Thursday , May 23 2019
Home / Yves Smith
Yves Smith

Yves Smith



Articles by Yves Smith

How Trump’s ‘America First’ Trade Strategy Is Accelerating America’s Decline

3 hours ago

By Marshall Auerback, a market analyst and commentator. Produced by Economy for All, a project of the Independent Media Institute
The United States has increased tariffs on $200 billion worth of Chinese products to 25 percent, and Beijing has responded in kind on $60 billion worth of American goods. More tit for tat appears to be on the way: the Trump administration is now openly deliberating whether to impose additional tariffs on a further $325 billion of Chinese goods exported to the United States. National security concerns are also being increasingly invoked: Not only is Huawei, the Chinese telecommunications group, already largely shut out of selling its products in the U.S. domestic market, but Trump is also now taking steps to ban the sale of U.S.-made components to Huawei as well.

Read More »

Links 5/23/19

6 hours ago

Dear patient readers,
I hope you get some R&R over this Memorial Day weekend or bank holiday Monday, if you are in the US or UK.
I also wonder if any reader knows an accountant or tax attorney who is knowledgeable about how New York applies its franchise tax in practice. I can’t interpret a key part (it ties not at all cleanly or well to other sections). A top tax attorney friend says the New York code is famously not well drafted. I’d like not to have to incorporate in Alabama and merge my NY corp into an Al corp (my accountant advises against Delaware for a small business) and I don’t have a reading on the tax costs of not doing so (from what I can tell, they are either a nothingburger or pretty bad).
If you have anyone to whom you can refer me, please e-mail me at

Read More »

Is Theresa May Finally Over?

9 hours ago

The political demise of the UK’s prime minister has been so overpredicted that it’s hard to believe that she might finally be leaving. But the resignation of Andrea Leadsom, May’s minister who managed the Commons, may be the fatal blow. The Times (which has gotten a great deal wrong on Brexit) reports that May’s supporters anticipate she’ll announce her departure after a meeting with Graham Brady, who heads the 1922 Committee. Recall that May managed to get them to hold off on plans to defenestrate her by turning on the tears.
Leadsom is a staunch but not rabid Brexiter. She deemed some new features May added to the withdrawal bill, in particular to let Parliament vote again on holding a second referendum, to come too close to reneging on Brexit. From the Financial Times:
In a fresh blow

Read More »

FAA Won’t Say When Boeing 737 Max Might Fly Again; Foreign Regulators Uppity

9 hours ago

The 737 Max situation has developed not necessarily to Boeing’s advantage.
A FAA news conference which presumably had restoring faith in the plane and the agency as a major goal didn’t appear to make much progress on either front. And it also appears that the FAA placing way too much trust in Boeing had led to the regulator losing its hegemony in certifications. Nicely played!
Boeing’s two largest US customers, Southwest and American Airlines, had made statements that they anticipated returning the 737 Max to service in August. That timetable was almost certainly the result of expectations set by Boeing.
That plan has gone up in smoke. The FAA said it wouldn’t give an idea as to when the 737 Max would be deemed airworthy again, and a year was not out of the picture, although commentators

Read More »

Documenting the Train Wreck: Atmospheric CO2 Is Now Higher Than Ever in Human History, and Rising

13 hours ago

As Tom pointed out, his piece isn’t just about the news of the CO2 hitting new levels, but on what can be done to stop the march to ruin?
By Thomas Neuburger. Originally published at DownWithTyranny!

Atmospheric CO2 levels have now reached 415 ppm. The last time humans experienced levels this high was… never. Human didn’t exist.#climatecrisis #climatechange pic.twitter.com/xtRSF2ScGC
— Peter Gleick (@PeterGleick) May 13, 2019

The Kochs and their carbon-lobby friends have essentially won.–Wen Stephenson (source)

Our betters chose another path for us, and the rest, I’m afraid, will merely be consequences, the train wreck mentioned above, easily foreseen.–Yours truly (source)
I wrote the sentence above in January 2018 as part of a backward look at 2017, the first of the years of

Read More »

“Code Red” at Tesla as Carmaggedon Sinks Tesla Bonds, Carmaker May Need Another $1-2 Billion Before Year End

3 days ago

Yves here. Things are looking ugly indeed at Tesla. The once-celebrated carmaker has has a lot of the air removed from its stock price, so that its market cap is finally below that of major auto manufacturers like GM. But the stock has fallen nine of the past ten days, for a cumulative decline of 20%, and the bottom does not seem to be nigh.
After drinking enough Tesla Kool-Aid for the electric car maker to float stock and bond market offerings earlier this month, collective sobriety kicked in. Tesla still has a high burn rate and is nowhere close to being consistently cash flow positive. For instance, Yahoo’s cheery headline late yesterday was, “Tesla may avert bankruptcy, but it will still need $1 billion in cash.” It didn’t help that one of Tesla’s biggest cheerleaders lost confidence.

