Tuesday, 23 May 2017

The American Fairy Tale.

Baltic Dry Index. 954 -02     Brent Crude 53.63

“I sometimes get the impression that many U.S. media outlets work according to a principle which was common in the Soviet Union. Back then, people used to joke that the newspaper Pravda [Truth] had no truth in it, and the Izvestia [News] paper has no news in it. I get the impression that many U.S. media operate in the same way.”

Russian Foreign Minister Lavrov.

With the latest anti-west bombing well covered in main stream media, we will just express our condolences and prayers for all those affected by the terror in Manchester, England yesterday.

We open today with the American Fairy Tale, aka the US budget estimates, being released later today. US presidents come and go, and all release their version of the same old fairy tale, but in this American version of the fairy tale, Cinderella never gets to go to the ball, for the fairy godmother never turns up. In President Trump’s version of the fairy tale today, the fairy godmother gets to show up twice. My guess is that with the US recovery in May already in month 93, (95 by another count, 96  by David Stockman’s count,) and very long in the tooth, what turns up will not be the fairy godmother, but the next recession.

Below, “Once upon a time” in the District of Crooks. Smoke and mirrors and hopium.

More than $2 trillion in savings to come from economic growth: Trump budget

Published: May 22, 2017 9:00 p.m. ET
President Donald Trump’s budget estimates over $2 trillion in savings will result under the 3% economic growth assumed in the proposal, an ambitious target analysts say would be hard to achieve.

The budget, to be released on Tuesday, assumes savings of $2.1 trillion under what the White House calls the effects of economic feedback. Put another way, it’s what the budget saves when accounting for growth.
In total, the Trump administration forecasts the deficit will widen by $3.15 trillion over a decade.

Mick Mulvaney, the director of the Office of Management and Budget, says 3% growth is achievable. But analysts say growth of that magnitude would be a major feat.

Read: Forget 4% growth: 3% would be a major feat for Trump after record drought.

Rosy economic assumptions should sound familiar to Trump-watchers. Treasury Secretary Steven Mnuchin, for example, said during his confirmation hearing that he believed in so-called dynamic scoring, in which growth is baked into assumptions.

But the proposal is almost certain to come in for a heavy dose of skepticism. The Committee for a Responsible Federal Budget recently said achieving 3% growth would require a “heroic combination of good policy and good luck.”

Investment, Hiring Plans Show Rising U.S. Business Optimism

by Sho Chandra
By margins of more than four-to-one, companies that were increasing their capital spending plans gave the reason as an improved business outlook rather than prospects for regulatory reform, the survey showed. The results are consistent with a post-election surge in confidence and support projections for a pickup in economic growth following a weak first quarter. At the same time, businesses and consumers are still awaiting evidence that President Donald Trump and Congress can quickly enact and implement legislation covering tax cuts, infrastructure investment and fewer regulations.

Given that most businesses pointed to the general outlook for demand as reason to feel upbeat, ISM manufacturing survey committee chairman Bradley Holcomb said it might not matter if the administration gains little traction on tax reform or deregulation by year’s end. The trajectory for industry will be positive regardless, he said on a conference call with reporters. “Part of the expectation, I’m guessing here, is that the tax reform will take a while and that it may not be at the level that was initially discussed,” Holcomb said. He added that he expects to see capital-expenditure plans pick up if things continue to go well in the economy.

Meanwhile back in the wealth and jobs destroying EUSSR, more of the same old story on Greece. Greece, the non-stop tragedy that runs and runs. European proof that you can’t get blood out of a stone no matter how hard the Germans try.

"If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"

Romano Prodi, former President of the European Commission, former Italy Prime Minister.

Mon May 22, 2017 | 6:52pm EDT

No deal yet on new loans, debt relief for Greece: Eurogroup head

Greece's international lenders failed to reach a deal on Monday on additional debt relief measures for Athens after an 8-hour meeting in Brussels, the head of the eurogroup of eurozone finance ministers said.

"This afternoon we had the first in-depth discussion on the topic of debt sustainability, but at this point we have not reached an overall agreement," Jeroen Dijsselbloem told a news conference after the meeting.

Ministers did not agree on releasing new loans to Athens, but Dijsselbloem said work is progressing towards a next disbursement "before the summer". Greece needs a new loan to pay debts due in July.

