China Fires Shot Across Petrodollar Bow: Shanghai Futures Exchange May Price Crude Oil Futures In Yuan | Zero Hedge
With the US shale revolution set to make America the largest exporter of crude, however briefly, the influence of Saudi oil is rapidly declining. This has been felt most recently in the cold shoulder the US gave Saudi Arabia and Qatar first over the Syrian debacle, and subsequently in its overtures to break the ice with Iran over the stern objections of Israel and the Saudi lobby (for a good example of this the most recent soundbites by Prince bin Talal ). But despite the shifting commodity winds and the superficial political jawboning, the reality is that nothing threatens the US dollar’s hegemony in what many claim is the biggest pillar of the currency’s reserve status – the petrodollar, which literally makes the USD the only currency in which energy-strapped countries can transact in to purchase energy. This may be changing soon following news that the Shanghai Futures Exchange could price its crude oil futures contract in yuan, its chairman said on Thursday, adding that the bourse is speeding up preparatory work to secure regulatory approvals.
In doing so China is effectively lobbing the first shot across the bow of the Petrodollar system, and more importantly, the key support of the USD in the international arena.
This would be in keeping with China’s strategy to import about 100 tons of gross gold each and every month, in addition to however much gold it produces internally, in what many have also seen as a preparation for a gold-backed currency, which however would require a far broader acceptance of the renminbi in the international arena and most importantly, its intermediation in a crude pricing loop. It is precisely the latter that China is starting to focus on.
China, which overtook the United States as the world’s top oil importer in September, hopes the contract will become a benchmark in Asia and has said it would allow foreign investors to trade in the contract without setting up a local subsidiary.
“China is the only country in the world that is a major crude producer, consumer and a big importer. It has all the necessary conditions to establish a successful crude oil futures contract,” Yang Maijun, SHFE chairman, said at an industry conference.
Yang’s presentation slides at the conference stated that the draft proposal is for the contract to be denominated in yuan and use the type of medium sour crude that China most commonly imports.
It is hardly panic time yet: Reuters adds that industry participants with direct knowledge of the plan have said the contract would be priced in the yuan, otherwise known as the Renminbi, and the U.S. dollar. However, one can argue that the CNY-pricing is for now a test to gauge acceptance of the Chinese currency, and will take on increasingly more prominence as more and more countries, first in Asia and then everywhere else, opt for the CNY-denomination and in the process boost the Renminbi to ever greater parity with the USD.
Here are the punchlines:
“The yuan has become more international and more recognised by the financial market,” Chen Bo, Chinese trading firm Unipec’s executive general manager, told Reuters.
“I don’t think it would be unacceptable for the world to use the renminbi for commodities trading.”
Certainly not, although it would also entail a depegging the CNY from the USD, something which China is for now unable and unwilling to do. Because once the Yuan is freely priced, kiss all those Wal-Mart “99 cent” deals goodbye.
Which in retrospect may be just what the US wants: a very gradual and controlled dephasing of the USD’s reserve currency status. Recall that what the Fed wants at any cost is inflation which has so far failed to materialize at the level demanded by the Chair(wo)man thanks in part to cheap Chinese goods and ongoing US exporting of inflation to China. So if that means a spike in the prices of China imports – so key to keeping US inflation in check – so be it. Because we can already see the Fed’s thinking on the matter – certainly it will be able to always restore the USD’s supreme status in “15 minutes” or less when it so chooses.
Of course, by then China, and the Petroyuan, may have a very different view on the world.
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Charles Schwab Warns “We Are In A Manipulated Market” | Zero Hedge
Charles Schwab Warns “We Are In A Manipulated Market” | Zero Hedge.
While the world of mainstream media stock pundits would like investors to believe that there is a wall of money on the sidelines waiting anxiously to go all-in on stocks (bear in mind there’s a seller for every buyer and where does the cash on the sidelines go when it is handed over to the seller in return for his stock?), as none other than Charles Schwab notes in this brief Bloomberg TV clip, “investors are less rattled” than most believe, “and have stayed invested” in large part. “There hasn’t been a wholesale movement away from stocks,” he goes on, busting myths asunder, adding that “investors want to see market-driven conditions, not Fed manipulated ones.”
So perhaps – just perhaps – Schwab is right, if the Fed stepped away and let markets be markets once again, maybe real capital would flow once again?
Schwab goes on to discuss how the Fed’s policy has hurt the older generation – “it has been a terrible thing”
Beginning at around 50 seconds, Schwab calmly dismisses one of the biggest market myths and raises a few red flags – “we see the market go up or down depending on which Fed member is speaking…”
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Crude Oil Spikes Most In 7 Weeks As Iran Nuclear Deal Hopes Fade | Zero Hedge
Crude Oil Spikes Most In 7 Weeks As Iran Nuclear Deal Hopes Fade | Zero Hedge.
With the WTI-Brent spread at 8-month wides, RINs having collapsed, and US investors buoyed by gas prices at the pump near recent lows, the surge in crude oil prices today – by their most since October 2nd – may take some of the ‘tax-cut’ punch from the party (remember gas prices are still 11.4% above recent seasonal norms). The 2% jump in WTI (and 1.85% rise in Brent over the last 2 days) may have only pushed it back to one-week highs but breaks a trend of lower prices that many have hoped would persist. Desk chatter is that much of this move is a re-up of middle-east premia as Iran’s nuclear negotiator says no deal today.
Bear in mind that despite the euphoria over lower gas prices, they are still 11.4% above seasonal norms of the last 5 years…
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Gregor Macdonald: What Happened to the Future? | Peak Prosperity
Gregor Macdonald: What Happened to the Future? | Peak Prosperity.
peapopp/Shutterstock
What Happened to the Future?
Improbably, the global economy has returned to growth over the past four years despite the ravages of a deflationary debt collapse, a punishing oil shock, ongoing constraint from debt and deleveraging, and stagnant global wages.
The proof of this growth comes from the best indicator of all: the growth of global energy consumption. Halted in 2009, as global trade collapsed from the second half of 2008 into the first half of the following year, the global demand for energy inputs quickly returned to its long-term trend in 2010, growing at approximately 2% per year.
Ecological economics holds that human economies are subordinate to the availability of natural capital. Technology therefore does not create natural resources, nor does human innovation. Instead, technology and innovation mediate the utilization of existing natural resources. In other words, an improvement in the techniques of longwall coal mining (late 1700s), deepwater offshore oil drilling (late 1900s), and horizontal natural gas fracking (early 2000s) are all impressive. But these innovations only matter when the prize of dense energy deposits are actually on offer. No dense energy deposits = no value to innovation.
We are therefore obligated to acknowledge that when few natural resources exist or are too expensive to extract, very little economic activity is possible. Conversely, we are equally obligated to admit that when resources are available for consumption, then growth will likely result. And lo and behold, that is precisely the explanation for the world’s return to growth since the collapse of 2008: Despite the punishing repricing of oil from $25 earlier in the decade to $100, there was enough energy from other sources to get the global economy back to some kind of growth.
Of course, this is not the smooth and well-lubricated growth that many in the West had become accustomed to in the post-war era. The nature of today’s growth is highly asymmetric between East and West, and highly imbalanced between rich and poor. Today’s growth is also quite lumpy, or highly clustered, as certain domains and regions are benefiting while other populations are living in very stagnant conditions. We’ll get to these details shortly.
