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Member since: Thu May 18, 2017, 11:36 AM
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Charles Aznavour, enduring French singer of global fame, dies at 94

Source: New York Times

Charles Aznavour, one of France’s most celebrated singers of popular songs as well as a composer, film star and lifelong champion of the Armenian people, has died at his home in Mouriès, in southwestern France. He was 94.

His accomplishments were prodigious. He wrote, by his own estimate, more than 1,000 songs, for himself and for others, and sang them in French, Armenian, English, German, Italian, Spanish and Yiddish. By some estimates, he sold close to 200 million records and appeared in more than 60 films.

At an age when most performers have long retired from the footlights and the brutal, peripatetic life of an international star, Mr. Aznavour continued to range the world, singing his songs of love found and love lost to capacity audiences who knew most of his repertoire by heart.

“We live long, we Armenians,” he said. “I’m going to reach 100, and I’ll be working until I’m 90.”

Read more: https://www.nytimes.com/2018/10/01/obituaries/charles-aznavour-dead.html

Charles Aznavour, 1924-2018.

Argentines sacrifice vacations, internet and even food as economic crisis intensifies

Argentina, Latin America’s third-largest economy is being whipsawed by rising inflation and a plunge in its currency, the peso - hurting everyone from laborers who are getting less work to professionals facing credit card bills with soaring interest rates.

The turbulence is the result of several factors: unclear policies, a foreign debt crisis, and an increase in U.S. interest rates have led investors to pull out of Argentina and into safer U.S. bonds.

President Mauricio Macri came to power in 2015 promising to reverse 12 years of protectionist, free-spending policies enacted by the leftist governments of Néstor Kirchner and his widow, Cristina Fernández de Kirchner.

But cuts to subsidies have instead led to sharply higher utility bills and fares, feeding inflation which under Macri has averaged 35% - 10 points higher than under his predecessor - and may reach 50% this year.

Wages are meanwhile rising by just 20%.

Critics consider the utility hikes effectively a tax increase amounting to 6% or more from average incomes - while $4 billion a year were granted in corporate and high-end tax cuts.

The economy grew last year by 2.9%; but GDP fell 4.2% in the second quarter of 2018 compared with a year earlier. Unemployment rose in June to 9.6% - the highest in 12 years - and another 60,000 jobs were lost in July.

The peso has lost over half its value so far this year, from 19 to 42 per dollar.

This has pushed up gasoline prices by over 60% - which impacts the price of many products, especially food. Argentina also suffered its worst drought since 2009 earlier this year, crippling soy exports and putting further pressure on food prices.

Stuck in the middle

The drop in purchasing power has also hit the middle class, which represents about 40% of the country’s population and were until recently strongly supportive of Macri.

The shrinking peso has made it more expensive to buy imported goods such as smartphones, or to travel abroad. Foreign spending by Argentine nationals fell abruptly in June by 28% - a $300 million monthly savings for the central bank dwarfed by $3 billion in capital flight a month.

Some have coped by dropping their internet service or sharing it with neighbors, while others have postponed buying a new home or car and have opted for public transport.

Over 130,000 borrowers with adjustable-rate (UVA) mortages promoted by Macri in 2016, are now facing steep negative amortization (loss of equity) or outright foreclosure as both their installments and principal rise - a situation similar to the 1981-82 Circular 1050 mortgage crisis during the last dictatorship.

From plaudits to bailout

Macri's image as a market-friendly businessman meant that early in his administration there was an inflow of cash from foreign lenders, which helped cover rising budget and external deficits.

Argentina sold $133 billion in bonds in Macri's first two years - more than any emerging market except South Korea. Foreign investors stopped buying in January however, popping last year's carry-trade debt bubble - known locally as the financial bicycle - and leading to wave of capital flight.

The crisis forced Argentina to request a $50 billion IMF credit line in June - a bailout conditioned on steep budget cuts. These cuts, plus an interest rate hike to 60% in a bid to shore up the peso, have exacerbated the recession.

And the crisis is unlikely to ease in the near future: The new central bank head, Guido Sandleris, announced he would "restrict the monetary base to reduce demand for dollars to a minimum."

Similar scorched-earth monetary policies during past financial crises in Argentina have failed to tame the dollar.

Nora Pastrana, 45, says she voted for Macri and his right-wing coalition — known as Cambiemos, or “Let's Change.”

