Monday, August 18, 2014

Today's links

"The US Air Force’s Defense Support Program utilizes satellites with infrared sensors to detect missile launches anywhere on the planet, and US radar posts in Europe would have tracked the missile as it shot through the sky. These satellite and radar data have not been released, because whatever they show does not fit the storyline concocted by the US government and media." WSWS


1---Why have the media and Obama administration gone silent on MH17?, wsws


The deafening silence of the US media and government about the investigation into the downing of Malaysian Airlines Flight MH17 one month ago reeks of a cover-up.


In the hours and days immediately after the crash, without a single shred of evidence, US officials alleged that the passenger jet was shot down by an SA-11 ground-to-air missile fired from pro-Russian separatist-held territory in eastern Ukraine. They launched a political campaign to obtain harsh economic sanctions against Russia and strengthen NATO’s military posture in Eastern Europe.


Picking up on the scent, the CIA attack dogs in the US and European media blamed the crash squarely on Russian President Vladimir Putin. The cover of the July 28 print edition of German news magazine Der Spiegel showed the images of MH17 victims surrounding bold red text reading “Stoppt Putin Jetzt!” (Stop Putin Now!). A July 26 editorial in the Economist declared Putin to be the author of MH17’s destruction, while the magazine ghoulishly superimposed Putin’s face over a spider web on its front cover, denouncing Putin’s “web of lies.”...


Having built up the crash into a casus belli against Russia, however, the US media suddenly dropped the matter completely. The New York Times has not found it fit to print a word on the MH17 crash since August 7.
There is no innocent explanation for the sudden disappearance of MH17 from the media and political spotlight. The plane’s black box has been held in Britain for examination for weeks, and US and Russian spy satellites and military radar were intensively scanning east Ukraine at the time of the crash. The claim that Washington does not have detailed knowledge of the circumstances of the crash and the various forces involved is not credible.


The sole evidence he presented were a few, dubious “social media records” posted to the Internet. He presented unauthenticated audio recordings of separatists speaking of a plane crash, edited and released by Ukraine’s SBU intelligence agency, which works closely with the CIA; YouTube video clips showing a truck moving unidentified military equipment along a road; and a retracted social media statement claiming responsibility for shooting down a plane attributed to separatist leader Igor Strelkov.
Very quickly, the US government’s story line on MH17 began to collapse


2---Lavrov explains phantom convoy, RT


Lavrov said Russia is working with the OSCE on giving more transparency in the border region, which is important, considering how often Kiev voices false reports on alleged violation of the border from the Russian side. He cited the latest claim by Kiev on Friday, when the Ukrainian military said it had destroyed a column of Russian armor after an incursion into Ukraine.


“What really happened was a Ukrainian column moved in the Lugansk Region, obviously to intercept the rout of a potential humanitarian aid delivery. That column was destroyed by the militia,” he said. “If such episodes are presented as glorious successes of the Ukrainian army, then please don’t accuse us of anything.”


3---We know with 99% certainty who shot down MH17, Vineyard saker
must see video


4---Foreigners Dump Record Amount of US Securities, But Who the Heck Is Still Buying? , wolf street


Treasury International Capital (TIC) report. And this time, the report for June – released on Friday when everyone was on vacation or getting ready to head out of town for the weekend, and when no one was supposed to pay attention – was a zinger: US net capital outflows soared to $153.5 billion, the largest ever recorded....


Foreigners added $418 billion in Treasuries to their holdings over that period – so nearly half of the new debt. Who bought the remaining $446 billion?
The Fed. During that period, it piled an additional $464 billion in Treasuries on its balance sheet.
So the two remaining net buyers, the only two forces left standing to buy US government debt, were foreign countries and the Fed. Their combined holdings of Treasuries soared by $882 billion – $18 billion more than the Treasury issued. The rest of the world, that is US and global investors, were net sellers of US Treasuries.


5---The events in Ferguson must be taken as a warning. The preparations for dictatorship are far advanced., wsws


At the same time, a new aristocracy, whose immense fortunes are based largely on financial speculation of a parasitic and quasi-criminal character, grabs an ever-bigger share of the national income and wealth. This ruling elite is terrified by the specter of social opposition from the working class. It has been preparing accordingly, over a protracted period.


Over the past several decades, the ruling class, under Democratic no less than Republican administrations, has built up a vast and unaccountable military-police-intelligence apparatus that serves as the defender of its economic and social interests. Over the past fifteen years, in particular, it has systematically transformed police departments all across the country into paramilitary forces, barely distinguishable from the military itself.


The Pentagon and other state agencies have distributed billions of dollars worth of military hardware to local police, from attack helicopters, tanks, planes and drones to assault rifles, grenade launchers, body armor and night goggles. They have trained local police to consider the working class populations in their cities to be the enemy, to be bloodily suppressed using the tactics of urban warfare....


The militarization of the police is only one facet of the buildup of the state apparatus of repression. Under the pretext of the “war on terror,” every basic democratic right has been gutted. The Patriot Act set the course for pervasive spying by the National Security Agency, FBI and CIA, in conjunction with state and local police, on every American. The Homeland Security Department established a huge source of funds and a clearinghouse for the buildup of domestic police forces. The Northern Command established, for the first time in US history, a military command covering the United States.


All of these agencies have been expanded under Obama, who asserts the right to detain and even assassinate American citizens without due process, and admits having done so.
The militarization of America and establishment of the framework of a police state go hand in hand with endless military aggression and war. There is no iron wall between foreign and domestic policy. Militarism and criminality abroad inevitably breed the destruction of democracy at home. Even as it wages war abroad, the American ruling class looks upon the United States itself as a battleground, and the working class as the enemy
Countless studies by military and intelligence agencies and academics have been produced on the techniques for mass repression within the United States. One recent Pentagon strategy paper on domestic urban warfare cited “radical income disparity” as the principal “driver of instability.”


6---Fears of Renewed Instability as Fed Ends Stimulus, NYT


After a nearly uninterrupted five-year rally in stocks and bonds, some investors seem to be getting nervous. On July 31, the Dow Jones industrial average dropped 317 points, wiping out the year’s gains. Last week, junk bond funds experienced record withdrawals and junk bond interest rates spiked....