But first, let’s look at the longer-term chart of global energy consumption from all sources – oil, natural gas, coal, nuclear, solar, wind, hydro, and biomass – denominated in Mtoe (million tonnes oil equivalent):
This chart is bad news for the many observers on all sides of the macroeconomic equation who are trying to puzzle out the post-crisis era. The fact is, there is enough energy to fund traditional, industrial economic growth in the phase after Peak Oil. Yes, the end of cheap oil did indeed shock the system, and along with the previous credit bubble, it has cast a pall on the potential rate of global growth. But many of the forecasts about the absolute end of growth have yet to come true. This is important because while the global economic system was highly sensitive to an oil shock coming into 2007, it is actually less sensitive now to an oil shock. Those who, ten years ago, correctly predicted the tail risk that oil presented to the system should declare victory. Equally, forecasting a repeat of that experience is probably unwise.
The Oil Crash is Now Behind Us
Why? Simply put, whereas oil used to be the key commodity on which a fast, just-in-time, high-functioning global economy depended all too much, now a combination of coal, natural gas, and other inputs to the power grid have taken nearly all of the market share over the past decade. It is axiomatic, therefore, that if the global supply of oil has only increased from 74 mbpd (million barrels per day) in 2004 to 76 mbpd here at the end of 2013, but total energy consumption globally from all sources has risen over 20% in the same period, then nearly all the growth in the global economy is being funded by other forms of energy.
So you can abandon the idea there will be a future oil crash – because we already had it. The world has been busily starting to wean itself off oil for nearly ten years now. Oil use in Europe and the United States peaked in 2004-2005. The decline of oil consumption only accelerated after 2008, and in the OECD, it’s still declining. Will $125 or $150 oil crash the economies of Japan, the United States, or Europe at this point? Perhaps not. There is hardly any growth to crash in the OECD. It is as if the OECD economies are effectively bunkered, with no growth in wages, jobs, or construction, and nearly all progress is confined to asset prices, mainly the stock market. Perversely, this stagnation is the new strength.
Meanwhile, in the Non-OECD, where growth is actually taking place, the big drive that has taken world energy use higher since 2008 – from 11310 Mtoe in 2009 to this year’s projected 12726 Mtoe – continues to be funded by natural gas, various inputs to the power grid, and the world’s still fastest growing energy source: coal. Yes that’s right, coal, which grew 2.5% last year. Again, ecological economics informs us that there must be energy inputs to fund economic growth. Well, the world has plenty of energy inputs in the form of natural gas and coal. There is no Peak Natural Gas and there is no Peak Coal. No crash is coming in either of these resources in the foreseeable future, either.
To give a better sense of the decline of oil and the rise of other energy inputs, consider that in almost every European country now, bicycle sales now outnumber automobile sales. Life After the Oil Crash, indeed! In the United States, oil demand has fallen to levels last seen over thirty years ago. The 5 mbpd of new demand in Asia, built over the past decade, has been supplied more from demand declines in the West than new global production. The real oil crash, now, the oil crash that matters most, is the decline of oil’s share in the total energy mix. A decade ago, oil provided nearly 39% of total global energy supply. Oil’s now down to 33%, and heading to 32% either this year, 2013, or by next year:
We would not say that the global economy is currently at high risk of losing its access to coal. So we should no longer be overly concerned that the global economy is going to lose its access to oil. It has already lost its access to cheap oil. And now coal, not oil, is in position to take the lead as the number one energy source, globally. But there is little room for complacency in this regard. Because there is little good news in this lower tail risk from oil and its lower-level threat to the global economy. Rather, the global economy is growing increasingly imbalanced.
The Grand Asymmetry
We can think of reflationary policy from Europe, the U.S., and especially Japan as an attempt to counter the West’s loss of access to cheap oil. Is that policy working? Not really.
The primary beneficiaries of this policy have largely been corporations, which derive most of their growth from the 5 billion people in the developing world but are located in the OECD. These corporations are sited in London, New York, Tokyo; the cash from worldwide operations rolls in, but they have little need for expensive, high-wage Western workers. Accordingly, stock markets in the West, composed of these corporations, continue to soar, while investment and growth in the OECD stagnates.
It’s bad enough that Western corporations do not hire domestic workers, do not raise wages, and have maintained capex (capital expenditures) at low levels for years. The huge cash piles stored in corporations represents their conversion, in some sense, to global utilities. Energy companies, technology companies, and infrastructure companies now operate at a very high level of efficiency. So high, and with the aid of information technology, that their need to invest in new capital equipment and especially human labor has fallen to very low levels. How low? A Standard-and-Poor’s report on global capex released just this summer showed that investment is, unsurprisingly, far lower in the post-2008 period than before. Recent commentary from the folks at FT Alphaville lays some color on this data point, because at current rates, U.S. capex has only recovered to the previous trough levels of prior recessions. Worse, whatever meager recovery in capex has taken place from the lows of 2009 is now stalling again. From the S&P Global Corporate Capital Expenditure Survey, July 2013:
The global capex cycle appears to be stalling even before it has fully got under way. In real terms, capex growth for our sample of nonfinancial companies slowed in 2012 to 6% from 8% in 2011. Current estimates suggest that capex growth will fall by 2% in 2013. Early indications for 2014 are even more pessimistic, with an expected decline in real terms of 5%…. Worldwide, capex growth has become increasingly reliant on investment in the energy and materials sectors. Together, these sectors account for 62% of capex in the past decade. This reliance creates risks. If the global commodity “super cycle” is fading, global capex will struggle to grow meaningfully in the near term. Sharp cutbacks in the materials sector are a key factor in the projected slowdown in capex for 2013 and 2014.
Notice that the total volume of global capex is increasingly reliant on investment in the very capital-intensiveenergy and materials sector. This is highly revealing. In the aftermath of oil’s repricing and the repricing of many other natural resources, the global natural resources sector now requires significantly more investment to extract the same units of oil, copper, iron ore, coal, natural gas, and potash, and requires more expensive technology and more human labor. This is the sector holding up the average spend of global capex, so we can conclude that beneath that average, the capex in typical post-war industries like media, finance, real estate, and even infrastructure is not only low, but historically low. The very poor level of employment growth confirms exactly this conclusion. Most poignant of all, this is a wildly strong confirmation of ecological economics, showing that a larger and larger proportion of total investment needs to be devoted now to natural resource extraction, leaving less investment to other areas. The net energy available to society is in decline.
But it’s not just the private sector that has stopped investing. Public sector levels of investment have been dropping as well. In fact, according to yet another dump of recent data, U.S. government investment in public infrastructure is at the lowest levels since WWII. The Financial Times covered this on November 3rd and produced a rather stunning chart. The Financial Times writes, “Public investment picked up at the start of Mr. Obama’s term – temporarily rising to its highest level since the early 1990s – because of his fiscal stimulus. But that has been more than reversed by subsequent cuts. The biggest falls are in infrastructure, especially construction of schools and highways by states and municipalities.”
Conclusion (to Part I)
When neither the private nor public sector is willing to invest in the future, it seems appropriate to ask, what happened to the future? Have corporations along with governments figured out that a return to slow growth does not necessary equal a return to normal growth? Why invest in new infrastructure, new workforces, new office space, equipment, highways, or even rail, when the demand necessary to provide a return on this investment may never materialize?
