Wednesday, July 26, 2017

Sputnik International — Hypersonic Weapons Should Be Under Int'l Rules - UK Nuclear Operations Head

UK's Head of Nuclear Operations for the Director General Nuclear, Commodore Paul Burke claims that hypersonic weapons should be under international norms and rules....
Paul Burke also noted that London is following Russia developing hypersonic aviation means of destruction yet is not capable of developing their own system.
"We watch what Russia is doing, absolutely. We’ll keep an eye on what we’re doing and trying to respond accordingly usually through diplomatic, international norms and treaty obligations," Burke said. "The UK wouldn’t be able to do anything like that. So, we wouldn't be able to develop that sort of system ourselves."
Shoe on other foot? Maybe Russia isn't just a gas station?

Russia warned it would respond asymmetrically. So will China.

Sweeta Singh — U.S. defense companies lift forecasts amid growing security concerns

Top U.S. weapons makers reported better-than-expected quarterly results and raised their full-year forecasts, buoyed by higher demand for fighter jets and tanks amid heightened security concerns around the world....
Mission accomplished.

Reuters
U.S. defense companies lift forecasts amid growing security concerns
Sweeta Singh

Pepe Escobar — China and India torn between silk roads and cocked guns


Old rivalries (nationalism) confront new opportunities (money). Bet on the money.

Asia Times
China and India torn between silk roads and cocked guns
Pepe Escobar

Reid Wilson — Trump to nominate Brownback for religious ambassador post

The White House said late Wednesday President Trump will nominate Kansas Gov. Sam Brownback (R) to serve as an ambassador at large for international religious freedom. Brownback, a devout Catholic, would be the fifth person to run the State Department's Office of International Religious Freedom -- an office first created by legislation Brownback sponsored when he was a member of the Senate back in 1998....
I guess he can't cause too much damage in this role.

The Hill
Trump to nominate Brownback for religious ambassador post
Reid Wilson

Zero Hedge — Who Is Michael Vickers? The CIA's Afghan Jihad Architect Declares War On Trump


Meeting the US deep state close up. It isn't pretty. In fact, it is pretty ugly. These are the folks bringing you endless war. Because it is cool?

Who knew that the US is behind state-sponsored terrorism?

The question now is whether the US deep state will pay attention to the president or continue to go rogue.

Zero Hedge
Who Is Michael Vickers? The CIA's Afghan Jihad Architect Declares War On Trump
Tyler Durden

Julia Conley — ACLU Sounds Alarm After DC Cops Tell Journalists to Delete Protest Photos


Controlling the narrative with censorship.

The Anti-Media
ACLU Sounds Alarm After DC Cops Tell Journalists to Delete Protest Photos
Julia Conley

Ted Rall — The Democrats Are A Lost Cause


Still losers.

Counterpunch
The Democrats Are A Lost Cause
Ted Rall

See also

Fox News
Hillary Writing Book About How Russia, Comey Cost Her the Election ...
Cortney O'Brien


Zero Hedge
Hillary Clinton Book, Set To Drop In September, Can Be Summarized In Two Words: 'Russia' & 'Comey'
Tyler Durden

Lord Keynes — Summaries of Chapter 7 and Conclusion


Final installments if you have been following.

Social Democracy For The 21St Century: A Post Keynesian Perspective
The 10,000 Year Explosion, Chapter 7: A Summary

Reuters — U.S. sanctions Venezuelan officials to pressure Maduro

The Trump administration imposed sanctions on 13 senior officials of Venezuela's government, military and state oil company PDVSA on Wednesday, U.S. officials said, seeking to ratchet up pressure on President Nicolas Maduro to scrap plans for a controversial new congress.…
Let's see now, the US is at war economically with North Korea, Iran, Russia, Syria, and now Venezuela. Did I forget anyone? Oh right, the US just sanctioned some Chinese entities over NK.