In April, in his last speech as a Fed board member, Mr. Stein warned that monetary policy should be “less aggressive” when credit risk premiums were extremely low, as they were then, and they’ve gotten even lower since.
“To be clear, we are not necessarily talking about once-in-a-generation financial crises here, with major financial institutions teetering on the brink of failure,” he said in a speech to the International Monetary Fund. “Nevertheless, the evidence suggests that even more modest capital market disruptions may have consequences that are large enough to warrant consideration when formulating monetary policy.”

7---
Sunni tribal leaders offer to battle Islamic State if Baghdad makes concessions, McClatchy

Leaders of Iraq’s Sunni Muslim tribes threatened Friday to rebel against the Islamic State, the first indication that a change of government in Baghdad might allow a new prime minister to rally the country’s divided ethnic and religious groups against the Islamist extremists.
But the Sunni offer to battle the militants came with strings _ possible autonomy and the withdrawal of Iraqi military forces from Sunni areas _

Read more here: http://www.mcclatchydc.com/2014/08/15/236669/sunni-tribal-leaders-offer-to.html#storylink=cpy

8---Autonomy? Sunni tribal leaders have announced a tentative offer to back the incoming PM-designate Hayder Abadi, saying they want to ensure that the Abadi government will respect the rights of the nation’s Sunni Arab minority., antiwar

9--Paul Krugman: The Forever Slump

10--Tepid wage growth and rising house costs prices out low-income households , oc housing

11---Why Half Of America Thinks We're Still In A Recession, mark gongloff

12---The Percentage Of Americans Who Can't Afford Food Hasn't Budged Since The Recession Peaked,

13---Unlocking the Mystery; Why US 10 Year Treasury Yields are Down at 2.4%, Ten Things You Need to Know, Forbes

How could Wall Street economists have been so wrong?  On January 1st the consensus forecast of the 66 most senior economists for the year end 10-year US Treasury yield was 3.44%. At the time, 10 year Treasury yields were hovering around 3%, their highest level in almost three years. Since then the benchmark interest rate has declined as low at 2.34% last week,  Treasury bonds have outperformed practically all major asset classes in 2014.....

Stalling Global Economy:  While the 4% Q2 US GDP growth appeared promising, the rate of growth was measured over the dismal Q1, in which the economy declined by over 2%. Measured over the same period in 2013, the US economy grew by a mild 2.4% and is expected to grow this year by 1.7%, which is the lowest GDP growth outside of a recessions year since measurements started in 1930.  It’s not just slow growth but how much expectations have come down.  Last month, the IMF cut their Global Growth forecast down to 3.4%, back in January they were calling for 3.7% growth, thanks China.
The underlying causes for the stalling US economy are the stagnating US labor force, which is structurally suppressing the potential growth rate of the US. In the financial markets, the sputtering US economy manifests itself through the oil price, which even fails to rally in the face of serious risks to about 15ml barrels of daily output (Russia, Iraq and Libya).  Equally important, the S&P Retail Index peaked in November of 2013 against the S&P and has underperformed the benchmark index by nearly 10% ever since. The last time this happened was in 2006, one year before the start of the great recession.




Read more here: http://www.mcclatchydc.com/2014/08/15/236669/sunni-tribal-leaders-offer-to.html#storylink=cpy


Friday, August 15, 2014

Today's Links

. And who the hell does Samantha Power think she is telling Russia what to do or not? Why doesn't she take a trip to Guantanamo Bay torture and concentration camp, place her hand on her left breast and sing God Bless America? Russian humanitarian aid convoys on Russian soil are Russia's business. And if she or anyone else sees Trojan Horses in an aid convoy, perhaps they should take their meds in the morning. Does anyone seriously think that Russia is going to smuggle troops into Ukraine in a convoy when if it wanted to, it could simply march across the border? And what about the border regions adjoining Russia? How ridiculous can anyone get?"
Timothy Bancroft-Hinchey, Pravda


1---Subprime Car Loans Are The New "Cash For Clunkers" - Auto Production Soars Most Since July 2009, zero hedge


2---No Return to Normal, James Galbraith (archive)


3--Europe’s Greater Depression is worse than the 1930s, WA Post (drawing the wrong conclusions)


But it's a little misleading to just call this a depression. It's worse than that. Europe is turning Japanese. The combination of zombie banks, a rapidly aging population and, most importantly, too-tight money have pushed it into a "lowflationary" trap that makes it hard to grow, and is even harder to escape from. That's what happened to Japan in the 1990s, and now, 20 years later, its nominal GDP is actually smaller than it was then. Now, Europe isn't that far gone, but it's getting there. Inflation is already a meager 0.4 percent. And you can tell that investors don't think it's going to pick up anytime soon, because they're willing to lend to governments for almost nothing. Indeed, for the first time in its history going back to the Napoleonic era, Germany (or one of its predecessor states) can borrow for 10 years for less than 1 percent. Japan, of course, has been able to borrow this cheaply for a decade now.


4---The Forever Slump (Krugman pushes monetary easing) NYT


The good news is that things don’t look that dire in America, where job creation seems finally to have picked up and the threat of deflation has receded, at least for now. But all it would take is a few bad shocks and/or policy missteps to send us down the same path.

The good news is that Janet Yellen, the Fed chairwoman, understands the danger; she has made it clear that she would rather take the chance of a temporary rise in the inflation rate than risk hitting the brakes too soon, the way the E.C.B. did in 2011. The bad news is that she and her colleagues are under a lot of pressure to do the wrong thing from the too-muchers, who seem to have learned nothing from being wrong year after year, and are still agitating for higher rates.

5---Turkey and Russia "bypass" the dollar, wolf street 

Indeed, according to Russian sources, when the Minister of Economic Development of the Russian Federation Alexei Ulyukayev met with Turkey’s Economy Minister Nihat Zeybekchi “on the margins” of the recent G20 meeting of trade ministers in Sydney, the Turkish side proposed strengthening trade and economic relations between the two nations through a bilateral currency agreement that would effectively bypass the US dollar middleman

6--Japan Economic Collapse - GDP Plunges by 6.8%!: Abenomics: Could it get any worse?, , market oracle

7---US Top Brass call for boots on the ground, wsws

This theme was made the center of a Washington Post front-page article Thursday entitled “Militant threat gets modest response.” The article states that ISIS “has attracted more fighters, controls more territory and has access to a larger stream of money than Al Qaeda did before the attacks of Sept. 11, 2001.” It chides the Obama administration for having “mounted a decidedly modest military campaign to check its advance through northern Iraq,” one that “has been defined primarily by the limits it has placed on the US military’s intervention.”

