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marmar

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Gender: Male
Hometown: Detroit, MI
Member since: Fri Oct 29, 2004, 12:18 AM
Number of posts: 72,733

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TTIP: We Were Right All Along


By Thomas Fazi. Originally published at Social Europe


Throughout the crisis – and ostensibly as a response to it – Europe has increased its focus on external competitiveness as a means to transform both the EU and eurozone into a huge German-style, export-led economic machine (as emphasised by the Global Europe strategy). Various experts and economists have pointed out that this is a fundamentally misguided strategy.

In recent years, however, the EU has negotiated numerous bilateral trade agreements. This has been topped by the announcement in early 2013 that the EU and the US had agreed to enter into negotiations on a bilateral trade agreement, the so-called Transatlantic Trade and Investment Partnership (TTIP). The European Commission has always argued that the agreement is aimed at ‘helping people and businesses large and small, by opening up the US to EU firms; helping cut red tape that firms face when exporting; and setting new rules to make it easier and fairer to export, import and invest overseas’. Furthermore, it contends that the TTIP, will ‘kick-start’ the EU economy by ‘generating jobs and growth across the EU’ and ‘cutting prices when we shop and offering us more choice’.

These assertions have been strongly challenged by European (and American) civil society organisations, which have maintained that the proposed agreement is not primarily intended to reduce the few remaining tariffs between the world economy’s two biggest trading blocs, but that ‘its central objective is to dismantle and/or harmonise regulations in areas such as agriculture, food safety, product and technical standards, financial services, the protection of intellectual property rights, and government procurement’. Since the EU-US negotiations are notably taking place behind closed doors, though, civil society organisations have had little to back their claims in terms of hard evidence (though the European Commission agreed last year to publish a long list of documents, the most important TTIP documents remain secret), and have had to rely mostly on historical precedents (the well documented nefarious social, economic and environmental effects of previous trade agreements, such as NAFTA), leaked documents relating to the other major trade deal being negotiated by the US, the Trans-Pacific Partnership (TTP), signed on 4 February 2016, and, well, good sense. This has allowed politicians in the EU and US – who have paradoxically stated that the purpose of keeping a tight lid on the negotiations is precisely to prevent vested interests to apply pressures – to accuse critics of the TTIP of fear-mongering.

Until now, that is. On May 1, Greenpeace Netherlands released 243 pages of leaked secret TTIP negotiation texts, which offer an unprecedented glimpse into the far-reaching implications that the agreement would have for climate, environment and public health – and, crucially, prove that civil society organisations were right all along. According to Greenpeace, the documents raise four aspects of serious concern from an environmental and consumer protection perspective:

• Long-standing environmental protections appear to be dropped. None of the documents received by Greenpeace refer to the General Exceptions, a 70-year-old rule enshrined in the GATT agreement of the World Trade Organization (WTO) that allows nations to regulate trade ‘to protect human, animal and plant life or health’ or for ‘the conservation of exhaustible natural resources’. The omission of this regulation suggests both sides are creating a regime that places profit ahead of human, animal and plant life and health.

• Climate protection will be harder under TTIP. There is no reference in the texts to the need to keep global temperature increase under 1.5 degrees, as stressed in the Paris climate agreement. Even worse, the scope for mitigation measures is limited by provisions of the chapters on ‘Regulatory cooperation’ or ‘Market access for industrial goods’. As an example, these proposals would rule out regulating the import of CO2-intensive fuels such as oil from tar sands.

• The end of the precautionary principle. The precautionary principle, enshrined in the EU Treaty, is not mentioned in the chapter on ‘Regulatory cooperation’, nor in any other of the obtained 12 chapters. On the other hand, the US demand for a ‘risk-based’ approach that aims to manage hazardous substances rather than avoid them, finds its way into various chapters. This approach undermines the ability of regulators to take preventive measures, for example regarding controversial substances like hormone disrupting chemicals.