Reuters
U.S. sanctions Venezuelan officials to pressure Maduro
Matt Spetalnick

See also

Russia Insider
Study: Russia Insulated From Further Sanctions by Import Substitution Success
Jon Hellevig

Natalie Wolchover — First Support for a Physics Theory of Life

The biophysicist Jeremy England made waves in 2013 with a new theory that cast the origin of life as an inevitable outcome of thermodynamics. His equations suggested that under certain conditions, groups of atoms will naturally restructure themselves so as to burn more and more energy, facilitating the incessant dispersal of energy and the rise of “entropy” or disorder in the universe. England said this restructuring effect, which he calls dissipation-driven adaptation, fosters the growth of complex structures, including living things. The existence of life is no mystery or lucky break, he told Quanta in 2014, but rather follows from general physical principles and “should be as unsurprising as rocks rolling downhill.”...
Quanta
First Support for a Physics Theory of Life
Natalie Wolchover | Senior Writer

Michael Lewis — Why the Scariest Nuclear Threat May Be Coming From Inside the White House

Donald Trump’s secretary of energy, Rick Perry, once campaigned to abolish the $30 billion agency that he now runs, which oversees everything from our nuclear arsenal to the electrical grid. The department’s budget is now on the chopping block. But does anyone in the White House really understand what the Department of Energy actually does? And what a horrible risk it would be to ignore its extraordinary, life-or-death responsibilities?
Vanity Fair
Why the Scariest Nuclear Threat May Be Coming From Inside the White House
Michael Lewis

Brian Romanchuk — Book Review: GDP

GDP: A Brief but Affectionate History by Professor Diane Coyle offers an interesting popular history of the concept of gross domestic product (GDP). GDP is a mental construct, and is the result of somewhat arbitrary decisions. The book discusses the history of the idea, tied in with economic history as well as the history of economics.… 
GDP is one of three aggregates that are theoretically equal to each other (in practice, there is a statistical discrepancy, since they are based on three different input data sets).
  1. The sum of all production in the domestic economy.
  2. The sum of all expenditures in the domestic economy.
  3. The sum of all incomes in the domestic economy (Gross Domestic Income, or GDI)....
I believe that a lot of the kvetching about GDP would disappear if we got rid of it, and replaced it with Gross Domestic Income. Since the two values are theoretically the same, we would be theoretically in the same boat. However, economists would be less hung up on their theoretical preconceptions....
Bond Economics
Book Review: GDP
Brian Romanchuk

Egg Glut


"We're out of eggs!"




Tuesday, July 25, 2017

Dustin Volz — Russia’s Kaspersky Lab launches free antivirus software globally


Free is good.

Reuters
Russia’s Kaspersky Lab launches free antivirus software globally
Dustin Volz

Fund Managers and Strategists Think the Bull Market Is Ending Next Year


Bearish sentiment fomented by projected CB actions.


Central bank policy cited as main risk over coming year or two. 
Bloomberg poll captures views of 30 investors across globe. 
The would-be end of a great cycle for financial markets would come just about when central bank balance sheet contraction is expected to kick into high gear. 
By mid-2018, the Federal Reserve’s wind-down may be well under way, and the European Central Bank might have joined the Bank of Japan in tapering asset purchases.




Jason Smith — Causality in money and inflation ... plus some big questions


That pesky causality again.

Information Transfer Economics
Causality in money and inflation ... plus some big questions
Jason Smith

Stephen S. Roach — Deciphering China’s Economic Resilience

International economic forecasters find it difficult to resist superimposing the experience of crisis-prone developed economies onto China. But, once again, the Chinese economy has defied the pessimists: after decelerating for six consecutive years, real GDP growth appears to be inching up in 2017.
Project Syndicate
Deciphering China’s Economic Resilience
Stephen S. Roach | senior fellow at Yale University's Jackson Institute of Global Affairs and a senior lecturer at Yale's School of Management, and former Chairman of Morgan Stanley Asia and the firm's chief economist.

Bill Mitchell — There is nothing much that Milton Friedman got right!

