Wednesday, August 26, 2015

How can the same thing happen to the same guys 8 times?

Wall Street Journal

Central Bankers to Confront Meltdown at Fed’s Retreat Federal Reserve

 Global central bankers are preparing to converge this week in Jackson Hole, Wyo., with a new economic mess on their hands.

Do any of these central bankers ever wonder why they have to meet year after year in various resort locations to discuss a "new" economic mess related to the functioning of financial markets that has somehow landed in their laps?

Sunday, August 23, 2015

Asked and answered

After the American tourists interrupting a terrorist attack on a train in Belgium, we now have, via the United Arab Emirates press agency --

His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, telephoned British Prime Minister David Cameron last night to inform him that the UAE Armed Forces operating in Aden had reached the location in Yemen where UK citizen Douglas Robert Semple had been kidnapped by the terrorist Al Qaeda organisation. During a military intelligence operation, the UAE forces had freed Mr. Semple, taking him to Aden from where he was flown on a UAE military aircraft to Abu Dhabi. 

Is anyone in the European intelligence/security apparatus actually working in August?

Saturday, August 22, 2015

Seagull mania reaches New Jersey

Philadelphia Inquirer --

The owner of Atlantic City's former Revel casino blames giant seagulls for smashing windows in the vacant gambling hall. Glenn Straub said on Friday that "the biggest seagulls I've ever seen" routinely smash into the glass-covered exterior of the building, which has been vacant for nearly a year. 

Revel is the casino that NJ governor and presidential candidate Chris Chistie thought was a better bet than new rail tunnels under the Hudson River. 

Friday, August 21, 2015

Great look good drummer

White House statement

Fadhil Ahmad al-Hayali, also known as Hajji Mutazz, the second in command of the terrorist group ISIL, was killed in a U.S. military air strike on August 18 while traveling in a vehicle near Mosul, Iraq, along with an ISIL media operative known as Abu Abdullah.

Pentagon statement just before Christmas last year (via Stars and Stripes) --

Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, said in an interview with The Wall Street Journal that three key Islamic State military leaders in Iraq were killed there in recent weeks during operations that are part of an expanding coalition effort ahead of a planned offensive next year. Between Dec. 3 and Dec. 9, American airstrikes killed Abd al Basit, the head of Islamic State’s military operations in Iraq, and Haji Mutazz, a key deputy to Abu Bakr al-Baghdadi, the leader of the group, officials told the Journal.

Monday, August 17, 2015

The Brooklyn Tax Dodgers

Good Wall Street Journal article on how even the hipster-domiciled Etsy couldn't resist an Irish corporate tax transaction: it set up a subsidiary in Ireland and then loaned that company money to buy its intellectual property, so that future income earned by that property is taxed at 12.5 percent:

While that approach ranks as relatively straightforward in the business of tax avoidance, it has taken Etsy into the realm of legalistic corporate-speak and vague disclosure that its founders long railed against. Etsy briefly described the moves this way in a May earnings release: “Etsy’s revised corporate structure was implemented to more closely align with its global operations and future expansion plans outside the U.S.”

Tuesday, August 11, 2015

No thanks for saving the free market from itself

Asset manager Romain Hatchuel in Wall Street Journal op-ed:

Austerity is just another word for free market, and the harsh debate around it is actually about whether the economy should operate freely again, or continue to drift toward a state-driven model.

China does what China wants to do

IMF expert analysis of Chinese exchange rate policy, May 2015 --

While undervaluation of the Renminbi was a major factor causing the large imbalances in the past, our assessment now is that the substantial real effective appreciation over the past year has brought the exchange rate to a level that is no longer undervalued. However, the still-too-strong external position highlights the need for other policy reforms—which are indeed part of the authorities’ agenda—to reduce excess savings and achieve sustained external balance. This will also require that, going forward, the exchange rate adjusts with changes in fundamentals and, for example, appreciates in line with faster productivity growth in China (relative to its trading partners). On the exchange rate system, we urge the authorities to make rapid progress toward greater exchange rate flexibility, a key requirement for a large economy like China’s that strives for market-based pricing and is integrating rapidly in global financial markets. Greater flexibility, with intervention limited to avoiding disorderly market conditions or excessive volatility, will also be key to prevent the exchange rate from moving away from equilibrium in the future.

