Wednesday, 29 July 2015

The 3-year-old threat to British National Security

3-Year-Old London Child Deemed "Extremist"; Placed In Government Reeducation Program

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28 July, 2015

The United Kingdom has gone batshit crazy. There’s simply no other way to put it. I warned about Britain’s “war on toddler terrorists” earlier this year in the post: The War on Toddler Terrorists – Britain Wants to Force Nursery School Teachers to Identify “Extremist” Children. Here’s an excerpt:

Nursery school staff and registered childminders must report toddlers at risk of becoming terrorists, under counter-terrorism measures proposed by the Government.
The directive is contained in a 39-page consultation document issued by the Home Office in a bid to bolster its Prevent anti-terrorism plan.
The document accompanies the Counter-Terrorism and Security Bill, currently before parliament. It identifies nurseries and early years childcare providers, along with schools and universities, as having a duty “to prevent people being drawn into terrorism”.

Never fear good citizens of Great Britain. While your government actively does everything in its power to protect criminal financial oligarchs and powerful pedophiles, her majesty draws the line at toddler thought crime. We learn from the Independent:

A three-year-old child from London is one of hundreds of young people in the capital who have been tipped as potential future radicals and extremists. 
As reported by the Evening Standard, 1,069 people have been put in the government’s anti-extremism ‘Channel’ process, the de-radicalization program at the heart of the Government’s ‘Prevent’ strategy.
The three-year-old in the program is from the borough of Tower Hamlets, and was a member of a family group that had been showing suspect behavior.
Since September 2014, 400 under 18s, including teenagers and children, have been referred to the scheme.

The fact that this story broke on the same day that chairman of the UK’s Lords Privileges and Conduct Committee, Lord John Sewel, was caught on video snorting cocaine off the breast of a prostitute with a £5 note, is simply priceless. 

You just can’t make this stuff up.

From the BBC:

Lord Sewel is facing a police inquiry after quitting as House of Lords deputy speaker over a video allegedly showing him taking drugs with prostitutes.

The footage showed him snorting powder from a woman’s breasts with a £5 note.
In the footage, Lord Sewel, who is married, also discusses the Lords’ allowances system.
As chairman of committees, the crossbench peer also chaired the privileges and conduct committee, and was responsible for enforcing standards in the Lords. 
Lord Sewel served as a minister in the Scotland office under Tony Blair’s Labour government.

Tony Blair, why am I not surprised:

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He has been a member of the Lords since 1996, and is a former senior vice principal of the University of Aberdeen.

Here’s a clip, in the event you’re interested:

The UK government is so far gone that it insists on protecting the public from toddlers, rather than protecting toddlers from powerful sexual predators. In case you need a reminder:

CIA agent directs destruction of MH17 in Novorussia

David L. Stern's phone talks before Malaysia Airlines Flight 17 plane crash

Агент ЦРУ руководил уничтожением самолёта Боинг-777 в Новороссии (аудиозапись)

17 July, 2015

Audio Player

Listen to audio HERE

Pressbox (Press Release) - David L. Stern, a citizen of the USA, working as a CIA agent under cover in international media, in particular in GlobalPost and BBC, in the middle of July of 2014 was near Grabovo village of the Donetsk region of Ukraine where the Boeing Malaysia Airlines Flight 17 (MH17/MAS17) was shot down.

The given transcripts of David L. Stern's phone talks partially clarify the events preceding the air crash on July 17, 2014 in Ukraine.

Audio files were provided by people of the ex-head of the Security Service of Ukraine (SBU) Valentyn Nalyvaichenko after his resignation.

For confirmation there is a phone talk with David Stern attached, the audio file is available on:

June 25, 2014

X (non-identified person): Hello.
David L. Stern: Hello.
X: How is the preparation work going?
David L.Stern: Just as it was planned.
X: Have you met with Ukrainian "warriors"? (laughs)
David L. Stern: (laughs) Not today.
X: I need you to personally control "the complex." It should be at a certain location at certain time. Understand?
David L. Stern: Yes, sure.
X: I want you to personally do this.
David L. Stern: Yes, don't worry.
X: Ok, good luck.
David L. Stern: Good luck.

June 27, 2014

David L. Stern: Hello! I didn't have time to tell you yesterday... It was a right decision to get Poroshenko replace Koval.
X: That was John's decision (presumably John Brannon). We thought it was right.
David L. Stern: I am proud to be in his team.
X: He said we should follow the Saudi model... You know what I mean.
David L. Stern: Yes, sure.
X: Why are you talking about this now?
David L. Stern: I got many questions concerning Buk's movement from the Koval's team. I hope, they don't suspect anything?
X: Of course, no. Thank you for telling me this. It is important there is no leak.
David L.Stern: Don't worry. We completely understand everything.
X: Excellent. Goodbye.
David L.Stern: Bye.

July 1, 2014.

David L. Stern: Hi.
X: Hi.
David L. Stern: I want to ask you something. Just for understanding.
X: Sure. Go ahead!
David L. Stern: Who recommended Heletey to us?
X: Are there any problems with him? Is he...?
David L. Stern: No, no... Everything is fine... I just need to know...
X: One of our people recommended him... Do you need to know his name?
David L. Stern: mmm... Is there a problem?
X: His name is Nalyvaichenko... He asked to discuss this with John... through Kondratyuk.
David L. Stern: I understand. That is all. No more questions. (laughs)
X: (laughs) Great. Remember you should be very careful with "the complex." Time frames are of crucial importance. You can't be early. You can't be late. You've got to be just in time. I don't trust Ukrainians. They are on drugs and drunkards. David L. Stern: Sure, don't worry. No problem.
X: Good luck.
David L. Stern: Good luck.

July 4, 2014

X: Hi. People working with "the complex"... are they freshmen or professionals?
David L. Stern: Say it again. I did not hear, what?
X: Soldiers who work on "the complex"... Buk... Do they know what they are doing?
David L. Stern: We found the best of those available
X: I was a little worrying, that's it. We were planning it for a long time. If there are any faults... any mistakes... people we work with will never forgive us. David L. Stern: Yes, sure. I'm doing my best.
X: Very good. I count on you.
David L.Stern: Goodbye.