Many sectors in Western economies remain in oversupply or overcapacity. There is a surplus of labor and a surplus of office and industrial real estate, as well as airports, highways, and suburbs that are succumbing to a permanent decrease in throughput and traffic. Perhaps the private sector is not so unwise. Collectively, through its failure to invest, it is making a de facto forecast: No normal recovery is coming.
In Part II: Why Social & Environmental Imbalances Are Becoming the Biggest Risks, we explore how the misguided policies being pursued worldwide to return to the growth we’ve been accustomed to are resulting in a volatile mix of imbalances in both wealth and resource availability.
As we move further into a future defined by less per capita – not more, as we’ve become accustomed to –dangerous rifts in our social fabric (both within and among countries) threaten to define the days ahead.
Click here to access Part II of this report (free executive summary; enrollment required for full access).
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The Money Bubble Gets Its Grand Rationalization
by John Rubino on November 20, 2013 · 12 comments
Late in the life of every financial bubble, when things have gotten so out of hand that the old ways of judging value or ethics or whatever can no longer be honestly applied, a new idea emerges that, if true, would let the bubble keep inflating forever. During the tech bubble of the late 1990s it was the “infinite Internet.” Soon, we were told, China and India’s billions would enter cyberspace. And after they were happily on-line, the Internet would morph into versions 2.0 and 3.0 and so on, growing and evolving without end. So don’t worry about earnings; this is a land rush and “eyeballs” are the way to measure virtual real estate. Earnings will come later, when the dot-com visionaries cash out and hand the reins to boring professional managers.
During the housing bubble the rationalization for the soaring value of inert lumps of wood and Formica was a model of circular logic: Home prices would keep going up because “home prices always go up.”
Now the current bubble – call it the Money Bubble or the sovereign debt bubble or the fiat currency bubble, they all fit – has finally reached the point where no one operating within a historical or commonsensical framework can accept its validity, and so for it to continue a new lens is needed. And right on schedule, here it comes: Governments with printing presses can create as much currency as they want and use it to hold down interest rates for as long as they want. So financial crises are now voluntary. They only happen if a country decides to stop depressing interest rates – and why would they ever do that? Here’s an article out of the UK that expresses this belief perfectly:
Our debt is no Greek tragedy
“The threat of rising interest rates is a Greek tragedy we must avoid.” This was the title of a 2009 Daily Telegraph piece by George Osborne, pushing massive spending cuts as the only solution to a coming debt crisis. It’s tempting to believe anyone who still makes it is either deliberately disingenuous, or hasn’t been paying attention.
The line of reasoning goes as follows: Britain’s high and rising public debt causes investors to take fright and sell government bonds because the UK might default on those bonds.
Interest rates then spike up because as less people want to hold UK debt, the government has to pay them more for the privilege, so that the cost of borrowing becomes more expensive and things become very, very bad for everyone.
This argument didn’t make sense back in 2009, and certainly doesn’t make sense now. Ultimately this whole Britain-as-Greece argument is disturbing because it makes the austerity project of the last three years look deeply duplicitous.
If you go to any bond desk in the City that trades British sovereign debt, money managers care about one thing – what the Bank of England does or doesn’t do. If Governor Mark Carney says interest rates should fall and looks like he believes it, they fall. End of story.
Why? Because the Bank directly controls the interest rate on short-term government debt, so it can vary it at will in line with any given objective. Interest rates on long-term government debt are governed by what markets expect to happen to short term rates, and so are subject to essentially the same considerations.
It doesn’t matter if investors get scared and dump government bonds because this has no implication for interest rates – it is what the Bank of England wants to happen that counts.
If investors do suddenly decide to flee en masse, the Bank can simply use its various tools to bring interest rates back into line.
The simple point is that since countries like the UK have a free-floating currency, the Bank of England doesn’t have to vary interest rates to keep the exchange rate stable. Therefore it, as an independent central bank, can prevent a debt crisis by controlling the cost of government borrowing directly. Investors understand this, and so don’t flee British government debt in the first place.
Greece and the other troubled Eurozone countries are in a totally different situation. They don’t have their own currency, and have a single central bank, the ECB, which tries to juggle the needs of 17 different member states. This is a central bank dominated by Germany, which apparently isn’t bothered by letting the interest rates of other nations spiral out of control. Investors, knowing this, made it happen during the financial crisis.
On these grounds, the case of Britain and those of the Eurozone countries are not remotely comparable – and basic intuition suggests steep interest rate rises are only possible in the latter.
Britain was never going to enter a sovereign debt crisis. It has everything to do with an independent central bank, and nothing to do with the size of government debt. How well does this explanation stand up given the events of the last few years? Almost perfectly. The US, Japan and the UK are the three major economies with supposed debt troubles not in the Eurozone.
The UK released a plan in 2010 to cut back a lot of spending and raise a little bit of tax money. The US did nothing meaningful about its debt until 2012, and has spent much of the time before and since pretending to be about to default on its bonds. Japan’s debt patterns are, to put it bluntly, screwed – Japan’s debt passed 200 per cent of GDP earlier this year and is rising fast.
But the data shows that none of this matters for interest rates whatsoever. Rates have been low, stable and near-identical in all three countries regardless of whatever their political leaders’ actions.These countries have had vastly different responses to their debt, and markets don’t care at all.
By the same token, the problems of spiking interest rates inside the Eurozone have nothing to do with the prudence or spending of the governments in charge.
Spain and Ireland both had debt of less than 50 per cent of GDP before the crisis and were still punished by markets. France and the holier-than-thou Germany had far higher debt in 2007, and are fine.
The takeaway is that problems with spiking interest rates amongst advanced countries are entirely restricted to the Eurozone, where there is a single central bank, and have no obvious relation to the state of public finances.
So what we have, then, is a disturbingly mendacious line of reasoning . Back in 2010 the Conservative party made a perhaps superficially plausible argument about national debt that was wrong then and is doubly wrong now. They then – sort of – won a mandate to govern based on this, and used it to radically alter the size of the state. The likelihood that somehow this was all done in good faith beggars belief.
Britain has had a far higher proportion of austerity in the form of spending cuts than tax rises relative to any comparator nation. On this basis austerity is a way of reshaping the state in the Conservative image, flying under the false flag of debt crisis-prevention.
If the British public had knowingly and willingly voted for the major changes made under the coalition in how the government taxes, spends and borrows, this wouldn’t be such a great problem.
Instead, they were essentially conned into it by the ridiculous story of Britain as the next Greece.
Some thoughts
What’s great about the above article is that it doesn’t beat around the bush. Without the slightest hint of irony or historical sense, it lays out the bubble rationale, which is that central banks are all-powerful: “If you go to any bond desk in the City that trades British sovereign debt, money managers care about one thing – what the Bank of England does or doesn’t do. If Governor Mark Carney says interest rates should fall and looks like he believes it, they fall. End of story.”
So this is the end of history. Interest rates will stay low and stock prices high and governments will keep on piling up debt with impunity – because they control the financial markets and get to decide which things trade at what price. Breathtaking! Why didn’t humanity discover this financial perpetual motion machine earlier? It would have saved thousands of years of turmoil.