The IMF put enough CYA clauses in there to handle various eventualities, but abruptly devaluing by 2 percent because the economy is getting weaker, is still not consistent with it.

UPDATE: The IMF issues an anodyne reaction to China's move which never acknowledges that their previous assessment is defunct, and Paul Krugman provides a sense of what's actually happening.

Monday, August 10, 2015

The Taxman cometh home

Income received by Airbnb hosts resident in Ireland will be reported to the government as potentially taxable income (Irish Times)  --

“The reporting obligation is driven by the fact that beginning May 1st, 2014, Ireland is Airbnb’s home base for transactions outside the United States. This will be an ongoing part of our annual corporate filing obligation in Ireland,” the company said.

Interesting about this case is that while the company probably sees overall tax advantages to being located in Ireland, this tax arbitrage is usually invisible to Irish people because they are not getting any income from most of the multinationals that locate here. For once, the income the country derives being an advantageous corporate base doesn't seem like free money.

Sunday, August 09, 2015

As the deluge subsides

-Sunday Independent (Ireland) --

Former Leinster rugby player and businessman Paul Hennebry has exited National Asset Management Agency (Nama) by refinancing his loans through the mezzanine fund backed by Cardinal Capital and Wilbur Ross, the Sunday Independent can reveal.

Hotelier Hennebry, the president of Terenure College rugby club, is now on the verge of acquiring the Citi Hotel beside the Central Bank on Dublin's Dame Street with his brothers Michael and Barry, with the transaction set to close next week. ...  Cardinal is the brainchild of Nigel McDermott, who founded National City Stockbrokers with financier Dermot Desmond, and Nick Corcoran, a founding director of Zurich Capital Markets. As well as the joint venture with Ross, it has another joint venture with US asset management giant the Carlyle Group, which is designed to invest in Irish SMEs - both north and south of the border. That fund has invested in chocolate and dessert maker Lily O'Brien's, meat and ready-meals company Carroll Cuisine, and payments business Payzone.

Work through the list: Celtic Tiger project started by ex rugby player, on prime site next to Central Bank, taken over by state bad loans agency during the property crash, but now control regained by the original developer helped by veterans of the Irish financial sector with enough links to major US investors to mobilize capital and capacity.

It's almost as if the Irish property crash never happened at all!

Friday, August 07, 2015

There will still be a bleak December day

Not hard to tell where the Irish elite is on holiday --

Sunday Independent, Eoghan Harris -- Field's coffee shop in Skibbereen is the place to take the national pulse.

RTE Business news -- Minister for Communications Alex White will turn the sod today on a new high-speed digital hub in Skibbereen, Co Cork. The hub in the centre of the west Cork town will have 75 separate workspaces, and when it is up and running in November, it will have the fastest broadband connection in Ireland, provided by Vodafone. Vodafone CEO Ann O'Leary, Glen Dimplex CEO Sean O'Driscoll and Discovery Channel Europe President and Managing Director Dee Forbes are on the steering group. They all have strong ties to west Cork and have homes in the area.

Genuine good luck to west Cork in finding sources of jobs besides seasonal tourism, but the odds that a development policy picked on the basis of sounding appealing to its summer swallows is a good one are not high.

Negotiating alone

Probably the key sentence in Democratic US Senator Charles Schumer's indication that he will vote against the Iran nuclear deal --

Better to keep U.S. sanctions in place, strengthen them, enforce secondary sanctions on other nations, and pursue the hard-trodden path of diplomacy once more, difficult as it may be.

So his alternative involves the US pursuing "diplomacy" with partners that it would be sanctioning for their own sovereign dealings with a sovereign Iran. 

Scott Walker as you've never seen him before


From the (quite entertaining) Fox News/Facebook Republican primary presidential debate, the Wisconsin governor:

I’m guy with a wife and two kids, and Harley. One article called me “aggressively normal.”

Above, via Spongepedia, the "normal" Spongebob Squarepants. Incidentally, the Krusty Krab isn't unionized.

