for them, but has been adding further fuel to the flames. At his latest rally, for example, he defiantly doubled down, issuing a further set of attacks and insults toward the four congress members – and Omar in particular. But it was the reaction of the crowd that was perhaps most worrying.

“Send her back!”

On 17 July, Trump held a campaign rally for his 2020 reelection bid in North Carolina. His typically rambling and disjointed speech soon turned to the controversy over the tweets. He claimed that Omar had “smeared US service members,” “minimized the September 11th attacks,” “pleaded for compassion for Isis [Daesh] recruits,” and had a “history of launching vicious anti-Semitic screeds”.

His comments were nothing new. He has frequently invoked this kind of knuckle-dragging nationalism to rally his base. But as he continued, the crowd started to chant “send her back”. Trump did nothing to discourage the chants. Instead, he allowed extended pauses to let the crowd continue.

Speaking on 18 July about the chanting, Trump argued: “I was not happy with it. I disagree with it. But again, I didn’t say that. They did.”

“If you’re chanting this, you’re a racist.”

Unsurprisingly, Twitter users responded firmly to the controversy:

This is racist. If you’re chanting this, you’re a racist. If you’re a journalist asking white people if this is racist—you’re an idiot.

— Soledad O'Brien (@soledadobrien) July 18, 2019

REPORTER: Why didn't you ask your fans to stop chanting "send her back"?

TRUMP: "Number one, I think I did. I started speaking very quickly."

(This is brazen gaslighting & damage control. Trump basked in the chants & took his time resuming his speech.)

— Aaron Rupar (@atrupar) July 18, 2019

This is fascism, it is waging war on minorities and the left, it is on the rise across the Western world, and it must be fought and defeated.

— Owen Jones

The "Final False Dawn" Looms

Zerohedge (BFFBT) - Fri, 2019-07-19 02:50

Authored by Jeffrey Snider via Alhambra Investment Partners,

Not A Paradox Nor A Conundrum: TICked at Powell

It seems a paradox, at least like it is backwards. The financial media doesn’t help because good editorial standards rely upon the opinions and beliefs of credentialed people who have no idea what they are talking about. If you hold high office in some central bank, we are to assume you are competent about monetary issues.

It’s all given a gloss of geopolitics, too, which isn’t helpful. The dollar destruction people are also onboard with how interest rates have nowhere to go but up. If the dollar is to be globally rebuked, so must UST’s given how there’s so much deficit to be financed. Who’s left to do it without foreign assistance?

What I am talking about is “selling UST’s.” It seems just that straightforward. Why else would foreigners be dumping US assets? They hate America, probably hate Trump, and like the Chinese are keen to create a new world order that isn’t politically SWIFT-centric.

And if these overseas haters aren’t going to buy US assets any longer, how in the world can the government auction its debt for anything beyond huge discounts to where it is priced now? The bond market must plunge.

Anyway, that’s what you’ll hear and read each and every time the TIC data comes out. Foreigners are ditching the dollar with every UST coupon they dispose of.

And yet, the dollar remains as unchallenged as ever (it seems like people were making a big deal out of petroyuan, for example, but that was ages ago, just like bilateral CNY swaps even further back in history) and paradoxically whenever foreign officials are dumping their Treasuries, yields on them go down.

It’s not a paradox at all, of course, it is merely another conundrum for the Alan Greenspan’s of the world. These people who hold high office predicated not on banking and monetary competence but which Ivy League Economics degree they hold; repeating only the things passed to them in academic theory no matter how much contrary practice they come up against.

As a statistician, the true nature and basis of their schooling, they can become the successful general manager of a Major League Baseball team but are utterly lost in economy, markets, and most of all money.

In April last year, the benchmark 10-year UST yield had moved to as a high as 3.03% which was the highest in years. In that same month, foreign governments and central banks began discarding their US federal government debt. Both of those things were characterized as evidence for the utterly ridiculous inflation hysteria.

Over the fourteen months since, including April 2018 and concluding with the latest TIC data for May 2019, official selling has totaled an astounding $314.5 billion.

Almost a third of a trillion has been dumped. And yet, it was just two weeks ago that UST 10s yields had dipped below 2%. They are closer again to all-time lows than they are to last year’s highs, let alone rates much higher.

It is, it can only be, a fundamental misunderstanding of how things really work. This isn’t actually a surprise; if you’ve followed Economics and especially its takeover of central banking you know what really happened.

Long ago, central banks found out they could no longer define (forget measure) money. Realizing the difficultly of the task, they just stopped trying. In place of technical capabilities, it was assumed that none were needed; that managing people’s expectations by moving the federal funds target rate around a quarter point here or there would suffice.

The assumption seemed to be a valid one, made so upon “evidence” of the Great “Moderation.”

Our big problem in 2019 is in how nobody grasped the operational implications of 2008. It disproved the assumption. That’s really all the Global Financial Crisis had been; proof that interest rate targeting and expectations management amounted to nothing more than an untested puppet show. About as effective, too. When the world needed some real monetary intervention, Ben Bernanke and crew had no idea what to do.

The only real difference between interest rate targeting and QE is how the latter is a tested puppet show.

The big parts of that monetary evolution were both its strangeness (Greenspan’s “proliferation of products”) and its location. Offshore. Offshore. Offshore. Shadow money, and, as many are now learning, shadow shadow money.

But how does any current central banker like Jay Powell stand up in front of the public and admit to what can only be described as decades of monetary dereliction? It might first start with an otherwise nondescript blog post written out of the Fed’s New York branch, followed up by what might seem to be in orthodox terms a peculiar speech in Paris this week (thanks M. Simmons).

The global nature of the financial crisis and the channels through which it spread sharply highlight the interconnectedness of our economic, financial, and policy environments.

Chairman Powell, giving this speech, then added that this posed challenges for domestic monetary policy (you think?), something which “requires that we understand the anticipated effects of these interconnections and incorporate them into our policy decisionmaking.”

In 2015, Janet Yellen’s Fed had dismissed “overseas turmoil” during Euro$ #3. It seems as if Jay Powell doesn’t have the same luxury, not with a potentially more disruptive Euro$ #4 and rate cuts staring him in the face just a few weeks from now.

It’s not even close to admitting eurodollars as being the real global reserve, and therefore the malfunction in that system which explains both “selling UST’s” (global dollar shortage) as well as the concurrent contradictory behavior of their yields (flight to safety, meaning liquidity hoarding). This isn’t even much of a first step (Powell is blaming differences in monetary policies for contributing to overseas turmoil).

It is the bare minimum: official recognition that the story you’ve been told for decades isn’t so simple and straightforward as you’ve been told. There’s stuff going on out there in the rest of the world that actually does matter. What I wrote last week applies here:

New York central bankers finally come out and admit offshore dollars are important, that they must play some fuzzy role in things, but don’t yet grasp just how important. 