The Post goes on to quote Adm. James Stavridis, a former supreme allied commander of NATO, as warning that air strikes are not sufficient and arguing for “a fast and serious response, including Special Operations forces on the ground.” Also cited is retired Col. Derek Harvey, a former senior officer in Iraq and at US Central Command, who insists that “probably close to 8,000” US ground troops will be needed to drive ISIS out of the large swathe of Iraqi territory it has taken....


That Washington’s supposed “humanitarian” impulses come into play only when they further US imperialism’s predatory objectives has been underscored by reports that the Iraqi military, to which the Pentagon is rushing arms and ammunition, has at least since May—before the ISIS offensive—been dropping barrel bombs on residential neighborhoods of the insurgent Sunni-dominated cities of Anbar province.
The Al-Monitor web site reported that the use of the weapon, together with the participation of Shi’ite militias in the fighting, has “exacerbated the rage, as the government is now accused of waging a war to exterminate Sunnis in Iraq.”


While the US administration has continuously denounced the Assad regime for the use of barrel bombs against areas held by the US-backed “rebels” in Syria, it has no problem when the same weapon is employed by the Iraqi regime just across the border.
Washington successfully imposed its dictate of regime change in Iraq Thursday, with Prime Minister Nouri al-Maliki announcing his resignation in favor of the US-backed prime minister-designate, Haider al-Abadi, a member of Maliki’s own Shi’ite Da’wa party. It is far from clear, however, that this reshuffling at the top of the regime will ameliorate the country’s deep crisis, the end product of the mass killing and destruction inflicted over the course of nearly nine years of US war and occupation.


8---No Russian troops crossed into Ukraine – FSB, RT


....Earlier, several foreign news agencies caused quite a stir, reporting that a convoy of Russian military vehicles had crossed into Ukraine overnight.
The reports triggered criticism from NATO and some European states.
NATO chief Anders Fogh Rasmussen referred to the alleged incident as to “a Russian incursion” that they “saw.”
Last night we saw a Russian incursion, a crossing of the Ukrainian border,” he said Friday, adding that “it is a clear demonstration of continued Russian involvement in the destabilization of eastern Ukraine.”
British Foreign Secretary Philip Hammond said he was “very alarmed by the reports.”
...


Russia’s Security Service (FSB) has denied reports that the country’s troops have crossed the border into Ukraine. Border guards have been deployed to provide security near the frontier, but they operate only on the Russian side, the FSB said.
The mobile military teams “operate strictly within the territory of the Russian Federation,” a spokesperson for the FSB Border Guard Service in Rostov region told RT on Friday.
Russia has stepped up security measures on its border with Ukraine as local residents are under constant threat because of “regular cross-border shelling” and an increased number of “mass border crossings” by the Ukrainian military, he explained. For that reason, FSB mobile border guards’ teams have been created.


9---Argentine President Cristina Fernandez de Kirchner blast corporate Mafiosi, RT


10--Aid convoy to Ukraine faces disruption, may be attacked - Russia, RT


Moscow has information that the convoy delivering humanitarian aid to eastern Ukraine may be attacked by Kiev’s forces, with the “punitive” Aidar Battalion planning to mine the road that the vehicles will use, the Russian Foreign Ministry says.
On Friday, Moscow accused Ukraine of attempting to disrupt the humanitarian aid convoy now that the preparations for its delivery have reached their final stages and all key issues have been agreed upon.
“We draw attention to the sharp intensification of military actions by Ukrainian forces with the obvious goal to block the route, agreed upon with Kiev, of the humanitarian convoy from the Russia-Ukraine border to Lugansk,” the Foreign Ministry said in a statement.
In Moscow’s view, all this gives the impression that there are people both in Ukraine and abroad who are willing to disrupt the humanitarian mission, even “at the cost of new casualties and destruction.”
Those nurturing such criminal plans are taking huge responsibility for their consequences,” the ministry said..


Russia sent a convoy of 280 trucks carrying humanitarian aid – such as medical supplies, food, including baby food, sleeping bags and other basic necessities – to conflict-torn southeastern Ukraine on Tuesday. The convoy is currently stuck near the Ukrainian border, and is awaiting final approval from Kiev before moving forward.


11---Kiev firebombs Donetsk, RT


Citizens of Donetsk have recorded multiple videos of white glowing particles raining on residential quarters. The locals allege that Ukraine's military has shelled their city with internationally prohibited phosphorus incendiaries.


12---Putin’s electoral rating doubles in 2014, RT


13---Finland seeks way around sanctions, itar tass


Putin described the Russian-Finnish talks as meaningful and constructive. The two presidents discussed bilateral cooperation and future prospects, including economic interaction to which the two countries pay special attention.
Putin said Russia was Finland’s leading trade and economic partner in 2013. “We practically meet all Finnish needs in natural gas and are reliable suppliers of other energy resources to the Finnish market. Finland, in turn, is one of Russia’s key European partners,” Putin said.


Russian President Vladimir Putin said on Friday that Russia and Finland would exert every effort to seek the earliest end of conflict in eastern Ukraine.
“We are going to do everything within our power to end the military conflict as soon as possible, establish a dialogue among all the parties concerned and provide relief aid,” Putin said, adding both countries were seriously concerned with the large-scale military operations and a true humanitarian disaster in south-east Ukraine


14--IEDs threaten humanitarian relief? itar tass
Reports are coming that a sabotage group of punitive battalion Aidar plans to mine some sections of roads in the Luhansk region in order to destroy a humanitarian aid convoy and personnel guarding it and then accuse militia of terrorist activity,” the diplomatic agency said.