July 11, 2014

David L.Stern: Hello.
X: What happened?
David L. Stern: No problems. Everything is fine. But I need to tell you something.
X: I'm listening.
David L. Stern: I am worried, there probably was a leak. Can we change the staff?
X: Do you have exact information? Or is it just your suspicion?
David L. Stern: No, no. It is just ... intuition. (laughs)
X: Ok. I will check everything again. Let's hope your intuition let you down this time. (laughs)
David L. Stern: Thank you. Goodbye.

July 15, 2014

X: Hi.
David L. Stern: Hi.
X: How are you?
David L. Stern: John, I need to tell you something important.
X: I would ask you not to mention our names in the conversation. Have you forgotten it?
David L. Stern: Sorry... I am very irritated and worried.
X: Has anything happened?
David L. Stern: Not yet. But I am sure it may.
X: Listen... There is no reason to worry... You are just tired... We're all tired...
David L. Stern: No! I got absolutely exact information that Russians are hunting me.
X: Where does it come from?
David L. Stern: Stop! Please, don't interrupt me. I personally made sure our Ukrainian colleagues are watching me. And I they might be listening to us now. I can't understand what the reason is... It can be either treachery or...
X: Listen, it is just how the things always are... Let them do their job.
David L.Stern: No, just listen it to the end. I have absolutely exact information that Russians are hunting me. All the more, they have a positive experience in this, if you know what I mean but... I'm sure if something happens, our bosses will give me up, and believe me I, we, personally I will have to get out of this myself. You know it very well how easily they can let us down.
X: Yes...
David L. Stern: So I have my own system that can ensure my safety. For at least our bosses will not forget or abandon me.
X: What are you talking about?
David L. Stern: I have several documents confirming that in Ukraine we are acting not on our own behalf... We are not terrorists... We act at the order of our management.
X: You are mad!
David L. Stern: No, it is very serious. These are not the games we played in Iraq and Afghanistan. It is much more serious. And I don't want to alone hold responsibility for everything that should happen with this object! I don't want to!
X: Wait...
David L. Stern: No, mate. I have already decided everything. I have these documents in several memory sticks and they, as you understand, are in different places. If something goes wrong, Russians get me and I get no support, then the documents will appear in mass media.
X: Listen... Do you understand that I'll have to report on this.
David L. Stern: Yes, that's what I count for...
X: OK... But I would ask you... Not to act thoughtlessly...
David L. Stern: Sure... I have thought everything through... But you should understand me... Ukrainians try to follow every step I make... Russians are hunting me... Our bosses are simply indifferent to the situation. The only thing that matters for them is the successful completion of the operation.
X: I understand... You're tired... You know, I will try to do something... I promise. And you don't make any steps now.
David L. Stern: Sure.
X: Can you tell me where you got these documents from?
David L. Stern: (laughs) You know the answer... Of course, no.
X: Ok... You made me worry. I'll try... I mean, I promise to do what I can for your safety.
David L. Stern: Ok... I have no doubt in you... Alright... Good luck... Talk to you later.
X: Bye... Take care... Talk to you later.

Caleb Gilbert

MH17 Update: Australia's Julie Bishop In New York To Lobby, Convince Russia For Independent Tribunal

Oleg Tsarev on the current situation in the Donbass and in Ukraine

29 July, 2015

SOURCETranslated by Carpatho-Russian. Edited by Tatzhit.

From the editor:  Ex-MP Oleg Tsarev was the last truly “Pro-Eastern” politician in Ukraine who attempted to act through democratic channels, e.g. running in a presidential election against Poroshenko. After he was severely beaten by a nationalist mob in Kiev, he withdrew his candidacy and called on all men of honor to do the same, saying the election is undemocratic and it is illegal to hold one while there is a civil war unfolding. Soon after, his house was burned down, and Kolomoiski (according to Tsarev’s claims and a phone recording) put a price of $1M on his head.
Oleg Tsarev
Oleg Tsarev

From that point on, he joined the supporters of the Constitution and continued to play a prominent role in the DPR/LPR politics, although not being a military man, his influence diminished once open warfare broke out. Here is a rather interesting (if unproven) recent analysis by him.
==============Interviewer: Oleg, let’s begin with Ukraine. You have friends who have stayed there, and you have certain exclusive sources who regularly provide you private information. On that basis, what do you think about the situation with the economy of Ukraine, and what are the strategic prospects for the country in the near future?

Oleg Tsarev: The situation is close to catastrophic. But, in general, this does not bother either the Kiev authorities or their bosses from the USA. Americans are actually interested in Ukraine declaring default. Simply because it will be easier and cheaper to buy up the capital assets, and the decreasing standard of living will make more people willing to join the army and serve for the salaries it pays. The army itself, Americans will support, supplying everything needed, including weapons.Judging by the fact that Victoria Nuland personally traveled to Kiev to ensure a vote in the Verkhovna Rada to introduce changes to the Constitution of Ukraine, and that due to her arrival the special status of the “separate regions of Donetsk and Lugansk Oblasts” is included in the primary text of the Constitution, we may infer that in the negotiations between Russia and USA on Iran, they also discussed Ukraine.

Evidently, it was for a good reason that Kerry flew to Moscow on May 12th, and Nuland came there on May 17th. The outlines of the agreements are clear. Russia, the European Union, and now also the USA are forcing Poroshenko to implement the Minsk Accords. In this way, a foundation for political settlement will be laid down. In accordance with the Minsk Accords, the DPR and LPR must re-integrate within Ukraine, and get a special status, similar either to “autonomies” or to subjects in a confederation. The Donbass will have a common economic space with Ukraine, but will preserve the right to make independent decisions on most issues. Kiev’s observance of its obligations to the Donbass will be guaranteed by the armies of the DPR and LPR with all their armament, renamed into “people’s police forces”.
Evidently, in the near future we shall observe the creation of a demilitarized region around Donbass, from which not just heavy artillery but also lightly armed soldiers will be withdrawn. I think that this process will begin as soon as it is tested with the successful example of Shirokino. Clashes and shelling will cease as soon as the soldiers can’t see each other in their rifle sights. The next step will be a general amnesty and lifting the economic blockade of Donbass by Kiev.
The most humiliating thing for the Kiev authorities is that they were not invited to these negotiations conducted by Russia with USA and EU, no one asked their opinion.But with all that, I would not get too hopeful just yet.