“He promised change,” Pastrana said, “but change failed.”

At: https://www.washingtonpost.com/world/the_americas/argentines-sacrifice-vacations-internet-and-even-food-as-economic-crisis-intensifies/2018/09/27/2fc10082-c01e-11e8-9f4f-a1b7af255aa5_story.html

Normally hectic Ninth of July Avenue at a near-standstill during a September 24th general strike - the fourth since Macri took office in 2015.

Macri has already spent the $15 billion IMF loan from June 22, mostly to cover capital flight by speculators.

"Our future is not in speculation and financial rackets," CTA labor federation head Pablo Micheli said. "That's for the loafers in the administration."

Senate Panel Approves Kavanaugh, but Flake Wants F.B.I Investigation Before Final Vote

Source: New York Times

The Senate Judiciary Committee voted along party lines on Friday to advance Judge Brett M. Kavanaugh's nomination to the full Senate, but in a dramatic reversal, Senator Jeff Flake of Arizona said he would not support final confirmation until the F.B.I. investigates accusations of sexual assault leveled against Judge Kavanaugh.

Mr. Flake, an Arizona Republican, had said in a statement Friday morning that he would vote to confirm Judge Kavanaugh, President Trump's Supreme Court nominee, less than 24 hours after a remarkable public hearing with a woman accusing him of sexual assault.

But after hushed negotiations with Democrats outside the hearing room, Mr. Flake, who is retiring at the end of the term, chose a different course. His decision threw the nomination into uncertainty just moments before the panel was set to vote.

“I think it would be proper to delay the floor vote for up to but not more than one week in order to let the F.B.I. to do an investigation limited in time and scope to the current allegations that are there,” he said.

Read more: https://www.nytimes.com/2018/09/28/us/politics/brett-kavanaugh-senate-judiciary.html

Arizona's Jeff Flake: Change of heart, or mere tactics?

IMF increases Argentina bailout package to $57 billion

The International Monetary Fund and Argentina announced Wednesday an arrangement to increase resources available to the South American country by $19 billion.

The agreement, pending IMF Executive Board approval, would bring the total amount available under the program to $57.1 billion by the end of 2021, up from the $50 billion secured on June 8.

Argentina's recession-laden economy is struggling under steep interest rates of 60% and a currency that has lost around 50% of its value against the dollar this year.

The governor of Argentina's Central Bank, Luis Caputo, resigned on Tuesday after taking the reins in June, the bank said in a statement - a surprise announcement for a country in the midst of talks with the IMF. The announcement sent the peso tumbling.

The agreement makes $14 billion available for borrowing for the remainder of 2018, rather than the planned $6 billion; and another $23 billion in 2019, rather than $12 billion - a $19 billion advance in total.

Macri has already spent nearly all the $15 billion drawn from the credit line on June 22 to prop up the peso, which has nevertheless lost half its value since Argentina's carry-trade debt bubble imploded in April.

At: https://www.cnbc.com/2018/09/26/imf-increases-argentina-bailout-package.html

Macri and the IMF's Christine Lagarde at an Atlantic Council (NATO) dinner in New York Monday night.

"I must confess I have a crush on Christine," Macri told attendees. "And soon all Argentines will be crushing on her too."

Argentine Central Bank president resigns; second in three months

Argentine Central Bank President Luis Caputo announced his resignation today - the second central banker to resign in three months.

The announcement comes amid the most severe financial crisis in Argentina since the 2001-02 collapse, which resulted in a then-record $82 billion bond default and massive unemployment.

Caputo, the seventh top economic official to resign in two years, will be replaced by Deputy Economy Minister Guido Sandleris.

Sandleris, 47, is a former academic with degrees from the London School of Economics and Columbia, where he received a PhD. in 2005.

His appointment was, however, met with skepticism due to his own record in government - mostly limited to serving as adviser under conservative President Fernando de la Rúa, who presided over the last collapse, and under Macri since the latter took office in late 2015.

The normally low-profile Sandleris is remembered for a March 1 interview in which he confidently predicted that "2018 will be better than 2017" and that inflation will be at most "19%" - a far cry from the 42% now projected by the central bank, or the 45-50% expected by most economists.

As of June, GDP was down 6.7% and unemployment had risen to 9.6% - the highest level in 12 years.

