By Lambert Strether of Corrente.
“When it comes to agriculture and food safety issues, TTIP negotiations are rapidly running into the ground. We have known for some time about the huge disparity in negotiating positions and the complete incompatibility of the “red lines” of the United States and the EU: from the EU’s determination to protect its Geographical Indication labels such as feta cheese in the US, to the American interest in the EU eliminating defensive tariffs for sensitive products in which the US has an enormous economic competitive advantage, such as beef” [TTIP]. “What is revealing are unintentional references to issues of conflict which confirm what we have suspected all along: that the EU is willing to make more concessions, particularly on SPS issues, than they are publicly willing to state.”
For instance, when the Commission changed the rules on acceptable washes of beef carcasses for hygiene purposes, to allow for lactic acid treatments, they insisted there was no connection to trade agreements. However, in the annex to this document, under “recent steps taken to solve SPS [“Sanitary and Phytosanitary,” see here at NC]. concerns”, the Commission lists “Approved lactic acid for beef carcass decontamination” – just as we always said was the case. Lactic acid treatments were designed to clear the way for TTIP. Similarly, the document shows that the Commission has opened the door to the possibility of allowing “the use of peroxyacetic acid for the reduction of bacterial contamination during the processing of carcasses and meat of poultry”. So much for their insistence that “Nor would the EU make any change to its food safety law”, stated elsewhere in the document.
This is very good, and I wonder if a similar process is taking place in the US.
“TiSA undermines COP21 action says analysis of leaked annex on Energy” [PSI]. “‘TiSA recycles ideas proposed by Enron and Halliburton back in 2005 – and rejected then by U.S. negotiators. The proposal that energy regulations must be technology-neutral is an attempt to insulate fossil fuel industries from changes in climate policy,’ warns international trade expert Professor Robert Stumberg from the Georgetown University Law School, in Washington.” A zombie infestation!
“‘We need to be in the EU in order to beat TTIP'” Ergo, no Brexit [OpenDemocracy]. Speech on Brexit from a former head of the British Greens.
“Trump has taught me to fear my fellow Americans” [Richard Cohen, WaPo]. ” I always knew who Trump was. It’s the American people who have come as a surprise.”
“Trump’s support, as Nate Silver has shown, is not comprised only of knuckle-dragging Neanderthals. On average, they earn above-average incomes and boast education levels that also exceed the national average. Some are professionals and merchants on Main Street, who acutely ride the ups and downs of the tangible economy. These voters may also be susceptible to rants about Mexican “rapists” and certainly would not favor a massive incursion of Muslim refugees. But their primary concerns are economic, not social. If they really favored regressive social policies, Ted Cruz was their man” [Real Clear Politics]. “Clinton faces a difficult situation. Ever more dependent on her party’s post-industrial urban core, she will be hard-pressed to moderate her stance on environmental issues,” including coal-fired electricity and fracking.
UPDATE “Since Malloy’s first successful run for governor in the 2010 election cycle, donors from the insurance companies and the lobbying firm have given more than $2 million to Malloy-linked groups, according to the figures compiled by PoliticalMoneyLine and the National Institute on Money In State Politics. Almost half that cash has come in since 2015, the year the [Anthem-Cigna] merger was announced” [David Sirota, International Business Times]. “While prominent politicians such as Hillary Clinton have warned about potential negative consequences of the merger, Malloy — a top Clinton surrogate set to co-chair the national Democratic Party’s platform committee — has not called for Wade to recuse herself from the matter.” Well, well, well. I wonder if Malloy has different views on Medicare for All from, say, National Nurses United?
UPDATE “In a Quinnipiac University poll released today, 45 percent of voters said they would vote for Clinton, while 41 percent favor Trump” [Yahoo News].
“Trump Finally Reveals Veterans Donations, Explodes over Calls for Transparency” [Nonprofit Quarterly]. ” [That Trump’s] exhibition of philanthropy [for Veterans was] badly managed and ridiculously defended against public scrutiny should be terrifying to people working in this sector. It indicates disrespect for philanthropy and transparency that is mindlessly deep and uninformed.” Ouch! Then again, I found myself nodding my head at the detail, until I remembered (a) the utter dysfunction at non-profits, plural, where I have worked and (b) that the nonprofit sector as a whole is deeply intertwingled with the donor class as well as both parties. So it’s not like they’re standing about the fray, here.