Jay Powell isn’t going to admit tomorrow to how the Fed was really a bystander to the Great “Moderation” and that its top Economists were just too eager to take the credit for what was a historical accident.

Don’t get too excited, however. Janet Yellen in 2016, not surprisingly, finally began expressing doubts, too, before then embracing globally synchronized growth in 2017.

As I’ve written before, it’s not these eurodollar squeezes that are the worst. It is the reflations in between. Just when reluctant central bankers finally open their eyes just a little, like that, the urgency disappears and the recovery fantasy begins anew. The worst thing is how it repeats over and over, the only constant these false dawns each and every time.

The end result? The mainstream still believes interest rates have nowhere to go but up, even when they fall, and that selling UST’s is an act of geopolitical defiance rather than the sustained monetary incompetence which, when truly discovered, will actually point the world in the direction of actual rather than imagined recovery. The final false dawn. 

"Please Don't Call At This Time": Bond Investors Stunned After First Trade War Casualty Plunges 66% In Days

Zerohedge (BFFBT) - Fri, 2019-07-19 02:35

Over a year in, the trade war between the US and China has claimed its first corporate casualty: a large Indonesian textile maker which missed a dollar loan payment last week is putting a fresh spotlight on how the stress from the geopolitical conflict is roiling global credit markets.

On Monday, S&P slashed its rating of dollar bonds sold by a subsidiary of Indonesia's Duniatex Group (also known as Delta Merlin Dunia Textile) by six notches to CCC-, citing "significant liquidity challenges" after another group company missed a payment on a syndicated dollar loan that had matured on July 10.

The ongoing U.S.-China trade tensions are “significantly hurting” the Indonesian textile market, and Duniatex’s liquidity was affected by plummeting prices due to the oversupply of imported cheap fabric from China, S&P also said. The ratings agency pointed to ripple effects from the U.S.-China trade war in part for Duniatex’s worsened liquidity.

“The ongoing U.S.-China trade tensions are significantly hurting the Indonesian textile market," S&P explained in the note. “Following the U.S.-imposed tariffs of 25% on Chinese imports, Chinese producers have started redirecting their products to more hospitable destinations, including Indonesia, from May onwards."

While the Duniatex sub should be able to make a bond payment on a $300 million note it priced just 4 months ago back on March 5, bond investors aren’t so sure, and the note have plunged to a low as 34 cents on the dollar, after trading above par just this past Friday. If the company defaults in the coming months, this could be the first new bond issuance since Blockbuster that has defaulted before even paying a single coupon.

The stunning fall in Duniatex bonds has shocked bond investors, many of whom have scrambled to allocate money to emerging markets - such as Indonesia.

The Indonesian firm’s implosion also highlights the risks faced by investors as they buy into the region’s junk bond market, which has returned 11% so far this year, the most in three years. Recent bond defaults out of China have raised concerns about the quality of financial reports. One defaulter, Chinese firm Kangde Xin Composite Material, was found to have faked billions of yuan in profit.

Yet while US corporations can easily issue new debt and loans at ridiculously, some emerging market corporations are finding themsleve locked out; as a result more stress is emerging in Indonesia. Fitch Ratings on Wednesday cut its credit score on notes sold by Agung Podomoro Land’s subsidiary, citing delays in raising funds for refinancing. The company’s $300 million 2024 bond fell 11 cents on the dollar to 70.2 on Thursday, according to data compiled by Bloomberg.

“This event reminds us of potential problems outside of China as well, with a lack of disclosure for private companies,” said Raymond Chia, head of credit research for Asia excluding Japan at Schroder Investment Management Ltd.

Meanwhile, Bloomberg highlights that the communication between Delta Merlin Dunia Tekstil and investors also highlights the difficulties bond buyers can face when things go sour.

There have been concerns about disclosure in recent defaults of unlisted companies including dollar bonds sold by CEFC Shanghai International Group and Reward Science and Technology Industry Group. Neither Duniatex nor its subsidiary that sold the bond or the loan are listed.

An email sent from a Duniatex executive to an investor that was seen by Bloomberg News, said “We will try to ring fenced DMDT as the bond issuer” from a missed payment on a loan.

We will update later, please dont call or email at this time, as my Inbox flooded with emails,” the email also said.

So with the issuer refusing to speak to anyone, attention turns to the underwriters: BNP Paribas and Standard Chartered arranged the bond sold in March. A spokeswoman for Standard Chartered declined to comment, while a spokesman for BNP Paribas also declined to comment when Bloomberg asked them how they could underwrite a bond that is set to default without having made a single payment.

Railroad CEO: This Economy Is The “Most Puzzling” In My 40-Year Career

Activist Post - Fri, 2019-07-19 02:14

By Mac Slavo

Railroad CEO James Foote says that the behavior of this economy is the “most puzzling” he’s seen in his 40-year career in the railroad industry. “The present economic backdrop is one of the most puzzling I have experienced in my career,” Foote told Wall Street analysts on a conference call Tuesday evening.

“Both global and U.S. economic conditions had been unusual this year, to say the least, and have impacted our volumes. You see it every week in our reported carloads,” the CSX CEO said according to Yahoo.We are seeing a range of conflicting data points and economic indicators and regularly speak with customers who despite the recent downtime — slowdown, remain cautiously optimistic about the second half.” Foote blamed the trade war for the crushing economic data. And he’s not far off, as industrial customers are a group caught smack in the middle of the trade war – much like farmers.

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CSX shares tanked 11% on Wednesday as second-quarter earnings came in 2 cents short of analyst forecasts. Sales dropped 1% to $3.06 billion, roughly in line with projections. “Although it shouldn’t have come as a shock that CSX lowered its FY19 revenue guide (the weekly industry volume data has been telegraphing macro weakness for some time), investors balked at the shortfall in yields relative to expectations. And while negative mix did have an impact, CSX also saw a sequential deceleration in core pricing in some parts of its book,” railroad analyst Allison Landry wrote in a note to clients.

“We expect solid cost side execution from CSX but weaker markets are a meaningful headwind to both EPS performance and the stock,” Landry said.

In case you need a point of reference: U.S. GDP is generally viewed to have grown by 2% in the second quarter. Judging by CSX’s results, that’s not a real number. –Yahoo

The economy has been acting odd for over a year now.  The Federal Reserve will likely cut interest rates during an economic expansion, and the United States government is running historically high deficits while unemployment is at low levels. There is something else going on below the surface we aren’t being told about, and yet we’re just expected to believe the mainstream media when they say things are going great.