The immense numbers of armed paramilitaries consist of radicals, whose life is war and who do not wish to lay down arms. It is also true that the population of Donbass, the majority of them having endured so much at the hands of Kiev during ATO, is not willing to return to Ukraine. From my point of view, the process of reconciling the Donbass with Ukraine can hardly be successful while those who unleashed civil war are still in power. And while people like Poroshenko, Yatseniuk, Turchinov, and Kolomoyskiy are not yet brought to justice for their crimes.
Still unresolved is one of the chief contradictions at the very foundation of the Ukrainian state –a state formed by the Russian and Ukrainian people – that the Russian language is not an official language. Nor it is not possible to call USA a reliable partner. The CIA employees who are controlling the State Security and the Armed Forces of Ukraine are not about to return to the USA. No one is about to give actual control of the country back to the people of Ukraine. Hence, of course, we must do everything we can to stop the bloodshed, but at the same time we need to keep the powder dry.
Unfortunately, I think woes and problems will plague my long-suffering homeland for a long time. Not long ago, an acquaintance who is a leader of an NGO in Dnepropetrovsk came to me and told me that they brought him to the Security Service [building], and among many other questions, they asked him questions about me.
The questions were about the period when I was engaged in politics in Dnepropetrovsk. At a meeting there was a man who remained silent and only listened to the answers, but when his phone rang, he began to talk on the phone in pure English. I am convinced that no matter how the conflict in Donbass develops, the Americans will do everything they can to keep Ukraine under their control.

A mini submarine found by divers off the coast of Sweden is a WWI Russian submersible that sank as far back as 1916, not recently as was previously thought, according to the Icelandic company IXplorer ocean research.

Group of French members of parliament in Crimean Simferopol

The lawmaker said french parliamentarians who visited Crimea last week are facing an eight-year prison term, confiscation of vehicles and prohibition to hold certain positions

The disintegrating Arctic - 07/28/2015

Storms Over Arctic Ocean

28 July, 2015

The image below shows sea surface temperature anomalies over the Arctic on July 27, 2015.

The image below shows sea surface temperature anomalies on July 28, 2015.

There is a growing chance that the sea ice will collapse over the next few weeks, due to heavy melting and storms speeding up the flow of sea ice out of the Arctic Ocean into the Atlantic Ocean.

An example of such storms is shown on the animation below. This is a forecast for July 31, 2015, showing cyclonic winds at the center of the Arctic Ocean, with strong winds moving sea ice down 
Fram Strait

The above situation alone is not likely to trigger sea ice collapse. It is more likely to be short-lived. However, there is a growing possibility for such storms to emerge and drive the melting sea ice out of the Arctic Ocean into the Atlantic Ocean.

As the situation in the Arctic further deteriorates, feedbacks can be expected to kick in with growing strength.

One of these feedbacks is the growing amount of heat that will have to be absorbed by the Arctic Ocean as the sea ice disappears, and that will accelerate warming of the water of the Arctic Ocean.

Another feedback is a changing jet stream (as illustrated in above animation), that can be expected to causing increasingly intense storms over the Arctic to emerge. Such storms can mix down warm surface water all the way to the bottom of the seafloor, especially in the many places where the Arctic Ocean is very shallow. This can in turn cause destabilization of hydrates resulting in huge amounts of methane to be abruptly released from the seafloor.

Methane itself is yet another feedback that will accelerate warming in the Arctic, in turn threatening to trigger further methane releases in a spiral of self-reinforcing positive feedback loops.

The situation is dire and calls for comprehensive and effective action as discussed at the 
Climate Plan

Tuesday, 28 July 2015

2015's el-Nino

Possible Strongest El Nino on Record Gets Another Kick From Upper Ocean Heat

27 July, 2015

For the month of July, El Nino crossed solidly into strong event thresholds. Temperatures in the key indicator Nino 3.4 region have continued to rise overall, hitting 1.5 degrees Celsius above average during the first week of the month, then hitting +1.7 and +1.6 C during the second and third weeks. Model consensus continues to show the heat building — hitting around +2.1 C in the average by October, November and December.

(A NOAA comparison shows the 1997-1998 El Nino at peak heat during November of 1997 [left frame]. The right frame image shows the 2014-2016 El Nino during its mid July ramp-up. Note the hot blob of water off the US West Coast in the July 2015 image. Heat in this region tends to drive an atmospheric feedback that continues to push more warm water into the Eastern and Central Equatorial Pacific. Note that, due to this and other factors, the 2014-2016 will likely also hit a peak intensity during October or November. An intensity that could exceed the monster 1997-1998 El Nino event. Image source: NOAA Environmental Visualization Laboratory.)

So much warming in this region of the Pacific would be enough to make the 2014-2016 El Nino nearly as strong as the 1997-1998 event. But, ominously, a few of our more trusted models show temperatures peaking out at around +3 C for the Nino 3.4 zone. A level that would exceed all previous thresholds for El Nino strength. It’s the kind of heat pulse that would re-write the record books for strong El Ninos. The kind that would enable global surface air temperatures — under the constant and building pressure of an excessive human greenhouse gas emission — to hit new and troubling record highs over the coming months.
For such a record event to happen, there needs to be a powerful plug of heat just beneath the ocean surface. It needs to back up into the Central Pacific and it needs to be intense enough to deliver the kind of heat energy predicted. And all indications are that the available heat energy for this potentially record event on the way.
A Massive Plug of Upper Ocean Heat

Back in March one of the strongest westerly wind outbreaks ever to occur in the Western Pacific sent a powerful wave of heat rippling out beneath the broadest section of equatorial ocean water in the world. Hot water, driven to near record temperatures by a human-forced warming of the atmosphere and ocean system spread out just below the surface and began to up-well — contacting the airs just off the West Coast of South America.
(Upper ocean heat is again ramping above the 1.8 C positive anomaly mark for the Equatorial Pacific. A sign that more surface warming is likely on the way. Image source:NOAA CPC.)

At that time, the NOAA measure of heat accumulated in the upper 400 meters of the Equatorial Pacific, showed temperatures had rocketed to 1.8 degrees Celsius above average for the entire basin. Since then, a series of west wind outbreaks have continued to pile abnormally warm water into the upper ocean environment — keeping temperatures in the range of 1.1 to 1.8 C above average.