IMF talks

Sandleris has experience as a visiting researcher at the IMF - with whom President Mauricio Macri is currently in New York negotiating both an $18 billion advance and a $20 billion extension to the unprecedented, $50 billion credit line obtained on June 8.

Macri has already spent nearly all the $15 billion drawn from the credit line on June 22 to prop up the peso, which has nevertheless lost half its value since Argentina's carry-trade debt bubble imploded in April.

The dollar rose another 2.9% in Buenos Aires following today's news, to 39.28 pesos.

The carry-trade debt bubble, known locally as the financial bicycle, contributed to a doubling in the country's public foreign debt to nearly $200 billion in just three years and to renewed fears of a bond default.

The bubble's implosion led to the resignation of Macri's first central bank head, Federico Sturzenegger, in June.

Caputo - first cousin of President Macri's best friend - had been a controversial choice given his appearance in the Paradise Papers scandal last year and his personally profiting from the May devaluation.

Calls for him to resign intensified after he raised the central bank discount rate from 45% to 60% on August 30.

The rate, now the highest among all emerging markets, had been 27% as recently as April and has led to a wave of business bankruptcies and layoffs.

At: https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.eldestapeweb.com%2Fel-nuevo-presidente-del-banco-central-pasado-el-gobierno-la-alianza-y-el-fmi-n49683&edit-text=

Trading their poker faces for long ones, Guido Sandleris (right) and Sebastián Galiani (left) endure a recent press conference by Economy Minister Nicolás Dujovne.

Sandleris's appointment was met with skepticism by the markets, which expect few policy changes from Luis Caputo's disastrous three months as central banker.

$14 billion in reserves were lost under Caputo, forcing Macri to seek $38 billion in new IMF funds this week.

Fearing default, Argentina's Macri accepts $8.7 billion Chinese currency swap

The People's Bank of China reached an agreement with the Argentine Central Bank today to expand its 70 billion yuan ($10.3 billion) currency swap with Argentina by another 60 billion yuan ($8.7 billion).

The agreement - over twice the $4 billion swap announced on August 16 - comes amid a severe financial crisis in Argentina that has led to over $30 billion in capital flight so far this year and the worst recession since the last debt crisis in 2001-02.

As of June, GDP was down 6.7% and unemployment had risen to 9.6% - the highest level in 12 years.

Today's agreement was a needed financial as well as political boost for President Mauricio Macri, who has faced massive protests and calls to resign since a 2016-17 debt bubble imploded in April.

The carry-trade debt bubble, known locally as the financial bicycle, contributed to a doubling in the country's public foreign debt to nearly $200 billion and to renewed fears of a bond default.

Argentina's foreign exchange reserves have fallen $14 billion in the last three months as the Central Bank sells dollars to prop up the peso - which nevertheless fell from 20 to the dollar in April, to 39 currently.

Avoided by global bond markets since January, Macri has since tapped lenders of last resort such as the Bank for International Settlements and the vulture fund BlackRock ($2 billion each in May) - and in particular the IMF, which issued a $50 billion stand-by credit line on June 8.

Macri has already spent nearly all the $15 billion drawn from the IMF credit line on June 22, and is seeking both an $18 billion advance and a $20 billion extension to the credit line.

The IMF agreed in principle today to a extension of $3-5 billion - but as yet no cash advance.

Chinese two-step

The Chinese-Argentine currency swap was originally signed in 2014 by Macri's center-left predecessor, Cristina Fernández de Kirchner, when Argentina was shut out of credit markets after its bondholders were blocked from collecting payment by a New York judge seeking to pressure the country to pay vulture fund holdouts a 1600% return.

Macri, who sought closer ties with the U.S., condemned the swap, and after taking office in late 2015, paid vulture funds an estimated 1160% payout and distanced Argentina from the Asian giant.

He then ordered construction on two hydroelectric power plants and two nuclear power plants cancelled in 2016 - an 85% Chinese-financed $20 billion investment.

But after trade and currency deregulation led to the current account deficit doubling to $31 billion, Macri changed tack and in June 2017 signed a three-year renewal of the 2014 currency swap.

While China is already Argentina's second-largest trading partner, a record $7.7 billion deficit with China made up 90% of its merchandise trade deficit last year. The currency swaps have helped finance this shortfall.