On a more serious note, here's Walker's answer to what he would do as President about the Iran nuclear deal --

To me, you terminate the deal on day one, you reinstate the sanctions authorized by Congress, you go to Congress and put in place even more crippling sanctions in place, and then you convince our allies to do the same. This is not just bad with Iran, this is bad with ISIS. It is tied together, and, once and for all, we need a leader who’s gonna stand up and do something about it.

For the Republicans, that's normal.

Wednesday, August 05, 2015

And the US is so good at keeping lists secret

The Financial Times describes the farcical process the US is undertaking to find Syrian rebels that it likes --

Many Syrian opposition activists say they have been engaged in talks with the US for months over this. “In March they asked us to give them lists so they could study the training and the number of fighters,” said an activist from Deir Ezzor, a province in eastern Syria controlled by Isis. “We sent by email a list consisting of 200 fighters as a start. Up until now we haven’t got a response.” After months of waiting, US officials finally contacted the Deir Ezzor activists last week and asked them to send a new list. But activists said they would struggle to provide the names of willing volunteers, because most on the earlier list were now partnering with Salafi Islamist groups unpalatable to the US. Such groups include Ahrar al-Sham or the Saudi-backed Jaish al-Islam.

Note in particular that the screening process excludes the most effective anti-Assad fighters!

Sunday, August 02, 2015

The Islamic calendar goes faster

Daily Telegraph (as an example of widely circulated information) --

King Salman arrived in France last weekend (July 24) for a three-week stay, bringing with him no fewer than 1,000 people from his entourage who will stay in his huge villa in overlooking the Mirandole beach or in nearby hotels. 

Above, King Salman arriving today in Tangier, Morocco, one week after his arrival in France for a three-week stay.

Photo: Saudi Press Agency.

Saturday, August 01, 2015

The other invisible hand

Triggered by an Adam Smith-themed post on Crooked Timber, we went looking for a Smith quote and stumbled across, in The Theory of Moral Sentiments:


They [the rich] consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.

No wonder housing there is so cheap

You don't need a building permit in Britain

Quote from Metrobank founder Vernon Hill in an interview with Stephen Moore for the Wall Street Journal ($).

Telegraph in Clickbait masterpiece

Headline:

Outrage over plunging neckline on new Man Utd women's shirt 

It has everything: the phony outrage, the prospect of cleavage, and Manchester United. Bravo!

Friday, July 31, 2015

New York Times headline commentary

Interesting conjunction of Israel news headlines (screenshot from the NYT Middle East page Friday morning US eastern time). And also, the headline on this article should be "Pentagon plan to help Bashar al-Assad by having Syrian rebels fight each other fails."

Wednesday, July 29, 2015

Mysterious source of instability in Lebanon

White House --

On August 1, 2007, by Executive Order 13441, the President declared a national emergency with respect to Lebanon pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions of certain persons to undermine Lebanon's legitimate and democratically elected government or democratic institutions; to contribute to the deliberate breakdown in the rule of law in Lebanon, including through politically motivated violence and intimidation; to reassert Syrian control or contribute to Syrian interference in Lebanon; or to infringe upon or undermine Lebanese sovereignty. Such actions contribute to political and economic instability in that country and the region. Certain ongoing activities, such as continuing arms transfers to Hizballah that include increasingly sophisticated weapons systems, serve to undermine Lebanese sovereignty, contribute to political and economic instability in Lebanon, and continue to constitute an unusual and extraordinary threat to the national security and foreign policy of the United States.

The rest of the statement says that the President will continue to exercise the powers under the order for another year. It's very difficult to tell what exactly is being done under the order. The list of sanctioned individuals seems to include just 4 people: Assaad Hardan, Hafez Makhluf, Wiyam Wahhab, and Michel Samaha. All seem to relate to old-style Damascus meddling in Lebanese politics, which is of a different order these days given the Assads' dependence on Hezbollah.

So what is this unmentioned source of these sophisticated weapons systems to Hezbollah which constitutes an unusual and extraordinary threat to the security of the USA?