Now, due to a very long duration westerly wind outbreak that began during late June and has extended for more than a month, upper ocean heat content is again on the rise. As of last week, it had rocketed again to 1.8 degrees Celsius above average for the basin. And signs indicated there was at least a moderate potential for continued strengthening of this heat pulse. Observational data and GFS model runs show a continuing westerly wind flow over the Western Pacific. Winds circling around two lows parallel to one another and straddling the Equator near 170 East are predicted to increase to near 25 to 35 mph over the next few days. It’s the most recent surge in this very long duration westerly wind outbreak. One that will likely only continue to drive more heat into the upper ocean environment.
Kelvin Wave
(A strong Kelvin Wave is now backing more and more heat into the Nino 3.4 zone. In watching the progress of upper ocean heat in this visualization, we could be witnessing the final stages of an event that will go down in the record books. Image source: NOAA CPC)

Already, we can see the strong, warm Kelvin Wave — which has been a persistent feature since mid March — becoming reinvigorated. The Kelvin Wave is now rebounding away from coastal South America even as its warm water zones expand. Its hottest waters are heading more toward mid Ocean. A trend that, if forecast models prove correct, will deliver serious heat to the middle Pacific sea surface region this Fall.
It’s a massive delivery of heat that we can now watch in slow motion. One that could now be in the process of delivering one of the strongest, if not the strongest El Nino in the history of record keeping for this ocean warming event.


From this country’s #1 traitor

And all the rest that he’s NOT talking about.

This government is getting close to selling off this country's sovereignty.

TPP could allow foreigners to buy large assets without formal approval - John Key

Prime Minster John Key insists that on balance, Kiwis will benefit from signing up to TPP.

27 July, 2015

The Trans Pacific Partnership trade deal could allow foreign entities to buy large assets without Crown approval, Prime Minister John Key has signalled.

Key was asked on Monday whether the TPP agreement, the proposed Pacific Rim trade deal being negotiated between 12 countries, would make it easier for buyers to acquire large land holdings in New Zealand.

He said negotiations were ongoing so he could not give a definitive answer, but he signalled that the matter under consideration was not "sensitive land" which includes farmland, but the size of other investments which would trigger an approval process.

"The question is not so much about sensitive land, I think, from memory, I'm pretty sure it's about whether it triggers the threshold, and how much that increases."

Currently those who are not citizens or do not normally reside in New Zealand need Overseas Investment Office approval if they are buying large assets, classified as those costing more than $100 million.

Residents of some countries, including Australia, have a higher threshold because of clauses in free trade agreements.

Last week Labour announced a series of "non-negotiable" conditions before it would support the TPP, including New Zealand maintaining the right to restrict the sales of farmland and housing to non-resident foreigners.

Key described Labour's position as "crazy" and "schizophrenic", claiming that if it wanted to restrict sales to foreigners it should not have included a "most favoured nation" clause in the China free trade agreement.

"[Labour leader] Andrew Little's desperate to find a way to keep the left flank of his caucus in check," Key said.

While negotiations were still continuing, Key said he believed that overall New Zealand would benefit from signing the TPP.

"I'm pretty darn confident that on the balance of benefits New Zealand is going to do a lot better if they sign a free trade agreement with the United States than if they don't."

Jane Kelsey responds to Labour’s TPPA announcement
Labour’s attempt to spin this announcement to appear to take a principled position that meets its members’ concernsm is disingenuous at best. There is only one red line in this list. The rest you can drive a bus through

25 July, 2015

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Labour’s attempt to spin this announcement to appear to take a principled position that meets its members’ concernsm is disingenuous at best. There is only one red line in this list. The rest you can drive a bus through.
That one red line reflects David Parker’s obsession with the right to regulate foreign investment in land – a crucially important right of governments, but it has already been given away in relation to China through the recent Korea FTA, because China is entitled to the same treatment as NZ gives Korea. True, not including it in the TPPA would mean the US and Japanese investors don’t get it, but investors can re-locate themselves easily enough to take advantage of the existing FTAs.
Is Labour not equally concerned about protecting the right to introduce a capital gains tax (a question not answered by officials in relation to the Korea FTA and not mentioned by Labour)? Or not pouring more of the health budget down the trough of Big Phrma or its local offshoot (not some vague promise that ‘Pharmac must be protected” – what does that mean????)? Or ensuring the SOE chapter will allow Labour to establish their state-owned KiwiAssure or rebuild a genuine public broadcaster?
As for balancing the economic gains, they know the economics don’t stand up.
Moreover, Labour seems to be sticking to the ‘we can’t reach a final decision until we see the fine print’ – by which time they know they can’t change anything.
What really matters to National is to legitimise the TPPA by claiming bi-partisan support. Labour’s leader Andrew LIttle needs to have the guts to say to Phil Goff, Mike Moore protogé Clayton Cosgrove, health minister Annette King (who has been super silent on the health impacts) and David Parker that this deal will place unacceptable handcuffs on future Labour governments and that Labour is going to oppose it – and he needs to do so before the TPPA ministers meet in Maui on Tuesday.


Chinese Stocks Suffer Second Biggest Crash In History, 1,500 Companies Halted Limit Down

27 July, 2015

This was not supposed to happen.

After pledging, investing and otherwise guaranteeing the Chinese stock market to the tune of 10% of GDP, and intervening on at least 40 different occasions in the past month ever since China's stock bubble burst in late June, with the subsequent crash nearly taking the Shanghai Composite red for the year, overnight China officially lost control for the second time, when after a weak start to the Monday trading session, things turned very ugly in the last hour, when the Shanghai Composite plunged by 8.48%, closing nearly at the lows, and tumbling some 345 points for its biggest one-day drop since February 2007 and its second biggest crash in history!

The selling was steady throughout the day, but spiked in the last hour on concerns China would rein in its market-supporting programs following IMF demands to normalize its relentless market intervention. According to Bloomberg's Richard Breslow: "fear that the extraordinary support measures employed to hold up the market may be scaled back caused heavy afternoon selling resulting in a down 8.5% day." Of course, one can come up with any number of theories to explain the plunge: for example the PBOC did not buy enough to offset the relentless selling.

The last thing the communist party and the PBOC wanted was another massive sell off after having not only fired the "bazooka" but come up with a different bazooka to halt "malicious sellers" virtually every day, including threats of arrest.

Nobody was spared in the selloff and of the 1,114 stocks in the Shanghai Composite, 13 closed higher on Monday.