At the risk of looking like a bully, let’s consider another peak-bubble gem:
“The simple point is that since countries like the UK have a free-floating currency, the Bank of England doesn’t have to vary interest rates to keep the exchange rate stable. Therefore it, as an independent central bank, can prevent a debt crisis by controlling the cost of government borrowing directly. Investors understand this, and so don’t flee British government debt in the first place.”
The writer is saying, in effect, that the value of the British pound – and by extension any other fiat currency – can fall without consequence, and that the people who might want to use those currencies in trade or for savings will continue to do so no matter how much the issuer of those pieces of paper owes to others in the market. If holders of pounds decide to switch to dollars or euros or gold, that’s no problem for Britain because it can just buy all the paper thus freed up with new pieces of paper.
This illusion of government omnipotence is no crazier than the infinite Internet or home prices always going up, but it is crazy. Governments couldn’t stop tech stocks from imploding or home prices from crashing, and when the time comes, the Bank of England, the US Fed, and the Bank of Japan won’t be able to stop the markets from dumping their currencies. Nor will they be able to stop the price of energy, food, and most of life’s other necessities from soaring when the global markets lose faith in their promises.
Tagged as: central banks, Dollar, euro, gold, inflation, interest rates, monetary policy, pound sterling,silver, yen
The Money Bubble Gets Its Grand Rationalization.
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PBOC Says No Longer in China’s Interest to Increase Reserves – Bloomberg
PBOC Says No Longer in China’s Interest to Increase Reserves – Bloomberg.
The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.
“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.
Yi Gang, deputy governor of People’s Bank of China and head of the State Administration of Foreign Exchange, said in the speech that the appreciation of the yuan benefits more people in China than it hurts. Photographer: Brent Lewin/Bloomberg
Nov. 20 (Bloomberg) — Robert Hormats, former U.S. undersecretary of state for economic growth, talks about the outlook for China’s planned economic reforms and outlook for talks in Geneva between world powers and Iran over a nuclear deal. Hormats speaks with Tom Keene on Bloomberg Television’s “Surveillance.” Judd Gregg, chief executive officer of the Securities Industry and Financial Markets Association, also speaks. (Source: Bloomberg)
Nov. 19 (Bloomberg) — Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, talks about China’s economy. He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
Nov. 21 (Bloomberg) — Simon Derrick, the London-based chief currency strategist at Bank of New York Mellon Corp., talks about global currency market imbalances and China’s yuan policy. He speaks from Singapore with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)
Nov. 19 (Bloomberg) — Pauline Loong, managing director at Asia-Analytica, talks about China’s reform plan and the outlook for the nation’s economy and financial system. She speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)
China’s foreign-exchange reserves surged $166 billion in the third quarter to a record $3.66 trillion, more than triple those of any other country and bigger than the gross domestic product of Germany, Europe’s largest economy. The increase suggested money poured into the nation’s assets even as developing nations from Brazil to India saw an exit of capital because of concern the Federal Reserve will taper stimulus.
Yi, who is also head of the State Administration of Foreign Exchange, said in the speech that the yuan’s appreciation benefits more people in China than it hurts.
‘Less Interventionist’
His comments are “consistent with the plans to increase therenminbi’s flexibility so they become less interventionist,”Sacha Tihanyi, senior currency strategist at Scotiabank in Hong Kong, said by phone today. The central bank may widen the yuan’s trading band in “the coming few months,” he added.
The yuan’s spot rate is allowed to diverge a maximum 1 percent on either side of a daily reference rate set by the People’s Bank of China. The trading range was doubled in April 2012, after being expanded from 0.3 percent in May 2007. The band could be widened to 2 percent, Hong Kong Apple Daily reported today, citing an interview with the Hong Kong Monetary Authority’s former chief executive Joseph Yam.
Capital inflows into China accelerated in October, official data suggest. Yuan positions at the nation’s financial institutions accumulated from foreign-exchange purchases, a gauge of capital flows, climbed 441.6 billion yuan ($72 billion), the most since January.
About half of October’s increase in the positions was attributable to surpluses in trade and foreign direct investment, with the rest accounted for by inflows of “hot money,” Goldman Sachs Group Inc. Hong Kong-based analysts MK Tang and Li Cui wrote in a Nov. 18 note.
Stronger Yuan
The yuan has appreciated 2.3 percent against the greenback this year, the best-performance of 24 emerging-market currencies tracked by Bloomberg. Non-deliverable 12-month forwards rose 0.2 percent this week and reached 6.1430 per dollar on Nov. 20, matching an all-time high recorded on Oct. 16. The currency was little changed at 6.0932 as of 10:33 a.m. in Shanghai today.
“It appears that many in the People’s Bank think the time is about right to scale back currency interventions,” Mark Williams, London-based chief Asia economist at Capital Economics Ltd., wrote in an e-mail yesterday. “But China has got itself into a situation where stopping intervention will be very hard to do” and comments such as Yi’s will spur speculative inflows, he added.
Less intervention and smaller gains in foreign-exchange reserves may damp China’s appetite for U.S. government debt. The nation is the largest foreign creditor to the U.S. and its holdings of Treasuries increased by $25.7 billion, or 2 percent, to $1.294 trillion in September, the biggest gain since February. U.S. government securities lost 2.6 percent this year, according to the Bloomberg U.S. Treasury Bond Index. (BUSY)
Yi’s comments didn’t imply China will be cutting its holdings of U.S. government debt, said Scotiabank’s Tihanyi. “They are probably going to keep their allocations reasonably stable unless there’s a big policy shift, but it means they will possibly be buying less at the margin,” he said.
To contact Bloomberg News staff for this story: Xin Zhou in Beijing atxzhou68@bloomberg.net; Fion Li in Hong Kong at fli59@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net; Rosalind Mathieson at rmathieson3@bloomberg.net
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Special Report: How Germany’s taxman used stolen data to squeeze Switzerland | Reuters
Special Report: How Germany’s taxman used stolen data to squeeze Switzerland | Reuters.
Special Report: How Germany’s taxman used stolen data to squeeze Switzerland
BY EDWARD TAYLOR, MATTHIAS INVERARDI AND MARK HOSENBALL
DUESSELDORF, Germany Thu Nov 21, 2013 5:06am
1 OF 5. A man poses holding a USB datastick in his hand in front of the Swiss flag in this photo illustration taken in the central Bosnian town of Zenica, August 29, 2013.
CREDIT: REUTERS/DADO RUVIC
He put the notes in his briefcase and took them home, where he created an Excel spreadsheet which he called “Mappe1-test1.xls.” The spreadsheet held names, addresses, and amounts held by clients.
Despite trying to cover his tracks, Lapour was eventually convicted of economic espionage, among other crimes. According to a statement he made in a plea bargain, the data he stole gave details of as many as 2,500 clients with combined assets up to 2 billion Swiss francs ($2.2 billion). He sold it to a middleman, who then sold it to German tax inspectors. The information led to police raids in 2010 on Credit Suisse’s main offices in Germany.
Lapour’s spreadsheet was one of a half-dozen sets of stolen data for which Germany has paid millions of euros over the past five years. Those purchases pushed the boundaries of German law; Reuters’ inquiries have found Germany’s 16 federal states all cooperated in making them.
