I held off on analysis of the FBI non-indictment of Hillary Clinton because I knew there would be many piquant opinions to be harvested from around the Internet, and indeed there are:
In other Clinton Corruption news:
This Week in Clinton Corruption for July 7, 2016
July 7th, 2016What’s Happening to Italy’s Banking System?
July 6th, 2016Yesterday’s Brexit roundup mentioned that Italian banks account for nearly half the bad loans for the entire Eurozone.
Italy is now the heads-on favorite as the most likely instigator of the next global economic crisis. Some analysts are calling it a perfect storm:
Italy’s bank bailout fund might not be enough to beat back the Brexit. More key Italian financial services firms are under pressure and face the potential need to raise capital, leaving Italian government officials and its banking system trying to steer clear of a crisis.
As Italian bank bonds and share prices are seeing their value slammed in the face of rising uncertainty, banks with substantial bad loans are facing greater pressure, with rates around the world slipping into negative territory.
And, of course, they’re blaming Brexit rather than all the myriad problems with the EU that caused the Brexit.
Italy’s bank bailout fund might not be enough to beat back the Brexit. More key Italian financial services firms are under pressure and face the potential need to raise capital, leaving Italian government officials and its banking system trying to steer clear of a crisis.
As Italian bank bonds and share prices are seeing their value slammed in the face of rising uncertainty, banks with substantial bad loans are facing greater pressure, with rates around the world slipping into negative territory. It’s an anxiety some in Italy and throughout the European Union may have been hoping would be eased by the Brexit vote last month — but then the U.K. referendum delivered the opposite outcome from the one they had sought.
“Market volatility following the U.K.’s EU referendum result hit the Italian bank sector particularly hard because it is one of Europe’s weakest,” Fitch Ratings analysts said in a July 4 report. “Asset quality pressure is a main driver for the negative outlooks on several large and medium-sized Italian banks.”
The Brexit vote, which calls for the United Kingdom to abandon a European Union that has careened for years from one crisis to another, could hasten weak Italian banks’ downfall. It was widely expected that European and U.K. banks will suffer the brunt of the vote in late June, and while British banks have been hard hit by the news — which brings with it tremendous regulatory uncertainty — EU banks have suffered as well.
Many banks in Italy, including its largest, UniCredit SpA, have seen share prices pounded; its stock is down more than 60 percent so far this year. A staffer at UniCredit could not provide comment when contacted.
Already, Italian officials and executives appear to be pulling out all the stops to stave off banking sector contagion. The lingering question for banks is whether they can continue to support lending operations at a time when creditors face potential losses and as some of the country’s leading financial services firms could be subject to shotgun M&A marriages by regulators.
Italian financial services firms earlier this year established a multi-billion dollar fund called Atlante to buy non-performing bank loans. But the fund, which is in the 4-billion euro to 6-billion euro range ($4.43 billion to $6.65 billion), one analyst said, is far too small to cover all the non-performing loans held by major Italian banks. However, the fund could still be leveraged in order to support loan purchases.
“The authorities need to get banks to remove a large portion of soured loans from their books so they can loan more,” said Julien Jarmoszko, senior research manager at S&P Global Market Intelligence. “If investors fear more Italian banks, this will raise their cost of capital and reduce lending as a result.”
Look for some sort of holding action for temporary recapitalization (including a “bail in” or some sort of ECB scheme) to let all the insiders dump their bad debts onto the European taxpayer, which was the real point of prolonging the Greek farce.
More news on that front:
Of course, when push comes to shove, we’re likely to see all sorts of banking rules get thrown out the window…
FBI Punts on Prosecuting Clinton
July 5th, 2016FBI punts on criminal prosecution.
FBI confirms Hillary was careless, sent classified information.
“Hostile actors” may have gained access to Hillary Clinton’s server.
All quick notes from the news conference. Maybe more later.
Brexit Update for July 5, 2016
July 5th, 2016While the reverberations from the Brexit vote are still being heard, here are a few interesting pieces you might have missed:
As several commentators, from Megan McArdle in The Atlantic to Rupert Darwall in National Review, have noticed, many liberal journalists, representing elites throughout the advanced world, have reacted with indignation to the fact that 52 percent of U.K. voters (many without degrees) have rejected the EU system of supranational government of which the elites approve. Naturally, these journalistic spokesmen argue, the common people could not possibly have good reasons for such an act of multinational vandalism. So they must be inspired by, er, racism, xenophobia, fear of globalization, and related other thought-crimes.