15---Ukranian Military May Use Force to Stop Humanitarian Aid Convoy - Moscow, ria novosski


– The Kiev government has intensified its military action to prevent the humanitarian aid convoy from moving along the agreed route to the city of Luhansk in eastern Ukraine, the Russian Foreign Ministry said Friday.
“We would like to note that the Ukrainian military has intensified hostilities with an evident purpose to disrupt the convoy’s route from the Russian-Ukrainian border to Luhansk that was previously agreed with Kiev,” the ministry said in a statement.


“It appears that a lot of people both in Ukraine and beyond its borders are willing to stop the humanitarian mission, regardless of new bloodshed and destruction,” the statement reads.
According to the ministry, reports come out regarding the direct threats to use force against the humanitarian convoy that Russia sent earlier this week. At the same time, the Russian side remains “strongly committed to a speedy and full-fledged implementation of the agreements reached with the leadership of Ukraine and the International Committee of the Red Cross (ICRC) about the delivery of the humanitarian aid” to citizens of Ukrainian eastern regions


16---Poroshenko should hear the screams of those civilians his Fascists burnt alive every single night for the rest of his life. He won't however because neither he nor those who support him could care less, pravda


All the Russian-speaking Ukrainians wanted at the time was to be listened to by Kiev. Amid all the latest fighting, we must not forget the massacres of civilians committed by Ukrainian security forces and pro-Kiev Fascist scum. For example, on Friday May 2, at least 40 anti-Kiev protesters were burnt alive in the Trade Union building by jeering Fascist scum which had surrounded the building and hurled Molotov cocktails through the windows, screaming "Death to Russians". A cleaning lady was strangled and had her throat cut. Let us not forget that. And karma will come to those who did it. And those who support them.

Let us not forget the massacre by Fascist scum in Slovyansk. Let us not forget the massacre by Fascist scum in Mariupol. Let us not forget the massacre by Fascist scum in Donetsk. And today, civilians are being indiscriminately targeted by Ukrainian armed forces in and around Lugansk and in and around Donetsk. War crimes are being committed and in sending these troops to perform these outrages, Poroshenko is a war criminal and deserves to be hauled before a court.


(Buckle up)
Again, troops are killing unarmed Russian civilians, and you are debating whether it is time to start delivering weapons to these murderers so that they can kill more Russians? All of your vaunted “politics of memory” and “learning from the past” is simply a pile of dog shit, as again before your eyes unarmed civilians are butchered, and you applaud this and promise these Ukrainian murderers fresh financing.

You have not learned humanism, you Germans. You have not learned responsibility. You have not learned to resist Evil and tell that Evil clearly to its face, “No, you are the killer, I will not help you, you must stop the killing immediately.” You have not learned to be a responsible, independent, free people, who are capable of giving good in return for good.

You are slaves who think good is a weakness.

In 1934, Hitler drove you like sheep, and in 2014 Obama is your shepherd. If tomorrow in Germany, the Americans open a concentration camp for Russians, half of you will immediately submit their curriculum vitaefor jobs as operators of the gas chambers, and your press will start to explain how this camp is patriotic and good for the German economy. It would then follow that killing these Russian “Untermensch”, crafting lampshades out of their skin for daring to resist, and sending this nicely packaged to Washington to please your American ally.

Germans have failed their test. When Evil has returned again to Europe, you do not even attempt to resist it, and immediately fall prostrate at its feet like a slave after the eagerly-awaited, long delayed return of your master. Serve Evil, impose sanctions, support the murder of Russians, supply weapons to the killers of Russians, justify this genocide – the end of your story will be familiar, because Evil cannot win.

Thursday, August 14, 2014

Today's Links

“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point wher the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater”  Frank Zappa




1---14 Reasons Why The U.S. Economy's Bubble Of False Prosperity May Be About To Burst, zero hedge


2---WOW!  10-year Treasury yield marks fresh 14-month low---‘A+’ auction boost U.S. government debt, flattens yield curve, marketwatch


3---Arab Gas Pipeline (AGP), Jordan, Syria, Lebanon, Egypt, HT


Arab Gas Pipeline (AGP) is a trans-regional gas export pipeline built to carry natural gas from Egypt to Jordan, Syria and Lebanon. The 1,200km-long pipeline was built at a cost of approximately $1.2bn and represents a unique model for future strategic Arab co-operation projects.
The pipeline is currently (as of March 2012) out of order because of attacks on a feeder pipeline to el-Arish. More than ten attacks have occurred since the beginning of the 2011 Egyptian protests.


The major stakeholders of the AGP include the Egyptian Natural Gas Holding Company (EGAS), Engineering for the Petroleum and Process Industries (ENPPI), The Petroleum Projects and Technical Consultations Company (PETROJET), the Egyptian Natural Gas Company (GASCO) and the Syrian Petroleum Company (SPC).
Minority stakeholders include subsidiaries and companies based in the US, the UK, Germany, Canada and Russia.




                   4--Syria's Pipelineistan war , pepe escobar




Deep beneath "Damascus volcano" and "the battle of Aleppo", the tectonic plates of the global energy chessboard keep on rumbling. Beyond the tragedy and grief of civil war, Syria is also a Pipelineistan power play.
More than a year ago, a $10 billion Pipelineistan deal was clinched between Iran, Iraq and Syria for a natural gas pipeline to be built by 2016 from Iran's giant South Pars field, traversing Iraq and Syria, with a possible extension to Lebanon. Key export target market: Europe.
During the past 12 months, with Syria plunged into civil war, there was no pipeline talk. Up until now. The European Union's supreme paranoia is to become a hostage of Russia's Gazprom. The Iran-Iraq-Syria gas pipeline would be essential to diversify Europe's energy supplies away from Russia.


It gets more complicated. Turkey happens to be Gazprom's second-largest customer. The whole Turkish energy security architecture depends on gas from Russia - and Iran. Turkey dreams of becoming the new China, configuring Anatolia as the ultimate Pipelineistan strategic crossroads for the export of Russian, Caspian-Central Asian, Iraqi and Iranian oil and gas to Europe.
Try to bypass Ankara in this game, and you're in trouble. Until virtually yesterday, Ankara was advising Damascus to reform - and fast. Turkey did not want chaos in Syria. Now Turkey is feeding chaos in Syria. Let's examine one of the key possible reasons.