UPDATE “‘Donald Trump to visit UK on day of EU referendum result” [Guardian]. On June 24, to officially open Turnberry golf resort.
UPDATE “National Nurses United Endorses Teachout for Congress” [Zephyr Teachout]. Sorry about the press release, but this is actually news, since Clinton oddly, or not, has conspicuously failed to endorse her.
UPDATE Democrat loyalist Joy Ann Reid gives Kristol’s unknown pick for President immediate attention:
— Joy Reid (@JoyAnnReid) May 30, 2016
Catch Reid doing that for Jill Stein! Proof, if more proof were needed, that for liberals the real enemy is not Trump, but the left.
“The 185,000-strong nurses union threatens unrest at July’s presidential nominating convention in Philadelphia” [Wall Street Journal, “Nurses Seek Democratic Showdown”]. NNU is serious, unlike (say) SEIU.
Clinton Email Hairball
“How Clinton can own her email scandal” [The Hill]. Essentially, Clinton should be saying not that Colin Powell did it — “those explanations have always been wack” — but that there’s no security to be had anywhere, because look at all the hacking! “If anything, she opens up a new, fairly noble front and a way for average people to start seriously talking about cybersecurity — which is something we should be doing, anyway.” Well, maybe. (I like the use of “The Beltway Adverb” in “fairly noble.”)
“Bernie Sanders keeps repeating his biggest mistake of the campaign” [Chris Cilizza, WaPo]. “For the bajillionth time in this campaign, Bernie Sanders was asked over the weekend about the ongoing FBI investigation into Hillary Clinton’s decision to exclusively use a private email server during her time as secretary of state. And, for the bajillionth time, Sanders took a hard pass on the question.” Stirring the pot!
‘Hillary’s fibs or lack of candor are all about bad judgments she made on issues that will not impact the future of either my family or my country. Private email servers? Cattle futures? Goldman Sachs lectures? All really stupid, but my kids will not be harmed by those poor calls. Debate where she came out on Iraq and Libya, if you will, but those were considered judgment calls, and if you disagree don’t vote for her” [The Moustache of Understanding, New York Times]. You tell ’em, Tommy! Who cares about corruption? Corruption had nothing to do with Iraq!
UPDATE “A top aide to former Secretary of State Hillary Clinton declined last week to answer questions from private lawyers about the setup of her email server, citing her subsequent role as Mrs. Clinton’s attorney” [Wall Street Journal, “Clinton Aide Declines To Answer Questions About Email Server Setup”]. Cheryl Mills. Not a good look.
“Where is President Obama in all this? So far he has largely stayed out of the campaign, other than to say that he doesn’t believe Mrs. Clinton compromised national security with her home-brew email server. But with her poll numbers dropping, her legal headaches increasing, the Sanders candidacy showing renewed vigor, and Donald Trump looming as a wrecking ball for the president’s legacy, Mr. Obama and adviser Valerie Jarrett might begin sending signals to the Democratic National Committee and to the vice president that a Biden rescue operation wouldn’t displease the White House” [Wall Street Journal, “Clinton Might Not Be the Nominee”]. But “Valerie Jarrett might begin sending signals” jibes well with today’s “The White House Is Terrified the Clinton Campaign “Is in Freefall.'”