That account doubtless condenses and oversimplifies the elites’ response to the Brexit shock, which is just one small skirmish in a new class war in advanced societies between geographically mobile, liberal, skilled, high-earning professionals and more rooted, communitarian, particularist, and patriotic citizens (or what British journalist David Goodhart calls “nowhere” people and “somewhere” people). “Nowhere” people simply didn’t grasp the outlook of “somewhere people” in the referendum, not seeing that many decent people who voted for Brexit had such respectable anxieties as loss of community or, one step up, the transformation of their country as motives for casting their votes. So the elites thought the worst. They were still making the same mistake in their television and columnar explanations of the result on Friday morning. But what was remarkable was the Darwall-McArdle thesis that in other countries the elites reacted to the Brexit shock as if personally or spiritually affronted in their own lives. Alarmed, they asked: Why weren’t we told that they might vote for Brexit?
It’s a hard question to answer.
One aspect of it, however, is ideologically fascinating. Among the central arguments of those favoring Brexit was that the Brussels system was dangerously undemocratic and that British voters and MPs had lost the power to propose, amend, or repeal failed or oppressive laws. This was a passionate concern among English people who had grown up in a self-governing democracy, who may have fought for it in wars, and who simply couldn’t understand why the loss of their democratic rights didn’t worry their opponents. Yet again and again liberal journalists treated this passionate belief as either abstract or a cover for more primitive emotions and bigotries. Democracy as such was rarely given weight in Remain or liberal debates on the cost/benefit analysis of Brexit. They treat multinational political institutions as such unalloyed goods that it would be impolite to raise questions about such defects as a democratic deficit. Has the knowledge class/meritocracy/cognitive elite/nowhere people/etc., etc. developed not only an intellectual snobbery towards the rest of society, but even an impatient, dismissive contempt for democracy that cannot be openly avowed but that does influence its other political attitudes?
Happy Independence Day
July 4th, 2016To celebrate, here’s Colin Furze setting off 5,000 fireworks launchers all at once:
Still More Brexit Aftershocks
June 30th, 2016It’s a big story, and the reverberations continue to sound around the world:
The utter incomprehension of some colleagues at the result would be comical were it not so injurious to the sub-constitutional role played by the Fourth Estate.
There is a sense of indignation that a majority of voters did not cleave to the group-think. The whiff of class-hatred hangs heavy in the air. This morning I risked pariah-status in the canteen queue by suggesting it was patronising to ascribe the working class with prejudices we could neither test nor vouch for. Dismissing their opinions as motivated by xenophobia precludes any notion that those uneducated poor folk might actually have a coherent view on sovereignty or national self-determination.
This democratic deficit has been well ventilated over the weekend. Janice Turner, in particular, wrote beautifully and wisely in Saturday’s Times about the folly of denigrating “retired miners who now drive taxi cabs”. It is no surprise that contrarians like the brilliant Julie Birchill, who has written at length about the demonisation of white-working class ‘chavs’, came out for Brexit.
Part of the seething fury felt by some of my co-workers lies in that feeling of being hoodwinked, of not being as smart, as omniscient as they, hitherto, imagined. Their self-esteem is bruised. Nobody likes to find out that the world they thought existed turns out to have been built on miopia and wishful thinking.
There’s a growing sense, not only in Great Britain, but in the US as well, that the elites, or the political class, or whatever you’d like to call them, are incompetent and have been leading us astray. And the response from elites is to call those criticisms illegitimate. Those doing the carping are assumed to be racists or nationalists, both of which, of course, are unpleasant, dirty types of people. Both the UK’s Leavers and the US’s Trumpers share some commonalities. Among them are skepticism over free trade and free immigration; concerns that elites dismiss as foolish and uneducated. And, of course racist.
Snip.
I think we’re about to watch the elites start paying a price for their incompetence, inattention and contempt. Euroskepticism is on the rise elsewhere in Europe. If EU membership were put to a popular vote in the Netherlands, Spain, or Sweden, there is a good chance that Leave would win there, too. Indeed, it’s possible that a vote to leave the EU might even win in France, the nation for whom creating and strengthening the EU has been the primary policy goal for 60 years.
Perhaps the “Vote Remain, you virulent racist!” PR campaign for staying in the EU needs a bit more thought.
(Hat tip: Instapundit.)
The Knives Comes Out For Corbyn
June 29th, 2016After Brexit’s passage, Labour MPs decided to take their frustrations out on their own leader:
A motion of no confidence in Labour leader Jeremy Corbyn has been passed by the party’s MPs.