German parliament and court records, Swiss legal documents and interviews with bankers and politicians show the states and the central government in Berlin gradually constructed a system, partly funded by Germany’s federal finance ministry, to buy information on tax evaders. It’s a campaign which involves hundreds of Germany’s roughly 2,500 tax inspectors, includes a formula to calculate each state’s share of a purchase, and continues to this day, German tax officials say.
Some German politicians say buying stolen data added to pressure on Switzerland to share more information about tax evaders. Last month, Switzerland, which for decades has nurtured bank secrecy as a cornerstone of its offshore wealth industry, signed a convention to exchange some tax information with other countries. If approved by the Swiss parliament, it could be the end of a long and passionate battle.
Swiss officials accuse the Germans of breaking Swiss laws on banking secrecy and of committing economic espionage. According to arrest warrants seen by Reuters, the Swiss prosecutor is seeking the arrest of three German tax inspectors on these charges. Swiss finance minister Eveline Widmer-Schlumpf declined to comment, but a spokesman for her ministry said Germany’s handling of stolen goods “is highly questionable with respect to the rule of law.”
In June this year, Germany’s parliament received a draft law with a clause to exempt from prosecution civil servants who handle stolen data. As Berlin parties haggle over a new government, it has yet to be passed.
Nonetheless Norbert-Walter Borjans, finance minister for North Rhine-Westphalia, the state which bought the Lapour data, says he would support the purchase of such information “so long as there is data containing valuable tips to be bought.” His predecessor, who signed off on the Lapour deal, could not be reached. Switzerland has filed no charges against the politicians involved.
Buying stolen data is an “emergency remedy”, a spokesman for Germany’s federal finance ministry told Reuters: It was justified because Germany and Switzerland did not have a deal through which Germany could enforce its tax claims. None of the tax inspectors could be reached, and the state declined to comment on their behalf.
THE DECEASED WITNESS
The Swiss prosecutors suspect the German tax inspectors of more than handling stolen goods. They allege the taxmen even solicited the theft of specific information, according to an international request for legal assistance that Switzerland sent to Germany on the case.
In that confidential document, seen by Reuters, Lapour is quoted as saying a middleman showed him a text message in which tax inspectors allegedly requested specific information.
Tax inspectors in North Rhine-Westphalia say they don’t solicit data stealing. Ingrid Herden, a spokeswoman for the state’s finance ministry, said German tax authorities had not actively encouraged theft of client data from Swiss banks. “There is no evidence that tax inspectors from NRW did such a thing,” she added in a written statement to Reuters.
However, Herden added that she could not rule out that a middleman may have incited Lapour to steal information.
That go-between, named in the Swiss request as an Austrian graphic designer called Wolfgang Umfogl, committed suicide in prison in Switzerland in 2010, weeks after his arrest on suspicion of money-laundering, according to police in Berne, Switzerland.
Lapour, who was given a two-year jail sentence but spent less than six months in custody, could not be reached for comment. His lawyer declined to be interviewed. North Rhine-Westphalia declined to comment on the details of the case.
THE FITNESS CENTER
Lapour was born in 1983 in Tehran, Iran. By the mid-2000s he was working at Credit Suisse in Zurich and would meet up with Umfogl at the Banane Fitness Centre in Winterthur, according to the Swiss request for assistance, which is also based on Umfogl’s testimony and other material gathered by Swiss police. How the two got talking about stealing data is not revealed.
Lapour created a data file on March 2, 2008, containing names, addresses, net worth and contact details for clients, the request for assistance says; Umfogl flew to Duesseldorf to meet German tax inspectors at the end of that month to see what this information was worth. His opening price: 6.75 million euros ($9.13 million).
By that time, North Rhine-Westphalia already had experience of handling stolen information from other sources. In 2008, it emerged that the state’s tax inspectors had obtained data stolen from LGT Group, a Liechtenstein bank, from a thief who originally sold it to Germany’s federal intelligence service, the BND.
That year, North Rhine-Westphalia officials commissioned a legal opinion from the regional prosecutors to determine if they were within their rights to buy stolen data from Lapour. The prosecutors found in their report that for civil servants, dealing with LGT data did not amount to handling stolen goods – the theft happened in Liechtenstein, to a foreign company. They also said “emergency measures” are justified if tax claims cannot be enforced by other legal means: Authorities in Liechtenstein had not cooperated with requests for legal assistance.
Tax authorities at three German states would go ahead with deals, buying at least five sets of data since 2008 according to media announcements they made; the data was stolen frombanks including UBS, Julius Baer and HSBC. The banks declined further comment or said they had resolved the issues.
THE UPDATED FILE
In Switzerland, Lapour was busy. The Swiss prosecutor says his data file was updated on July 21, 2008, four months after Umfogl allegedly first met the German tax inspectors, to add the dates each account was opened.
This, the Swiss prosecutor asserts, suggests he was stealing to order: German tax authorities needed the dates to see how long a client had evaded taxes. In the request for legal assistance, Lapour is cited as saying Umfogl asked him to get that extra data: Umfogl had shown him a text message from June 24, 2008 in which the tax inspectors purportedly demanded more information. The alleged message’s exact contents are not described.
In May 2009, Umfogl and the German tax inspectors met again, at the Kronen Hotel in Stuttgart, the Swiss document says. There, prosecutors say, tax inspectors asked for a sample of the data and for information beyond names and dates.
According to the Swiss prosecutor, Lapour confessed he stole and sold a PowerPoint presentation that Credit Suisse made for staff on how to handle German clients who were “non compliant” – evading German tax. The presentation told staff how to avoid implicating themselves or the bank in aiding tax evasion. The Swiss say the Germans wanted to use it as evidence Swiss banks had a strategy to look after foreign tax-evading clients.
Credit Suisse would eventually pay 150 million euros to the state of North Rhine-Westphalia to end an investigation into allegations it helped German citizens evade taxes. Neither the bank nor North Rhine-Westphalia would comment further.
Back in 2009, after another meeting in the German lakeside city of Konstanz, Umfogl handed tax inspectors a USB stick containing a sample of 10 percent of the data, according to the Swiss request for assistance. In mid-July, he purportedly handed over the PowerPoint presentation. It’s not clear from the document when or how the rest of the information was handed over or paid for.
In all, Umfogl allegedly paid Lapour at least 65,000 euros for his information; Lapour later told Swiss prosecutors that he used most of the money to support his Czech girlfriend. He showered her with gifts including a car, paid for vacations to Italy, Spain and Egypt, and helped her to pay off a mortgage in the Czech Republic. She was not accused of wrongdoing and could not be reached for comment.
Germany’s legal machinery continued to gather opinions on how far tax inspectors could go. In 2010, the North Rhine-Westphalia inspectors got some legal reassurance.
A CHANGE OF VIEW
“With the LGT CD, many said it’s a one-off, but then came 2010,” said Borjans, the finance minister of North Rhine-Westphalia.
On February 23, representatives from the Federal Central Tax Office, an authority under the jurisdiction of the German Ministry of Finance, contacted officials from what is now Borjans’ ministry and decided to coordinate bank data purchases so different states would not all buy the same set, parliamentary questions show.
Days later, Borjans’ predecessor, a member of Chancellor Angela Merkel’s CDU party, announced he had struck a deal to buy a “client data CD” – the Lapour data – for 2.5 million euros.