Prolegomena to gaming things out: (1) In a way, the outcome of the Clinton Email Hairball, whatever it may be, will be an instance of “The Party Decides.” For example: There are some forms of cancer that cannot be removed without killing the patient. The Clinton network may have metastatized too much for treatment. In which case, “eat, drink, and be merry.” For Clinton to be removed: (2)(a) somebody will have to take her aside and explain. Under Nixon, that role was performed by a delegation led by Barry Goldwater. Perhaps Democrat insiders like John Podesta, who has a power base independent from the Clinton campaign, or Nancy Pelosi, who has not yet endorsed, could play a similar role. (2)(b) The White House would have to send a strong enough signal, through Valerie Jarrett. (Remember that Obama’s inner circle is very small.) (2)(b)(i) Although Obama is a lame duck, he retains power over Loretta Lynch, even though Lynch is a long-time loyalist (see page 44). He also retains the power to pardon. He also retains the affection and loyalty of a large part of the Democrat base. And he has his library to think of. (3) No matter what Obama does: (a) the FBI leadership and Judicial Watch are independent power sources, and (b) the worker bees at State and FBI are really fed up and ticked off with Clinton (and for good reason). (4) No matter what Clinton does: She will retain the affection and loyalty of a large part of her own base. (I remember vividly, though possibly not correctly, WaPo’s coverage of the Iowa 2008 caucus, which Clinton unexpectedly lost to Obama, where the young
punkreporter mocked some older women sitting sadly in an empty high school auditorium, mourning their loss, and thinking “something’s not right, here.”) (5) “You can’t beat something with nothing.” If Clinton is to be removed, there has to be a candidate willing to replace her at the top of the ticket; #NeverTrump was a fiasco because nobody (credible) could be found. I think if the party decides on Biden, they will be in a lot more trouble than they bargained for. And Kerry’s a loser. So who? (6) The formal way for the party to decide is for Clinton delegates, pledged and unpledged, to vote against her. Who’s going to be the first delegate* to do that? (7) Nobody normal pays attention to the election before Labor Day. So the Democrat Party still has time to change course. But not a lot, especially if they go with a dark horse (like, say Sherrod Brown) and have to introduce them to voters. (8) The obvious face-saving maneuver for everyone is for Clinton to “discover” a previously unknown medical condition, and decide to spend more time with her family. There’s probably more to be said… This is an overly dynamic situation! (Oh, and: (9) Sanders had better not go up in any small planes. I cannot imagine the party deciding in his favor.)
* I’m picturing Howard Dean, fulfilling a lifetime of enmity toward Sanders by conspicuously not supporting him in his announcement (and nobody in this this year’s ridiculous crop novices, flakes, and straws, either).
PMI Manufacturing Index, May 2016: “Markit Economics’ U.S. manufacturing sample continues to report nearly dead flat conditions…. Production is in outright contraction for the first time in 6-1/2 years as growth in new orders is as slow as it’s been all year” [Econoday]. “Export orders posted a marginal drop while total backlog orders are also down. The sample, however, increased hiring in an anomaly that won’t likely last given the weakness in orders. Efforts to slow inventory accumulation contributed to the decline in production.”
ISM Mfg Index, May 2016: “A slowing in delivery times gave a lift to the ISM’s manufacturing index which rose 5 tenths to a higher-than-expected but still subdued 51.3 for May” [Econoday]. “Focusing on orders is essential to understand this report — and new orders are solid and export orders are the highest they’ve been since November 2014. For a factory sector that has been barely above water, the ISM offers a welcome indication of health.”
Construction Spending, April 2016: “A major downturn for construction spending in April is offset to a large degree by a major upward revision to the prior month” [Econoday]. “Construction had been at the very top of this year’s economy though this report takes the sector down a notch. But when looking exclusively at housing and excluding the downbeat trend for business investment, the news is still very positive.” And: “The headlines say construction spending slowed, and was well below expectations. The backward revisions make this series wacky – but the rolling averages declined” [Econintersect].
MBA Mortgage Applications, week of May 27, 2016: “Mortgage activity slowed in the May 27 week, with purchase applications for home mortgages falling 5 percent and refinancing 4 percent” [Econoday]. “Despite the weekly decline, the purchase index is a towering 28 percent higher than it was a year ago.”
Leading Indices: ” Leading Index Review: April 2015 Philly Fed Leading Index Forecasts Marginal Slowing In Rate of Growth” [Econintersect]. “This post is a review of all major leading indicators follows – and no leading index is particularily strong. The leading indicators are to a large extent monetary based. Econintersect’s primary worry in using monetary based methodologies to forecast the economy is the current extraordinary monetary policy which may (or may not) be affecting historical relationships. This will only be known at some point in the future.”
GDP: “The Second Estimate of our 1st Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services grew at a 0.8% rate in the 1st quarter, revised up from the 0.5% growth rate reported in the advance estimate last month, as residential investment was revised higher, growth in private inventory investment decreased less than was previously estimated, and exports were down less than had previously been reported” [Economic Populist]. “Real consumption of durable goods fell at a 1.2% annual rate, which was revised from a 1.6% drop in the advance report, and subtracted 0.09 percentage points from GDP, as a drop in consumption of automobiles at a 11.5% rate more than offset an increase at a 9.3% rate of in real consumption of recreational goods and vehicles, while growth in consumption of other durable goods was down as well. Real consumption of nondurable goods by individuals rose at a 1.3% annual rate, revised from the 1.0% increase reported in the 1st estimate, and added 0.18 percentage points to 1st quarter economic growth, as higher consumption of food and energy goods more than offset a small decrease in consumption of clothing. At the same time, consumption of services rose at a 2.6% annual rate, with all categories of services contributing to that growth.”
