Jim’s Mailbox

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Courtesy of Dave.


“Everybody Immediately Knew That It Was For Amazon”: Has Bezos Become More Powerful In D.C. Than Trump?
August 13, 2018

By May Jeong

There’s a new scandal quietly unfolding in Washington. It’s far bigger than Housing Secretary Ben Carson buying a $31,000 dinette set for his office, or former EPA chief Scott Pruitt deploying an aide to hunt for a deal on a used mattress. It involves the world’s richest man, President Trump’s favorite general, and a $10 billion defense contract. And it may be a sign of how tech giants and Silicon Valley tycoons will dominate Washington for generations to come.

The controversy involves a plan to move all of the Defense Department’s data—classified and unclassified—on to the cloud. The information is currently strewn across some 400 centers, and the Pentagon’s top brass believes that consolidating it into one cloud-based system, the way the CIA did in 2013, will make it more secure and accessible. That’s why, on July 26, the Defense Department issued a request for proposals called JEDI, short for Joint Enterprise Defense Infrastructure. Whoever winds up landing the winner-take-all contract will be awarded $10 billion—instantly becoming one of America’s biggest federal contractors.

But when JEDI was issued, on the day Congress recessed for the summer, the deal appeared to be rigged in favor of a single provider: Amazon. According to insiders familiar with the 1,375-page request for proposal, the language contains a host of technical stipulations that only Amazon can meet, making it hard for other leading cloud-services providers to win—or even apply for—the contract. One provision, for instance, stipulates that bidders must already generate more than $2 billion a year in commercial cloud revenues—a “bigger is better” requirement that rules out all but a few of Amazon’s rivals.



Courtesy of JB.


The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued, Debt Crises Ensue
August 13, 2018

By Wolf Richter

Grand Collapse in Turkey; to avoid the same fate, Argentina hikes rate to 45%.

On Monday, Argentina’s central bank responded to the currency chaos in Turkey and other sections of the Emerging Markets, including the ongoing collapse of the Argentine peso: It raised its policy rate by five percentage points to 45%.

Argentina’s annual rate of inflation in June surged to nearly 30%, and indications are that this is getting worse. The central bank (the BCRA) is part of the Ministry of Finance, has no independence, and has been tasked over the decades to fund government spending. But at least the current government publishes inflation data. The prior government made inflation a secret and made independent publication of inflation data illegal.

To soothe everyone’s nerves apparently, the BCRA promised to keep the rate at 45% until October. This was the fourth draconian rate-hike since April 27.

Argentina has also received a $50-billion bailout loan commitment from the IMF with which to prop up the peso. This money, which was approved in June, comes with some IMF strings attached. Flush with this bailout money, the government has since been selling dollars and buying pesos in daily auctions to put a floor under the peso. But on Monday, along with the rate hike, the government stopped throwing those dollars out the window, hoping that higher rates will do the job.