Jim Sinclair’s Commentary
John Williams shares the following with us.
– Economic Bluff and Bluster versus Reality, Politics and Elections
– Minimal Upside Revision to Second-Quarter GDP Left Gimmicked Growth Even More Heavily Overstated
– Underlying Reality Remains a Severely Impaired Consumer and Economy
– Monthly Economic Series to Turn Increasingly Negative
"No. 653: First Revision to Second-Quarter 2014 GDP"
Russia Sanctions Hit German Consumers, “Economic Expectations Completely Collapse”
by Wolf Richter • August 27, 2014
It starts out un-alarmingly. The optimism of German consumers weakens somewhat, according to the forward-looking Gfk survey, conducted on a monthly basis for the European Commission. So the overall index fell to 8.6 for September, from 8.9 in August. It was the first decline since January 2013.
The index bottomed in late 2008 below 2, after a breathtaking crash during the financial crisis. In late 2007, it had hovered above 9. Early 2014 was the first time since the prior bubble that the index broke above 8. And August’s level of 8.9 represented an “extremely optimistic economic outlook,” as Gfk calls it. German consumers have been feeling good, and according to the headline index, they’re still feeling good up there somewhere in the rarefied air above 8.
But beneath the surface, there is serious trouble. Gfk reports that the sub-index of economic expectations, “in light of the intensified state of international affairs, completely collapses.”
It plunged 35.5 points to 10.4. The worst monthly plunge since the beginning of the survey in 1980. In a single month, it nearly wiped out all the gains of the boom of the last 12 months. Gfk cites the escalation of the situation in Iraq, Israel, the Eastern Ukraine, and particularly “the faster rotating sanctions spiral with Russia.”
Since there appears to be no sustainable solution to any of the trouble spots, consumers are showing increased uncertainty about the possible consequences for the German economy, Gfk reports. “Particularly the sanctions against Russia, which have already hit exports noticeably, could become a real danger for the German economy.”
Ukraine: emergency UN, Nato, EU meetings after Russian invasion claim
Nato says 1,000 Russian troops fighting in Ukraine as Kiev accuses Moscow of de facto invasion and opening second front
Shaun Walker in Kiev
The Guardian, Thursday 28 August 2014 20.02 BST
World powers have called a succession of emergency meetings to step up the international response to Russia after Kiev accused Moscow of a de facto invasion and of opening up a second front in the conflict in eastern Europe.
The UN security council was meeting in emergency session, and Nato and EU leaders will consider a response on Friday, amid signs that hundreds of Russian soldiers are actively involved in the insurrection against Kiev’s rule.
Russia denies that any of its troops are in eastern Ukraine. But on Thursday Nato said it estimated there were now more than 1,000 Russian soldiers fighting in Ukraine. The organisation released satellite images that it said showed Russian armoured vehicles and artillery had been crossing into Ukraine for at least a week.
The Ukrainian president, Petro Poroshenko, said: "Russian forces have actually entered Ukraine," while Ukrainian fighters in the south-east said Russian forces had helped separatists take over the border town of Novoazovsk.
China vows to respond to US surveillance flights
Aug. 28, 2014 | 02:59 PM
BEIJING: China said Thursday it will continue responding to U.S. military surveillance flights off its coast, rejecting American accusations that one of Beijing’s fighter jets acted recklessly in intercepting a U.S. Navy plane last week.
Defense Ministry spokesman Yang Yujun said China’s military would closely monitor U.S. flights and reiterated calls for the U.S. to scale back or end such missions altogether.
"According to different situations we will adopt different measures to make sure we safeguard our air and sea security of the country," Yang said at a monthly news briefing.
China has long complained about U.S. surveillance flights that just skim the edge of China’s territorial airspace. However, Yang said such flights this year have become more frequent, are covering a wider area and are coming even closer to the Chinese coast.
U.S. sea and air surveillance missions occur most frequently during Chinese military exercises or weapons tests, raising the risk of accidents and misunderstandings, Yang said.
That was a likely reference to an incident last December in which China accused a U.S. Navy cruiser, the USS Cowpens, of having veered too close to China’s sole aircraft carrier in the South China Sea during sea drills. That nearly led to a collision with a Chinese navy ship in the most serious sea confrontation between the two nations in years.
FBI examining whether Russia is tied to JPMorgan hacking
The Federal Bureau of Investigation (FBI) is investigating whether Russians had any links with recent cyber intrusions against US banking giant JPMorgan Chase and other American banks.
The FBI is investigating whether the attacks, discovered in mid-August, were in retaliation for Western sanctions levied on Russia over the crisis in Ukraine, according to Bloomberg.
Security experts say the sophistication used to bypass multiple layers of security to steal data, is far beyond the capability of ordinary criminal hackers.
Some analysts however believe retaliatory attacks involve destruction or disruption of networks, not theft of data.
The attack on JPMorgan resulted in the loss of gigabytes of sensitive data, said two people familiar with the FBI’s probe, who asked not to be identified because the investigation is still preliminary.
Authorities are investigating whether recent infiltrations of major European banks using a similar vulnerability are also linked to the attack, one of the people said.
A third person familiar with the probe said the National Security Agency is cooperating with the FBI in the investigation.