Read More »

The Bad News About Nudges: They Might Be Backfiring

3 days ago

Yves here. A problem with “nudges,” as in manipulation that makes clever use of cognitive biases (like putting fruit ahead of cake in a school cafeteria line…which ought to work all of once in getting kids to chose healthier desserts but reportedly has a higher success rate than that) is that, in the climate change context, the measures that will have a big impact require collective action, not individual action.
But this study finding is even worse…..that successful nudges reduce support for broader environmental policies.
By Kate Yoder. Originally published at Grist
Nudges, those tweaks that use behavioral science to help people make smarter decisions, are popular all around the world. If you get a bill comparing your electricity use to your neighbors’, you’re more likely to turn off

Read More »

Technology, Convenience…..and Death

3 days ago

Reader Petter S sent along a recent article The Myth of Convenience, by L.M. Sacasas, Director of the Center for the Study of Ethics and Technology. The piece covers a lot of ground in a relatively short space, so I encourage you to read it in full, along with his earlier post, Privacy Is Not Dying, We’re Killing It.
The point of departure for Sacasas’ post on convenience was an essay by Colin Horgan, The Tyranny of Convenience. As you’ll see soon enough, Sacasas starts with familiar material and takes it in some unexpected but important directions.
Hogan, who provided the grist for the Sacasaa post, with well-warranted ire at the notion that JetBlue was using facial recognition, as described here:

I just boarded an international @JetBlue flight. Instead of scanning my boarding pass or

Read More »

On The Cusp Of War: Why Iran Won’t Fold

4 days ago

Yves here. Glenn F sent along this story about recent events in the US-Iran conflict, many of which don’t appear to have been reported in the English language press. Interestingly, the article takes the position that it is the Saudis that have been doing their best and largely succeeding in suppressing these reports.
Going into the weekend, it looked as if the US was trying to turn down the Iran threat meter a notch. Both Iran and the Saudis said they didn’t want war but were prepared for one. Then a mystery rocket landed in the Green Zone in Baghdad. Oopsie. From the Wall Street Journal:
No major destruction was inflicted by the rocket, which landed near a museum displaying old planes and caused some damage to a building used by security guards, according to an official in the interior

Read More »

Wednesday June 12 Meetup in Cleveland and Thursday June 13 in Chicago?

4 days ago

Dear patient readers,
Even though I will be overbusy in June with my upcoming move, the flip side is that thanks to being able to engage a “moving concierge,” the hardest part, sorting out what gets gotten rid of in some manner is ahead of schedule.
As a result, I would like to see if there is reader interest in a meetup on Wednesday June 12 in Cleveland and then Chicago on Thursday June 13. Reader Carla R has been lobbying for a Cleveland meetup but could use guidance as to where would be good to gather. I’d assume we’d have a small group, perhaps only 5 but as many as 12.
For Chicago, I’m pretty sure we’d have decent turnout (last year we had ~35 people later in the summer) but I wonder about venue options. We went to an Irish pub last time, D4. We did get a side room but it was a

Read More »

The Federal Government Has Poured Millions into Failing Charter Schools in Louisiana

5 days ago

By Jeff Bryant, a writing fellow and chief correspondent for Our Schools, a project of the Independent Media Institute. He is a communications consultant, freelance writer, advocacy journalist, and director of the Education Opportunity Network, a strategy and messaging center for progressive education policy. His award-winning commentary and reporting routinely appear in prominent online news outlets, and he speaks frequently at national events about public education policy. Follow him on Twitter @jeffbcdm. Produced by Our Schools, a project of the Independent Media Institute
When Arne Duncan, the U.S. Secretary of Education under President Barack Obama, said Hurricane Katrina was the “best thing that happened to the education system in New Orleans,” he was no doubt referring in part to

Read More »

How to Pay for the War

6 days ago

Yves here. While war metaphors have gotten a deserved bad rap, in the US,, they are nevertheless something pols are always willing to fund.
And as for the Green New Deal, I wish MMT advocates would take to tying their economic proposals more tightly to Green New Deal initiatives. For instance, I’ve seen, but nowhere near often enough, the idea of a Climate Conservation Corps. Would people keep whinging about the Job Guarantee if jobs were in, say, the the CCC, public day and elder care centers. and local community initiatives (with local control, emulating the old Federal revenue sharing model)?
By Randy Wray. Originally published at New Economic Perspectives
Remarks by L. Randall Wray at “The Treaty of Versailles at 100: The Consequences of the Peace”, a conference at the Levy Economics