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Why I’m Glad About Trump’s Latest Twitter Tirade

Truthdig - Fri, 2019-07-19 01:53

People of color in the U.S. have experienced many variations of the “go back to where you came from” sentiment. In the wake of President Donald Trump’s racist Twitter tirade aimed at “the Squad” of four recently elected women of color in Congress, the Los Angeles Times asked its readers to share their own stories. The anecdotes were painful to read and yet all too familiar to me. Social media threads are filled with similar stories, and, like the outpouring of shocking personal stories that marked the #MeToo movement, white Americans are hearing for perhaps the first time how widespread and deeply ingrained racism is in American culture and how much people of color have endured.

I remember my first experience on the receiving end of this type of hate. It was just a few days after the Sept. 11 attacks. While I was driving on the streets of Los Angeles, a man with a large American flag flying from his car screamed out of his window at me to “go back to my country.” I was shaken, but I was not surprised.

It was certainly not my last time being told to leave the U.S. It is an age-old American insult, a perfect encapsulation of xenophobic ideals about who belongs in this country and who doesn’t. It matters little if the targets of such attacks are natural born citizens, naturalized citizens, legal residents, undocumented immigrants or visitors to the U.S. All that matters is that they represent an “impurity” in the perceived whiteness of America. They need only be nonwhite, have an accent, speak a different language, have a foreign-sounding name or simply issue a criticism about the way things are.

On the one hand, Trump’s latest example of racism has done deep damage and likely traumatized his direct victims, Congresswomen Alexandria Ocasio-Cortez, Ilhan Omar, Ayanna Pressley and Rashida Tlaib. On the other hand, it has created an opportunity to do away with any lingering doubts about where he stands. Media outlets like The Associated Press have called out his racism using plain language and without resorting to euphemisms. “Trump digs in on racist tweets: ‘Many people agree with me,'” reads one headline, a refreshingly direct statement that did not use quotation marks around the word “racist,” or rely on phrases like “racially charged.”

In fact, the AP Stylebook announced a critical change earlier this year, advising journalists to call something racist if it appears so. Although some media outlets are chiding Democrats for falling for the president’s distraction, Trump’s words are actually a misstep on his part, as they have helped clarify claims of his racism in no uncertain terms. It is not a distraction—it is a direct symptom of his presidency. One can argue that it is better for a racist to show his or her true colors than to strongly hint at bigotry and thus preserve plausible deniability.

Trump’s words have also had the effect of uniting a Democratic Party that just last week appeared fractured along racial and political lines. House Speaker Nancy Pelosi had openly criticized the Squad in a New York Times interview and was met with swift pushback from Ocasio-Cortez, who accused her of being “outright disrespectful” to the women of color.

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When Trump sided with Pelosi against the Squad, hoping to exploit the division to his advantage, the House speaker may have realized she needed to get on the right side of this battle and moved swiftly to condemn Trump. She rightly sided with her party members in a strongly worded message on Twitter saying Trump’s “plan to ‘Make America Great Again’ has always been about making America white again.”

Trump literally proved the Squad’s point and made clear that outspoken women of color in Congress were problematic to the white wealthy establishment, forcing Pelosi to adjust her liberal views to step in line and back her colleagues. The liberal leader who earlier this year condemned Representative Omar’s remarks in a resolution about anti-Semitism, was given the chance to prove to the Squad that she is on the side of congress members of color.

Even better, the president is now in the official record as being condemned as a racist by a leading lawmaker. In speaking to her resolution aimed at the president, Pelosi said on the floor of the House: “Every member of this institution, Democratic and Republican, should join us to condemn the president’s racist tweets.” Her use of the word “racist” to describe the president triggered a debate about long-standing rules based on colonial traditions to not insult the head of state—as if Trump has adhered to any reasonable standards of decorum in his relentless insults aimed at the country and its people. In the end, Pelosi’s words prevailed and went on record with the passage of the resolution.

What we can count on from a president like Trump is that when he makes an outrageous statement, he rarely, if ever, backtracks. His go-to tactic has been to double down on his extremism, because in Trump’s world, apologizing is a sign of weakness. And so he stepped even deeper into the morass of his own making by reiterating the sentiments of his offensive tweets in public a day after firing them off, saying, “If you are not happy here, then you can leave.” He said it not once or twice, but five times in the span of a few sentences.

He then proceeded to go even further in justifying his language, saying, “A lot of people love it by the way. A lot of people love it,” prompting responses from white supremacists who chorused that they did indeed love it. One person posted to the neo-Nazi website Daily Stormer, “This is the kind of WHITE NATIONALISM we elected him for.” Trump waded so deeply into the rhetoric and imagery of white supremacist ideology that he has left no doubt in anyone’s mind.

Trump’s words have also helped draw attention to the culpability of the entire Republican Party. A very small handful of Republicans have mildly chastised him. Sens. Susan Collins of Maine and Lisa Murkowski of Alaska issued criticisms that stopped short of calling Trump a racist, and four House Republicans voted alongside Democrats on Pelosi’s resolution condemning Trump’s racism. But the overwhelming majority of Republicans have not only stood by the president silently but have openly defended him.

House Minority Speaker Kevin McCarthy shamelessly turned the tables on the victims of Trump’s hate and claimed, “Let’s not be false about what is happening here today. This is all about politics and beliefs of ideologies.” He laughably added, “This is about socialism versus freedom,” as if a label of socialism—if that even applied in the cases of the four congresswomen—was a reason to deserve racist targeting. So Trump’s words have clarified not only his own racism but that of his party.

Hours after the House resolution passed, Democratic Congressman Al Green introduced articles of impeachment against Trump in the face of opposition from his party’s leadership. Coming so soon after Democrats passed the resolution sent a strong message that lawmakers’ patience is wearing thin. Even though the measure failed, the fact that 95 Democrats did vote to support it is a good sign.

Just as Pelosi had to make her choice, the Democratic Party as a whole has to decide which side it is on. Pursuing impeachment offers Democrats a clear path to prove their anti-racist credentials. Trump deserves impeachment on a list of issues so long that several books have been written describing his crimes and offenses. But if this incident is what it takes to push Democrats to act, so be it.

Trump’s defenders have got to know and understand that history will not judge this president kindly. He has drawn a very clear line in the sand that invites every American to choose a side. The clarity of his racism is a useful tool to measure where America stands. The closet racists who voted for him in droves in 2016 are more exposed than ever as the villains in this epic fight of good versus evil. While millions of Americans tacitly echo the “go back to where you came from” sentiment toward people of color, millions more boldly respond, saying, “We are here to stay and we will prevail.”

Congress Hammers Big Tech on Competition, Money, Power

Truthdig - Fri, 2019-07-19 01:48

Big Tech faced tough questions this week as federal lawmakers focused on issues of potentially anticompetitive behavior by technology giants and expressed bipartisan skepticism over Facebook’s plan for a new digital currency.

Companies such as Apple, Google, Facebook and Amazon have long enjoyed nearly unbridled growth and a mythic stature as once-scrappy startups — born in garages and a dorm room and a road trip across the United States — that grew up to dominate their rivals. But as they’ve grown more powerful, critics have also grown louder, questioning whether the companies stifle competition and innovation, and if their influence poses a danger to society.