Tuesday, July 28, 2015

Know when to fold them

Some key paragraphs, that would have had several attendees squirming, from Barack Obama's really excellent African Union speech --

I have to also say that Africa’s democratic progress is also at risk when leaders refuse to step aside when their terms end. (Applause.) Now, let me be honest with you -- I do not understand this. (Laughter.) I am in my second term. It has been an extraordinary privilege for me to serve as President of the United States. I cannot imagine a greater honor or a more interesting job. I love my work. But under our Constitution, I cannot run again. (Laughter and applause.) I can't run again. I actually think I'm a pretty good President -- I think if I ran I could win. (Laughter and applause.) But I can't. So there’s a lot that I'd like to do to keep America moving, but the law is the law. (Applause.) And no one person is above the law. Not even the President. (Applause.) And I'll be honest with you -- I’m looking forward to life after being President. (Laughter.) I won't have such a big security detail all the time. (Laughter.) It means I can go take a walk. I can spend time with my family. I can find other ways to serve. I can visit Africa more often. (Applause.) The point is, I don't understand why people want to stay so long. (Laughter.) Especially when they’ve got a lot of money. (Laughter and applause.) When a leader tries to change the rules in the middle of the game just to stay in office, it risks instability and strife -- as we’ve seen in Burundi. (Applause.) And this is often just a first step down a perilous path. And sometimes you’ll hear leaders say, well, I'm the only person who can hold this nation together. (Laughter.) If that's true, then that leader has failed to truly build their nation. (Applause.)

Civil and financial engineering

Irish political debate has its occasional dips into absurdity.

Today we have left-wing politicians claiming vindication in their campaign for zero user-cost household water supply not in the achievement of that goal, or even success in principle on the argument for zero user-cost water ... but on a statistical ruling by the European Union statistical agency that the debt of the new water utility is part of the government sector. For context, bear in mind that the balance sheet of the National Asset Management Agency (NAMA), which takes on far more risks than a water utility, is not on the government balance sheet through a special purpose vehicle ownership wheeze. Or that one way to get Irish Water off the government balance sheet would be to privatize it, which is presumably not what its opponents want!

But for a day, the callers to the radio shows will all be experts on Eurostat rules regarding the balance sheet rules of public utilities. 

Monday, July 27, 2015

The truth hurts

Turkish Prime Minister Ahmet Davutoğlu in an interview with CNN's Christiane Amanpour today --

"If that [action against Assad] was done before, [the] Assad regime wouldn't be killing so many people, or pushing them to Turkey, Jordan, or Iraq or Lebanon. There wouldn't be any place or power vacuum for Daesh, for ISIS, to be active ... Assad lost this legitimacy long before; unfortunately, because of inactivity of international community, he continued his crimes, and he created a power vacuum -- he admitted this vacuum a few days ago -- and ISIS filled this vacuum. ... Eliminating ISIS is of course a strategic objective, but there should be some other elements .. We have to have a strategy about the future of Syria ... If there is one person who is responsible for all these terrorist crimes and humanitarian tragedies in Syria, it is Assad's approach, using chemical weapons, barrel bombs against civilians."

Four years after the first opportunity, there are now two genies out of the box: ISIS and Kurdish separatism in Syria. Just as the Obama administration has convinced itself that it can intervene against ISIS without helping Assad, it seems to have convinced itself that it can coax greater Turkish intervention against ISIS without putting the Kurdish question on the table too.


Messy diplomacy

One unusual feature of President Obama's east Africa visit is that he met with a former International Criminal Court indictee, President Uhuru Kenyatta (the charges were dropped). Now while in Addis Ababa he had a regional meeting on South Sudan, and (via Reuters) --

Those at the talks also include Ugandan President Yoweri Museveni, Kenyan President Uhuru Kenyatta, Sudanese Foreign Minister Ibarahim Ghandour and the African Union's Dlamini Zuma.

Since three presidents were there (Obama, Museveni, and Kenyatta), the presence of the Sudanese foreign minister was an obvious wheeze to avoid the formal presence of current ICC indictee, Omar al-Bashir. It's a recognition of reality that Sudan will have to be involved in a settlement but it also shows that the throwing-of-shapes that sometimes goes on regarding which countries can attend particular talks (e.g. Iran on Syria) is just that. There's always some way to work around who's talking to who, regardless of who's in the room.

