“When it becomes serious, you have to lie.”
Jean-Claude Juncker. Failed former Luxembourg P.M.,
serial liar, president of the European Commission. Scotch
connoisseur.
This weekend the
growing problems of Europe, from Brexit to dodgy elections from Germany to
Italy, Catalan independence, Poland, Hungary and the Czech Republic against
all, and the never-ending tragedy of Greece. If it wasn’t for bad luck
continental Europe would have no luck at all.
But first this from
the ever more rigged world of stocks. With the month end approaching and stocks still wobbling
from normalising interest rates, time to dress up the indexes to protect the
bonuses.
Dow surges 350 points as stocks book weekly gains
Published: Feb 23, 2018 5:08 p.m. ET
Closely watched 10-year Treasury yield eases to 2.87%
U.S. stocks jolted higher in the final hour of trading on Friday, erasing weekly losses as persistent hand-wringing about rising bond yields and the re-emergence of long-dormant inflation receded on Wall Street.A report from the Federal Reserve, a precursor to Federal Reserve Chairman Jerome Powell’s comments in front of Congress next week, offered few signs that the central bank would adopt a more aggressive monetary-policy tacked.
What are the main benchmarks doing?
The Dow Jones Industrial Average DJIA, +1.39% rose 347.51 points, or 1.4%, to 25,309.99, benefiting from sharp gains in components Goldman Sachs Group Inc., underlining rising demand for bank stocks which are likely to profit as benchmark yields march higher. The index has been up for two straight weeks, representing its largest two week climb, up 4.6%, since Nov. 18, 2016, according to WSJ Market Data Group.The S&P 500 index SPX, +1.60% added 43.34 points, or 1.6%, to 2,747, buttressed by broad sector gains and highlighted by advances of more than 2% in the energy and technology sectors. The two straight weeks of gains for the equity index, up 2.9% over that period, are its most since Feb. 13, 2015.
The tech-laden Nasdaq Composite Index COMP, +1.77% meanwhile, surged 127.30 points, or 1.8%, to end at 7,337.39, snapping a four-session skid, and putting the index just 2.2% shy of its Jan. 26 peak at 7,505.77.
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Now back to the
growing problems of the dying EUSSR. First tiny Latvia, was the ECB asleep at
the switch or deliberately turning a blind eye?
Jean-Claude
Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of
Finance Ministers. Confessed liar. European Commission President. Scotch
connoisseur.
Russians, Bribes and Spies Raise the Scandal Bar for EU Banking
Kremlin shrugs off the
turmoil of ‘our Latvian comrades’
By Aaron Eglitis, Jake Rudnitsky, and Ott Ummelas
23 February 2018, 05:00 GMT
Just days after the U.S. threatened to penalize Latvia’s third-biggest lender for having “institutionalized money laundering,” including for clients linked to North Korea’s nuclear-weapons program, authorities in Riga detained veteran central bank Governor Ilmars Rimsevics on suspicion of bribe-taking.
Hours
later, after Rimsevics’s two-day detention ended, the drama deepened with the
publication of an Associated Press investigation that suggested he’s
a target of Russia’s security services. As a member of the European Central Bank’s governing
council, Rimsevics is privy to market-moving decisions, as the AP noted, and
he’s also a senior official in a former Soviet state that angered Moscow
by joining NATO.
Under fire from multiple
sides, Rimsevics quickly summoned reporters Tuesday to deny wrongdoing,
accuse banks of conspiring against him and declare himself the victim
of a death threat designed to destabilize Latvia. Premier Maris
Kucinskis thickened the plot shortly after by urging Rimsevics to
resign—while also disparaging the bank Norvik and its Russian owner Grigory
Guselnikov for publicly accusing Rimsevics of demanding a bribe
without producing evidence.
Then the Defense Ministry
weighed in with what amounted to a national-security alert that all but accused
Russia of a disinformation attack it called “identical” to those seen in the
U.S., France and Germany. President Raimonds Vejonis followed with a
warning of his own, saying Latvia is locked in a “hybrid war” and that
Rimsevics should step down for the sake of the financial system.