At: https://translate.google.com/translate?hl=en&sl=es&tl=en&u=http%3A%2F%2Fwww.ambito.com%2F934601-bcra-renueva-swap-con-china-por-mas-de-us-10000-millones

Greeted in Beijing during a state visit last year, Argentina's Macri has recently sought closer ties with China after his own deregulatory policies plunged the country into its most severe crisis since 2002.

Vatican and China reach 'provisional' deal on appointment of bishops

The Vatican said on Saturday that it had reached a “provisional agreement” with China on the process used to appoint bishops, a breakthrough after years of contentious negotiations on the management of Catholic leadership in the communist country.

The deal paves the way for bishops to be recognized by the Vatican and the Chinese government, a step toward ending the current system — one that has divided followers — in which some bishops are backed by only one side or the other.

The accord marks a potentially transformative step in relations between the world’s most populous country and one of the most powerful religious institutions.

Some outside experts say the agreement could end seven decades of strain between the sides, opening the door for the possible resumption of diplomatic ties, which were severed in 1951.

Beijing and the Holy See have long been at odds on leadership of Catholics in China, where the government has appointed bishops and authorized which churches can operate.

Their deal comes even as President Xi Jinping has tightened his grip on power, cracking down on freedoms and saying that any practice of religion must be “Chinese in orientation.”

For Pope Francis, the outreach to China has been perhaps his most ambitious diplomatic venture, an effort to broaden the appeal of a faith that has lost ground in much of the Western world and is dealing now with a global wave of sexual abuse cases.

Catholicism is one of the five religions officially tolerated by Chinese leaders; but it has been steadily eclipsed in popularity by Protestant and evangelical denominations.

At: https://www.washingtonpost.com/world/vatican-and-china-reach-provisional-deal-on-the-appointment-of-bishops/2018/09/22/8e2054e6-be59-11e8-8792-78719177250f_story.html?noredirect=on&utm_term=.bc4b105c7ae8

Pope Francis (then Cardinal Bergoglio) and his Chinese-Argentine doctor, Liu Ming (right), around 2005. For Francis, a Catholic rapprochement with China has long been a personal goal.

UN report: 4 million Argentines facing serious food insecurity issue

Hilal Elver, the UN Special Rapporteur on the Right to Food, reported after a 10-day fact-finding mission that the economic crisis in Argentina has greatly impacted the access to food for millions of people.

The current economic and financial crisis in Argentina is eroding purchasing power and increasing food prices according to the report, which noted that 4 million Argentines (9%) now face food insecurity.

Trade and financial deregulation policies enacted by President Mauricio Macri were followed by a debt crisis, forcing Argentina to seek a $50 billion IMF bailout on June 8.

A severe recession began after the 2017 debt bubble imploded in April, and by June GDP was down 6.7% and unemployment at 9.6% - the highest in 12 years. Real wages, according to official data, have fallen 15% since Macri took office three years ago.

Austerity measures agreed to with the IMF as part of the bailout are, Nobel laureate Joseph Stiglitz warns, likely to exacerbate the crisis.

Granary of the world

Argentina is the world's third-largest net agricultural exporter, and its 44 million people were until this year the highest paid and best fed in Latin America.

Elver points out however that "since the end of last year and amid the economic crisis, poverty rates have begun to increase at an alarming level - affecting children in particular."

The rapporteur noted "an increasing number of people going to soup kitchens or skipping meals, and children being forced to rely entirely on school lunch programs."

"My concerns are with not only the most vulnerable but also with Argentina’s large middle class," Elver said. She called on Macri to protect people's right to food, education, health, and housing.

From zero hunger to zero for hunger

The situation is in stark contrast to the one Macri inherited in late 2015.

Elver noted that during the center-left Néstor Kirchner administration "Argentina was the top performer in the region in reducing poverty between 2004 and 2008."

The FAO declared that by 2015, the last year of Cristina Kirchner's administration, "zero hunger was at hand" - an assessment echoed by prominent anti-hunger advocate Juan Carr.

"Malnutrition-related deaths had fallen from 24 daily to three," Carr noted. "But demand at food banks is now increasing and we're seeing underweight children again."

Meanwhile many family farmers - 80% of the nation's farms and source of half its fruits and vegetables - are being forced out of business by soaring costs.

Elver was critical of Macri's decision to dismantle government support for family farms.

"This seems to be targeted to further promote export-oriented agroindustry, mainly soy and maize, and in the middle of a severe economic crisis will impact Argentina’s right to food."