Read More »

Gregory Travis and Marshall Auerback: Anatomy of a Disaster – Why Boeing Should Never Make Another Airplane, Again

6 days ago

Yves here. Even thought this critique of Boeing might seem a bit….bloodthirsty…Boeing does have blood on its hands and has been astonishingly unrepentant about it.
Given the fact that Boeing is part of a duopoly of makers of large planes, and there is no plausible way that Airbus could take up the new orders slack, predictions of its demise would seem to be premature. But AIG was widely viewed as indomitable until it started its nosedive.
Another way to return Boeing to the community of adequately-behaved major corporations would be a housecleaning of its executive ranks, starting the the CEO, and the board, along with board reforms such as the creation of a safety subcommittee with clout. But the odds of anything like that happening look remote.
Why might Boeing be at much greater risk of

Read More »

Peak Gasoline Vehicles Is Already Here

6 days ago

By Nick Cunningham, a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics based in Pittsburgh, PA. Originally published at OilPrice
The internal combustion engine has already reached a peak in sales.
That startling conclusion comes from a new report from Bloomberg New Energy Finance (BNEF). “Sales of internal combustion passenger vehicles have already peaked, and may never recover unless EV growth falters, or major economies such as China invest in significant stimulus programs,” BloombergNEF wrote.
EVs may reach price parity with the internal combustion engine by the mid-2020s, even as there is variation between countries and market segments. But new policies are largely heading in one direction: tighter or more costly restrictions on vehicle

Read More »

Wolf Richter: Subprime Bites – Auto-Loan Delinquencies Spike to Q3 2009 Level, Despite Strongest Labor Market in Years

7 days ago

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street
Serious auto-loan delinquencies – 90 days or more past due – jumped to 4.69% of outstanding auto loans and leases in the first quarter of 2019, according to New York Fed data. This put the auto-loan delinquency rate at the highest level since Q4 2010 and merely 58 basis points below the peak during the Great Recession in Q4 2010 (5.27%):

These souring auto loans are going to impact banks and specialized lenders along with the real economy – the automakers and auto dealers and the industries that support them.
This is what the banks are looking at.
The dollars are big. In Q1, total outstanding balances of auto

Read More »

Announcing Birmingham Meetup Thursday May 30

7 days ago

If you live in Alabama or a not-too-far driving distance from Birmingham, hope you can join us. We’ve had a lively group come to these sessions so please come by for some good company and stimulating conversation!
Details:
Time: Thursday, 5:00 to 8:00 PMGrand Bohemian Hotel, which is opposite the Birmingham Botanical Gardens (the bar is on the top floor, next to the restaurant, Habitat and Feed; there are two entrances, so if you have not been here before, use the valet parking and ask the valet to point you to entrance that takes you the restaurant)2655 Lane Park RoadMountain Brook, AL 35223(205) 414-0505http://www.grandbohemianmountainbrook.com/

See you soon!

Read More »

Links 5/16/19

7 days ago

Songkhla Zoo puts lemur babies on display The Nation (furzy)
After Walking Thousands Of Miles, Mink The Bear Is Almost Back Home NPR (David)
‘Balls Are Complete’: How a Navy Jet Crew Drew a Massive Penis in the Sky Vice (resilc)
The moon is shrinking, and a new study shows it’s racked by moonquakes NBC (furzy)
Neanderthals and modern humans diverged at least 800,000 years ago PhysOrg
The Rise of the First Animals Scientific American (furzy)
Study finds scientific reproducibility does not equate to scientific truth PhysOrg (Robert M)
India’s court system teeters on brink of collapse Bangkok Post (furzy)
China?
Trump’s Huawei Threat Is the Nuclear Option to Halt China’s Rise Bloomberg
China dumps US Treasuries at fastest pace in two years Financial Times. Brace yourselves for a yawn.
Brexit

Read More »

British Government Passes the Buck to Sweden Where the Military Offense Exclusion Protects Julian Assange From Extradition to the Us

8 days ago

Yves here. Recall that the UK refused to knuckle under to US pressure not to do business with Huawei, and also appears to have woken up to the fact that the US is prepared to take advantage of UK desperation in the event of a hard or crash-out Brexit. So Helmer’s reading may not be as much of a stretch as it might appear to US readers, who assume that the UK is ever and always America’s poodle.
By John Helmer, the longest continuously serving foreign correspondent in Russia, and the only western journalist to direct his own bureau independent of single national or commercial ties. Helmer has also been a professor of political science, and an advisor to government heads in Greece, the United States, and Asia. He is the first and only member of a US presidential administration (Jimmy Carter)