Dijsselbloem said that euro zone finance ministers hoped to reach a deal on disbursing more bailout funds to Greece at their next meeting on June 15.

"We will continue our work on that and try to come to a conclusion at the next Eurogroup," he told a news conference.

EU Economics Commissioner Pierre Moscovici also said he saw a deal at the next Eurogroup meeting, in Luxembourg.

Mon May 22, 2017 | 10:10am EDT

German government at odds with itself over Greek debt relief

Germany's coalition government split along party lines on Monday over the question of debt relief for Greece ahead of a crunch meeting in Brussels to tackle the thorny issue.

Euro zone finance ministers and the International Monetary Fund are meeting to seek a deal on Greek debt relief that balances the IMF's demand for a clear "when and how" with Berlin's preference for "only if necessary" and "details later".

Foreign Minister Sigmar Gabriel, a Social Democrat, caused the divergence in views by demanding that the euro zone make a firm commitment on granting debt relief to Greece, effectively criticising conservative Finance Minister Wolfgang Schaeuble's tough stance.

"Greece has been promised debt relief over and over again if reforms are carried out," Gabriel told the Sueddeutsche Zeitung paper. "Now we must stand by this promise."

"This must not fail due to German resistance," said Gabriel.

Without the deal no new loans can be granted to Athens, even though the bailout is now handled only by euro zone governments and Greece needs new credit to repay some 7.3 billion euros worth of maturing loans in July.

Schaeuble later described reforms agreed by Greece as "remarkable" but said the Greek economy was not yet competitive and that Athens must press ahead with implementing its existing reforms-for-aid program.

"We are not talking about a new program but the implementation of the program agreed in 2015," Schaeuble said. "At the end of the program, in 2018, we will, if necessary, put in place additional measures that we have defined."

----Speaking at a regular government news conference, Foreign Ministry spokesman Martin Schaefer said institutions such as the IMF and the European Commission were not far apart in their assessment on Greece.

"Germany should have an interest in not isolating itself too much," Schaefer said.

Decisions can only be reached in Europe if France and Germany agree.

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President. Scotch connoisseur.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Below, – the good old days in America presented without need for comment. Though I suppose the people of Taormina, Sodom-on-Sea, Sicily, might be longing for the return of US Presidents staying home.

When Presidents Feared Setting Foot on Foreign Soil

With one fishy exception, none dared to set foot outside the country prior to 1906.
by Stephen Mihm
20 May 2017, 13:22 GMT+1
Donald Trump has always prided himself on thinking big, and his first trip abroad as president is no exception. Instead of a modest foray to a single country as many presidents have done, he’s stopping in Saudi Arabia, Israel, the Vatican, Sicily, and Brussels. It’s a lot for a provincial president to endure, but his hosts at his first stop, according to the A.P., will try to make him feel at home with steak with ketchup.

His staff is hoping -- praying, really -- that the trip will serve as a distraction from the scandals that now embroil his administration.   Perhaps. But given the tortured history of president travel to foreign countries, Trump may want to stay home, or at least hand over future traveling duties to Vice President Pence.

Here’s a quiz: How many countries did American presidents visit prior to the twentieth century? The answer is zero. None. Nada. With one fishy exception, no president of the U.S. dared to set foot outside the country prior to 1906.

The origins of this “ironclad taboo” date back to the very beginning of the nation, according to historian Richard Ellis. The founders of the country counted themselves republicans, meaning they self-consciously created a government that rejected both monarchy and aristocracy. For a president to go abroad and consort with kings and nobles was to invite corruption and foreign meddling in our affairs. Presidents might find themselves in compromising situations, betray vital intelligence, and invite what George Washington liked to call “entangling alliances.”

Presidents observed the prohibition at all costs, taking it to the most literal extremes. In a visit to Niagara Falls, New York, Andrew Johnson’s traveling party walked across a suspension bridge to Canada. He and his secretary of state stopped at the invisible line dividing the two countries; the rest of the delegation kept going.

The travel ban remained in place for his successor, Ulysses S. Grant.  When the Canadians invited him to the opening of a railroad in New Brunswick, it was a hard pass. “It has never been the custom for the President to leave the United States during his term in office,” he declared. He even believed that there may have been some “statute, or provision” guarding against the practice. In any case, he refused to “be the one to establish the precedent of an Executive going beyond the limits of his country.”