The 172-40 vote, which is not binding, follows resignations from the shadow cabinet and calls on Mr Corbyn to quit.
Mr Corbyn said the ballot had “no constitutional legitimacy” and said he would not “betray” the members who voted for him by resigning.
So the purpose of the vote was, what, essentially? To shame him into resigning? To push him out without having their fingerprints on the knife in his back?
“Dave Sparks, a councillor in Dudley and a former chair of the Local Government Association, warned that if Mr Corbyn stays, Labour will be wiped out.”
Maybe so, but barring a Tory no confidence vote (which, with Cameron’s resignation and an absolute parliamentary majority, would not be in the Tories’ interests) the next general election will not be until 2020, by which standard this leadership move is about three years premature.
It seems to have been a dry run for an actual leadership challenge, but I suspect that Corbyn, in all his loony left glory, is far more popular with Labour voters than anyone the MPs could replace him with.
“The [Scottish National Party], meanwhile, is to ask the Speaker to declare it the official opposition at Westminster, claiming their Westminster leader Angus Robertson has more support than Mr Corbyn.”
In essence, Corbyn is the victim of three things:
- Labour’s rage at losing the Brexit vote. It seems that Corbyn is being penalized for not clapping loud enough to keep Tinkerbell alive.
- Long-simmering resentment of Corbyn being elected head by the party’s Tony Blair faction. (Some have suggested that it’s meant to distract from the imminent release of the Chilcot Report on the Iraq War. Which would make Corbyn’s attempted ouster an odd “distraction” to launch an entire week before…)
- Corbyn has always been more popular with the party’s rank and file than with their MPs.
As disorienting as it is for me to sound like I’m actually defending Corbyn, he isn’t the source of Labour’s ills, and booting him isn’t going to solve them.
Labour, Brexit, and the Left-Wing Revolt Against Global Elites
June 27th, 2016Among the more interesting storylines to emerge after the Brexit vote was how Labour blew it. Despite having a leadership far more Europhilic and in favor of transnational statist government than even Tory insiders, Labour’s support of Remain was markedly tepid, starting right at the top with Labour leader Jeremy Corbyn:
Less than a month before the historic EU referendum, the team assembled by Cameron to keep Britain in the European Union was worried about wavering Labour voters and frustrated by the opposition leader’s lukewarm support. Remain campaign operatives floated a plan to convince Corbyn to make a public gesture of cross-party unity by appearing in public with the prime minister. Polling showed this would be the “number one” play to reach Labour voters.
Senior staff from the campaign “begged” Corbyn to do a rally with the prime minister, according to a senior source who was close to the Remain campaign. Corbyn wanted nothing to do with the Tory leader, no matter what was at stake. Gordon Brown, the Labour prime minister whom Cameron vanquished in 2010, was sent to plead with Corbyn to change his mind. Corbyn wouldn’t. Senior figures in the Remain camp, who included Cameron’s trusted communications chief Craig Oliver and Jim Messina, President Obama’s campaign guru, were furious.
So to Corbyn, a vote many in Labour leadership regarded as the most important in their lifetime took a backseat to his bitter hatred of even appearing with the Tories. “An old school socialist, the Labour leader had in the past attacked the EU as an undemocratic, corporatist conspiracy that threatened workers’ rights. He never looked the part to save Cameron in a referendum the Conservative leader brought on himself.”
From the same piece:
Hardened by close-run contests in the 2014 Scottish independence referendum and last year’s general election, the strategists running Stronger In decided to follow the playbook that worked in those campaigns, particularly the 2015 Conservative sweep, and focus mainly on economic security.
It failed spectacularly. The depth of public anger over the influx of workers from other EU countries, and more broadly the rejection of political and business elites, was more significant than they had anticipated.
Also this:
Internal polling found just weeks before June 23 one in five Labour voters did not know the party’s position in the referendum. As party aides canvassed voters around the country, they discovered a deep well of concern about immigration.
Labour leadership no doubt found it quite shocking that so many traditional Labour strongholds voted in favor of Brexit. There were also a small but notable number of Labour MPs who supported Brexit. Some hail from those same hinterland locales that voted for Brexit, and thus could be said to actually represent the wishes of their constituents (try to contain your shock).
But Labour MP Kate Hoey represents a constituency smack dab against the south bank of the Themes in central London, an area that voted heavily to Remain. Yet Hoey was an early and notable voice for Brexit:
I’m tired of people thinking that only those on the right of politics are Eurosceptic. This is far from true.