More
Europe to Wind Down Latvian Bank Targeted by U.S. Over Sanctions
By Nicholas Comfort
24 February 2018, 02:29 GMT
European authorities moved to liquidate ABLV
Bank AS after clients pulled assets from the lender following U.S.
accusations that it laundered money.The European Central Bank, which had already placed a freeze on payments by the lender, said early Saturday in Frankfurt that ABLV was failing or likely to fail, handing it over to Europe’s Single Resolution Board. That authority said a resolution of the bank and its Luxembourg-based subsidiary isn’t in the public interest.
ABLV was plunged into crisis after the U.S. Treasury Department this month proposed to ban it from the American financial system, saying it helped process illicit transactions, including for entities with alleged ties to North Korea’s ballistic missile program. The bank responded by saying the allegations are wrong and misleading and that it’s working to provide information to the Treasury that would help to overturn the proposal.
Latvia’s
central bank late Friday tripled emergency liquidity assistance to ABLV after
input from the ECB and local regulators. The ECB previously asked Latvia’s
Financial and Capital Markets Commission to impose a moratorium on ABLV, which
meant the bank was barred from making payments on financial liabilities
including deposits and bonds until further notice. The measure, a first for the
ECB, was necessary to stabilize outflows after a “significant deterioration of
bank’s financial position.”
----ABLV
and a subsidiary will be wound down under Latvian and Luxembourg law, meaning
eligible deposits are protected up to 100,000 euros ($123,000), the SRB said in
a statement early Saturday from Brussels.
More
But the rest of the
insane asylum is no better and about to get much worse. Euros anyone?
Jean-Claude
Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of
Finance Ministers. Confessed liar. European Commission President. Scotch
connoisseur.
German Politics Enters Era of Instability
Germany's big-tent parties have ensured political stability for decades. But they are rapidly losing power and influence. The Social Democrats are witnessing an open rebellion against party leadership while many conservatives are beginning to doubt Merkel's abilities. By DER SPIEGEL Staff
February 16, 2018
06:34 PM
Early Tuesday afternoon, a
small group met for a closed-door meeting at the headquarters of Germany's
Social Democratic Party (SPD) in Berlin. The meeting was supposed to be about a
formality, but it was in fact about the very future of the party.
Martin Schulz, still the
center-left party's chair at the time, was present, as were six of his
deputies, the general secretary, the treasurers, Lower Saxony Governor Stephan
Weil and, of course, Andrea Nahles, the party's parliamentary whip. The group
wanted to commence the previously announced change in party leadership --
former chancellor candidate Schulz was to step down, with Nahles taking over as
the provisional head of the SPD until her planned installation as chair at an
upcoming party conference. The hope was to restore calm in the party.
But it didn't work. Resistance
cropped up everywhere. SPD lawyers argued that it wasn't legal for Nahles to
serve as the party's interim head. Emails from furious party members began
flooding into SPD headquarters. On social media, members of the party began
cursing the stubborn party establishment. And three state chapters opposed the
plan outright.
It set off a wave of the kind
seen often recently, an insurgency from below against those at the top, the
party grassroots against its leadership.
----In actuality, though, it
was a defeat for Nahles. Yet again, she was caught entirely by surprise by the
sentiment in a party that she believes to know so well.
The fact is that the party's
grassroots are angry, and their fury is no longer exclusively focused on plans
to join Chancellor Angela Merkel's conservatives in yet another grand
coalition. The upcoming party vote on that coalition agreement is in the
process of transforming into a vote on the SPD's leadership and political
culture. Party leaders in Berlin are at risk of losing control -- as though
their link with the party base has been broken.
Western Democracies in Crisis
And this phenomenon is by no
means exclusive to the SPD. The conservative Christian Democrats are also
seeing the authority of their once all-powerful chancellor being eroded, with
discontent and the urge for change growing in the party base.
Germany finds itself
oscillating between a longing for stability and the desire for upheaval.
Surveys show that support for both the CDU and the SPD has plunged, to the point
that, were elections held today, it isn't even certain that a grand coalition
would have a majority.