Both Democrats and Republicans had grievances to air, even if there wasn’t much consensus on what to do about them.

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A Tuesday afternoon panel of the House Judiciary Committee focused on whether it’s time for Congress to rein in these companies, which are among the largest on Earth by several measures. Central to that case is whether their business practices run afoul of century-old laws originally designed to combat railroad and oil monopolies.

For some legislators, mostly Democrats, those laws are in need of updates or at least more stringent enforcement. Ultimately such action could lead to breaking up big online platforms, blocking future acquisitions or imposing other limits on their actions.

Subcommittee chairman David Cicilline, a Rhode Island Democrat, charged that technology giants had enjoyed “de facto immunity” thanks to current antitrust doctrine, which typically equates anticompetitive behavior with higher prices for consumers. That allowed them to expand without restraint and to gobble up potential competitors, he argued, creating a “startup kill zone” that prevents smaller companies from challenging incumbents with innovative services and technology.

A panel of four mid-level executives from the companies countered that their firms continue to innovate, that they face vigorous competition on all fronts — including from one another — and, perhaps most of all, that they were not monopolists in any way, shape or form.

Facebook, for instance, has argued that it is not a monopoly because it has many competitors in businesses as diverse as private messaging, photo sharing and online advertising.

So Democratic Rep. Joe Neguse of Colorado asked Facebook’s head of global policy development, Matt Perault, to name the world’s largest social network by active users. (It is Facebook.) When Perault said he couldn’t, Neguse ticked off four of the six largest — Facebook, Facebook Messenger, Instagram and WhatsApp — and had Perault verify that all are owned by Facebook.

“We have a word for that and that word is monopoly, or at least monopoly power,” Neguse said.

The company representatives didn’t help their case by pleading ignorance on multiple occasions. Google’s director of economic policy, Adam Cohen, said he was “not familiar” with how much Google pays Apple for the right to supply the default search engine for Safari on iPhones. (Rep. Jamie Raskin, a Democrat from Maryland, said It was $9 billion in 2018 and $12 billion in 2019.) Cohen also said he was “not familiar” with allegations of widespread fraudulent listings on Google Maps.

Amazon also faced some pointed questioning. Cicilline asked Nate Sutton, an associate general counsel at the online retailer, whether it uses the data it collects about popular products to direct consumers to Amazon’s own in-house products.

Sutton said the company doesn’t use third-party sellers’ data to “directly compete” with them. Cicilline, affecting disbelief, twice reminded Sutton that he was under oath. “Amazon is a trillion-dollar company that runs an online platform with real-time data,” he said.

Expert witnesses suggested it might be time to reassess antitrust policy. Timothy Wu, a law professor at Columbia University who has advocated for more expansive antitrust enforcement, noted concerns about a fall in the number of startups being formed, and wondered aloud whether the U.S. will remain a place where startups thrive and launch new industries.

Fiona Scott Morton, a Yale economics professor, argued that stifled competition has hampered innovation and hurt both smaller businesses and consumers, who have no choice but to surrender their privacy and watch more advertising.

Others, mostly Republicans, rejected what they described as a big-is-bad approach in favor of keeping antitrust enforcers narrowly focused on protecting consumers when there’s clear evidence of harm such as price gouging.

Attorney Maureen Ohlhausen, a former Republican commissioner and acting chairwoman of the Federal Trade Commission, said the government can still protect against anticompetitive behavior without “reducing the focus on consumer welfare.” She warned against “drastic” steps such as breakups that carry “serious risk of doing more harm than good for competition and consumers.”

Earlier Tuesday, a Facebook executive appeared before a Senate panel to defend the company’s ambitious plan to create a digital currency and pledged to work with regulators to achieve a system that protects the privacy of users’ data. David Marcus, who leads the Libra project, faced sharp criticism from both Democrats and Republicans.

“Facebook is dangerous,” asserted Sen. Sherrod Brown of Ohio, the committee’s senior Democrat. Like a toddler playing with matches, “Facebook has burned down the house over and over,” he told Marcus. “Do you really think people should trust you with their bank accounts and their money?”

Republican Sen. Martha McSally of Arizona said “the core issue here is trust.” Users won’t be able to opt out of providing their personal data when joining the new digital wallet for Libra, McSally said.

Marcus returned to Capitol Hill on Wednesday to face grilling from House lawmakers.


AP Business Writer Marcy Gordon contributed to this article from Washington.

Right-wing Labour MPs use Trump’s racism for their own advantage

Canary, The Other - Fri, 2019-07-19 01:36

Donald Trump and his supporters have sunk even further into vile racism. On 14 July, Trump issued a series of racist tweets. He told four progressive congresswomen of colour to “go back and help fix” their “broken and crime infested” countries.

Since then, his supporters have pushed the racist attacks against congresswoman Ilhan Omar further, chanting “send her back” at a rally. In response, thousands of people have spoken out to support Omar, including some right-wing Labour MPs. Yet in the face of ongoing accusations of antisemitism in Labour and attacks against Jeremy Corbyn, their words of ‘support’ ring hollow. Because if Omar were a Labour MP, those same MPs would probably have opposed her political stances and attacked her for them too.

I Stand With Ilhan Omar

Following the chants at the Trump rally, #IStandWithIlhan trended worldwide on Twitter.

Labour’s Jess Phillips and Wes Streeting criticised Trump, seemingly offering solidarity to Omar:


This is what fascism looks like. We must fight it at home and abroad.

— Jess Phillips (@jessphillips) July 18, 2019

To think our great country rolled out the red carpet to this man. Truly one of Theresa May’s worst judgements.

— Wes Streeting MP (@wesstreeting) July 18, 2019

Margaret Hodge also shared a petition of support for Omar and the other women Trump attacked. But no one was buying her faux solidarity:

I don't think Margaret got the memo:

— Michael Gardner (@MGardner1977) July 17, 2019

Former Labour MP Luciana Berger also chimed in:

This is sickening and dangerous racism.

Don’t think because it’s happening 000s of miles away that it’s not our problem. Or that because we do business with America that we can ignore it. Aspiring/Leaders have a duty and responsibility to call this out.

Don’t be a bystander.

— Luciana Berger (@lucianaberger) July 18, 2019

Omar and Rashida Tlaib are the first ever Muslim women elected to congress. Since her election, Omar has stood firm to challenge the ongoing human-rights abuses in occupied Palestine. Indeed, as Haaretz reported, Tlaib and Omar plan to visit Israel and the West Bank. Yet to do this, they need permission from Israeli prime minister Benjamin Netanyahu. Reportedly, he will “have to decide whether they would be let in” to Israel. This is because of the support they’ve given to the Palestinian-led boycott, divestment and sanctions (BDS) movement. In doing so, and by refusing to pledge allegiance to Israel, Omar has faced vicious smears calling her ‘antisemitic’ (including from Trump).