• Opening the door for corporate takeover. While the proposals threaten environmental and consumer protection, big business gets what it wants. Opportunities to participate in decision-making are granted to corporations to intervene at the earliest stages of the decision-making process. While civil society has had little access to the negotiations, there are many instances where the papers show that industry has been granted a privileged voice in important decisions. The leaked documents indicate that the EU has not been open about the high degree of industry influence. The EU’s recent public report has only one minor mention of industry input, whereas the leaked documents repeatedly talk about the need for further consultations with industry and explicitly mention how industry input has been collected. Yet, Cecilia Malmström, the European Commissioner for Trade, had the nerve to respond to the leak by stating that ‘the EU industry does not have greater access to EU negotiating positions than other stakeholders. We take into account submissions by industry, but exactly the same applies to submissions by trade unions, consumer groups or health or environmental organisations – all of which are represented in the advisory group that regularly meets our negotiating team’ (my emphasis). This is the same person that stated, when asked how she could continue her persistent promotion of the TTIP in the face of such massive public opposition, replied: ‘I do not take my mandate from the European people’.


......................(more)

http://www.nakedcapitalism.com/2016/05/ttip-we-were-right-all-along.html





Nuit Debout: Building An Open Movement In France’s Squares


Nuit Debout: Building An Open Movement In France’s Squares




[font size="4"]Paolo Gerbaudo interviews Nuit Debout activist Baki Youssoufou on the driving force behind the social mobilization and the inclusiveness of the movement.[/font]

What is the driving force behind this movement? Is it the Labor Law or is it something broader than that?

I think that the Labor Law is what made people join this movement. But in a way it was just the initial pretext for the mobilization to begin. Most people are coming here because they think there is a problem of democracy in France.

There are two reasons for this feeling. First, the el-Khormi bill shows that there is no difference between the parties of the left and the right. It has been made by the Socialist Party but it is essentially a right-wing law. Second, people have realized that the security laws that have been introduced in the aftermath of the November 13 terrorist attacks are endangering civil liberties. The government has used the terror attacks as an excuse to curtail our freedoms.

Nuit Debout looks very similar to the movement of the squares of 2011. There also seem to be some differences in tactics, however. For example, instead of a fixed camp, people set up tents every day and pack them up again every night. Why is that?

Nuit Debout is not an occupation because we believe the movements of 2011 have been defeated precisely because they were occupations. The problem is that when you occupy, the army or the police can always come and evict you from the square. When we started this movement we said we are not going to set up an occupation. We are not occupying this space, we are just staying here, we are using the space to have conversations. We are not setting up structures, we are not setting up barriers.
How has the police reacted to that?

They don’t really know what to do, because when they come to disperse the crowd, people let them in. The movement mostly does not react to that. It just allows them to do that. Because then, as soon as they have left, we can simply come back again. We just use our communications and social media to tell people that we are going to meet for an assembly again. We do not need to have a fixed place for that.

Can you describe the different souls of the movement? How representative is the left-wing faction Convergence des Luttes and its intellectual figurehead Frédéric Lordon?

Convergence des Luttes only represent one part of the movement. They think that unions are still the main force capable of changing society, and they work within the political party of the left, Front de Gauche. Many people in the square disagree with that. We distrust both parties and unions because we think that they have also been responsible for the present situation. ...............(more)

https://www.popularresistance.org/nuit-debout-building-an-open-movement-in-frances-squares/




China’s Population Decline Dooms the Transition to Consumer Economy

China’s Population Decline Dooms the Transition to Consumer Economy
by Chris Hamilton • May 7, 2016


[font color="blue"]And yet, China’s total debt goes parabolic.[/font]
By Chris Hamilton, Hambone’s Stuff


If a business could foresee that it would have a declining consumer base (declining number of total potential customers), that would likely be a pretty good reason for serious concern and significantly lower growth expectations. However, when it comes to China, the shrinkage of its under 65yr/old population and particularly of the 20-59yr/old population is somehow coinciding with the story of China transitioning from an export-based to a domestic consumption-based economy?

To wit, with a declining population, China will transition from exporter to consumer, while all those grown one-child-policy adults support their 65+ year-old parents, and still grow 6%-7% annually? Inquiring minds wonder how it’s possible a declining base of consumers would consume more.

In a word…CREDIT! And, the growth of credit in China has gone parabolic. It’s highly unsustainable and likely ruinous.