Here, courtesy of the WSJ, are some of the more amazing numbers of today's selloff:
  • The Shanghai Composite Index ended down 8.5% at 3725.56, its second-straight day of losses and worst daily percentage fall since February 27, 2007. The smaller Shenzhen Composite fell 7% to 2160.09 and the ChiNext, composed of small-cap stocks and sometimes known as China’s Nasdaq,  closed 7.4% lower at 2683.45.
  • More than two-thirds of the stocks in the Shanghai Composite, or about 765 companies, hit their down limit on Monday. Those limits prevented hundreds of stocks from logging sharper declines, though they can also make it harder for investors to exit positions.
  • Since the Shanghai Composite peaked in June, it has lost 28% of its
    Massive intervention by authorities in Beijing engineered a
    rebound for the country’s stock markets earlier this month, but Monday’s
    selloff eroded much of that recovery.
  • Although hundreds of stocks have resumed trading since the market bottomed earlier this month,126 stocks on the Shanghai Composite are still halted.
  • International investors have been ditching Chinese stocks for the past few weeks, spooked by widespread share suspensions that locked up capital. Investors sold stocks during 13 of the past 16 trading sessions via the Shanghai-Hong Kong Stock Connect, a trading link connecting the two cities that launched in November. Cumulative outflows now total 39.9 billion yuan, or U.S. $6.43 billion.
According to Reuters, there was little to explain the scale of the sell-off. Some analysts said fears that China may hold off from further loosening of monetary policy had contributed to souring investor sentiment.

Sure enough, narratives to "explain" the selling which beget more selling, were promptly offered, as can be seen in this Bloomberg summary of aftter the fact research reports;

  • The decline, extending losses on Friday, is a technical correction after hundreds of companies rebounded 50% with dozens of stocks even doubling after the sell-off,” analyst Shen Zhengyang says by phone
  • The rebound from the earlier sell-off has pretty much come to an end and the market needs to take a breather”
  • Possible expansion of yuan band may put the currency under  depreciation pressure, while pick-up in home prices in 1st-    tier cities may mean weaker-than-expected monetary easing policies going forward
  • Mkt might enter range-bound consolidation after technical correction, but upside will be limited as investor confidence was shattered in earlier sell-off
  • Mkt slumps due to “fragile” investment sentiment, investors locking in profit from previous rebound: chief strategist Yang Delong says in phone interview
  • A shares extend decline as investors started to take profit from last Friday after recent mkt rebound
  • Investors lose faith in a longer-term rebound
  • Expects China to roll out more measures to boost A shrs if SHCOMP drops below 3,800
  • Govt backed funds, with big enough war chest, may buy stocks after mkt slump today
  • Pullback today mainly due to profit-taking, while news on possible govt exit of mkt rescue also has impact on mkt: analyst Qian Qimin
  • Weakness in heavyweight stks may lead to “double dip” in mkt, sees “policy bottom” at 3,500 points as index below that level may trigger panic again
  • Fundamentals underpinning bull mkt may have disappeared given low probability in further monetary easing, potential investment shifting to property mkt, more cautious mkt sentiment
  • A share slump today is an “aftershock” as mkt sentiment needs longer time to recover from previous mkt correction: analyst Huang Cendong
We agree with one thing: having gone all in, the Chinese government can't stop now, and after pledging half a trillion for its Plunge Protection Team (recall China skipped all the QE pleasantries and proceeded straight to buying stocks, launching a quasi-nationalization of the market and making the China Securities Finance Corp a Top 10 shareholder of numerous stocks), it will be forced to do even more, in the process crushing confidence that much more, since investors both offshore and domestic, realize that the fair value of stocks is far lower than current price ex. government intervention.

"Investors are not confident that the bull market will return any time soon," Jimmy Zuo, a trader at Guosen Securities, told Bloomberg.

"People want to pocket profits after the benchmark index rose past the 4,000 mark."

And who can blame them? The only question we have is when will people in other "developed" markets wake up to their own just as manipulated markets, and decide they too have had enough with the rigged casino.

Actually, there is another question: the last time Chinese stocks had a near-record crash, the PBOC somehow "discovered" 600 tons of gold hiding under the couch to prop up confidence. We wonder how much it will "discover" this time.

From the South China Morning Post

An investor stands in front of an electronic board showing stock information at a brokerage house in Qingdao. Photo: Reuters

Government action to prop up stocks buckles under selling pressure as the Shanghai index suffers biggest one-day fall in eight years

What Loss Of Control Looks Like: Chinese Regulator Urges Traders To Rat Out "Malicious Sellers"

Investors and savers hit as FTSE 100's gains for 2015 are wiped out
The UK's benchmark index fell as much as 1.2pc, wiping out gains so far this year

27 July, 2015

Gains made on Britain’s benchmark index so far this year have been wiped out after the FTSE 100 fell as much as 1.2pc in afternoon trade.

At 3.30pm, the FTSE 100 was trading around 6,500 mark - 66.09 points below its 6,566.09 closing position on December 31 last year.

The top flight index - made up of the UK's biggest 100 companies - had been flat in early trade this morning as losses from both Pearson andMerlin were offset by the rebound in gold prices, which helped gold miners edge towards the top of the index.

But as investors began to consider the potential impact of the biggest one day drop in Chinese stocks in eight years, it sank lower.

European bourses were also dragged lower as concerns over Chinese growth weighed on investor sentiment.
With China the dominant factor driving industrial metal prices, these fears are fueling falling metal prices,” Rebecca O’Keefe, of Interactive Investor, said.
"This fall in global commodity prices is putting pressure on many individual stocks and is acting as a serious drag on global markets,” Ms O’Keefe added. FTSE 100 miner Antofagasta and Glencore have fallen 2.9pc and 3.1pc, respectively, in afternoon trade.

Meanwhile, Jameel Ahmad, of ForexTime, warned a resumed selling in commodities is inspiring markets to decline, as “a combination of indications suggest a deeper downturn in the Chinese economy than previously expected”.
The opening bell in Wall Street did little to calm sentiment, as US markets also opened lowerfollowing a sell-off in Shanghai shares amid concerns over China’s slowing growth.

The Dow Jones fell 0.5pc to 17,482.61, the S&P 500 slipped 0.4pc to 2,071.97 and the Nasdaq composite dropped 0.7pc to 5,053.37.