5---Abenomics Goes to Heck, in one Chart , wolf street
It’s not a pretty picture:
Japan-GDP_2010-2014
Note the sudden impact of the stimulus after the earthquake in 2011, followed by its big fade that lasted four quarters. That’s how stimulus works.


6--Producer Prices Spike in Japan , wolf street


7---Financial meltdown threatened by bankruptcy of any Wall Street bank, wsws


8---Guardian Lays Out Details of How Petraeus Organized Death Squads in Iraq, empty wheel


9--The fascist atrocities in east Ukraine and the fraud of “humanitarian” war, wsws


10--More Evidence Supporting the House of Debt, House of Debt
Here is total consumption, indexed to 2006, for the biggest decline and smallest decline states:
houseofdebt_201400808_1
The pattern is striking. The collapse in total consumption was much larger in states that were hit hardest by the decline in house prices, something we show in our book. It wasn’t just the fact that house prices collapsed. It was also because these states had the highest debt levels when house prices crashed. It was the combination of the two that decimated household spending in these states. Even in 2012, there continues to be a very large difference in the level of consumption. The very large gap between the blue and red lines shows how long-lasting the effects of the housing crash have been.




11---Stocks, Flows, and Abenomics, Dean Baker


12---Tepid wage growth and rising house costs prices out low-income households          
               
               

Monday, August 11, 2014

Today's links

"Any further unilateral intervention by Russia into Ukrainian territory, including one under the guise of providing humanitarian aid, would be completely unacceptable and deeply alarming, and it would be viewed as an invasion of Ukraine.”   US Ambassador Samantha Power


1---Why Half Of America Thinks We're Still In A Recession, Mark Gongloff


2---Junk-Bond Turmoil just Preliminary, “The Real Panic Will Come With…” , wolf street


3---The Syrian conflict and gas pipeline routes, Phil Ebersole's blog


Yellow lines show proposed pipeline route.
Yellow lines show proposed pipeline routes.  Dark lines are existing pipelines.
The


4---BRICS establish $100bn bank and currency pool to cut out Western dominance, RT


5---De-Dollarization Accelerates - China/Russia Complete Currency Swap Agreement, zero hedge


The Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments.


 “The draft document between the Central Bank of Russia and the People’s Bank of China on national currency swaps has been agreed by the parties,” and is at the stage of formal approval procedures, ITAR-TASS quotes the Russian regulator’s office on Thursday.
The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China,” the Russian regulator said.



Currently, over 75 percent of payments in Russia-China trade settlements are made in US dollars, according to Rossiyskaya Gazeta newspaper


6--US analysts conclude MH17 downed by aircraft , new straits times


7---Ukraine Quickly Backs Off Threat Of Halting Russian Gas Transit After Europe Screams, zero hedge


Bloomberg reports citing an EU official.
"Different parts" of the Ukrainian government are “actively considering” a cut-off of Russian natural gas in transit through Ukraine as part of possible sanctions against Russia, a European Union official says. The EU would oppose such a step by the Ukrainian government, which is drawing up legislation to allow sanctions against Russia because of its encroachment in eastern Ukraine, the EU official tells reporters in Brussels on the condition of anonymity


"The secure supply of energy through Ukraine must be maintained,’’ the official says.


Translation: sorry Ukraine, but when Europe has to choose between you and Russian gas, the gas wins every time.


8---The Wall Street Hype Machine Suddenly Breaks Down , wolf street


It’s also another sign that something has changed in the markets. Hype is being undermined by the timid reappearance of reality. The Fed, which has single-handedly driven this thing to these absurd levels, is shutting down QE and is threatening to do the same to ZIRP. And so the mood is changing because everybody knows that everybody knows that, with the Fed pulling back, all bets would be off.


9--Economic groundhog day, NC


Yet, contrary to expectations, growth in household consumption has remained lackluster, and businesses have not ramped up investment. In the first two quarters of this year, America’s GDP barely exceeded the level it attained at the end of last year, and much of the increase was driven by goods that have been produced but not yet sold. The prevailing explanation – a brutally cold winter – is wearing so thin that everyone should be able to see through it.


American consumers remain scarred by the crisis. But there is another problem: in their homes and workplaces, the sense of excitement about the future is missing, despite all the gee-whiz gadgetry that now surrounds them. And while the US Federal Reserve’s policy of quantitative easing has propped up businesses, it is no substitute for the enthusiasm and anticipation needed to propel investment.
Even the reduced global forecast of 3.4% GDP growth for this year is likely to prove excessively optimistic. Before the crisis, world trade grew at 6-8% annually – well faster than GDP. But, so far this year, trade growth remains stuck at about 3%.


Failure to recognize the fundamental slowdown that is occurring is reinforcing the expectation that old models can revive growth – an approach that will only create new fragilities. Atif Mian and Amir Sufi warn that US consumers’ purchases of cars and other durables have been bolstered by the same unsustainable “subprime” lending practices that were used to finance home purchases before the crisis.


10---Looting Ukraine


11---NYTimes discovers Nazis in Ukraine, Robert Parry


On Sunday, a Times article by Andrew E. Kramer mentioned the emerging neo-Nazi paramilitary role in the final three paragraphs:
“The fighting for Donetsk has taken on a lethal pattern: The regular army bombards separatist positions from afar, followed by chaotic, violent assaults by some of the half-dozen or so paramilitary groups surrounding Donetsk who are willing to plunge into urban combat.
“Officials in Kiev say the militias and the army coordinate their actions, but the militias, which count about 7,000 fighters, are angry and, at times, uncontrollable. One known as Azov, which took over the village of Marinka, flies a neo-Nazi symbol resembling a Swastika as its flag.


“In pressing their advance, the fighters took their orders from a local army commander, rather than from Kiev. In the video of the attack, no restraint was evident. Gesturing toward a suspected pro-Russian position, one soldier screamed, ‘The bastards are right there!’ Then he opened fire.”
In other words, the neo-Nazi militias that surged to the front of anti-Yanukovych protests last February have now been organized as shock troops dispatched to kill ethnic Russians in the east – and they are operating so openly that they hoist a Swastika-like neo-Nazi flag over one conquered village with a population of about 10,000.