So it didn’t take long for people to question the ‘support’ from these right-wing Labour politicians. As hip-hop artist Lowkey pointed out, if Omar were a Labour MP, Phillips, Streeting and Hodge (and Berger) would very likely have accused her of antisemitism too:

You spearhead the campaign against actual progressives like Ilhan Omar in your own party. Be honest please, if she was a member of Labour you and your gang would be militating against her in front of the nearest cameras you could find.

— Lowkey (@Lowkey0nline) July 18, 2019

If Omar was a Labour MP…

As journalist Owen Jones noted, as long as charges of antisemitism against the pro-Palestinian left continue from so-called ‘centrists’, those on the right will continue to ‘appropriate’ and weaponise this further:

The left has been systematically demonised by those who style themselves as "moderates" or "centrists" on both sides of the Atlantic. They might not like it being pointed out that, in doing so, they're legitimising far right attacks on the left. It is, nonetheless, still true.

— Owen Jones

Ilhan Omar is charged with invoking ‘myth of dual loyalty’ — but many Jewish writers say it’s no myth

Greanville Post - Fri, 2019-07-19 01:23
PHILIP WEISS—ccusing Jews of “allegiance to a foreign country” is a historically classic way of delegitimizing their participation in the political system….Omar is directly invoking the hoary myth of dual loyalty, in which the Americanness of Jews is inherently suspect, and their political participation must be contingent upon proving their patriotism. But many Jewish writers and thinkers have raised precisely this “hoary myth” very seriously. They have cited “dual loyalty” as a real factor in the Israel-supporting community,

Iran Acknowledges Missing Tanker Was Seized in Persian Gulf

Truthdig - Fri, 2019-07-19 01:21

DUBAI, United Arab Emirates—Iran said Thursday its Revolutionary Guard seized a foreign oil tanker and its crew of 12 for smuggling fuel out of the country, and hours later released video showing the vessel to be a United Arab Emirates-based ship that had vanished in Iranian waters over the weekend.

The announcement solved one mystery — the fate of the missing ship — but raised a host of other questions and heightened worries about the free flow of traffic in the Strait of Hormuz, one of the world’s most critical petroleum shipping routes. One-fifth of global crude exports passes through the strait.

The incident happened with tensions running high between Iran and the United States over President Donald Trump’s decision to pull the U.S. out of the Iran nuclear deal.

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Iranian state television did not at first identify the seized vessel but said it was intercepted on Sunday and was involved in smuggling some 1 million liters (264,000 gallons) of Iranian fuel. Iran did not identify the nationalities of the crew.

Crude prices, which had been falling since last week, ticked higher almost immediately after the announcement.

Iran said the tanker was seized south of its Larak Island in the Strait of Hormuz. Neighboring Qeshm Island has a Revolutionary Guard base on it.

Hours after that initial report, Iranian TV released footage of the ship surrounded by Guard vessels and showed the registration number painted on its bridge, matching that of the UAE-based MT Riah.

The Panamanian-flagged tanker stopped transmitting its location early Sunday near Qeshm Island, according to data on the tracking site Maritime Traffic. However, it often did so over the past two years when nearing Iranian waters, other tracking data shows.

U.S. Central Command, which oversees American military operations in the Middle East, declined to comment.

It was not immediately clear whether the seizure was a straightforward attempt by Iran to curb oil smuggling or also an effort to assert its authority in the strait and send a message to its rivals in the region. The UAE has long lobbied for tougher U.S. policy toward Iran, though more recently it has called for de-escalation.

Iran’s Foreign Minister Mohammad Javad Zarif said that the seized vessel was at best a “small tanker” and that Iranian forces are cracking down on fuel smuggling daily.

“We live in a very dangerous environment. The United States has pushed itself and the rest of the world into probably the brink of an abyss,” he told reporters at the United Nations in New York. Zarif accused the Trump administration of “trying to starve our people” and “deplete our treasury” through sanctions.

Iranian media reported earlier this month that some 8 million liters of government-subsidized Iranian fuel are smuggled daily through Iran’s borders to other countries where prices are much higher.

Analysts at the Israeli-based maritime risk analytics company Windward said that the Riah has been at sea for the past two years and has a pattern of turning off its location transmitters for days at a time, particularly when entering Iranian waters.

The firm said data suggests that for more than two years that the 58-meter (190-foot) Riah had been clandestinely receiving fuel from an unknown source off the UAE coast and delivering it to other tankers, which then take it to Yemen and Somalia.

No distress calls were made from the Riah, and no ship owner reported a missing vessel.

The ship’s registered owner, Dubai-based Prime Tankers LLC, told The Associated Press it had sold the vessel to another company, Mouj Al-Bahar. A man who answered a telephone number registered to the company told the AP it didn’t own any ships.

Officials in the UAE said the ship was neither UAE-owned nor operated and carried no Emirati personnel.

In past weeks, the Persian Gulf region has seen six attacks on oil tankers that the U.S. has blamed on Iran, the downing of a U.S. surveillance drone by Iranian forces and a tense encounter between Iran’s Guard and the British navy. Iran has denied involvement in the attacks or the British naval encounter.

The U.S. has also sent thousands of additional troops and increased its security presence in the region.

Meanwhile, Iran has begun increasing uranium production and enrichment beyond the limits of the 2015 accord in a bid to pressure Europe to find ways around U.S. sanctions.

On Thursday, Iranian President Hassan Rouhani, in a phone conversation with French President Emmanuel Macron, urged European signatories of the deal to speed up their efforts to stop U.S. pressure, his website reported. He said efforts to stop Iran’s nuclear activities “are not acceptable under any circumstance.”


Karimi reported from Tehran, Iran. Associated Press writers Ian Phillips in New York and Jon Gambrell in Dubai contributed to this report.

The 99th Congress ‘Screwed’ Us By Giving Vaccine Makers Legal Exemptions From Product Liability Regarding Vaccines: That Has To Stop NOW

Activist Post - Fri, 2019-07-19 01:20

By Catherine J. Frompovich

Ever since the 99th U.S. Congress caved to Big Pharma—under DURESS—in the 1980s with passage of  the National Childhood Vaccine Injury Act of 1986 (42 U.S.C. §§ 300aa-1 to 300aa-34), the U.S. CDC and FDA have been committing healthcare and medical science FRAUD regarding vaccines as:

No. 1: Safe and Effective

No. 2: ‘Proven NOT to cause diseases, specifically Autism’

No. 3: Absolute ‘legitimate’ consensus science regarding the efficacy of neurotoxic and other poisonous chemicals found in vaccines as listed in the CDC’s Pinkbook of Vaccine Excipients and

No. 4: Quantified in each vaccine package insert in Section 11–DESCRIPTION, and

No. 5: Not evaluated regarding Carcinogenesis, Mutagenesis, Impairment of Infertility found in Section 13—Nonclinical Toxicology

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The above  five FACTS prove a conspiracy based in CDC/FDA propaganda and hype, which the 99th Congress should have realized was a reflection of an inordinate number of lawsuits vaccine makers were facing in the 1980s that would have put them out of business, and Congress should have regarded as a red flag and trouble, but caved! 