Suddenly, upheaval is
everywhere. Within the SPD, everyone seems to be fighting with everyone else,
with a large number taking aim at acting Foreign Minister Sigmar Gabriel. Above
all, the party base is in open revolt against the leadership. Within the
Christian Democrats, meanwhile, Chancellor Merkel's authority is melting away.
The Merkel era is drawing to a close and the upheavals caused by her efforts to
modernize her party are now breaking into the open.
The country is slipping into a
crisis and Germany, the bastion of stability in Europe, is becoming politically
unstable. And every month the country continues to be run by a provisional
government is another month that Germany doesn't have a voice in Europe or the
world.
This is by no means purely a
domestic development. The party system is currently being turn upside down
across Western democracies. Owing to Germany's prosperity and the sedative power
of its chancellor, it long appeared that Merkel had been spared by the
international development. But the torturous wrangling to create a new
government has now dashed that hope.
In France, the two parties
that once dominated the country now hold only just over a quarter of the seats
in the national parliament. In Italy, the Five Star Movement, which doesn't
seem to stand for much other than the desire for change and its loathing of the
status quo and is led by a former TV comedian, appears to have strong chances
of winning the election there in March.
A Radical Loss of Support
In Germany, the old
establishment parties are also struggling to maintain political stability.
Combined support for the SPD and the conservatives has dropped from over 90
percent at the beginning of the 1970s to just 49 percent today. Their decline,
which had previously been a slow and creeping process, has rapidly accelerated
in recent months.
The party system in Germany is
splintering, with seven parties now represented in national parliament. When it
is no longer possible to form governments with two or three parties, it will
necessarily become increasingly difficult to build stable governments. Italy
already provides an example of what that can mean. The country is constantly swapping
out its prime minister and holding snap elections. Italy has had almost 30
prime ministers and a total of 61 cabinets since 1946. In the same period,
Germany has been governed by eight chancellors.
More
February 22, 2018 / 3:11 PM
Germany's far-right AfD set to embrace anti-Islam PEGIDA
BERLIN
(Reuters) - A leader of the nationalist Alternative for Germany (AfD) is
pushing to overturn the party’s ban on members joining rallies by the
anti-Islam PEGIDA movement - another sign of the rightward shift of Germany’s
budding main opposition party.
Chancellor Angela Merkel’s
conservatives and the Social Democrats (SPD) are struggling to stop voters
switching to the AfD, which won almost 13 percent in a Sept. election and
entered parliament. The latest INSA poll this week showed the AfD on 16 percent
- overtaking the SPD for the first time.
Keen to ensure it does not
alienate voters in the political centreground, the AfD has in the past been
careful to avoid allying itself with the grassroots PEGIDA movement which holds
regular events to protest against “Islamisation”.
Crowds at PEGIDA (Patriotic
Europeans Against the Islamisation of the West) rallies have dwindled since
peaking in early 2015. At that time, some 25,000 supporters joined twilight
rallies and marches through Dresden which struck a chord with those opposed to
an influx of migrants in Germany.
“This is about PEGIDA in
Dresden,” Joerg Meuthen, AfD co-leader, told the Frankfurter Allgemeine Zeitung
daily. “We should lift the ban on cooperation that we have,” he said.
He wants AfD members to be
able to speak at PEGIDA rallies and show party symbols there.
The city of Dresden in the
formerly communist east of Germany has since become home to a strong far-right
movement and fertile ground for PEGIDA. At the marches, PEGIDA supporters hold
placards with slogans such as “foreigners out”.
More
February 22, 2018 / 11:16 AM
Tuscan rivals in Italy vote spar over centre-right currency plan
SIENA,
Italy (Reuters) - A proposal by a centre-right coalition, leading polls ahead
of a March 4 election, to issue small-denomination sovereign bonds would damage
public accounts and curb economic growth, Economy Minister Pier Carlo Padoan
said on Thursday.
Championed by the eurosceptic
League and backed by former premier Silvio Berlusconi’s Forza Italia, the bonds
would be issued by the Treasury to those owed money by the state.