The reputation of the EU has fallen sharply among many on the Left. The sight of the EU establishment imposing unprecedented levels of austerity on Greece was a real wake-up call. This was not a benign political institution guaranteeing social protection and international solidarity, but an unaccountable force bringing crippling pain on a people who cannot hope to repay the loans that are recapitalising their banks.
Meanwhile, the EU is willing to require ever-greater sacrifice to living standards in order to keep the Euro and the wider European “Project” moving forwards. Ever closer Union is what is on the tin – and even if the words are removed to satisfy the Prime Minister, the contents will still be the same.
The Labour Party has traditionally had a sceptical view of the European institutions. From Attlee to Foot, and until the late 1980s, Labour was predominantly Eurosceptic – but then, following three Thatcher victories, many on the Left looked desperately to Europe to block her policies. Wise Labour voices like Peter Shore and Tony Benn, however, argued that democratic faith in the wisdom of the public was a better guarantor than the benevolence of transitory political elites. They have been proved right as the EU is no longer motivated by Jacques Delors’ ‘Social Europe’, but is increasingly out of touch with the needs of its people.
Familiar voices try to scare us into believing that leaving the EU would ruin the UK, but these are the same people who told us that we had to join the Euro or face disaster. We stayed out of the Euro and have therefore been spared much of the chaos of that unsustainable currency – but we still give £7.3 billion net a year of our money to the EU.
How can we protect civil liberties when the EU forces on us unaccountable extraditions through the European Arrest Warrant? How can we ensure the jobs and growth that we need when vital contracts for work go to preferred bidders on the continent and not to British firms? How can we preserve and improve our public services when the Services Directives help force the privatisation of the Royal Mail and EU rules against state aid will make it almost impossible to renationalise the railways? TTIP is a gift to the multi-national corporations. I don’t trust the EU to negotiate on our behalf, and I certainly don’t trust it to be on the side of small businesses or Trade Unions.
The Labour Party is looking at radical policies to tackle the problems in our country. We need to take back real control from the unelected and unaccountable European Commission if we are to have a chance of implementing any of these.
My politics are very far indeed from those of Hoey, but she’s not wrong. Greece’s government may have brought upon the crisis by spending radically more money than they took in even after it became apparent they were going broke, but the EU responded in exactly the way described. It was born as an undemocratic organization, a fact the Euro crisis finally made apparent even to the those on the left, with the decisions of democratically elected officials overruled by unelected bureaucratic elites. And the self-serving agendas of those elites tend to be at odds with the goals of both left and right.
The question isn’t why Hoey supported Brexit, but why so many Labour MPs didn’t.
Other Brexit News:
The inability of those elites to grapple with the rich world’s populist moment was in full display on social media last night. Journalists and academics seemed to feel that they had not made it sufficiently clear that people who oppose open borders are a bunch of racist rubes who couldn’t count to 20 with their shoes on, and hence will believe any daft thing they’re told. Given how badly this strategy had just failed, this seemed a strange time to be doubling down. But perhaps, like the fellow I once saw lose a packet by betting on 17 for 20 straight turns of the roulette wheel, they reasoned that the recent loss actually makes a subsequent victory more likely, since the number has to come up sometime.
Or perhaps they were just unable to grasp what I noted in a column last week: that nationalism and place still matter, and that elites forget this at their peril. A lot people do not view their country the way some elites do: as though the nation were something like a rental apartment — a nice place to live, but if there are problems, or you just fancy a change, you’ll happily swap it for a new one.
In many ways, members of the global professional class have started to identify more with each other than they have with the fellow residents of their own countries. Witness the emotional meltdown many American journalists have been having over Brexit….
A lot of my professional colleagues seemed to, and the dominant tone framed this as a blow against the enlightened “us” and the beautiful world we are building, struck by a plague of morlocks who had crawled out of their hellish subterranean world to attack our impending utopia.
I’m always up for a good Morlock reference. And if you haven’t read H. G. Wells’ The Time Machine (which you should, because it’s a great novel), that analogy is more apt than you know. In Wells’ novel, the Morlocks were the underground race that actually ran things, the ones that maintain the machinery the Eloi depended on to live. Just like those inbred redneck freaks from JesusLand (or, to use a UK analogy, those Northern monkeys), the Morlocks are the essential population that keep things running, not the beautiful, useless Eloi.