How much $$$$$$$ did that cost Big Pharma’s lobbyists?

Was Congress’s “get out of jail free” card an actual buy-out to save Big Pharma, but not protect innocent infants, children and adults, especially parents who, stupidly, believed the BS federal regulatory agencies would submit to none other than the World Health Organization?

WHO is an organization which disseminates CDC/FDA ‘vaccine science’ as state of the art vaccinology prophylactics!  What a crock of you know what, which has been responsible for some medical gaffs, plus egg on WHO’s face, for miscalculations, i.e., the swine flu 2009 H1N1 pandemic fiasco, something that factually didn’t pan out very much!

Was H1N1 ‘pandemic status’ more scare and hype than anything else, but necessary to ‘program’ everyone to get the annual flu vaccine?

During the 20172018 flu seasons, flu vaccine efficacy was estimated at just 36%.  , not very ineffective, I’d say! [1]

But the very REAL, scientifically OFFENSIVE and ILLEGAL status of vaccines since the 1986 law passed can be found in the following FRAUDULENT activities of the CDC/FDA:

In 1999, the CDC commissioned an in-house researcher, Thomas Verstraeten to perform vaccinated/unvaccinated study on CDC’s giant Vaccine Safety Datalink (VSD). The results were disturbing and showed a link between mercury-containing hepatitis B vaccines and several neurological injuries including autism. The CDC shared the results with the then four vaccine makers, published a “sanitized” version then cut off public access to the VSD. [CJF emphasis]


So what was the original Vaccine Safety Datalink (VSD)?

Four large health maintenance organizations, including Kaiser Permanente, were initially recruited to provide the CDC with medical data on vaccination histories, health outcomes, and subject characteristics.


The original VSD is what CDC’s Dr. Thomas Verstraeten epidemiologically examined that led to his 1999 findings vaccines CAUSED Autism, and which was responsible for calling the clandestine Simpsonwood Conference in June 2000 for select, vested-interested Big Pharma and World Health Organization doctors and researchers.  Here’s the transcript for that infamous fraudulent and conspiratorial meeting:

The apparent $64-million-question is: To whom did CDC transfer those original VSD data so they never could be obtained via a FOIA filing and for authenticity investigations?   

Isn’t that CDC action indication of collusion and fraud? 

Isn’t that enough legal evidence to file a RICO [2] lawsuit against CDC and FDA?

Both federal health agencies can be proven to have committed fraudulent science by ‘sanitizing’ legitimate data to exonerate unsafe vaccines, especially with regard to Autism!

Note what happened with the CDC whistleblower William Thompson, PhD, and his recorded phone confession on tape, regarding CDC’s instructions to destroy the 2003-04 research the MMR vaccine caused Autism in young black boys less than three years of age, and as documented in VAXXED: From Cover-up to Catastrophe.

For extra proof, Congress and the Inspector General need to deep dive into the following allegations as put forth by Children’s Health Defense in the article Fully Vaccinated vs. Unvaccinated—Part 3,  authored by Robert F. Kennedy Jr., Esq.

You will find all the slides and charts for the data below in the above link.

Titles of Vaxxed/Unvaxxed Slides Below:

Thimerosal Containing Hepatitis B Vaccines—When Compared to Children Vaccinated Without Thimerosal—Increased Odds of ADHD 1.9X;

Highest Levels of Thimerosal Exposure Increase Autism Risk 11.35X;

Two H1N1-Containing Influenza Vaccines Prior to and During Pregnancy Increases Miscarriage Odds by 7.7X;

H1N1 Influenza Vaccine Increases Risks of Bell’s Palsy (1.34X), Paraesthesia (1.25X) and Inflammatory Bowel Disease (1.25X) in High Risk Patients;

HPV Vaccination Increases Odds of Memory Impairment (1.23X) and Involuntary Movement (1.53X);

Thimerosal Containing Triple HepB Series in the First Six Months of Life Increases Odds of Emotional Disturbances by 2.37X;

HPV Vaccine Increases the Risk of Celiac Disease by 1.56X;

The H1N1 and Seasonal Influenza Vaccines Both Given During Pregnancy Increase Fetal Loss by 11.4% Compared to the Seasonal Influenza Vaccine Only.

The time has come for what’s referred to as “anti-vaxxers” to stand up and demand our legal rights just like the Antifa crowd and other progressives, especially since most, if not all, anti-vaxxers now referred to as “ex-vaxxers” were, at one time, believers who vaccinated their kids, only to have them seriously damaged by vaccines.

No one has a right or the apparent “color of law” to damage your or your children’s health!

It now is time to demand and take corrective legal action(s).


[1] Study predicts 2018 flu vaccine will likely have 20 percent efficacy


Vaccine Cover-ups Continue
36:13 minutes
Insert the above video URL address into any search engine that does not censor.

Catherine J Frompovich (website) is a retired natural nutritionist who earned advanced degrees in Nutrition and Holistic Health Sciences, Certification in Orthomolecular Theory and Practice, plus Paralegal Studies. Her work has been published in national and airline magazines since the early 1980s. Catherine authored numerous books on health issues along with co-authoring papers and monographs with physicians, nurses, and holistic healthcare professionals. She has been a consumer health ​issues researcher ​and holistic health advocate since the late 1970s; she continues researching and writing in retirement. Her career in holistic healthcare began in the early 1970s when she had to save, and restructure, her life resulting from having “fallen through the allopathic medical paradigm cracks.”

Catherine has written numerous books. The following can be purchased on Amazon books:

Eat To Beat Disease, Foods Medicinal Qualities (2016)
Vaccination Voodoo, What YOU Don’t Know About Vaccines (2013)
A Cancer Answer, Holistic BREAST Cancer Management, A Guide to Effective & Non-Toxic Treatments (2012)
Our Chemical Lives And The Hijacking Of Our DNA, A Probe Into What’s Probably Making Us Sick (2009)
Lord, How Can I Make It Through Grieving My Loss, An Inspirational Guide Through the Grieving Process (2008)

Subscribe to Activist Post for truth, peace, and freedom news. Follow us on Minds, Twitter, Steemit, and SoMee.