Banking: Handy diagram of SWIFT-related hacks:
Overview of the SWIFT Related Hacks pic.twitter.com/cAr90GjUXz
— Simon Choi (@issuemakerslab) May 26, 2016
Rather a lot?
Shipping: “‘We need to demolish an enormous number of ships’: Philippe Louis-Dreyfus” [Splash247].
Shipping: “Cargo volumes at the two largest ports in the East fell back in April, a fresh sign that retailers are stepping back from restocking amid continuing high inventory levels, WSJ Logistics Report’s Robbie Whelan writes. Loaded imports at the Port of New York and New Jersey were down from a year ago and even slipped from March. At the same time, Georgia’s Port of Savannah saw imports fall 3.8% year-over-year in April while ticking up slightly from March” [Wall Street Journal]. “The scale of the ports and their deep supply chain connections suggests broad, national strategies are at play and that the inventory glut is defying efforts to pare back stocks. The growth in consumer spending in April may help the inventory picture, but retailers will need firmer signs of economic expansion to change their shipping patterns very soon.
Shipping: “[Analyst:] South Korea is the leading country leasing agricultural land in other countries for own food sourcing” [Air Cargo News]. “But it is likely that India and China will increase food outsourcing in the future.”
Shipping: “Thermal blanket has lithium-ion fires covered” [Air Cargo News]. For the cabin, apparently.
ETFs: “The Top 10 Risks Of ETFs” [ETF.com]. As a Maine Bear, I like #10.
ETFs: “Investors are putting record amounts of money into exchange-traded funds as bonds become increasingly difficult to buy and sell” [Bloomberg]. Global fixed-income ETFs, which track bond indexes and trade like stocks, attracted $60 billion of inflows this year through May 25, according to data compiled by BlackRock Inc. That’s the most for the period since the funds were created 14 years ago and on pace to top last year’s record total of $93.5 billion. The funds are emerging as one of the few winners from worsening trading conditions as dealers pull back from making markets and investors seek cheaper ways to take and hedge credit exposure. Liquidity and ease of use are the top reasons given by about 70 percent of bond ETF users, according to a report by Greenwich Associates.”
The Fed: “‘My sense is that markets are well-prepared for a possible rate increase globally, and that this is not too surprising given our liftoff from December and the policy of the committee which has been to try to normalize rates slowly and gradually over time,’ Bullard told a news conference after speaking at an academic conference in Seoul” [Futures].
The Fed: “There Goes the Fed’s Credibility” [Narayana Kocherlakota, Bloomberg]. “[It seems quite possible that] the Fed’s current course is driven not by state of the economy, but by a desire to get interest rates and its balance sheet back to what is considered ‘normal.’ Savers, bankers and many politicians agree with this objective. They want ‘normal’ — meaning higher — interest rates. The Fed, however, promised to focus on actual economic outcomes such as inflation, not on those voices. It can’t break that promise without undermining people’s faith in its willingness to keep promises in the future.” And: “This erosion of faith is visible in Treasury bond prices.” But what if the Fed, which operates on the loanable funds theory, is the biggest fool in the shower of all, meaning that the taps aren’t actually connected to the plumbing?
Political Risk: “Economic thinking is changing. If that thesis is correct – and there are many reasons to believe it is – then historical experience suggests policy and politics will change as well. How significant that change will be remains to be seen. It is still early days and the impact thus far has been limited. Few politicians or policymakers are even dimly aware of the changes underway in economics; but these changes are deep and profound, and the implications for policy and politics are potentially transformative” [INET Economics]. With a handy chart showing “Traditional Economics” vs. “New Economics.” And I have to say that the ideas in the “New Economics” column seem so obviously true to me that they verge on cliché. “What oft was thought, but ne’er so well expressed,” to go meta.
Political Risk: “We don’t speak of it very often but economists face a fundamental challenge with respect to innovation: if innovation is something no one has anticipated, then the (Savage) axioms upon which we base our rational choice decision-making cannot apply” [Digitopoly]. Implying that colleges and universities should purge their boards of business-people, eh? Letting them return to running their businesses, which many do well, instead of controlling public goods.