In November, a legal opinion from Germany’s Federal Constitutional Court added weight to that plan. The court found that if data had been “received” rather than actively solicited, then those who used it were not guilty of abetting the theft. Whether it was legal to buy stolen data was a question it referred to other courts.
“It’s not like I commission a purchase, or people come directly to me,” Borjans told Reuters this year. Tax inspectors, not politicians, are in the driving seat, he said. They act on tips and then ask him for resources.
THE KEY OF KOENIGSTEIN
By 2010, all Germany’s tax collectors had reached agreement on how to split the cost if the federal ministry decided to join the states in funding a purchase, parliamentary questions show.
Acquisitions of taxpayer names are funded using a formula known as the “Koenigsteiner Schluessel,” which translates as “the key of Koenigstein.” The formula, named after a wealthy Frankfurt suburb, was devised after World War Two to work out how to spread the cost of funding scientific research in Germany.
“Should the Federal Ministry of Finance decide to make a purchase, it will contribute 50 percent of the acquisition costs,” a spokesman for the ministry told Reuters. All 16 states told Reuters they have helped pay for data: Berlin and Hamburg say these purchases led to the recovery of more than 100 million euros each.
But not all are convinced the system is legal. After initially joining in, one state – Brandenburg – said it was opting out because of such doubts. Last June, when the draft law on handling stolen data went to parliament, Brandenburg’s finance minister issued a news release saying it would “provide long overdue legal certainty for our finance officials.” The state which bought the material paid the shortfall, a spokesman for Brandenburg said.
Volker Kauder, head of the parliamentary group for the CDU, is still “highly critical” about buying such data, a spokesman told Reuters. “In doing so the state is in danger of slipping into the role of a dealer in stolen goods,” he said.
THE TELEVISION CABLE
In March 2010, Umfogl opened a bank account in Austria. According to the Swiss request for legal assistance, he was trying to divide the 2.5 million euros he had received between banks in Germany, Austria and the Czech Republic. Staff at a savings bank in Dornbirn, Austria, got suspicious about a deposit of 893,000 euros, and raised the alarm with police on March 25, 2010, believing Umfogl could be a money-launderer.
Austrian authorities froze Umfogl’s funds that September, said the prosecutor’s office in Feldkirch, Austria. Swiss Federal Police were notified because Umfogl lived in Switzerland. They arrested him at his work. A day later, Lapour was tracked down and arrested in the Czech Republic where he was visiting his girlfriend.
Lapour was convicted in Switzerland’s Federal Criminal Court of economic espionage, violating bank secrecy and violating trade secrecy, by passing client data outside the bank. Besides his 24-month sentence, he was fined 3,500 Swiss francs.
At a house in a suburb on the outskirts of Winterthur, given in the request for assistance as Lapour’s parents’ address, a man told a reporter he did “not know where Sina is.”
At about 6.30 a.m. on September 29 2010, just days after Umfogl was arrested, he was found dead in his police cell in Berne. He had left a note before hanging himself with a television cable, according to a joint statement issued by the coroner and police. Both declined to reveal the note’s contents.
That month, Switzerland’s government said it had agreed to resolve the problem of untaxed money stashed away by Germans in Swiss accounts.
North Rhine-Westphalia’s Borjans believes the purchase of stolen names was crucial to that. “You could tell this was not only a question of decency,” he told Reuters. “It was also about hardcore commercial interests. And that’s why Switzerland was suddenly willing to negotiate.”
The Swiss finance ministry said it had been Swiss financial market policy since 2009 to seek international tax agreements.
By August 2011, Switzerland and Germany had reached an outline deal on sharing tax information. But the pact failed to win political support within Germany and the upper house threw it out in November last year.
Borjans was one of the pact’s opponents. He said he felt Berlin had sold itself short. “It left the door open to bank secrecy and tax evasion,” he said.
Last month, Switzerland finally signed onto the international tax convention, giving Germany some of what it wanted. The Swiss request to Germany to arrest three tax inspectors has gone unanswered: Germany’s finance ministry said it is still evaluating it.
(Hosenball reported from Berne, Switzerland; Additional reporting by Andreas Rinke and Michelle Martin in Berlin and Jan Lopatka in Prague; Edited by Sara Ledwith)
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Kennedy Conspiracy Theories Go Mainstream … 50 Years After Assassination Washington’s Blog
Kennedy Conspiracy Theories Go Mainstream … 50 Years After Assassination Washington’s Blog.
The CIA and FBI Hid Information from the Warren Commission
Preface: Some “conspiracy theories” are true, and some are false. Each must be judged on its own merits.
A solid majority of Americans have always believed that John F. Kennedy’s assassination involved a conspiracy.
But now that view is starting to be discussed by mainstream power players.
Current Secretary of State John Kerry said recently:
To this day, I have serious doubts that Lee Harvey Oswald acted alone. I certainly have doubts that he was motivated by himself.
Watergate reporter Bob Woodward long ago became a mainstream, establishment journalist.
But Woodward – and long-time CBS news anchor Bob Schieffer – agree that the CIA and FBI refused to give information to the Warren Commission, and so that Commission was in the dark as to what might actually have happened:
And CBS News reports:
It has long been known that the Warren Commission, the blue ribbon panel of public officials appointed by former President Lyndon Johnson to investigate the assassination of former President John F. Kennedy, was flawed in ways that led to generations of conspiracy theories about what happened on Nov. 22, 1963. A forthcoming book from former New York Times reporter Philip Shenon digs into exactly what the commission got wrong, both by intentional concealment, or, in Shenon’s view, extensive attempts by both the CIA and FBI to withhold just how much they knew about Kennedy assassin Lee Harvey Oswald in the weeks and months before he killed the president.
“In many ways, this book is an account of my discovery of how much of the truth about the Kennedy assassination has still not been told, and how much of the evidence about the president’s murder was covered up or destroyed – shredded, incinerated, or erased – before it could reach the commission,” Shenon writes in the prologue to A Cruel and Shocking Act: The Secret History of the Kennedy Assassination, which draws its title from the first sentence of the commission’s report. “Senior officials at both the CIA and the FBI hid information from the panel, apparently in hopes of concealing just how much they had known about Lee Harvey Oswald and the threat that he posed.”
In fact – as the Washington Post reports – official investigators have long said there was a conspiracy and a cover up:
The Church Committee, a Senate-led investigation in 1976 into the CIA and FBI, concluded that the 888-page Warren Report may have been insufficiently thorough and suppressed key evidence, giving legs to the persistent belief that a cover-up was involved.
By 1979, the U.S. House Select Committee on Assassinations determined that the assassination was “probably” the result of a conspiracy. Indeed, four years after that report, public perceptions of a conspiracy hit their peak at 80 percent.
(Similarly, it is well-documented that the 9/11 Commission was deceived by the U.S. military and other branches of the government. No wonder even the Commissioners themselves are calling for a new investigation.)
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Is BP ‘trolling’ its Facebook critics? – Features – Al Jazeera English
Is BP ‘trolling’ its Facebook critics? – Features – Al Jazeera English.