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Categories: News for progressives

Sergey Lavrov’s interview with the newspaper Argumenty i Fakty

Vineyard of the Saker - Fri, 2019-07-19 01:00
Foreign Minister Sergey Lavrov’s interview with the newspaper Argumenty i Fakty published on July 17, 2019 Original interview in Russian Question: Can an improvement in the relations with the United

2:00PM Water Cooler 7/18/2019

Naked Capitalism - Fri, 2019-07-19 01:00
Today's Water Cooler: Booker, Sanders, Trump, AOC vs. Trump vs. Pelosi, centrist Democrat angst, business outlook, leading indicators, sleep tracking apps, Boeing, miltary hydrocarbons, California wildfires, ocean temperatures, games and Big Stream, CBD, Bezos and the planet, Storm Area 51

Are Veterans Finally Through With Forever War?

Truthdig - Fri, 2019-07-19 00:55

This piece originally appeared on

It is undoubtedly my favorite part of every wedding. That awkward, but strangely forthright moment when the preacher asks the crowd for any objections to the couple’s marriage. No one ever objects, of course, but it’s still a raw, if tense, moment. I just love it.

I suppose we had that ubiquitous ritual in mind back in 2007 when Keith – a close buddy and fellow officer – and I crafted our own plan of objection. The setting was Baghdad, Iraq, at the start of the “surge” and the climax of the bloody civil war the U.S. invasion had unleashed. Just twenty three years old and only eighteen months out of the academy, my clique of officers had already decided the war was a mess, shouldn’t have been fought, and couldn’t be won.

Related Articles by by TomDispatch

Me and Keith, though, were undoubtedly the most radical. We both just hated how our squadron’s colonel would hijack the memorial ceremonies held for dead troopers – including three of my own – and use the occasion of his inescapable speech to encourage we mourners to use the latest death as a reason to “rededicate ourselves to the mission and the people of Iraq.” The whole thing was as repulsive as it was repetitive.

So it was that after a particularly depressing ceremony, perhaps our squadron’s tenth or so, that we hatched our little defiant scheme. If (or when) one of us was killed, the other promised – and this was a time and place where promises are sacred – to object, stand up, and announce to the colonel and the crowd that we’d listen to no such bullshit at this particular ceremony, not this time. “Danny didn’t believe in this absurd mission for a minute, he wouldn’t want his death to rededicate us to anything,” Keith would have said! Luckily it never came to that. We both survived, Keith left the army soon after, and I, well, toiled along until something snapped and I chose the road of public dissent. Still, I believe either of us would have actually done it – even if it did mean the end of our respective careers. That’s called brotherhood…and love.

I got to thinking on that when I read a story this week which was both disturbing, refreshing, and sickening all at the same time. A major opinion poll’s results were released which demonstrated that fully two-thirds of post 9/11 veterans now think the wars in Iraq and Afghanistan “weren’t worth fighting.” That’s a remarkable, and distressing, statistic and one that should give America’s president, legislators, media, and people as a whole, serious pause. Not that it will, mind you, but it should! It’s doubtful that US military combat vets – who are more rural, southern, and conservative than the population at large – have ever so incontrovertibly turned on a war, at least since the very end of Vietnam.

On one level I felt a sense of vindication for my longtime antiwar stances when I read about the study – in the Military Times no less. But that was just ego. Within minutes I was sad, inconsolably and completely melancholy. Because if, as a “filibuster-proof” majority of my fellow veterans (and maybe even our otherwise unhinged president) believes, the Iraq and Afghan wars weren’t worth the sacrifice, then consider the unsettling implications. It would mean, for starters, that the US flushed nearly $5.9 trillion in hard-earned taxpayer cash down the toilet. It means that 7,000 American soldiers and upwards of 244,000 foreign civilians needn’t have lost their ever precious lives. Hundreds of thousands more might not have been injured or maimed. 21 million people wouldn’t have become refugees. The world, so to speak, could’ve been a safer, better place.

Those ever-so-logical conclusions should dismay even the most apathetic American. They should make us all rather sad, but, more importantly, should inform future decisions about the use of military force, the role of America in the world, and just how much foreign policy power to turn over to presidents. Because if we, collectively, don’t learn from our country’s eighteen year, tragic saga, then this republic is, without exaggeration, finished, once and for all. Benjamin Franklin, that confounding Founding Father, wasn’t sure the American people could be trusted to “keep” the republic he and other elites formed. It’d be a devastating catastrophe to prove him right, especially in this time of rising right-wing, strongman populism in the Western world.

So consider this a plea to Congress, to the corporate media establishment, and to all of you: when even traditionally more conservative and martial military veterans raise the antiwar alarm – listen! And next time the American war drums beat, and they undoubtedly will, consider this article encouragement to do what Keith and I promised way back when. Object! Refuse to fight the next ill-advised and unethical war. Remember: to do so demonstrates brotherhood and love. Love of each other and love of country…

Danny Sjursen is a retired US Army officer and regular contributor to His work has appeared in the LA Times, The Nation, Huff Post, The Hill, Salon, Truthdig, Tom Dispatch, among other publications. He served combat tours with reconnaissance units in Iraq and Afghanistan and later taught history at his alma mater, West Point. He is the author of a memoir and critical analysis of the Iraq War, Ghostriders of Baghdad: Soldiers, Civilians, and the Myth of the Surge. Follow him on Twitter at @SkepticalVet.

Copyright 2019 Danny Sjursen

Money Laundering Fines Worth Billions Help Bankers Avoid Prosecution and Unpleasant Labels

Activist Post - Fri, 2019-07-19 00:49

By Lubomir Tassev

The recent seizure of a cargo ship owned by JP Morgan, a vessel loaded with 20 tons of cocaine according to latest accounts, highlighted the risks of banks’ involvement in illicit activities, inadvertent or otherwise. And although U.S. authorities released the MSC Gayane after the owner, JP Morgan’s asset management arm, and the operator, Mediterranean Shipping Company, paid a $50M in cash and surety bond, the stain remains and this is not the only stain. Money laundering for drug cartels and moving funds for terrorists, arms dealers and dictatorial regimes are among the sins banks have accumulated through the years. However, court settlements and billions of dollars in fines often help major financial institutions avoid prosecution, conviction, and labels like ‘Drugbanks.’

Also read: Money Laundering Scandals Bring Court Charges and Record Job Cuts to Euro Banks

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According to a study conducted by the International Monetary Fund (IMF) and the United Nations Office on Drugs and Crime (Unodc) in 2017, up to $2.1T dollars is being laundered by criminals each year. Although it remains extremely difficult to estimate the exact amount, Unodc believes it’s between 2 and 5% of the global gross domestic product (GDP).

The advancement of financial technologies, including cryptocurrencies, has undoubtedly increased the speed and ease with which money moves around the world. However, the organization singles out developments related to the traditional financial system to explain why finding, freezing and forfeiting criminal assets have become harder. Unodc says the “dollarization” of black markets, financial deregulation, and the spread of financial havens are the main factors.

Many banks have invested in implementing expensive transaction monitoring systems that should by design detect suspicious behavior on the part of their clients. They are programmed to raise the alarm whenever predetermined patterns are observed, such as large cash deposits, multiple transfers through a bank account in a quick succession, and other complex financial transactions.