Padoan, who has served as a
technocrat in a government run by the centre-left Democratic Party (PD), told
RAI state TV the scheme was “a plan to circulate a disguised parallel
currency”.
He is running for the first
time as a PD candidate in the Tuscan town of Siena, where his rival is the
architect of the currency scheme -- the League’s economics chief Claudio
Borghi.
“Historical experience shows
that, in these cases, a country that adopts a double currency drastically
damages its public finances, growth potential and stability,” said Padoan,
whose party has slumped in polls as the centre-right has strengthened.
The League maintains that such
a measure would not constitute printing a parallel currency, saying that having
two currencies with different exchange rates would risk putting a “disastrous”
gap between the value of income in the weaker currency and debts in the
stronger.
Proposals to flank the euro
with new financial instruments have caused some concern among investors, who
ditched Italian debt last year when Berlusconi said he wanted to print a “new
lira” for domestic use.
While the general scheme is
jointly backed by the centre-right group, including the far-right Brothers of
Italy, the League has separately presented a detailed plan to issue
“mini-BOTs”, named after Italy’s short-term government bonds.
Once in circulation, the
League says these notes could be used to pay taxes and buy state-provided goods
and services, such as petrol from government-controlled oil company ENI.
More
February 23, 2018 / 11:30 AM
Italian bonds set for worst week of year as election approaches
LONDON
(Reuters) - Italy’s 10-year government bond yield was poised on Friday for its
biggest weekly rise of the year, reflecting some unease at the approach of a
national election that is expected to result in a hung parliament.
Italian bond markets have so
proved resilient in the run-up to the March 4 election thanks to a stronger
euro zone economy, a ratings upgrade, the fading risk of a euro-zone break-up
and a toning down of anti-euro rhetoric from populist parties.
But with the election just
over a week away some uncertainty has crept in, leading to losses for Italian
debt and gains for safe-haven German bonds. Markets also digested new bond
supply from Italy.
Latest polls point to a hung
parliament and analysts expect a short period of volatility that could weigh on
bonds and stocks.
More
EU ON BRINK: Germany demands rogue states Hungary and Poland get LESS cash from Brussels
GERMANY wants countries hosting large numbers of migrants to be rewarded with more EU regional aid in a move that would shift funds away from poorer countries in central and eastern Europe.
By Paul Withers 07:01,
Fri, Feb 23, 2018 | UPDATED: 10:42, Fri, Feb 23, 2018
According to a proposal,
Berlin wants more of the EU’s multinational budget to be tied to respect for
core Brussels' policies and values, such as migration and the rule of law.
The report said Berlin pushed
the plan at a preparatory meeting of senior officials earlier this week,
according to two people at the talks in Brussels.
Under the proposal, seen by
the Financial Times, the EU’s “structural and investment” funds would
support governments that “have assumed responsibility for taking in and integrating
beneficiaries of international protection of migrants with a right to stay”.
This approach would reportedly
cut the focus on a country’s wealth and possibly move some funds to richer
nations in northern and western Europe which host migrants.
----Budget talks will begin at a summit of EU leaders in Brussels this week,
with the future of the regional funds set to be one of the hot topics.
But the question of how far
the EU should reduce spending by in the wake of Brexit, which will deprive the
bloc of the UK’s financial contribution, could complicate negotiations.
This initiative comes amid
growing concern in a number of EU capitals that the Polish and Hungarian
governments are disregarding the bloc’s usual stance on independence of the
judiciary and other institutions.
Traditionally, there has been a heavy focus on infrastructure projects as
well as education and training for EU nationals, so the new plan would be a big
departure from that.Germany’s draft coalition deal between Chancellor Angela Merkel’s CDU/CSU and the centre-left Social Democratic party commits the country to increasing its contribution following the UK exit from the EU.
In a podcast on February 17, Mrs Merkel spoke of linking more regional funds to the way the bloc handles migrants, and added “solidarity cannot be a one-way street”.