Burying this information at the end of a long article is also typical of how the Times and other U.S. mainstream news outlets have dealt with the neo-Nazi problem in the past. When the reality gets mentioned, it usually requires a reader knowing much about Ukraine’s history and reading between the lines of a U.S. news account...


Burning Insects
The brutality of these neo-Nazis surfaced again on May 2 when right-wing toughs in Odessa attacked an encampment of ethnic Russian protesters driving them into a trade union building which was then set on fire with Molotov cocktails. As the building was engulfed in flames, some people who tried to flee were chased and beaten, while those trapped inside heard the Ukrainian nationalists liken them to black-and-red-striped potato beetles called Colorados, because those colors are used in pro-Russian ribbons.
“Burn, Colorado, burn” went the chant.
As the fire worsened, those dying inside were serenaded with the taunting singing of the Ukrainian national anthem. The building also was spray-painted with Swastika-like symbols and graffiti reading “Galician SS,” a reference to the Ukrainian nationalist army that fought alongside the German Nazi SS in World War II, killing Russians on the eastern front.


The death by fire of dozens of people in Odessa recalled a World War II incident in 1944 when elements of a Galician SS police regiment took part in the massacre of the Polish village of Huta Pieniacka, which had been a refuge for Jews and was protected by Russian and Polish partisans. Attacked by a mixed force of Ukrainian police and German soldiers on Feb. 28, 1944, hundreds of townspeople were massacred, including many locked in barns that were set ablaze.


13---On the Brink of Survival: No electricity, water, communications in besieged Lugansk, E. Ukraine, RT


14---'US might support Iraqi president in a coup against Maliki', RT


15---Mea culpa, media? RT


Russia has been suffering from similar vilification and falsity in much of the Western mainstream press since the US and EU ignited a needless civil war in Ukraine. I’ve already covered in a previous dispatch how the UK media managed to charge, try and sentence President Putin within hours of the appalling MH17 disaster - “Putin’s missile” as the internationally little-known court of ‘The Sun’ in London adjudicated. Never mind that there was no evidence. In fact, nearly a month on and there’s still not a shred of proof connecting the rebels to the tragedy - much less the Kremlin. But don’t hold your breath waiting for a UK paper to lead with “Obama’s missile” splash when reporting on atrocities in Gaza - despite the fact that we know the USA arms Israel.


The language used in Ukraine is telling. Let’s just think about the term ‘pro-Russian separatists’, which is almost uniformly used to describe the rebels in eastern Ukraine. Given that they already held a referendum declaring themselves independent from Ukraine, and Moscow didn’t dive in to annex the territory, what exactly makes them ‘pro-Russian?’ Would ‘anti-Kiev rebels’ or ‘East Ukraine separatists’ not be more apt? Does the same Western media call the forces fighting the Syrian government ‘Pro-Saudi rebels’ or did they call the Croatian separatists in 1990s Yugoslavia ‘pro-German separatists?’ (Germany was the primary backer of Croat independence). No, they don’t and they didn’t. So why ‘pro-Russian separatists?’ ...


It’s not just in the UK; the leading German business newspaper, Handelsblatt, also broke ranks at the weekend with the chief editor, Gabor Steingart, launching a stunning attack on NATO/EU policy in Ukraine under the headline “Der Irrweg des Westens/The aberration of the West”.
Regarding Russia being used as a bogeyman by the NATO press, he cautions: “Even the idea that economic pressure and political isolation would bring Russia to its knees was not really thought all the way through. Even if we could succeed: what good would Russia be on its knees?
“How can you want to live together in the European house with a humiliated people whose elected leadership is treated like a pariah and whose citizens you might have to support in the coming winter?”
Emphasizing that the current escalation harms German interests, Steingart continues, “There are no recorded cases in which countries under sanction apologized for their behavior and were obedient ever after. On the contrary: collective movements start in support of the sanctioned, as is the case today in Russia.
“The country was hardly ever more unified behind their president than now. This could almost lead you to think that the rabble-rousers of the West are on the payroll of the Russian secret service,” he adds.
I don’t think that the ‘rabble-rousers’ are Russian agents. Nor do I believe they are American or British proxies. They are merely media operators looking for a ‘bad guy’ and, in the absence of Bin Laden and Saddam, Russia seems to fit the bill right now.


16--The "idiot" state; Ukraine committing economic suicide by thinking to stop gas transit’, RT


17---Putin: Russia teams up with Red Cross to send humanitarian convoy to Ukraine, itar tass


Russia in cooperation with the International Committee of the Red Cross (ICRC) will send a humanitarian convoy to Ukraine, President Vladimir Putin said in a telephone conversation with European Commission President Jose Manuel Barroso on Monday.

Putin shared his assessment of the crisis in Ukraine and its causes, placing the emphasis on “the catastrophic consequences of the military operation the Kiev authorities are conducting in south-eastern regions and on the need for urgent humanitarian aid to the region”, the presidential press service said.


President Vladimir Putin and European Commission President Jose Manuel Barroso in a telephone conversation on Monday discussed some pressing issues of cooperation between Russia and the European Union.
The call took place “in the context of the Association Agreement signed by Ukraine and Russia’s ban on the import of agricultural products from EU countries in response to the Western sanctions”, the press service said.


18--"Raze it to the ground" RIA Novoski


– The Kiev government’s military operation in eastern Ukraine seems to be aimed at “razing the southeast to the ground” and forcing the Russian-speaking population to flee, Russian Foreign Minister Sergei Lavrov said Monday.
“So far, it seems that the purpose of the so-called anti-terrorist operation is to raze the southeast [of Ukraine] to the ground and make all Russians leave it. Apparently, with a purpose to later populate it with those who have a different view of our history, culture, friendship and centuries-long ties between our peoples,” Lavrov told reporters during his visit to Sochi.


19---Assault on Donetsk risks war with Russia, wsws


In response to the ongoing US-backed military campaign, Russian Foreign Minister Sergei Lavrov called for a ceasefire in east Ukraine and the rapid deployment of humanitarian aid supplies to stem the crisis. He told reporters, “We believe the issue is pressing and must not be delayed. The question is under the Russian president’s control. I am certain that we will be able to agree on this aid as soon as possible.”
Lavrov also stated that a ceasefire was required by an agreement, which has not been honored by the Ukrainian government, signed by Ukrainian and Russian diplomats in April that called for both Kiev and the pro-Russian separatists to refrain from violence.