In reality, however, the great majority of the automated alerts, 95% in the U.S., are being evaluated as “false positives,” according to research by the Thomson Reuters Regulatory Intelligence published last year. Around 98% never make it into a report on suspicious activity. At the same time, the billions buried in these software systems fail to stop the big money launderers who employ sophisticated techniques and manage to avoid detection. That includes drug cartels, terrorists and rogue states.

Swedbank Accused of Moving Funds for WMD Program

Since 2018, a number of large banks, mostly European, have been dogged by money-laundering accusations. Swedbank, one of the financial institutions implicated in the scandal centered on the Danish Danske Bank’s operations in the Baltics, now has to deal with another chapter in the ordeal. A new report by the Dagens Industri newspaper reveals that Sweden’s leading bank has identified transactions from its customers to the FBME bank, shut down two years ago after being connected to the Syrian chemical weapons program.

The suspicious transfers were discovered during an internal investigation last year and, according to the publication, were brought to the attention of the bank’s top management. It’s unclear when exactly they were carried out, which makes it hard to determine whether they breached sanctions imposed by the United States and the European Union on the regime in Damask.

The transactions were made between account holders in Swedbank’s Lithuanian branch and one or more clients of FBME. The Dar es Salaam-headquartered bank had previously been linked to arms and drugs trafficking, terrorist financing and money laundering. It was denied access to the U.S. financial sector and its license was revoked by the central bank of Tanzania in 2017.

Dagens Industri’s article comes during a difficult period for Swedbank. A documentary aired in February by the Swedish national broadcaster SVT provided details about the bank’s involvement in money laundering transactions with Danske Bank in the Baltic states. Following the revelations, Swedbank’s Chief Executive Birgitte Bonnesen and Chairman Lars Idermark left their posts.

Banks Fined Billions for Money Laundering Violations

The crypto industry is often criticized by the establishment for not doing enough to prevent risks associated with money laundering and terrorist financing that come with the use of decentralized digital currencies. But it’s actually the traditional financial sector that has a much longer track record of such violations. Scandals with banks providing services to bad actors are not a new occurrence and failure to prevent money laundering and the movement of illicit funds are not a recent phenomenon.

Banks often pay huge fines for breaches of anti-money laundering (AML) and counter terrorist financing (CTF) regulations. Multiple cases involving major financial institutions were recorded in 2018 alone, indicating either the inability of their AML systems to cope with the challenges or simply the lack of will to prevent criminal activities.

The list of banks punished by regulators last year is pretty long. ING Bank paid $900 million in the Netherlands for its failure to prevent money laundering and other bad practices between 2010 and 2016. One of the cases involved $55 million in bribes paid to the daughter of Uzbekistan’s president by the Russian mobile operator Vimpelcom, as reported by the Global Financial Integrity portal.

Another Dutch institution, Rabobank, paid $369M to the U.S. government for allowing hundreds of millions in cash from Mexico to be deposited in its branches in California and then transferred elsewhere. That happened despite obvious signs that the funds were linked to drug trafficking and other organized crime-related money laundering.

Last year again, US Bancorp agreed to pay $613M in fines which went to settle two criminal charges after the bank was accused of failing to prevent money laundering by investigating only a limited number of suspicious transactions. According to the U.S. Department of Justice, as much as 80% of these transactions had to be examined. The bank, however, did not take steps to increase the funding and the size of its AML team.

The Swiss banking giant UBS was fined $15 million in the U.S. for failing to file suspicious activity reports. Between 2011 and 2013, its branch in San Diego transferred $9 billion for around 6,000 accounts of non-U.S. residents from Mexico, Venezuela and Panama. The U.S. Securities and Exchange Commission (SEC) found that the bank’s analysts were allowing transactions despite multiple red flags.

Elsewhere, Australia’s largest bank was found responsible for no less than 50,000 breaches of AML and CFT laws between 2012 and 2015. They were related to a type of smart ATMs called intelligent deposit machines (IDMs) which allowed users to anonymously credit cash deposits to their accounts with an unlimited number of transactions. Regulators believe they were used by criminals who laundered $75M. The Commonwealth Bank of Australia agreed to pay $534M in penalties.

Other notable examples from the past couple of decades include JP Morgan Chase which paid over $2B in a 2014 court settlement for ignoring alerts about Bernard Madoff. The Wall Street financier had an account at the bank and used it to run his Ponzi scheme. Citigroup is another entry in a list compiled by Bloomberg, with $237M in fines for the operations of its subsidiary Banamex USA. It processed transactions worth some $8.8B with limited oversight in a five-year period until 2012.

Drug Cartels Use US Banks to Launder Illicit Proceeds

Wells Fargo-owned Wachovia was fined $160M for processing $373B in wire transfers from Mexican currency houses between 2004 and 2007. U.S. authorities believe drug cartels used accounts at the bank to launder illicit funds and finance their criminal operations. According to a federal investigation into the notorious Mexican crime syndicate Los Zetas, covered in media reports in 2012, accounts at Bank of America were allegedly used to launder proceeds from cocaine trafficking. HSBC, the largest European bank, was also used for money laundering by Latin American drug cartels. It had to pay $1.9B for failing to implement proper monitoring of over $670B in transfers from Mexico and $9.4B in USD purchases.

Standard Chartered, another London-headquartered bank which operates in more than 70 countries, was fined $967M in total for violating U.S. sanctions on Iran in 2012 and for weak AML controls in 2014. Deutsche Bank, which is the largest German bank, paid authorities in the U.S. and U.K. fines worth $670M for allowing Russian citizens to expatriate billions of dollars in mirror trades conducted through its Moscow office. Commerzbank, another German giant, was fined $1.45B in 2015 for failing to share with U.S. authorities information about the dealings of clients that were subject to sanctions. The institution was accused of processing over $250B in transactions ordered by Iranian and Sudanese entities between 2002 and 2008.

In so many of these cases, the fines have been paid as part of court settlements that helped the banks avoid further prosecution. The absence of prison sentences for bankers involved in facilitating money laundering schemes on behalf of drug traffickers and entities under sanctions also makes a strong impression. It turns out that crime syndicates and bad actors have less trouble accessing regular bank services than crypto companies with perfectly legitimate businesses, which continue to face difficulties when trying to open a bank account in many jurisdictions.

Are fines enough of a punishment for banks in cases of large-scale money laundering via traditional financial channels? What are your thoughts on the subject? Tell us in the comments section below.

Lubomir Tassev is a journalist from tech-savvy Bulgaria, which sometimes finds itself at the forefront of advances it cannot easily afford. Quoting Hitchens, he says: “Being a writer is what I am, rather than what I do.” International politics and economics are two other sources of inspiration.

This article was sourced from

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