Read More »

Links 5/15/19

8 days ago

Scientists discover why grocery store tomatoes don’t taste like anything BGR
Europe Sticks a Knife Into Vegan Meat Wall Street Journal
The Dirty Truth About Green Batteries Gizmodo. UserFriendly:
This is a horribly optimistic spin of the actual facts. I recommend the full report, which I also think is somewhat over-optimistic. It waves away CdTe and CIGS as nitch solar technology, but polycrystalline PV has a much higher lifecycle GHG use (way worse than the most common nuclear plants), and assumes into existence recycling programs that don’t exist yet and doesn’t mention how energy intensive recycling is.
Also they frequently say in X years demand exceeds current production, which is rather irrelevant because metals that have other uses that aren’t tied to renewables will have higher

Read More »

”Who Says Violence Doesn’t Solve Anything?” A Review of Radicalized: Four Tales of Our Present Moment by Cory Doctorow

8 days ago

By John Siman
On the back cover of this collection of four tales— intricately-imagined novellas, really, of about sixty to a hundred pages each — one reads a second subtitle: Radicalized: Dystopia is now. For Doctorow is not warning us about extra bad things that could very likely happen in the near future — about really scary things that might be well-nigh inevitable! — but is rather elucidating worst-case-scenarios into which the USA has already been immersed.
And the proof of the devil’s active existence in the Neoliberal USA is in the details, which Doctorow gets right in a way that is enrapturing in its precision: Here is the alluring beauty that arises from staring squarely at and studying what is most abhorrent.
 The reigning devil is, of course, the Neoliberal dispensation by which

Read More »

How Deep Is Boeing’s Hole?

8 days ago

Due to time constraints, I’m going to deal with the current state of Boeing’s woes in broader strokes than usual, and I hope readers will chime in with details, calibration, and any quibbles or corrections.
The latest stories are not pretty:
Boeing new sales have collapsed. However, no one has cancelled orders but new orders have stalled. From CNN:
Boeing had no new orders for planes in April.
Not only did the troubled 737 Max receive zero new orders since it was grounded March 13. Boeing’s other jets, such as the 787 Dreamliner or the 777, also did not get any new orders last month, according to a company report released Tuesday….
None of Boeing’s other jet models have crashed, and airlines have not reported any safety problems other than the 737 Max. But the 737 Max’s problems could be

Read More »

China-US Trade War Heats Up: 3 Reasons It Won’t Cool Down Anytime Soon

9 days ago

Yves here. This is a useful article as far as it goes, but it may not go far enough for the taste of some readers.
The first is that it may miss the real source of the outtrade between the US and China, which is that China appears not to accept a fundamental consequence of greater economic integration with other countries, which is a weakening of national sovereignity. This is a fundamental point made by Dani Rodrik’s trade trileamma.
The US supported China joining the WTO in 2003 largely for geopolitical reasons, that trading more with the rest of the world would bring Chinese interests more in alignment with those of the West. It didn’t hurt that multinationals were salivating at the prospect of getting access to China’s ginormous population, even if it might take a while for incomes to

Read More »

Working on Cloudflare’s Captcha Hell

9 days ago

Dear patient readers,
It appears that in the last two weeks some readers are getting captchas with much greater frequency when they try to comment, and worse, for some, the captcha refuses to accept correct responses. The really bad cases seem to be happening to readers using older OS and browsers, but we aren’t sure it is limited to them.
We are pretty confident this problem comes from Cloudflare. We already tried contacting Cloudflare to tell the about this new bad behavior and also opened up a trouble ticket, but all we have gotten so far is bureaucratic handwaves (and yes, we pay a reasonable amount of hard dollars to Cloudflare, so the poor customer service attitude does not speak well of them).
Our webhost is concerned that if we turn off the captcha function altogether, we will be

Read More »

“It’s Not Just Barclays – Tackling Climate Change Means Building a New Bank System”

9 days ago

Yves here. I’m running this post because while the author has some good impulses about addressing climate change, many of particular ideas on the whole seem unproductive.
One big misconception is that bank lending is an “investment”. Even though a bank can retain a loan on its balance sheet as asset, loans are often sold, and in loan syndications, the lead lender often keeps only a small interest. Loan participations may be sold to private equity credit funds, other banks, large institutional investors like life insurers, or to “collateralized loan obligations” where various tranches are sold to investors.
Moreover, the subtext of the article is that bank loans are a major source of financing for fossil fuel exploration and development firms. It would take a lot of work to take a stab at