Critics using BP America’s Facebook page allege they have been harassed [Erika Blumenfeld/Al Jazeera]
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| New Orleans, United States – BP has been accused of hiring internet “trolls” to purposefully attack, harass, and sometimes threaten people who have been critical of how the oil giant has handled its disaster in the Gulf of Mexico.
The oil firm hired the international PR company Ogilvy & Mather to run the BP America Facebook page during the oil disaster, which released at least 4.9 million barrels of oil into the Gulf in what is to date the single largest environmental disaster in US history. The page was meant to encourage interaction with BP, but when people posted comments that were critical of how BP was handling the crisis, they were often attacked, bullied, and sometimes directly threatened. “Marie” was deeply concerned by the oil spill, and began posting comments on the BP America Facebook page. Today, she asks that she remain anonymous out of what she described to Al Jazeera as “fear for my personal safety should the BP trolls find out that I am the whistleblower in this case”. In internet slang, a troll is someone who sows online discord by starting arguments or upsetting people, often posting inflammatory messages in an online community, or even issuing physical threats. Marie sought assistance from the Government Accountability Project (GAP), a non-profit group in Washington DC, and has produced boxes of documents and well-researched information that may show that the people harassing BP’s critics online worked for BP or Ogilvy. “We’d been hearing of this kind of harassment by BP when we were working on our health project [in the Gulf of Mexico], so it sparked our interest,” GAP investigator Shanna Devine told Al Jazeera. “We saw Marie’s documentation of more serious threats made on the BP page, and decided to investigate.” According to both Marie and Devine, some of the threats began on the page, but then escalated off the page. Threats included identifying where somebody lived, an internet troll making reference to having a shotgun and making use of it, and “others just being more derogatory”, according to Devine. “We’ve seen all this documentation and that’s why we thought it was worth bringing to the ombudsman’s office of BP, and we told them we thought some of it even warranted calling the police about.” Death threats “We have thousands of documents regarding communications posted through various Facebook websites,” said certified legal investigator Steve Lockman of Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor. “In addtion, we are in possession of communications between the federal government and the ombudsman’s office of BP regarding the internet communications, and the federal government requesting BP to control the harassment through their Facebook page and their interactions.” “The harassment communications are not something that BP and their people are not aware of,” Lockman told Al Jazeera. “It’s not a hidden secret that the personal attacks, broadcast abuse, and type-written harassment were happening and continue to go on.” Marie provided the firm and Al Jazeera with files of complaint letters, computer screenshots of the abuse, and a list of Facebook profiles used by the people who harassed her and others.
“I was called a lot of names,” Marie added. “I was called a streetwalker and a lot of things like that, and eventually had gun threats.” According to Marie, the harassment didn’t remain on the BP page. Trolls often followed users to their personal Facebook pages and continued to harass them there. “They resorted to very demeaning methods of abuse,” Marie said. “They were racist, sexist, and threatened me and others with legal action and violence. They’ve insinuated that some commenters are ‘child molesters’, and have often used the tactic of mass reporting with the goal of having their targets completely removed from Facebook.” One troll using the name “Griffin” makes several allusions to gun violence, while another, named “Ken Smith” also harassed and threatened users, even going so far as to edit a photo of a BP critic’s pet bird into the crosshairs of a gunsight, before posting the photo online – along with photos of an arsenal of semi-automatic weapons. Another instance occurred involving “Griffin” and an environmentalist who posted a picture of a rendition of Mother Earth saying “Mother Earth Has Been Waiting for Her Day in Court, BP”. “Griffin” posted a comment to the picture that read, “A few rounds from a .50 cal will stop that b**ch”. According to Marie, Lockman and GAP, BP’s “astroturfing” efforts and use of “trolls” have been reported as pursuing users’ personal information, then tracking and posting IP addresses of users, contacting their employers, threatening to contact family members, and using photos of critics’ family members to create false Facebook profiles, and even threatening to affect the potential outcome of individual compensation claims against BP. Marie, along with several other targets of harassment, wrote and sent two letters to BP America, asking the company to respond to the allegations and deal with the matter. Neither letter received a response, which is why Marie decided to contact GAP, as well as the law firm. While Marie’s evidence appears to tie Ogilvy and BP together via the trolls, the law firm Lockman works for is investigating further, in order to conclusively determine the extent of BP’s involvement. Spinning the disaster Stephen Marino worked for Ogilvy during the BP disaster. BP had been a client of Ogilvy for five years before the spill, and when the disaster occurred, “we were responsible for all the social media for BP during the spill”,Marino said during a lecture he gave at the University of Texas, Austin, on April 19, 2012. His team, which he called the “digital influence team”, was “responsible for the crisis response”. Marino told the audience that his job during the BP disaster was to run a ” reputation management campaign ” and gave this specific example of the depths to which Ogilvy worked to maintain a positive appearance for BP: “We were putting out ads, if you guys remember those ads that came out where it would be Iris in the Gulf of Mexico and she’d be talking about how she grew up there and she wasn’t going to go away,” he explained . “The way we were working with the strategy on that was we would cut the ads one day, we would edit them overnight, we’d air them on Tuesday let’s say, and then we’d look at social media to see what the response was to the ads – and based upon the feedback we were getting on social media, the advertising agency would then go back and re-cut the ads to fix the message to make it resonate more with what the constituents wanted… that was the first key strategy.” Chris Paulos, an attorney with the firm investigating Marie’s case, believes this is a perfect example of “subversive attempts by corporations to put forward their ideology of what we should think about them, and doing it in a way that is not decipherable to the average person”. According to Paulos, the public should be concerned about this because we can no longer tell if people online are truly who they say they are, “or are working for a corporation and talking their script to control the dialogue about whatever issue they are addressing”. “We are in unprecedented times with technology, and [in] the disparity between the power of corporations and autonomous consumers,” Paulos told Al Jazeera. ” Citizens United has basically emboldened corporations with their ability to speak as individuals with First Amendment rights. Ever since that decision, corporations have been outspoken and vigorously protecting themselves while doing it.” BP’s response Billie Garde, BP’s deputy ombudsman, in a letter to the Government Accountability Project dated December 18, 2012, stated clearly that “BP America contracts management of its Facebook page to Ogilvy Public Relations” and added, “Ogilvy manages all of BP America’s social media matters”.
“According to BP America, Ogilvy has a group of 10 individuals in different time zones that perform comment screening of the page,” wrote Garde.
Interestingly, Garde’s letter addressed the fact that, at that time, according to Ogilvy’s data, 91 percent of all the comments on BP’s Facebook page were considered to be “unsupportive” of BP, while only nine percent were considered “supportive”. She added that “i n previous years, the number of comments that were ‘unsupportive ‘ of BP was larger than the present 91 per cent “. Her letter stated that Ogilvy follows a “three strike” policy for all comments, “meaning if they find a comment to be in violation of the commenting policy, they delete the comment and record a ‘strike’ against the user, and three strikes means a user is no longer able to comment on the page. It is also noted that Ogilvy will delete offending comments and send a note to the user indicating the comment was inappropriate”. Garde added: “BP America has informed our office that Ogilvy strictly adheres to the Commenting Policy as stated on the BP America Facebook page. This policy serves as the guidelines that Ogilvy follows when evaluating the appropriateness of comments. Ogilvy does not evaluate a comment with respect to it being a positive or negative statement towards BP. Likewise, they do not delete any comments based on either of these qualifiers.” According to Garde, BP America’s Director of Employee Concerns Oversight, Mike Wilson, was apprised of the situation. Wilson was provided examples of harassment and was asked if the examples were reviewed by Ogilvy. “The discussion is ongoing, and Mr Wilson is addressing these specific concerns internally,” Garde added.