“Self-driving cars could be on public roads within five years, market watchers say, as auto makers and technology companies continue to invest in the technology. That’s expected to gut demand for personal auto liability insurance,” Warren Buffet’s cash cow [MarketWatch]. Not so fast. Silicon Valley’s political clout will get their (often shitty) algorithms and programs exempted from legal liability, and then “pedestrian insurance” will be a thing. So Buffet can pivot.
“Boston Dynamics is known for making robots that use limbs in a natural, organic way. The robots react to the environment rapidly in real time, and are a showcase of unprecedented agility and speed in robotics. According to a report by TechInsider, Toyota is close to finalising a deal to buy Boston Dynamics from Google. The news follows a reports of a string of Boston Dynamics talent leaving to join Toyota Research Institute” [First Post].
Today’s Fear & Greed Index: 75, Extreme Greed (previous close: 75, Extreme Greed) [CNN]. One week ago: 63 (Neutral). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Jun 1 at 11:34am.
Our Famously Free Press
“‘It is just a fact that we live in a world where half the population of this planet, if you criticize the leader, you’ll go to jail or worse,” [Jeff] Bezos said. ‘We live in this amazing democracy with amazing freedom of speech, and a presidential candidate should embrace that'” [New York Times]. Hmm. Personally, I don’t think the unexamined concept of “the leader,” ubiquitous in business writing in this country, is the sign of an “amazing democracy” at all. And that word “amazing” (twice repeated)….
“Applications for TFA’s two-year teaching stints have plummeted 35 percent during the past three years, forcing the organization to reexamine and reinvent how it sells itself to prospective corps members. It has been focusing particularly on how to engage students at the nation’s most-selective colleges, where the decline in interest has been among the steepest” [WaPo]. “TFA believes that some issues common to the teaching profession at large are affecting its ability to recruit. In an era of fierce debate about public education, morale among teachers has taken a nosedive…” Well, scabs do tend to make morale plummet, yes.
“Moving Forward on Basic Income” [YCombinator]. I believe that YCombinator is the fons et origo of “disruption,” “innovation,” “startups,” “founders,” and the ginormous VC-inflated bezzle of Uber, AirBnB, and [shedding silent tear], Theranos, all of whose business models and hence valuations are based on law-breaking or outright fraud, and many of which screw working people, hard. Hence, you should apply a hermeneutic of suspicion to whatever these guys are pushing. And that would imply BIG, which is having a moment (see, e.g., at Economists’ VIew).
“Employers didn’t seem to see a part-time job as a barrier to hiring women, with a callback rate of 10.9%. But for men, a part-time job translated into a 4.8% callback rate – little better than the 4.2% callback rate for unemployed men. (Unemployed women had a callback rate of 7.5%.)” [Wall Street Journal, “How Men Can Pay a High Price for Taking a Part-Time Job”]. “A growing body of research indicates that the financial and psychological damage from a period of joblessness can be significant and long-lasting, especially for people who remain out of work for an extended period.”
“After more than 1,100 deaths exposed dangerous labor conditions in Bangladesh in 2013, brands like H&M, Walmart and Gap were among the most powerful companies that pledged to improve the safety of some of the country’s poorest workers” [New York Times]. “But human rights groups say that three years later, those promises are still unfulfilled, and that safety, labor and other issues persist in Bangladesh and other countries where global retailers benefit from an inexpensive work force.”
News of the Wired
“A new study in the Journal of Consumer Research has identified one more reason why [Microsoft’s much-hated Clippy] sent so many people into rage spirals: Digital assistants tend to make us feel powerless. It’s not just Clippy, in other words — it’s his entire species” [New York Magazine].
“Zuckerberg doesn’t seem to realize that, when it comes to online video, “raw and visceral” — from viscera, which literally means guts (!) — can be a very bad thing” [WaPo].
“To this day, I don’t think most people realize the song was aimed at parents who drank and told their kids not to do drugs. I felt they were full of crap, but to write a good song, you need a few more words than that” [Wall Street Journal, “How Jefferson Airplane’s Grace Slick Wrote ‘White Rabbit'”] “My only complaint is that the lyrics could have been stronger. If I had done it right, more people would have been annoyed.” I’m with you there!
Readers, feel free to contact me with (a) links, and even better (b) sources I should curate regularly, and (c) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! See the previous Water Cooler (with plant) here. And here’s today’s plant (Kurt Sperry):
Video? Why not? From Torrente Sovara Anghiari (AR) Italy.