Read More »

ZEN and the Art of Modern Money, Part 3 (MMT)

9 days ago

By J. D. Alt, author of The Architect Who Couldn’t Sing, available at Amazon.com or iBooks. Originally published at New Economic Perspectives. Please read Part One here and Part Two here
OPERATION #2—The federal government buys something big for the collective good.
NOTE: A much appreciated comment at Naked Capitalism re: Post#1 suggested that the term “Combustion Chamber” was misleading since the “fuel” (money) put into the chamber is not burned as in a motorcycle engine but is redistributed to other accounts. I was planning to point this out further into the narrative but the comment showed that would be too late. So, beginning now, I’ve changed the name “Combustion Chamber” to “Production/Consumption (P/C) Chamber,” of which we have two: a Public P/C Chamber and a Private P/C Chamber.

Read More »

Why Everyone in the U.S. Who Counts Wants Julian Assange Dead

9 days ago

Yves here. Even though this post covers known territory, it seems worthwhile to encourage those of you who haven’t watched the “Collateral Murder” footage to view the full version. It’s important not only to keep the public (and that includes people in your personal circle) focused on what Assange’s true hanging crime is in the eyes of the officialdom….and it ain’t RussiaGate. That serves as a convenient diversion from his real offense. That effort has a secondary benefit of having more people watch the video.
By Thomas Neuburger. Originally published at DownWithTyranny!

Before and after images of the van that came to pick up the bodies of eleven men shot to death by circling American helicopters in Iraq in 2007. Both children in the van were wounded. “Well, it’s their fault for

Read More »

ZEN and the Art of Modern Money, Part 2 (MMT)

10 days ago

By J. D. Alt, author of The Architect Who Couldn’t Sing, available at Amazon.com or iBooks. Originally published at www.realprogressivesusa.com. Please read Part One here
FIRST: Prime the fuel-pumps
As it stands, our diagram-machine has no fuel (“money”) in it, so it can’t operate. We could go through an exercise to imagine how it could prime itself in order to begin operations. But this would lead to other topics and considerations which would only distract us from our present goal—which is to simply understand HOW the diagram-machine operates—and how, and when, in the course of its operations, it creates money. To move things along, we’ll simply (and arbitrarily) populate the machine with some money to get it started.
We’ll assign to each of the eight “accounts” of our diagram-machine a

Read More »

The Roots of Health Inequality and the Value of Intra-Family Expertise

11 days ago

Yves here. This article has an important finding, that having health care industry professionals in the family is a plus for longevity in lower-income households. However, it also has a disturbing “blame the poors” subtext, in that it assumes that having relatives in the health biz leads to better lifestyle choices, as if not having an uncle who is a doctor means someone is more likely to swill Coke and eat Big Macs.
This piece utterly looks past what one of my highly credentialed friends who came from a blue collar family and has a lot of nurses and later MDs in his family: that even when he was as fully armed as a medical professional in dealing with medical professional and institutions on behalf of his father, who suffered from dementia, he would be treated completely differently than

Read More »

CalPERS Admits It Is Nowhere on Its New Private Scheme After More Than Two Years

11 days ago

CalPERS’ private equity initiative is looking a lot like Brexit.
Just like Brexit, CalPERS launched its private equity scheme for political reasons, namely, to reduce transparency since the public agency is too thin-skinned to take well-warranted criticism, yet too lazy to up its game (CalPERS failure to offer a coherent justification makes it hard to reach any other conclusion). Both were undertaken with a remarkable lack of thought or investigation.1
Just like Brexit, CalPERS keeps running into realities that undermine its claims about how great things would be, like having to admit it will pay higher fees (lowering net returns), and that one of its planned new funds, one that will engage in Warren-Buffet-style long-hold investing, will earn less than CalPERS’ current private equity

Read More »

Politicization of Sports and Sportization of Politics: A Global Dangerous Trend

12 days ago

By Francesc Badia i Dalmases, editor of DemocraciaAbierta and a journalist. He has been senior fellow and general manager at the Barcelona Centre for International Affairs (CIDOB), general manager at the European Institute of the Mediterranean and at the Interarts Foundation. He was executive director of URB-AL-III, adecentralised and urban cooperation program for Latin America of the European Commission. Follow him on Twitter: @fbadiad. Originally published at openDemocracy and produced in partnership with CIVICUS in the context of the International Civil Society Week conference 2019, held this year in Belgrade, Serbia
The globalizing way of promoting sports as a way of thinking and a way of life really just serves the dominant capitalist system. We interview Ivan Ergic, an international

Read More »