The only president who ventured over the border was Chester Arthur, who went fishing on the St. Lawrence River in 1883. At the beginning of his trip, Arthur instructed his guides to keep him in American waters, but the fish weren’t biting. Eventually, and a bit surreptitiously, Arthur permitted himself to be taken into Canadian waters, where he had better luck, though he didn’t technically set foot on foreign soil.

As the U.S. gradually transformed into one of the dominant players in world affairs, the pressure for presidents to maybe, just maybe, cross national borders began to build. William McKinley, who presided over the Spanish American War in 1898, was the first to seriously contemplate the idea during a visit to El Paso, Texas in 1901. “I cannot go over there,” he said, gesturing toward Mexico. “There is something in the traditions of this Republic, something in its precedents that does not permit the President to go outside the United States during his term in office.” The Americans in the audience applauded -- their president was safe from corruption.
"I have left orders to be awakened at any time in case of national emergency -- even if I'm in a Cabinet meeting."
President Ronald Reagan.
Technology Update.
With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Today, something different. The New York subway system as the poster child for President Trump’s infrastructure renewal program.

New York's Ancient Subway Tech is Becoming a Serious Problem

On one level, it's remarkable that it's worked for eighty years.

By David Grossman  May 1, 2017
The New York City subway system is getting old. This might not surprise anyone who has ridden the busiest rapid transit rail system in America, as well as one of the longest and oldest. The New York Times recently took a deep look at the system, and issues as old as block signaling show how left behind the 24-hour subway is.

As trains started to become commonplace in the 19th century, it became necessary to track and direct the trains as they came into various stations on the same track. Timetables emerged, the idea spread to new technologies like telegraphs. Now, as part of a system that traces back to 1871, the tracks of the subway are divided into blocks, which are either "occupied" or "vacant." If a block has any amount of train on it, it counts as occupied. Each signal has a control length, showing how far its dominion extends down the tunnel, as well as lights that flash a green, yellow and red, to indicate a surprisingly large number of conditions.

It's a language the Metro would just as soon stop speaking, considering that many parts of this system are still using components from the 1930s. While the city promises that these components are safe, it has been trying for over twenty-five years to begin transitioning to computer-based systems without much success to show for it. One line, the L, has added computers which allow it make trains more efficient and reliable, but it has also faced overcrowding in recent years and is set for a shutdown to the need for critical repairs.

The process of improving the system is a complex and expensive one, requiring transponders every 500 feet of track, radios and zone controllers, and buying new trains or upgrading them with onboard computers and speed sensors, all on a system custom-built for the New York subway. The current estimates for total system renewal is 2045.

The infrastructure, while currently reliable, is over thirty years past its expiration date. It's a common situation in American infrastructure, from the 16-bit computers running the nuclear weapons to locks and dams, there's no shortage of projects that need a boost. President Trump has long promised a national infrastructure plan, which he says is coming within a few weeks. In January, Democrats showed off a trillion-dollar infrastructure plan of their own.

Key to Improving Subway Service in New York? Modern Signals

New York’s subway is struggling with old infrastructure and overcrowding.
The M.T.A.’s failure to modernize its signal system is a crucial example.

At a subway station deep under Manhattan, a dingy room is filled with rows of antique equipment built before World War II. The weathered glass boxes and cloth-covered cables are not part of a museum exhibit, however — they are crucial pieces of the signal system that directs traffic in one of the busiest subways in the world.

Much of the signal equipment at that station, at West Fourth Street, is decades beyond its life span, and it is one of the main culprits plaguing the overburdened subway.

As New York City’s sprawling subway faces a deepening crisis over delays, the Metropolitan Transportation Authority says that modernizing the signals is a top priority. But the rollout of a new signal network is unfolding at a glacial pace even as the subway system is straining under the demands of a booming ridership. 
Two decades after the agency began its push to upgrade signals, work has been completed on just one line.

At the current pace, transforming every subway line could take half a century and cost $20 billion.

The monthly Coppock Indicators finished April

DJIA: 20,941 +149 Up. NASDAQ:  6,048 +190 Up. SP500: 2,384 +152 Up.

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