A BP spokesman provided the following statement for Al Jazeera: “The BP America Facebook page, and its moderators, do not endorse or dictate any user activity. All users’ comments and actions are their own. BP created the BP America Facebook page to engage the public in an informative conversation about our ongoing commitment to America and to facilitate constructive dialogue for any and all who wish to participate. No users are compensated for participating in the Facebook community. More information on our commenting policy can be found here .” Marie, however, staunchly believes that BP is responsible for the pro-BP Facebook trolls. “I have no doubt that they are, and I’ve found the links between the trolls and their friends who work for BP,” she told Al Jazeera. “The Government Accountability Project, through the inquiry they’re conducting for me, is still trying to find out. But we are being stonewalled on the other end, as far as BP doing some type of an internal investigation into these connections that I’ve uncovered.” According to Marie, the harassment “almost ceased completely at around the same time GAP received Garde’s letter. I say ‘almost’ because at least two of the people who were involved in the prior harassment are still allowed to comment on BP’s page to this day, and [one of those] was still checking on people’s profiles to obtain their state of residence, and would use this against them on the page.” ‘Terroristic threats’ Lockman’s investigation continues, as do the efforts of recovering additional documentation and sifting through information on hand that links the trolls to both BP and Ogilvy as well as to other subcontracted companies used by BP as creative storytellers. “The information we possess regarding Marie’s claims, printed out, fills two file boxes, and that does not include all the DVDs which are currently being duplicated at this time,” Lockman said. “It is an unbelievable amount of documentation that has been developed. This documentation, support materials, and information is coming from several different sources. It is like a spider web and we just got started.” Al Jazeera asked the firm Lockman works for what the possible legal ramifications would be for the alleged actions of BP and Ogilvy. “What these guys are doing is bordering on illegal,” said Paulos the attorney. “Marie’s allegations are that these guys have made overt acts beyond what they did online, and it does sound like people who’ve been the victims of these actions believe they are in imminent danger of bodily harm, and that can become the basis for a claim of assault.” Paulos went on to say that if people who had pending claims against BP were being targeted “it can become a claim of extortion or fraud, depending on how the money is being used”. The same applies in cases where money or other benefits are offered in exchange for ceasing the harrassment. Yet these are not the worst possible crimes. “They [BP/Ogilvy] are obviously trying to silence folks who are opposed or critical of what they are doing,” Paulos claimed. “But it appears as though it has moved into threats that can be considered terroristic threats depending on the intent behind them, so there are a lot of laws they can be treading on, including stalking, and tortious interference with someone’s businesses. I understand they’ve called the workplaces of people on the websites, and depending on what’s being said that may become actionable under US civil law. So there are a lot of ways they could be breaching the law based on the intent of their communication and how that has been received.” Paulos believes Marie’s case is an example of how corporations such as BP use their money and power to take advantage of a lack of adequate legal regulations over the use of internet trolls and vigorous PR campaigns, and that this should give the general public pause. “Marie’s story shows that corporations do not refrain from cyber-bullying, and they are doing it in a very aggressive fashion.” Other harassment Linda Hooper Bui, an associate professor of entomology at Louisiana State University, experienced a different form of harassment from BP while working on a study about the impact of the oil disaster on spiders and insects. “BP was desperately trying to control the science, and that was what I ran into,” Bui told Al Jazeera. According to her, BP’s chief science officer “tried to intimidate me”, and the harassment included BP “bullying my people” who were working in the field with her on her study that revealed how “insects and spiders in the oiled areas were completely decimated”. While collecting data for the study, Bui and her colleagues regularly ran into problems with BP, she said. “Local sheriffs working under the auspices of BP, as well as personnel with Wildlife and Fisheries, the US Coast Guard – all of these folks working under BP were preventing us from doing our job,” Bui explained. “We were barred from going into areas to collect data where we had previous data.” Bui said personnel from the USCG, Fish and Wildlife, and even local sheriffs departments, always accompanied by BP staff, worked to prevent her from entering areas to collect data, confiscated her samples, and “if I’d refused to oblige they would have arrested me” – despite her having state permits to carry out her work. Bui has also been harassed online, by what she thinks was “a BP troll”, but she remained primarily concerned about what BP was doing to block her science. Her frustration about this prompted her to write an opinion article for The New York Times , titled A Gulf Science Blackout . That is when she received a call from BP. “August 24, 2010, at 7:15am the morning my op-ed was published, I received a call from BP’s chief science officer who tried to get me to be quiet,” Bui said. “He said he’d solve my problem, and asked me how much money I needed.” Bui explained to him she was only interested in being allowed to conduct her studies, and was not interested in working with BP, “that I was publishing science and it involved the entire scientific community”, and she never heard back from him. She believes her method of dealing with the overall situation was a success. “When somebody starts to mess with me, I publicise it and say: ‘Don’t f**k with me,'” she concluded. “And if you do, I’m going to go very public with it, and that’s what I did.” BP did not respond to Al Jazeera for comment regarding her specific allegation. GAP’s Shanna Devine told Al Jazeera she believes the onus is on BP to investigate the possibility that there is a connection between the harassment and Ogilvy and BP employees. “But so far they’ve taken a very hands-off approach,” she explained. “They’ve not taken responsibility and they are not willing to share information with us.” Follow Dahr Jamail on Twitter: @DahrJamail |
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Storms rage across the Arabian Peninsula – Weather – Al Jazeera English
Storms rage across the Arabian Peninsula – Weather – Al Jazeera English.
The storms caused widespread power cuts in Riyadh, and closed schools and universities across the capital. [AFP]
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| A weather system has caused widespread flooding across the Arabian Peninsula over the past few days.
Initially the thunderstorms stretched from Saudi Arabia to Iraq, then the system slid slowly southwards. In Saudi Arabia, the storms killed at least seven people, with five more still missing. The capital, Riyadh, and the northeastern city of Arar were amongst the worst hit. The storms flooded a number of underpasses on major routes around Riyadh, causing widespread disruption, and the north of the city was plunged into darkness as the storms pulled down powerlines. Schools and universities across the capital have been closed since Sunday. Iraq was also badly hit, as the rising flood waters submerged streets and caused buildings to collapse. At least 11 people are known to have died across the country, most of those were killed when their homes collapsed in on them. In order to try to limit the damage caused by the storms, authorities have tried declaring national holidays. Another holiday was called earlier in the month. The heaviest rain that has been reported was 112mm in just 24 hours in the Iraqi city of Karbalaa. The International Airport in Riyadh reported 20mm of rain in a day, just a little more than Doha, where 18mm was received. The rain is now moving away, across the United Arab Emirates and Oman. Although heavy rain is still expected, the system is weakening, so the flooding should be less extensive. The region regularly floods when it rains. This is partly due to the lack of drains and also thanks to the sandy soil of the region, which cannot readily absorb water. In May last year, around 20 people were killed after torrential rain swamped parts of Saudi Arabia. |
Olduvaiblog: Musings on the coming collapse 