Oil slump leads to $200bn cut in new energy projects - study

© Lucy Nicholson

27 July, 2015

The world’s top energy firms have put off $200 billion in spending on 46 major oil and gas projects due to the oil price slump, according to energy consultancy Wood Mackenzie. This is in reaction to the oil price dropping, with it now at to 4-month low.

The dramatic fall in oil prices in 2014 and subsequent dismantling of 2015 company budgets has, by mid-year, already resulted in over 45 major project final investment decision (FID) deferrals,” analyst Angus Rodger from Wood Mackenzie reported late Friday in his blog.

The deferred range of onshore, shallow-water and deepwater projects had 20 billion barrels of oil, according to the report.
#BlogAlert: Pre-FID project deferrals: 20 billion boe and counting
Wood Mackenzie (@WoodMackenzie) July 27, 2015

Over 50 percent of those reserves are located in deepwater projects, and nearly 30 percent in Canadian oil sands. The majority of the projects are “targeting start-up between 2019 and 2023”. If major energy firms continue cutting future capital commitments then those dates will be pushed back further.

BP, Shell, Chevron, Statoil and Woodside Petroleum are said to be among the big companies postponing projects, the FTreports. This week Shell will set out deeper cuts to its capital spending, with its more recent expenditure estimated at $33 billion.

Postponing “final investment decisions” is one of the responses to falling oil prices as it frees up capital that can be deployed elsewhere and pushes back expenditure. This can ease the hit falling crude prices has on revenue.

Calling off investment also boosts free cash flow and helps the companies cover dividend payouts which can strengthen investor confidence.

The sliding oil price has been matched by a broader decline in a value of copper, gold and other raw materials, which pushed the Bloomberg commodities index to a six-year low.

After more than a 30 percent rebound in the first quarter of 2015, oil prices have started falling again.

On Monday crude fell to near four-month lows due to sharp drop in Chinese stock markets. Evidence of a global oil supply glut has halved prices in the past year also affected the crude plunge.

Brent crude for September on Monday was down to $53.41 a barrel at 17:20 MSK. West Texas Intermediate (WTI) stood at $47.37.

China Stock Market CRASHING as Central Bank Buying Shares to Prevent COLLAPSE!

China’s Record Dumping Of US Treasuries Leaves Goldman Speechless

On Friday, alongside China’s announcement that it had bought over 600 tons of gold in “one month”, the PBOC released another very important data point: its total foreign exchange reserves, which declined by $17.3 billion to $3,694 billion.
We then put China’s change in FX reserves alongside the total Treasury holdings of China and its “anonymous” offshore Treasury dealer Euroclear (aka “Belgium”) as released by TIC, and found that the dramatic relationship which we first discovered back in May, has persisted – namely virtually the entire delta in Chinese FX reserves come via China’s US Treasury holdings. As in they are being aggressively sold, to the tune of $107 billion in Treasury sales so far in 2015.

We explained all of his on Friday in “China Dumps Record $143 Billion In US Treasurys In Three Months Via Belgium“, and frankly we have been surprised that this extremely important topic has not gotten broader attention.
Then, to our relief, first JPM noticed. This is what Nikolaos Panigirtzoglou, author of Flows and Liquidity had to say on the topic of China’s dramatic reserve liquidation
Looking at China more specifically, it appears that, after adjusting for currency changes, Chinese FX reserves were depleted for a fourth straight quarter by around $50bn in Q2. The cumulative reserve depletion between Q3 2014 and Q2 2015 is $160bn after adjusting for currency changes. At the same time, a current account surplus in Q2 combined with a drawdown in reserves suggests that capital outflows from China continued for the fifth straight quarter. Assuming a current account surplus in Q2 of around $92bn, i.e. $16bn higher than in Q1 due to higher merchandise trade surplus, we estimate that around $142bn of capital left China in Q2, similar to the previous quarter.
JPM conclusion is actually quite stunning:
This brings the cumulative capital outflow over the past five quarters to $520bn. Again, we approximate capital flow from the change in FX reserves minus the current account balance for each previous quarter to arrive at this estimate (Figure 2).
Incidentally, $520 billion is roughly triple what implied Treasury sales would suggest as China’s capital outflow, meaning that China is also liquidating some other USD-denominated asset(s) at a feverish pace. So far we do not know which, but the chart above and the magnitude of the Chinese capital outflow is certainly the biggest story surrounding the world’s most populous nation: what is happening in its stock market is just a diversion.

At this point JPM goes into a tangent explaining what the practical implications of a massive capital outflow from China are for the global economy. Regular readers, especially those who have read our previous piece on the collapse in the Petrodollar, the plunge in EM capital inflows, and their impact on capital markets and global economies can skip this part. Those for whom the interplay of capital flows and the global economy are new, are urged to read the following:
One way that slower EM capital flows and credit creation affect the rest of the world is via trade and trade finance. Trade finance datasets are unfortunately not homogeneous and different measures capture different aspects of trade finance activity. Reuters data on trade finance only aggregates loan syndication deals, which have mandated lead arrangers and thus capture the trends in the large-scale trade lending business, rather than providing an all-inclusive loans database. Perhaps the largest source of regularly collected and methodologically consistent data on trade finance is credit insurers (see “Testing the Trade Credit and Trade Link: Evidence from Data on Export Credit Insurance”, Auboin and Engemann, 2013). The Berne Union, the international trade association for credit and investment insurers with 79 members, includes the world’s largest private credit insurers and public export credit agencies. The volume of trade credit insured by members of the Berne Union covered more than 10% of international trade in 2012. The Berne Union provides data on insured trade credit, for both short-term (ST) and medium- and long-term transactions (MLT). Short-term trade credit insurance accounts for the vast majority at around 90% of new business in line with IMF estimates that the vast majority 80%-90% of trade credit is short term.
 Figure 4 shows both the Reuters (quarterly) and the Berne Union (annual) data on trade finance loan syndication and trade credit insurance volumes, respectively. The quarterly Reuters data showed a clear deceleration this year from the very high levels seen at the end of last year. Looking at the first two quarters of the year, Reuters volumes were down by 25% vs. the 2014 average (Figure 4).The more comprehensive Berne Union annual volumes are only available annually and the last observation is for 2014. These data showed a very benign trade finance picture up until the end of 2014. Trade finance volumes had been trending up since 2010 at an annual pace of 8.8% per annum (between 2010 and 2014) which is faster than global nominal GDP growth of 6% per annum, i.e. the trend in trade finance had been rather healthy up until 2014, but there are indications of material slowing this year. This is also reflected in world trade volumes which have also decelerated this year vs. strong growth in previous years (Figure 5).