More
February 23, 2018 / 2:16 PM
Portugal PM backs higher EU contributions, new taxes post-Brexit
LISBON
(Reuters) - Portugal wants member states to contribute more to the European
Union’s budget and is proposing three new taxes to finance what will be a
27-strong bloc after Britain leaves it, Prime Minister Antonio Costa said on
Friday.
In
televised comments made in Brussels before the start of an informal EU summit, Costa
said Portugal supported the idea of a common EU tax on international financial
transactions, as well as levies on digital platforms and companies that
pollute.
With less
contributions (post-Brexit) every state should be ready to give more, just as Portugal
is ready to contribute more to the EU,” Costa said, calling for member
contributions to rise to 1.2 percent of gross national income from 1 percent
now.
Some member
states argue they should not pay more and the EU budget should be cut instead
to compensate for Britain’s exit.
Twenty
months after Britons voted to leave the EU, London and Brussels are still
negotiating the terms of the divorce. Britain is due to leave the bloc in March
2019 with a transition period to follow that Brussels proposes will end on Dec.
31, 2020.
“But it is
also important for the EU to have new own resources so as not to simply depend
on contributions by the member states ... It would be good to have the two
forms balanced out,” Costa said, urging the current EU parliament to approve
such changes before its term ends in mid-2019.
More
Austria sues over EU approval of Hungary nuclear plant
Staunchly anti-nuclear Austria
lodged a legal complaint with the European Court of Justice yesterday (22
February) against the EU’s approval of the expansion of a nuclear plant in
neighbouring Hungary.
The approval, granted by the
European Commission in March, would allow the expansion of the Paks nuclear
plant outside the Hungarian capital Budapest with a €10 billion Russian loan.
The plant is Hungary’s only
nuclear facility and supplies around 40% of its electricity needs.
“For our nature, our
environment and our unique landscape, we must take up this David and Goliath
struggle,” sustainability minister Elisabeth Koestinger said in a statement,
confirming the launching of the complaint at the Court of Justice of the
European Union.
“Nuclear energy must have no
place in Europe. We will not budge one centimetre from this position!” she
added.
In its decision the European
Commission judged that the project met EU rules on state aid, but Austria
disputes this.
Austrian environmental
campaigners praised the new centre-right government for pursuing a legal action
that had been planned by the Social Democrat voted out of power late last year.
The Paks plant was built with
Soviet-era technology in the 1980s during Hungary’s communist period.
The construction of two new
reactors at the site is part of a 2014 deal struck between Hungary’s right-wing
Prime Minister Victor Orbán and ally Russian President Vladimir Putin.
More
February 23, 2018 / 11:38 AM
May to set out Brexit wishes; EU says ideas so far are 'pure illusion'
LONDON
(Reuters) - Prime Minister Theresa May will outline her wishes for Britain’s
post-Brexit ties with the European Union next week after winning support from
key ministers, although European Council President Donald Tusk on Friday called
the ideas floated so far “pure illusion”.
EU leaders have repeatedly
pressed May to detail her vision for future relations, but she has been
hampered by divisions within her Conservative Party, with some backing
continued close ties and others seeking a “clean break”.
In an attempt to forge a
common position, May hosted an eight-hour meeting of her so-called Brexit war
committee on Thursday at her 16th-century country residence outside London.
Few details of the discussions
were released, but one source said May had accepted the argument of those
ministers who wanted to diverge more quickly from EU rules and regulations.
“It was a very positive
meeting and a step forward, agreeing the basis of the prime minister’s speech
on our future relationship,” May’s spokesman told reporters, adding that she
would deliver her speech on March 2.
More
“Of
course, there will be transfers of sovereignty. But would I be intelligent to
draw the attention of public opinion to this fact?”
Jean-Claude Juncker. Failed
Luxembourg Prime Minister and ex-president of the Euro Group of Finance
Ministers. Confessed liar. European Commission President. Scotch connoisseur.
Trudeau's trip began to go awry right off the bat. Indian Prime Minister Narendra Modi, known for his social-media savvy, did not make any posts welcoming Trudeau, who was greeted off the plane by a low-level agricultural minister.