According to UN estimates, 730,000 Ukrainians have fled to Russia since the Ukrainian regime began military operations and a further 117,000 people have been displaced internally.


The UN also estimates that more than 1,129 people have been killed and 3,500 wounded in the east since the Ukrainian government began its operations in April. Many of the civilian casualties have come as a result of indiscriminate artillery shelling of residential areas by Kiev-backed forces.
At a meeting of the United Nations (UN) Security Council on Friday, US Ambassador Samantha Power warned against any humanitarian intervention by Russia in eastern Ukraine. She laid blame for the crisis in the country entirely at Russia’s feet, stating that “the humanitarian situation needs addressing, but not by those who have caused it.


20---The war cabal in Washington, wsws


21---Economist who predicted busted housing bubble says another recession is coming, san jose mercury



Saturday, August 9, 2014

Today's links

1---Nikkei slumps to 2-month low on mounting geopolitical concerns, Reuters
2---The US plan to invade Russia, inf clearinghouse, Sergei Glazyev


3--The rich get richer, Bloomberg


4--Junk-Bond Turmoil just Preliminary, “The Real Panic Will Come With…” , wolf street
5--Credit card debt growth exceeds wage growth in the US , sober look


6---Two indicators explain some of the recent volatility, sober look


7---Federal Reserve study points to disastrous financial state of US households, wsws
 
A typical American household cannot raise $400 without borrowing money or selling possessions, according to the results of a survey published Friday by the Federal Reserve, the US central bank. The Fed’s Report on the Economic Well-Being of U.S. Households in 2013 points to the precarious state of the majority of US households, who risk poverty or bankruptcy in the event of job loss, accident or unforeseen medical expense.
According to the report, nearly two-thirds of those under 45 did not have funds set aside to cover their expenses for a three-month period.


The survey helps expose the fictitious character of the economic “recovery,” which has supposedly been going on for five years. Seventy percent of respondents said they were no better off than they were in 2008, during the depth of the worst downturn since the Great Depression. From this the report draws the extraordinarily understated conclusion that the recovery has been “uneven.”
When asked how they would pay for an “emergency expense” that cost $400, less than 40 percent said they could pay for it with funds currently available in a checking or savings account. Nineteen percent of respondents said they would be entirely unable to cover the expense; 9 percent said they would have to sell something; and 12 percent said they would have to get a loan from friends or family, while the rest would put it on a credit card.


8---ISIS in Iraq: A disaster made in the USA, wsws


9---Malaysian press charges Ukraine government shot down MH 17 , wsws


A Thursday article in the New Straits Times, Malaysia’s flagship English-language newspaper, charged the US- and European-backed Ukrainian regime in Kiev with shooting down Malaysian Airlines flight MH 17 in east Ukraine last month. Given the tightly controlled character of the Malaysian media, it appears that the accusation that Kiev shot down MH17 has the imprimatur of the Malaysian state.


The US and European media have buried this remarkable report, which refutes the wave of allegations planted by the CIA in international media claiming that Russian president Vladimir Putin was responsible for the destruction of MH17, without presenting any evidence to back up this charge.
The New Straits Times article, titled “US analysts conclude MH17 downed by aircraft,” lays out evidence that Ukrainian fighter aircraft attacked the jetliner with first a missile, then with bursts of 30-millimeter machine gun fire from both sides of MH17. The Russian army has already presented detailed radar and satellite data showing a Ukrainian Sukhoi-25 fighter jet tailing MH17 shortly before the jetliner crashed. The Kiev regime denied that its fighters were airborne in the area, however.


The New Straits Times article began, “Intelligence analysts in the United States have already concluded that Malaysia flight MH17 was shot down by an air-to-air missile, and that the Ukrainian government had had something to do with it. This corroborates an emerging theory postulated by local investigators that the Boeing 777-200 was crippled by an air-to-air missile and finished off with cannon fire from a jet that had been shadowing it as it plummeted to earth


10---What Obama Told The Caliph, moon of Alabama


11---Alarm bells sound louder over danger of financial collapse, wsws
 
Warnings are mounting internationally that the global financial system is heading for another disaster as a result of the flood of virtually free cash to the banks and speculators from the US Federal Reserve and other central banks.
On Tuesday, the British daily Telegraph published an article entitled “Global economy one shock away from another crisis.” It cited comments from the financial firm Fathom Consulting, run by former Bank of England economists, to the effect that the present calm in the markets is masking the build-up of risks in the global financial system.


Fathom’s director told the newspaper that when it came to risks, China was “way out in front,” and that if its economy underwent a “hard landing” the already large number of non-performing loans would soar. He drew parallels between China today and the situation in the US in 2006 when the housing market began to slide.


According to Fathom, non-performing loans in the Chinese economy now amount to 17 percent of gross domestic product (GDP). While predicting a “soft landing” for the Chinese economy, the firm warned there was a “significant risk” that authorities would not be able to contain a crisis, noting that “there’s a lot of money sloshing around out there that’s non-performing.”
While China, or some other market, may provide the spark, a new global crisis will have its source in the policies pursued by the Fed over the past six years. Since the Lehman Brothers collapse in September 2008, the Fed has pumped around $4 trillion into the financial markets, fuelling a bubble in share values and other financial assets.