Summarizing the above as simply as possible: for all those confounded by why not only the US, but the global economy, hit another brick wall in Q1 the answer was neither snow, nor the West Coast strike, nor some other, arbitrary, goal-seeked excuse, but China, and specifically over half a trillion in still largely unexplained Chinese capital outflows.

* * *
But wait, because it wasn’t just JPM whose attention perked up over the weekend. This morning Goldman Sachs itself had a note titled “the Curious Case of China’s Capital Outflows“:
China’s balance of payments has been undergoing important changes in recent quarters. The trade surplus has grown far above previous norms, running around $260bn in the first half of this year, compared with about $100bn during the same period last year and roughly $75bn on average during the previous seven years. Ordinarily, these kinds of numbers would see very rapid reserve accumulation, but this is not the case. Partly that is because China’s services balance has swung into meaningful deficit, so that the current account is quite a bit lower than the headline numbers from trade in goods would suggest. But the more important reason is that capital outflows have become very sizeable and now eclipse anything seen in the recent past. Headline FX reserves in the second quarter fell $36bn, from $3,730bn at end-March to $3,694bn at end-June. While we estimate that there was a large negative valuation effect in Q1 (due to the drop in EUR/$ on the ECB’s QE announcement), there was likely a positive valuation effect in Q2, which we put around $48bn. That means that our proxy for reserve accumulation in the second quarter is around -$85bn, i.e. the actual “flow” drop in reserves was bigger than the headline numbers suggest because of a flattering valuation effect. If we put that number together with the trade surplus in Q2 of $140bn, net capital outflows could be around -$224bn in the quarter, meaningfully up from the first quarter. There are caveats to this calculation, of course. There is obviously the services deficit that we mention above, which will tend to make this estimate less dramatic. It is also possible that our estimate for valuation effects is wrong. Indeed, there is some indication that valuation-related losses in Q1 were not nearly as large as implied by our calculations. But even if we adjust for these factors, net capital outflows might conceivably have run around -$200bn, an acceleration from Q1 and beyond anything seen historically.

Granted, this is smaller than JPM’s $520 billion number but this also captures a far shorter time period. Annualizing a $224 billion outflow in one quarter would lead to a unprecedented $1 trillion capital outflow out of China for the year. Needless to say, a capital exodus of that pace and magnitude would suggest that something is very, very wrong with not only China’s economy, but its capital markets, and last but not least, its capital controls, which prohibit any substantial outbound capital flight (at least for ordinary people, the Politburo is clearly exempt from the regulations for the “common folk”).
Back to Goldman:
The big question is obviously what is driving these flows and how long they are likely to continue. We continue to take the view that a stock adjustment is at work, although it is clear that the turning point is yet to come. We will look at this in one of our next FX Views. In the interim, we think an easier question is what this means for G10 FX. This is because this shift in China’s balance of payments is sure to depress reserve accumulation across EM as a whole, such that reserve recycling – a factor associated with Euro strength in the past – is unlikely to be sizeable for quite some time.

In other words, for once Goldman is speechless, however it is quick to point out that what traditionally has been a major source of reserve reflow, the Chinese current and capital accounts, is no longer there.
It also means that what may have been one of the biggest drivers of DM FX strength in recent years, if only against the pegged Renminbi, is suddenly no longer present.

While the implications of this on the global FX scene are profound, they tie in to what we said last November when explaining the death of the petrodollar. For the most part, the country most and first impacted from this capital outflow will be China, something its stock market has already noticed in recent weeks.

But what is likely the take home message for non-Chinese readers from all of this, is that while there has been latent speculation over the years that China will dump US treasuries voluntarily because it wants to (as punishment or some other reason), suddenly China is forced to liquidate US Treasury paper even though it does not want to, merely to fund a capital outflow unlike anything it has seen in history. It still has a lot of 10 Year paper, aka FX reserves, left: about $1.3 trillion at last check, however this raises two critical questions: i) what happens to 10 Year rates when whoever has been absorbing China’s Treasury dump no longer bids the paper and ii) how much more paper can China sell before the entire world starts paying attention, besides just JPM and Goldman… and this website of course.

Finally, if China’s selling is only getting started, just what does this mean for future Fed strategy. Because one can easily forget a rate hike if in addition to rising short-term rates, China is about to dump a few hundred billion in paper on a vastly illiquid market.

Or let us paraphrase: how soon until QE 4?

An op-ed from RT written just a day before today's collapse. What can I say other than Russia (and RT) has a vesзed interest in talking down any potential problems in China and the BRICS

Collapse that never happened: China bounces back, discrediting Western analysts

© Carlos Barria

26 July, 2015

All the voices in the US media who gave alarmist predictions in the aftermath of China's stock market plunge earlier in July should be very embarrassed. The aftermath of the market crash has proved China’s economy to be highly resilient.
Since capitalism in China is tightly controlled and not allowed to run rampant, the population is far safer from the harmful effects of market turbulence.

According to the Financial Times, 55 percent of the US public is directly invested in the stock market. The majority of these people have no choice in the matter. They are seniors whose pensions were invested by their employers, or they are employees whose salaries are tied to “stock options” or other mechanisms linking them to the New York Stock Exchange.

As a result of the stock market’s central role in US society, when the financial crash of 2008 occurred, unemployment almost immediately went up to 10.1 percent, the highest it had been since 1983. The rate of hours worked per week dropped to 33, the lowest number ever recorded. Overall, the median household net-worth dropped by 35 percent between 2005 and 2011, according to a Vox Media report. Many people in the United States are still suffering the aftereffects of the financial crash of 2008, despite the widely reported “recovery.”

What makes China different?

Analysts in the US media, probably basing their views on what they know about the US economy, made predictions of catastrophe when China’s stock market plummeted on July 8 and 9. The US press had already spent months describing the “slowdown” in the Chinese economy as proof of impending collapse, at the same time as demonizing China’s President Xi Jinping for allegedly being a “neo-Maoist.” When 1,400 companies filed for a trading halt after a 30 percent drop, the US press went into a frenzy, declaring that the seemingly invincible Chinese economy had finally been brought to its knees.