On Tuesday, Trudeau's wife, Sophie, posed for a photo with Jaspal Atwal, a Sikh separatist who was once convicted of trying to assassinate an Indian politician.
Back in Canada, Trudeau's liberal party has ties to the country's Sikh community, some of whom support the Khalistan movement, which backs a new Sikh state in India's Punjab region. When Outlook India magazine pointed this out, it found itself disinvited from a dinner with Trudeau.
"Canadian Prime Minister Justin Trudeau feted the world over as the new face of 'liberalism' seem to find it difficult to accommodate critical media coverage," the magazine wrote.
Though Trudeau assured India's government that he didn't back the separatist movement, Canada's diplomatic mission had also sent a dinner invitation to Atwal — which it later rescinded.
But the political blunders paled in comparison with the more visible cultural missteps. On several occasions Trudeau and his family appeared dressed in traditional Indian clothing, something other Western politicians don't usually attempt with such vigor.
Prominent Indian personalities expressed their distaste for Trudeau's dress, with India Today calling it "tacky." Trudeau showed up at an event full of Bollywood stars in full traditional dress, while the movie stars themselves simply wore black suits.
On social media, popular Indian personalities put it more bluntly, calling for Trudeau to "have some chill" and calling his outfit choices "fake and annoying."
At one point, Trudeau, wearing traditional dress, broke into the Indian dance called the Bhangra, to a mixed reaction on Twitter.
A: Canadian.
Finally, Oh Canada!
There's hope for GB’s Prime Minister May yet.
Maybe, just once, someone in India will call me "sir" without adding, "you're making a scene."
Maybe, just once, someone in India will call me "sir" without adding, "you're making a scene."
Justin
Trudeau, with apologies to Homer Simpson.
Canadian PM Trudeau roundly mocked for political, fashion blunders during disastrous trip to India
Canadian Prime Minister Justin Trudeau has been roundly mocked for a series of political, cultural, and fashion blunders during his trip to India.
Indian Prime Minister Narendra Modi did not acknowledge his arrival on social media and sent a junior-level agricultural minister to meet him at the airport.
Indian citizens, politicians, and pundits have been ripping Trudeau for various elements of his trips, while the papers back in Canada do the same.
Canadian Prime Minister Justin Trudeau, normally a darling of Western media, has been roundly, and sometimes savagely, mocked for a trip to India that included cultural, fashion, and political blunders at every turn.Trudeau's trip began to go awry right off the bat. Indian Prime Minister Narendra Modi, known for his social-media savvy, did not make any posts welcoming Trudeau, who was greeted off the plane by a low-level agricultural minister.
On Tuesday, Trudeau's wife, Sophie, posed for a photo with Jaspal Atwal, a Sikh separatist who was once convicted of trying to assassinate an Indian politician.
Back in Canada, Trudeau's liberal party has ties to the country's Sikh community, some of whom support the Khalistan movement, which backs a new Sikh state in India's Punjab region. When Outlook India magazine pointed this out, it found itself disinvited from a dinner with Trudeau.
"Canadian Prime Minister Justin Trudeau feted the world over as the new face of 'liberalism' seem to find it difficult to accommodate critical media coverage," the magazine wrote.
Though Trudeau assured India's government that he didn't back the separatist movement, Canada's diplomatic mission had also sent a dinner invitation to Atwal — which it later rescinded.
But the political blunders paled in comparison with the more visible cultural missteps. On several occasions Trudeau and his family appeared dressed in traditional Indian clothing, something other Western politicians don't usually attempt with such vigor.
Prominent Indian personalities expressed their distaste for Trudeau's dress, with India Today calling it "tacky." Trudeau showed up at an event full of Bollywood stars in full traditional dress, while the movie stars themselves simply wore black suits.
On social media, popular Indian personalities put it more bluntly, calling for Trudeau to "have some chill" and calling his outfit choices "fake and annoying."
At one point, Trudeau, wearing traditional dress, broke into the Indian dance called the Bhangra, to a mixed reaction on Twitter.
More
Q: What
do you call a sophisticated American?
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