“If we want to ensure more people are well-employed, central banks alone will certainly not suffice” is a quote I am happy to republish because I consider it to be 100 per cent accurate. The only problem is that the way I think about that statement and construct its implications is totally at odds with the intent of its author, who claimed it was “an important lesson of Friedman’s speech”, which “remains valid”. The quote appeared in a recent Bloomberg article (July 17, 2017) – What Milton Friedman Got Right, and Wrong, 50 Years Ago – written by journalist Ferdinando Giugliano. It celebrates the Presidential Speech that Friedman gave to the American Economic Association on December 29, 1967 at their annual conference in Washington D.C. In terms of the contest of paradigms, the speech is considered to be the starting point proper of the Monetarist era, even though it took at least another 5 or 6 years (with the onset of the OPEC oil crises) for the gospel espoused by Friedman to really gain ground. The problem is that Friedman was selling snake oil that became the popular litany of the faithful because it suited those who wanted to degrade the role of government in maintaining full employment. It was in step with the push by capital to derail the Post War social democratic consensus that had seen real wages growing in proportion with productivity, reduced income inequality, jobs for all who wanted to work and a strong sense of collective solidarity emerge in most advanced nations. This consensus was the anathema of the elites who saw it as squeezing their share of national income and giving too much power to workers to negotiate better terms and conditions in their work places. Friedman provided the smokescreen for hacking into that consensus and so began the neo-liberal era. We are still enduring its destructive consequences.

Friedman’s speech was subsequently published in the American Economic Review as ‘The Role of Monetary Policy’ in the 1968 volume 58(1) (pages 1-17). 
The Bloomberg article goes along with the view that Friedman’s speech represented a “paradigm shift” in economics....
Bill Mitchell – billy blog
There is nothing much that Milton Friedman got right!
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Capital and Leverage Ratios


A couple of good articles on these two regulatory ratios from Clarus Financial:

Capital Ratio here:

CAPITAL RATIOS AND RISK WEIGHTED ASSETS FOR TIER 1 US BANKS

Leverage Ratio here:

SUPPLEMENTARY LEVERAGE RATIO: COMPARING US BANKS

If you look at it systemically, via the Fed's H.8 report of the system level asset composition, you can see that currently it is the Leverage Ratio that is the control ratio; due to current Fed monetary and Treasury fiscal policies forcing about $5T of non-risk assets into the system's asset accounts.

We have about $12.5T total assets so with a LR of 7% that requires about $900B capital, risk assets of about $7.5T so with a CR of  8% that requires only about $600B.

Capital requirements are being driven by the amount of non-risk assets govt policy is creating in the system.

Banks are over-capitalized via the Capital Ratio by 100s of $B and accordingly we see them increasing dividend and share buybacks with their earnings rather than adding to their regulatory capital accounts; they dont need any more or at least much more capital to operate the risk side of their business.

This should start to reverse somewhat when Fed starts to reduce the reserves in September...



Monday, July 24, 2017

Chase Madar — The Conservative Case for Universal Healthcare


Democrats may be about to lose a core issue if they don't wake up.

The American Conservative

Zero Hedge — Former CIA Director Calls For A Coup If Trump Fires Mueller

In the most vocal opposition to president Donald Trump yet, former CIA Director John Brennan said that if the White House tries to fire special counsel Robert Mueller, government officials should refuse to follow the president orders, as they would be - in his view - “inconsistent” with the duties of the executive branch.
"I think it's the obligation of some executive branch officials to refuse to carry that out. I would just hope that this is not going to be a partisan issue. That Republicans, Democrats are going to see that the future of this government is at stake and something needs to be done for the good of the future," Brennan told CNN's Wolf Blitzer at the Aspen Security Forum, effectively calling for a coup against the president should Trump give the order to fire Mueller.... 
Zero Hedge
Former CIA Director Calls For A Coup If Trump Fires Mueller
Tyler Durden

See also
Just six months after his inauguration, Americans already are split down the middle, 42%-42%, over whether President Trump should be removed from office, a new USA TODAY/iMediaEthics Poll finds.…
Those findings, designed to measure the intensity of opinion, also show a perfect divide, 34%-34%.
USA Today
Poll: Americans split 42%-42% on impeaching Trump