The Details:

Each bar in the chart below represents annual growth or decline of the Chinese adult population. The blue line is a 4 period moving average of the population change. From 1973 through 2008, an additional 12.5 million Chinese adults entered the Chinese economy every year. That meant 12.5 million more consumers, home buyers, car buyers, potential job seekers, etc. ...............(more)

http://wolfstreet.com/2016/05/07/china-population-decline-dooms-transition-to-consumer-economy/




US Commercial Bankruptcies Skyrocket


US Commercial Bankruptcies Skyrocket
by Wolf Richter • May 5, 2016


[font color="blue"]The “credit cycle” begins to unravel.[/font]

One of the big indicators of the end of the “credit cycle” is the number of bankruptcies. During good times, so earlier in the credit cycle, companies borrow money. Then, overconfident and lured by low interest rates and overoptimistic rosy-scenario rhetoric emanating from all sides, they do what the Fed and Wall-Street firms want them to do: they borrow even more money. Then reality sets in, and they buckle under this pile of debt.

The bankruptcy filings of Ultra Petroleum and Midstates Petroleum on Friday and Saturday brought oil & gas bankruptcies of companies rated by Fitch and other ratings agencies to 59. These two companies piled $3.1 billion in defaulted junk bonds and another $1.5 billion in defaulted loans on top of the growing mountain of defaulted oil & gas debt.

With these two bankruptcies, Fitch Ratings raised its high-yield energy default rate to an all-time record of 13% and now projects that by the end of 2016, this default rate will jump to an even more glorious record of 20%.

But it’s not just oil and gas. And it’s not just companies whose bonds and loans are traded and are rated by Fitch and other ratings agencies. These are the larger outfits – big enough to have bondholders and big enough for the financial media to report.

But bankruptcies of all kinds and sizes and in a wide variety of sectors are now soaring. ..............(more)

http://wolfstreet.com/2016/05/05/us-commercial-bankruptcies-chapter-11-liquidations-rise-end-of-credit-cycle-april-abi/




In Cowboy Capitalism, High Technology Worsens Economic Inequities


In Cowboy Capitalism, High Technology Worsens Economic Inequities

Thursday, 05 May 2016 00:00
By Robert McChesney and John Nichols, Nation Books | Book Excerpt


The following is an excerpt from People Get Ready: The Fight Against a Jobless Economy and a Citizens Democracy:


The growth in the economy's capacity to produce since the 1930s, or even the 1960s, has been extraordinary, much as these economists anticipated. If the experts we used as counsel for this chapter are anywhere near accurate, the next four or five decades could make the twentieth century look like the twelfth century.

In popular economic theory, such revolutionary increases in productive capacity are supposed to translate into higher living standards, much shorter workweeks, richer public infrastructure, and a greater overall social security. Society should have the resources to tackle vexing environmental problems with the least amount of pain possible. In fact, however, nothing on the horizon suggests that this is in the offing. As automation and computerization take productive capacity to undreamed-of heights, jobs grow more scarce and are de-skilled, many people are poorer, and all the talk is of austerity and seemingly endless cutbacks in social services. There is growing wealth for the few combined with greater insecurity for the many. Washington, we've got a problem.

The false assumptions, of course, are that the benefits of the technology accrue to more than the owners of the firms deploying the technologies. And also that capitalists have incentive to produce far more than they do to satisfy the needs of people worldwide. In fact, Veblen had it right: capitalists produce as much as they do only as long as it remains profitable to do so. Producing more than that lowers prices and lessens profits. In short, to follow Keynes's logic to a place he did not go, capitalism would seem to have little or no reason to exist if the "economic problem" is solved, so it is imperative that the economic problem remain. For business and wealthy investors to continue to win, everyone else has to lose.

In our view, the evidence points in one direction: the economy needs to be fundamentally reformed, if not replaced. Capitalism as we know it is the wrong economic system for the material world that is emerging. This is a radical conclusion, but it is not made merely by radicals. The number of true believers who think leaving firms and wealthy investors alone to do as they wish will ultimately solve the employment problem and give us a great economy that can be the foundation for a vibrant democracy is shrinking, primarily because it is a faith-based position. There are also some who have a similar faith that technology is innately progressive and all-powerful, so it can and will solve capitalism's problems for us. They tell us that all we have to do is get out of the way, make some fresh popcorn, and grab a front-row seat as the future unfolds. .................(more)

http://www.truth-out.org/opinion/item/35917-in-cowboy-capitalism-high-technology-worsens-economic-inequities




US Commercial Bankruptcies Skyrocket


US Commercial Bankruptcies Skyrocket
by Wolf Richter • May 5, 2016


[font color="blue"]The “credit cycle” begins to unravel.[/font]

One of the big indicators of the end of the “credit cycle” is the number of bankruptcies. During good times, so earlier in the credit cycle, companies borrow money. Then, overconfident and lured by low interest rates and overoptimistic rosy-scenario rhetoric emanating from all sides, they do what the Fed and Wall-Street firms want them to do: they borrow even more money. Then reality sets in, and they buckle under this pile of debt.