At: https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.pagina12.com.ar%2F143753-la-onu-advierte-sobre-el-hambre-en-la-argentina&edit-text=

UN Special Rapporteur on the Right to Food Hilal Elver, reporting from Buenos Aires.

Amid deep recession, Argentina's Macri to eliminate most income tax deductions

Argentine Economy Minister Nicolás Dujovne presented President Mauricio Macri's 2019 budget proposal to Congress today.

The proposed budget proved controversial not only for its "optimistic" assumptions regarding the nation's economy next year; but also for provisions eliminating many income tax deductions enjoyed by individual as well as business filers.

On the chopping block are exemptions for bonuses, stipends, paid travel and moving expenses and other supplemental pay, as well as some business expense deductions.

Numerous scientific, engineering, and other highly-specialized professions, as well as high-risk professions such as in the oil and mining sectors, will also lose their special exemptions - as will employees in Tierra del Fuego, whose promotional income tax rate was enacted in 1972 as part of an effort to develop the remote, far-south province.

Dujovne expects the exemption rescissions to raise 25 billion pesos ($600 million) next year - around $300 for each of some 2 million affected employees.

"The objective is to have equity in the tax code," Dujovne said in a congressional hearing. "There were too many laws modifying its application."

Nevertheless the most controversial exemption - one freeing federal judges and court staff from paying any income tax at all - was not altered. The exemption costs federal coffers $235 million annually.

The decision to retain the costly judicial exemption, critics note, is in line with Macri's policy of weaponizing Argentina's already-strained judiciary against opponents while shielding him and his administration from over 70 charges so far.

"Under Macri," María Servini de Cubría, the nation's most senior federal judge, noted, "pressure on judges has been unprecedented."

Highest unemployment in 12 years

The tax increase is part of a series of austerity measures agreed to with the IMF as part of a $50 billion bailout agreed to on June 8.

The revenue benefit of the proposed changes is limited, however, by the fact that the Argentine federal tax code exempts most of the nation's work force of 19 million. Income taxes last year brought in $17 billion, or just 14% of federal revenues (compared to 47% in the U.S.).

Macri pledged to reduce the budget deficit from 6% of GDP last year, to 1.3% in 2019. Earlier cuts have already trimmed it to 3.7% of GDP - roughly the same level Macri inherited in 2015.

Nobel laureate Joseph Stiglitz expects austerity to exacerbate a severe recession that began after the 2017 debt bubble imploded in April; GDP was down 6.7% just as of June, and unemployment has risen from 5.9% when Macri was elected three years ago to 9.6% currently - the highest in 12 years.

At: https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.infobae.com%2Feconomia%2F2018%2F09%2F19%2Fel-presupuesto-2019-contempla-cobrar-mas-por-ganancias-a-los-trabajadores-y-jubilados%2F&edit-text=

IMF = Poverty. Argentines protest budget cuts and tax increases imposed by the IMF bailout agreed to in June.

The bailout, critics note, was brought about by record external deficits and capital flight caused by Macri's own deregulation.

EU says McDonald's, Luxembourg tax deal not illegal

Source: Reuters

McDonald’s tax deal with Luxembourg did not breach EU state aid rules, EU antitrust regulators ruled on Wednesday - saying the reason the U.S. fast food chain did not pay some taxes was due to the mismatch between U.S. and Luxembourg laws.

The decision by the European Commission came after a three-year long investigation, part of its crackdown against illegal sweetheart deals between EU governments and multinationals that has resulted in Apple, Starbucks, and Fiat paying billions of euros in back taxes.

The investigation had focused on McDonald’s Luxembourg-based subsidiary Europe Franchising which receives royalties from franchisees in Europe, Ukraine and Russia.

Luxembourg in a 2009 tax ruling said the company did not have to pay corporate taxes as its profits would be taxed in the United States. In a second tax ruling, the Grand Duchy said that the company was no longer required to prove that its royalty income was subject to U.S. taxation.

“Of course, the fact remains that McDonald’s did not pay any taxes on these profits – and this is not how it should be from a tax fairness point of view,” European Competition Commissioner Margrethe Vestager said.

Read more: https://www.reuters.com/article/us-eu-mcdonald-s-corp-subsidies/eu-says-mcdonalds-luxembourg-tax-deal-not-illegal-idUSKCN1LZ16W

Another day in corporatocracy.
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