Yasser Abdih and Stephan Danninger — What Explains the Decline of the U.S. Labor Share of Income? An Analysis of State and Industry Level Data

“The U.S. labor share of income has been on a secular downward trajectory since the beginning of the new millennium. Using data that are disaggregated across both state and industry, we show the decline in the labor share is broad-based but the extent of the fall varies greatly. Exploiting a new data set on the task characteristics of occupations, the U.S. input-output tables, and the Current Population Survey, we find that in addition to changes in labor institutions, technological change and different forms of trade integration lowered the labor share. In particular, the fall was largest, on average, in industries that saw: a high initial intensity of “routinizable” occupations; steep declines in unionization; a high level of competition from imports; and a high intensity of foreign input usage. Quantitatively, we find that the bulk of the effect comes from changes in technology that are linked to the automation of routine tasks, followed by trade globalization.”

Lord Keynes — The 10,000 Year Explosion, Chapter 6: A Summary

Chapter 6 of Gregory Cochran and Henry Harpending’s The 10,000 Year Explosion: How Civilization Accelerated Human Evolution(2009) is called “Expansions,” and examines the genetic effects of large-scale migrations of human beings.
History is filled with examples of certain population groups that conquer, migrate into, or spread over large areas and replace other groups, or replace other groups with some mixing.
Cochran and Harpending (2009: 156) accept that cultural and technological advantages have played a large role in the success of such movements, but also contend that sometimes, in important cases, evolutionary genetic traits have also been a factor. In this respect, as in normal evolutionary theory, we must look at group fitness, and not just individual fitness, as factors in human history (Cochran and Harpending 2009: 158).
Social Democracy For The 21St Century: A Post Keynesian Perspective

Pepe Escobar — A coup in the House of Saud?


Gives "MBS" new meaning. It's no longer mortgage backed security but Mohammad bin Salman.

But just as MBS were involved in the global financial crisis that began with the housing bubble in the US; so too, Mohammad in Salman is poised to initiate a global political crisis. Pepe Escobar explains.

Asia Times
A coup in the House of Saud?
Pepe Escobar

James Petras — Imperial Power Centers: Divisions, Indecisions and Civil War

One of the most important outcomes of the Trump Presidency are the revelations describing the complex competing forces and relations engaged in retaining and expanding US global power (‘the empire’). The commonplace reference to ‘the empire’ fails to specify the interface and conflict among institutions engaged in projecting different aspects of US political power.
In this essay, we will outline the current divisions of power, interests and direction of the competing configurations of influence.
James Petras Website
Imperial Power Centers: Divisions, Indecisions and Civil War
James Petras | Professor (Emeritus) of Sociology at Binghamton University in Binghamton, New York and adjunct professor at Saint Mary's University, Halifax, Nova Scotia

David Dayen — Single Payer, Meet All Payer: The Surprising State That Is Quietly Revolutionizing Health Care


Maryland.

Lord Keynes — The 10,000 Year Explosion, Chapter 5: A Summary

Chapter 5 of Gregory Cochran and Henry Harpending’s The 10,000 Year Explosion: How Civilization Accelerated Human Evolution (2009) is called “Gene flow,” and looks briefly at the evolutionary changes induced by mixing of genetically distinct populations.
Social Democracy For The 21St Century: A Post Keynesian Perspective
The 10,000 Year Explosion, Chapter 5: A Summary
Lord Keynes

VIPS — Intel Vets Challenge ‘Russia Hack’ Evidence


Letter to the President.

Consortium News
Intel Vets Challenge ‘Russia Hack’ Evidence
Veteran Intelligence Professionals for Sanity (VIPS)

Awara — Doing Business in Russia: Russian Financial System


Short summary. Essentially, Russia is internationalizing (in effect Westernizing) its banking and financial system, as is China also.

Awara
Doing Business in Russia: Russian Financial System
Eugene Isaev

David Glasner — Hayek, Deflation and Nihilism


At least Hayek later admitted he was wrong about deflation being useful in breaking rigidities.

Uneasy Money