The bankruptcy filings of Ultra Petroleum and Midstates Petroleum on Friday and Saturday brought oil & gas bankruptcies of companies rated by Fitch and other ratings agencies to 59. These two companies piled $3.1 billion in defaulted junk bonds and another $1.5 billion in defaulted loans on top of the growing mountain of defaulted oil & gas debt.

With these two bankruptcies, Fitch Ratings raised its high-yield energy default rate to an all-time record of 13% and now projects that by the end of 2016, this default rate will jump to an even more glorious record of 20%.

But it’s not just oil and gas. And it’s not just companies whose bonds and loans are traded and are rated by Fitch and other ratings agencies. These are the larger outfits – big enough to have bondholders and big enough for the financial media to report.

But bankruptcies of all kinds and sizes and in a wide variety of sectors are now soaring. ..............(more)

http://wolfstreet.com/2016/05/05/us-commercial-bankruptcies-chapter-11-liquidations-rise-end-of-credit-cycle-april-abi/




Wrath of Draghi Hits Germans who Refuse to Blow their Savings


Wrath of Draghi Hits Germans who Refuse to Blow their Savings
by Don Quijones • May 5, 2016


Just shocking that Germans dislike stocks, with the DAX down 21%
By Don Quijones, Spain & Mexico, editor at WOLF STREET.


Since promising to save the euro at any price, ECB president Mario Draghi has thrown just about everything he can at Europe’s crisis-ridden economy. That includes the mother of all financial anomalies, negative interest rates. Yet despite all the trillions of euros of his alphabet-soup creations — QE, LTRO, TRTRO I, TRTRO II… — the European economy is still frail, growth is lackluster, public debt is out of control, and unemployment remains worryingly buoyant.

As for the region’s banks, the less said, the better.

Not to worry. As Draghi said in a speech to Asian government officials and business leaders on Monday, there’s still a great deal more that can be done to punish Europe’s hordes of savers, the central banker’s scapegoat du jour for all that ails Europe’s debt-laden economy.

.....(snip).....

Inevitably, whenever Draghi talks about “savings,” he has a particular kind of savings in mind: German savings. If Germans spent money on imported products rather than saving their money, they wouldn’t have an account surplus — which has been “above 5% of GDP for almost a decade,” he complained — and would thus save the world.

While Draghi bemoans Europe’s savings glut, reality is that household savings have been on a sharp downward trajectory ever since the creation of the single currency. Even in Germany, the personal savings ratio has slipped from 12% at the beginning of the crisis to 10% today. A similar trend has occurred in Japan, the U.S and just about every other so-called developed economy since the beginning of this century. ...............(more)

http://wolfstreet.com/2016/05/05/wrath-of-draghi-germans-refuse-to-blow-savings-in-stock-market/





The Party’s Over in Alaska


The Party’s Over in Alaska
With oil revenue off, Alaska may be out of savings in two years.


(Bloomberg Businessweek) On an early morning in late March, a Beechcraft turboprop plane takes off from Juneau, Alaska, the only U.S. state capital not accessible by road. As the aircraft heads north over America’s largest national forest to Fairbanks, 700 miles away, Alaska Governor Bill Walker yawns and stretches his long legs. Across the aisle, wrapped in a fleece blanket, sits his wife and closest adviser, Donna. Easter is coming up, and the two discuss what to include in their grandchildren’s baskets. Donna suggests putting a $1 bill inside each plastic egg. “A dollar each?” the governor asks incredulously. “We’re in a budget crisis here.”

America’s Last Frontier is in trouble. The 40-year oil boom that turned Alaska from a frigid backwater into one of the nation’s richest states is over. Not only have petroleum prices crashed, but Alaska’s supply of crude is running out. Thirty years ago the state was pumping 2 million barrels a day, a quarter of all U.S. output. But over the past decade, the Prudhoe Bay oil field, once the largest in North America, has started to reach the end of its life. Alaska’s output has fallen to 500,000 barrels a day, enough to fill only one-quarter of the capacity of the state’s main economic artery, the 800-mile Trans-Alaska Pipeline System.