12---Ukrainian offensive against Donetsk raises threat of war with Russia, wsws

Thursday, August 7, 2014

Today's Links

1---High-Yield Bond Funds Smashed With Record $7.1 Billion Outflows, zero hedge


2---Consumer Credit Growth Tumbles, Misses By Most In 8 Months, zero hedge


3---Top Ten Signs Of The Coming Stock Market Crash, Forbes


4---As a Man-Made Famine Looms, Christmas Comes Early to South Sudan: The Limits of America's African Experiment in Nation Building, Nick Turse, smirking chimp


5---GFC Seer Raghuram Rajan Warns of New Crash, naked capitalism


6--Only Now Does Influential Bank Group Complain That Low Volatility is Producing Too Much Risk-Taking, naked capitalism 


7--Kiev ends ceasefire at MH17 crash site, West blocks Moscow’s UN plea to reinstate it, RT


8--Obama authorizes airstrikes in Iraq to 'protect US personnel', RT


9--Russia bans agricultural products from EU, USA, Australia, Norway, Canada, RT


10--Abenomics has two problems - consumers and companies: James Saft, Reuters


11---Western countries at the UN Security Council have blocked Russia-suggested draft statement calling for the obsevance of a ceasefire at the Malaysian Boeing airliner's crash site in Ukraine, itar tass




August 08, /ITAR-TASS/. Western countries at the UN Security Council have blocked Russia-suggested draft statement calling for the obsevance of a ceasefire at the Malaysian Boeing airliner's crash site in Ukraine, Russia's UN Ambassador Vitaly Churkin told journalidts on Thursday.


"It (the draft statement) was blocked in a typical manner," the diplomat said. According to him, Lithuania, the United States, and Australia started suggesting unacceptable amendments for introduction to the text. Churkin recalled that the discontinuance of the ceasefire in the area of the airliner's crash site was a direct breach of the UNSC resolution.


12---Poroshenko Ends MH17 Crash Zone Ceasefire, RIA Novoski


13---Ukrainian offensive against Donetsk raises threat of war with Russia , wsws

Wednesday, August 6, 2014

Today's links

1---Abenomics: Japanese Households On Welfare Rise To Record, zero hedge


2---Market complacency and excessive risk taking, zero hedge


Interest rate volatility can be viewed as a proxy for the corporate bond market and the interest rate at which people and companies borrow money.


Shown below is 1y10y interest rate vol with 5yr spreads of the credit default index of investment grade on the left and high yield on the left





Note the lack of 10% corrections during the past hiking cycles in 2004 and 1994


3--Ilargi: As you’ve seen from what happened and happens in Ukraine, and from so many other events, you can’t trust your governments or media to tell you the truth. There’s a lot of plain dumb asses among them, and even more lying bastards with agendas. So keep your eyes and your nose open. A lot of things will look good at first sight but come with a nasty odor.


4---Senate Bill Preps for War with Russia, counterpunch


5---S&P: Wealth gap is slowing US economic growth, AP


6--Economic Research:   How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways To Change The Tide, GCP


7---In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates, Dealbook


8---GM unit gets subpoena over subprime auto loans, reuters


9---Focusing on G.M. Unit, U.S. Starts Civil Inquiry of Subprime Car Lending, Dealbook


10--Subprime Lending Drives Spending, House of Debt


A concern that we highlighted in yesterday’s post is that the only way the U.S. economy can generate significant consumer spending is through aggressive lending to borrowers with low credit scores. Here is more evidence supporting that view.


In the chart below, we plot retail spending on appliances, furniture, and home improvement, or “home-related spending” (blue line) and spending on new autos (red line) from 1998 through 2014. We have highlighted the two major subprime lending booms we’ve seen in that period — the subprime mortgage lending boom from 2003 to 2006, and the subprime auto loan boom from 2010 to 2014. In order to be able to include 2014, we focus only on the first four months of each year.

houseofdebt_20140613_1

When subprime mortgage lending was booming from 2003 to 2006, so were purchases of home-related goods. As soon as the subprime mortgage lending market crashed, so did home-related spending. In fact, in 2014, home-related spending is still below its 2006 level in nominal terms. It’s a pretty incredible boom and bust.


For auto spending, growth was positive prior to the Great Recession, but unspectacular. But as soon as subprime auto lending heated up in 2011 and afterward, so did purchases of new auto vehicles. The growth in new auto sales from 2011 to 2014 has been really impressive. So once again, spending in a particular market is strongest when subprime lending in that market is strongest.


It appears that the key to boosting spending in the U.S. economy is subprime lending. The financial system was lending against homes before the Great Recession, and now it has moved to lending against cars. But the basic message is the same.


10---Europe Is Highly Dependent On Russian Gas, big picture


11--Flight MH17 - What You're Not Being Told, video


12--Abenomics Charm Fades as Yields Signal Headwinds, Bloomberg


13--Half-Trillion-Dollar Exodus Magnifies Treasury Bill Shortage, Bloomberg


14--A socialist in Canada, Roger Annis
15--EU, US intensify confrontation with Russia, wsws


16--Russia Presents Its Account of Malaysia Airlines Flight 17 Crash, wsj


17--Moscow blasts Kiev’s false accusations and lack of cooperation with air crash investigators, RT


18--Claims about MH17 that MSM fails to question, RT


19--California and Ukraine National Guard gear up for military collaboration in 2015, RT


20--Exposed: The REAL Reason MH17 Was Shot Down, video


21---Eastern Ukraine faces humanitarian crisis as Kiev steps up attack, wsws


22---Will the Pacific Northwest be a Climate Refuge Under Global Warming? , cliff mass


23---NATO exerting pressure, not interested in MH17 investigation – Russia’s mission, RT


24---Senate Bill Preps for War with Russia, Renee Parsons, cp


25---Goldman Warns Of 6.5% Japanese GDP Collapse, Worst Since Lehman, zero hedge


26---Inequality in the U.S. today is near its historical highs, largely because the Federal Reserve’s policies have succeeded in achieving their aim, zero hedge


Irony aside, the growth of income (trough to peak) during so-called 'economic expansions' has changed... and President Obama's "recovery" is the worst of the lot...








Chart: @ptcherneva
Inequality in the U.S. today is near its historical highs, largely because the Federal Reserve’s policies have succeeded in achieving their aim: namely, higher asset prices (especially the prices of stocks, bonds and high-end real estate), which are generally owned by taxpayers in the upper-income brackets. The Fed is doing all the work, because the President’s policies are growth-suppressive. In the absence of the Fed’s moneyprinting and ZIRP, the economy would either be softer or actually in a new recession. 





The greatest irony is that the President is railing against inequality as one of the most important problems of the day, despite the fact that his policies are squeezing the middle class and causing the Fed – with the President’s encouragement – to engage in the radical monetary policy, which is exacerbating inequality. This simple truth cannot be repeated often enough.


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http://www.vineyardsaker.blogspot.fr
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