However, the results were very different than those predicted. Within a week, China’s economy was pretty much back to normal. US economists were shocked to see the country reach the goal of 7 percent quarterly growth, despite so many predictions that it would finally lag behind. China’s plans for massive construction of irrigation systems and high-speed trains were not halted. The “New Silk Road” foreign investment programs are still moving head.

How was it that a massive stock market crash had so little impact? How was it that China’s market could crash dramatically, yet society could just move on apparently unscathed? The answers point to realities about the Chinese economy that many Western analysts are unable to comprehend or even acknowledge.

First, only 6 percent of the Chinese population is invested in the stock market. The Chinese stock market is a small club for millionaires and billionaires. China’s industrial workforce, which make up the majority of the planet’s industrial workers, do not have their wages or salaries tied up in “stock options.” The pensions of China’s elderly people are also not at stake with market flexibility. Most of the Chinese population is fully insulated from the chaos of the beloved neoliberal “free market.”

State ownership of industry is very widespread in China. Fifty percent of the world’s crude steel is manufactured in the mostly government-owned Chinese steel industry. China’s state sector controls a great deal of banking and other centers of economic power.

Secondly, despite a huge amount of private ownership, the classic laws of the market studied by economists all over the world do not apply even in China’s vast private sector.

Usually, following a financial crash, there is widespread panic in the stock markets, with investors rapidly pulling their money out. This did not occur in China because the government refused to allow it. Immediately after the crash, the government moved swiftly into action, implementing a variety of “anti-selling measures.” The Chinese government threatened to arrest anyone who was caught short-selling. All major shareholders and directors were blocked from selling stock for six months.

Essentially, the Chinese government stepped in and prevented the natural results of a stock market crash. Corporations were prevented from doing what they would normally and naturally do under such circumstances. The Chinese government gave marching orders, forced market players to do the opposite of what they were inclined to do. The result was a rapid economic recovery that shocked the world.

© Jason Lee
© Jason Lee / Reuters

Keeping the “Invisible Hand” in check

In China, capitalists are not free to invest as they choose, nor are they allowed to move money around based on what is most profitable. Corporations and assets are routinely nationalized, and wealthy capitalists have even been sentenced to death for harming the public. Last year, several employees of a Shanghai based food firm were taken away in handcuffs when it was exposed that they were supplying rotten meat to clients, including McDonald’s and other major restaurant chains.

The Chinese economy is watched over closely by a huge entity with over 88 million members: the Communist Party. It has direct control of the People’s Liberation Army, and all government officials are subject to its discipline. Most major private corporations have Communist Party officials who are assigned to watch over and monitor their activities. Sometimes these officials can be helpful to corporations. Capitalists can often utilize the government’s assistance in order to make more money, as this is in line with the party’s goal of expanding China’s Gross Domestic Product. However, the Chinese government has the ability to give direct orders to privately owned entities, forcing them to act according to the party’s wishes and against the dictates of capitalism’s much heralded “invisible hand.” China’s economy is now rebounding, with the stock market rising once again, because the Communist Party refused to allow the market to function naturally in response to the crash.

Attempts in the US press to blame the market crash on Chinese president Xi Jinping are highly disingenuous. Articles that make these arguments offer very few explanations why Xi is to blame. They merely quote broadly worded statements from market-oriented Chinese think tanks.

If anything, it was lack of regulations that caused the crisis. The Financial Times reports: “Since they were not subject to regulation, fund-matching companies permitted higher leverage and lower barriers entry.

There is now widespread investigation into the unregulated practices of fund matching corporations in China, who may have greatly contributed to the events of July 8th and 9th.

Xi Jinping and the rising “Chinese Dream”

While Xi Jinping is hated in corporate boardrooms and on Wall Street, his actions are wildly popular with many people living on the Chinese mainland. The Economist stated: “He is now more popular than any leader since Mao.” On another occasion they described him as possessing “unusual popularity,” saying “Mr Xi has been winning hearts with a ferocious assault on corruption.”

It’s understandable why Xi’s “mass line campaign,” as well as his popularization and revival of the ideas of Mao Zedong and Deng Xiaoping, are refreshing to millions of Chinese people. Many have become alienated and frustrated by rising corruption over the last few decades, coinciding with the expansion of China’s market sector. With headlines such as, “To Reignite A Nation, Xi Carries Deng’s Torch”, the Chinese press portrays Xi Jinping as a champion of the founding principles of the People’s Republic, whipping China back toward building a prosperous socialist society.

China’s highly successful economic model should be studied by anyone who wants to improve the living standards of the human race. When the global capitalist economy reacted to decades of neoliberalism and experienced a horrific crash in 2008, China continued to roll ahead. As the world market reeled in the aftermath of the crash, China’s Gross Domestic Product increased by 9.6 percent in 2008. Chinese industrial production increased by 12.9 percent that year. Since 2009, the wages of Chinese industrial workers have been steadily increasing, with the rest of society keeping up with them. In 2012, the wages of Chinese private sector workers increased by 14 percent.

While the Western world is consumed by austerity debates and its new generation faces a low-wage economy, the standard of living for China is rapidly increasing.

The secret to China’s success can be found in the role of the state. A powerful government, which has its roots in the 1949 popular revolution, has the ability to keep the market under its control. In China, the “rule of the dollar” certainly exists, but it is secondary. It is the population, organized and directed by the Communist Party, which ultimately has the final say in economic matters. While capitalist investment is utilized to strengthen China's economy, the country is spared from the difficulties associated with the market. Capitalism exists, but it is obedient and compliant, existing at the whim of a very strong government, with deep roots among the population.

As China rolls ahead, it should be clear that Xi Jinping’s “Chinese Dream” contains key economic lessons for the entire human race.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

Caleb Maupin is a radical journalist and political analyst who lives in New York City. Originally from Ohio, he studied political science at Baldwin-Wallace College. In addition to his journalism, analysis, and commentary, he has engaged in political activism. He is a member of the Workers World Party and Fight Imperialism – Stand Together (FIST). He is a youth organizer for the International Action Center and was involved in the Occupy Wall Street movement from its planning stages in August 2011. He has worked against police brutality, mass incarceration, and imperialist war. He works to promote revolutionary ideology, and to support all who fight against the global system of monopoly capitalist imperialism