With 90 percent of the general fund revenue tied to oil, the collapse has been devastating. Alaska, facing a $4 billion budget deficit, is one of four energy states that have slid into recession over the past year because of cheap oil. The state’s rainy day fund is burning through $11 million a day. If that keeps up, it will be out of emergency funds within two years.

The unenviable task of fixing this mess rests with Walker, a 65-year-old former carpenter who won the governor’s office by about 6,000 votes in 2014 as an independent after leaving the Republican Party. Walker came in with big plans that included expanding Medicaid and building a natural gas pipeline, all without raising taxes. He’s since had to switch to a proposal that rewrites the social compact at the heart of Alaska since it achieved statehood in 1959: Its 738,000 residents enjoy the country’s lowest tax burden and highest per capita rate of state spending. .............(more)

http://www.bloomberg.com/news/articles/2016-05-06/the-party-s-over-in-alaska




It’s happening — oil and gas defaults are starting to hurt the rest of the credit market


(MarketWatch) The high default rate in the oil and gas sector after a long period of low oil prices is starting to hurt the broader high-yield market, according to a new report from Moody’s.

Until now, slow-but-positive U.S. growth has been a support for corporate cash flow and helped prevent commodity weakness from spreading to other sectors.

“But the commodity-driven climb in defaults is contributing to an increase in investor risk aversion and borrowing costs,” said analysts led by Moody’s Senior Vice President John Puchalla.

It’s a classic Catch 22 situation. Defaults are making investors nervous and that is making it more expensive for speculative-grade, or high-yield, companies to borrow short term to resolve liquidity issues. That’s because investors demand higher premiums for the extra risk they are taking on. And that in turn presents risks to the economy and makes if more likely the default risk will spread. ...........................(more)

http://www.marketwatch.com/story/its-happening-oil-and-gas-defaults-are-starting-to-hurt-the-rest-of-the-credit-market-2016-05-05




The coming debt bust


(The Economist) CHINA was right to turn on the credit taps to prop up growth after the global financial crisis. It was wrong not to turn them off again. The country’s debt has increased just as quickly over the past two years as in the two years after the 2008 crunch. Its debt-to-GDP ratio has soared from 150% to nearly 260% over a decade, the kind of surge that is usually followed by a financial bust or an abrupt slowdown.

China will not be an exception to that rule. Problem loans have doubled in two years and, officially, are already 5.5% of banks’ total lending. The reality is grimmer. Roughly two-fifths of new debt is swallowed by interest on existing loans; in 2014, 16% of the 1,000 biggest Chinese firms owed more in interest than they earned before tax. China requires more and more credit to generate less and less growth: it now takes nearly four yuan of new borrowing to generate one yuan of additional GDP, up from just over one yuan of credit before the financial crisis. With the government’s connivance, debt levels can probably keep climbing for a while, perhaps even for a few more years. But not for ever.

When the debt cycle turns, both asset prices and the real economy will be in for a shock. That won’t be fun for anyone. It is true that China has been fastidious in capping its external liabilities (it is a net creditor). Its dangers are home-made. But the damage from a big Chinese credit blow-up would still be immense. China is the world’s second-biggest economy; its banking sector is the biggest, with assets equivalent to 40% of global GDP. Its stockmarkets, even after last year’s crash, are together worth $6 trillion, second only to America’s. And its bond market, at $7.5 trillion, is the world’s third-biggest and growing fast. A mere 2% devaluation of the yuan last summer sent global stockmarkets crashing; a bigger bust would do far worse. A mild economic slowdown caused trouble for commodity exporters around the world; a hard landing would be painful for all those who benefit from Chinese demand.

Brace, brace

Optimists have drawn comfort from two ideas. First, over three-plus decades of reform, China’s officials have consistently shown that once they identified problems, they had the will and skill to fix them. Second, control of the financial system—the state owns the major banks and most of their biggest debtors—gave them time to clean things up.

Both these sources of comfort are fading away. This is a government not so much guiding events as struggling to keep up with them. In the past year alone, China has spent nearly $200 billion to prop up the stockmarket; $65 billion of bank loans have gone bad; financial frauds have cost investors at least $20 billion; and $600 billion of capital has left the country. To help pump up growth, officials have inflated a property bubble. Debt is still expanding twice as fast as the economy. ..............(more)

http://www.economist.com/news/leaders/21698240-it-question-when-not-if-real-trouble-will-hit-china-coming-debt-bust




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