And they say mean things about King George III

National Review's The Corner, David Pryce-Jones --

In office, Obama rid the White House of a bust of Winston Churchill, who in his day epitomized everything Britain stood for. He also directed that British prime minister Gordon Brown enter the White House through the kitchen.

At least regarding the Churchill bust, Pryce-Jones doesn't repeat the claim that it was loaned to the White House after 9/11, but in any event, the basic grievance relates to the White House returning an object that had been vanity-borrowed by a previous occupant. But as for Gordon Brown entering the White House through the kitchen, that's simply false. It's a mangled version of a story involving Obama and Brown having a side meeting at the UN General Assembly.

Sunday, July 26, 2015

English racket

Greek newspaper Ekathimerini has quite a scoop with the recorded phone call of former #MinisterofAwesome Yanis Varoufakis regarding an alleged Syriza Plan B to take over the tax administration system network and use it as an alternative payments system if relations broke down with the ECB. But isn't the other scoop in the story the context of that mid-July phone call? --

In a teleconference call with members of international hedge funds that was allegedly coordinated by former British Chancellor of the Exchequer Norman Lamont, 

Hedge funds and former Tory ministers getting the inside story on a plan to develop an alternative payments system within the Euro? It's almost as if there's as kind of Anglo-Saxon conspiracy afoot!

Saturday, July 25, 2015

Birds of a feather

FIFA President -- still! -- Sepp Blatter and Russian President Putin meet in St Petersburg ahead of the World Cup draw. Says Sepp --

We are saying ‘yes’ to Russia and assuring you of our support. This is especially important in the current geopolitical situation. We must speak not only of our desire to make the world a better place; we also want to do something tangible to support peace, to support the development of football.

Is Sepp proposing some specific intervention in eastern Ukraine to achieve these lofty goals?

Photo: Kremlin.

Did things just get better or worse?

Reuters --

Turkish fighter jets and ground forces hit Islamic State militants in Syria and Kurdistan Workers Party (PKK) camps in Iraq overnight on Saturday, in a campaign Ankara said would help create a "safe zone" across swathes of northern Syria. 

When Turkey agreed to demands that it take a greater role in fighting ISIS, wasn't it inevitable it would mean them taking on Kurdish militants as well?

Tuesday, July 21, 2015

Off message

Sermon by Ayatollah Khamenei at the end of the Ramadan, as reported on his website --

Referring to the slogans “Death to Israel” and “Death to the US” chanted by the Iranian nation on the Quds (Jerusalem) Day, the Leader of the Islamic Revolution said, “Major orientations of the Iranian nation should be understood through these slogans and not on the basis of the biased language of foreigners, which is unfortunately repeated by some people who misunderstand [the realities] inside [the country].” In his second sermon, Ayatollah Khamenei referred to tragic developments in the region, saying, “Unfortunately, unholy and mischievous hands made the blessed month of Ramadan bitter and difficult for many nations in the region [including] in Yemen, Bahrain, Palestine and Syria. These issues are important for the people of Iran.”

By the way, when he mentions the problems in Syria, he doesn't mean the ones caused by Bashar al-Assad.

Sunday, July 19, 2015

Feather touch regulation

Debate in Dáil Éireann (Irish Lower House) on Central Bank and Financial Services Authority of Ireland Bill, 2002, Wednesday 19 June, Minister of Finance Charlie McCreevy --

As a precaution the Central Bank has formally written to all credit institutions within its remit to re-emphasise the need for compliance with best international standards of management and controls. Moreover, it has asked that there be independent verification that these controls are being operated.

Saturday, July 18, 2015

Be careful with stray apostrophes

Pentagon website --

WASHINGTON, July 17, 2015 – In the world of political-military affairs, Army Gen. Martin E. Dempsey likes to say that he is “the dash.” The dash is not the name of some superhero. It is the punctuation mark found between “political” and “military” when both factors exist in a given situation. 

At the very least, General Dempsey shouldn't go any Arab countries claiming that he's "Dash."