Monday, December 12, 2011

Today's links

1--US mom denied food stamp, shoots Kids, Press TV

Excerpt: An American woman has shot her two children before killing herself in a state welfare office in Texas after being denied food stamps for months.

The shooting took place at a Texas Department of Health and Human Services building in Laredo, Texas, on Tuesday, where police said about 25 people were inside at the time, Huffington Post reported.

The mother, Rachelle Grimmer, 38, seven hour standoff with police ended with her shooting her 10-year-old boy and 12-year-old girl before committing suicide. The children are still in critical condition.

According to the Texas Department of Health and Human Services, Grimmer was denied food stamps since July, because she did not turn in enough information.

"We were still waiting, and if we had that, I don't know if she would still qualify or not," Texas Department of Health and Human Services spokeswoman Stephanie Goodman said.

Families seeking state benefits in US state of Texas must provide documents proving their information, such as proof of employment and residency, in addition to completing an 18-page application form.

2--Maybe Merkel and the ECB Want to Weaken Labor, CEPR

Excerpt: If someone has a gun and is shooting it repeatedly at another person, we might infer that the shooter wants to kill this person. In this vein, how could it never occur to analysts that the purpose of Chancellor Merkel and the ECB's policy of austerity across Europe is to permanently weaken the power of labor across the continent.

It is hardly a secret that workers can be forced to make concessions on wages and benefits in periods of high unemployment. The power of workers will be further undermined if government supports like pensions and employment protection legislation are also removed. All of this is well-known and widely understood.

Therefore it is remarkable that the class implications of the Merkel-ECB policies never get mentioned in a NYT piece examining the contrasting approaches of Merkel and President Obama to the euro zone crisis. In fact the piece explicitly sends readers in the opposite direction, saying it is:

"it’s a battle of ideas"

in a quote from Almut Möller, a European Union expert at the German Council on Foreign Relations.

In fact the most obvious basis for the difference in the views between President Obama and the Merkel-ECB view is standard Keynesian story that it is in the interest of any individual business owner to have other businesses pay their workers more money. This creates more demand for her products.

In this context, President Obama would be very happy to see a prosperous Europe which would provide a stronger market for U.S. exports right now. However, Chancellor Merkel and the ECB seem more focused on keeping down their own labor costs.

3--Draghi pours cold water on euro zone grand bargain, Reuters

Excerpt: We’ll take care of the banks; you deal with your debt. That’s the stern message European Central Bank President Mario Draghi chose to send to euro zone governments on the eve of their high-stake summit. By insisting repeatedly on the “spirit” of the European Union’s founding treaties, Draghi has scotched any speculation that the central bank could save the single currency by stepping up its sovereign bond-buying programme.

As if the message wasn’t clear enough, Draghi paid homage to the “Bundesbank tradition” that inspired the creation of the euro zone – specifically, that monetising budget deficits should be prohibited. He did, however, leave the door ajar for the second variety of bazooka that has been considered in recent weeks: using central bank loans to boost the International Monetary Fund’s resources...

Draghi is, however, willing to help banks. Combined with a 25 basis point cut in interest rates, that should go some way to help ease the credit crunch that is threatening to tip the euro zone into another recession. The ECB will offer two separate three-year liquidity facilities, providing the long-term funding that private investors won’t.

Most notably, Draghi also loosened the rules on using bank loans as collateral, making it easier for lenders to raise funds against assets that can’t be easily repackaged into bonds. But the responsibility for such claims will be borne by the national central banks, not the ECB. Euro zone member states would take on greater liabilities at the same time as the central bank is demanding that they put their fiscal house in order: if Draghi was aware of the irony, he seemed impervious to it.

4--Lessons From Europe, Paul Krugman, NY Times

Excerpt: Let me return for a minute to Kevin O’Rourke’s recent piece on the European summit. Aside from pointing out just how bad an idea the new super-stability pact is, O’Rourke makes an important observation about what the European experience teaches us about macroeconomics:

One lesson that the world has learned since the financial crisis of 2008 is that a contractionary fiscal policy means what it says: contraction. Since 2010, a Europe-wide experiment has conclusively falsified the idea that fiscal contractions are expansionary. August 2011 saw the largest monthly decrease in eurozone industrial production since September 2009, German exports fell sharply in October, and now-casting.com is predicting declines in eurozone GDP for late 2011 and early 2012.

A second, related lesson is that it is difficult to cut nominal wages, and that they are certainly not flexible enough to eliminate unemployment. That is true even in a country as flexible, small, and open as Ireland, where unemployment increased last month to 14.5%, emigration notwithstanding, and where tax revenues in November ran 1.6% below target as a result. If the nineteenth-century “internal devaluation” strategy to promote growth by cutting domestic wages and prices is proving so difficult in Ireland, how does the EU expect it to work across the entire eurozone periphery?

The world nowadays looks very much like the theoretical world that economists have traditionally used to examine the costs and benefits of monetary unions. The eurozone members’ loss of ability to devalue their exchange rates is a major cost. Governments’ efforts to promote wage cuts, or to engineer them by driving their countries into recession, cannot substitute for exchange-rate devaluation. Placing the entire burden of adjustment on deficit countries is a recipe for disaster.

Basically, European experience is very consistent with a Keynesian view of the world, and radically inconsistent with various anti-Keynesian notions of expansionary austerity and flexible prices.

5--Wolf Richter: Germany’s Last-Ditch Compromise, At A Price, naked capitalism

Excerpt: On Thursday, the ECB has come close with its announcement that it would lend unlimited amounts of money at near-zero interest rates for up to three years … to banks. But not countries. Inflationary risks may be similar, but it doesn’t violate the treaty. A solution that left some Greeks, whose salaries and pensions had been decimated, scratching their heads.

The agreement corresponds to Merkel’s demands:

Strict limits on budget deficits

Nearly automatic sanctions imposed on violators

European Commission involvement in approving national budgets

European Court of Justice as final budget arbiter

Eurobonds struck off the list

Bailout funds … well, that debacle hasn’t changed

Involvement of the IMF (the ECB would lend the IMF €200 billion, and the IMF would then lend the money to Italy and other countries…. to circumnavigate the Lisbon Treaty).

The back door is already wide open. While each country is required to propose an essentially balanced budget, any major catastrophe or recession would allow it to run a large deficit—a matter of interpretation. No date has been set when the rules would go into effect. Maybe 2020, if Germany’s own new rules are any guide. It’s not a current fix.

Then, a majority of finance ministers can vote to stop the “nearly automatic” sanctions. There are precedents. The existing deficit and debt limits have been violated with impunity by 11 of the 17 Eurozone countries, including Germany and France. In 2003, when Germany’s debt blew past the debt limit, EU finance ministers stopped the sanctions against Germany, which was the end of all sanctions for all times. Hence, the crisis. The new sanctions? Actually, there aren’t any in the agreement.

6--Markets update - Credit - The Generous Gambler, macronomy blogspot

Excerpt: The EFSF has only raised 16 billion euros from four bonds this year and looking at the amount that needs to be raised in 2012, the prospect of raising more money is looking slimmer by the day....

The 500 billion Euro ‘permanent” bailout fund (ESM) was slated to replace the 440 billion "Temporary" European Financial Stability Facility (EFSF) fund. Well, the latest proposal that has the stock markets excited is to merge the two funds…. But there is a bias; it is double counting the money.

The total overall cap is 500 billion euros, of which 160 billion have already been committed or spend to help Greece. Therefore there is only 340 billion left! So how can you get 940 billion euros? This would raise the permanent fund above the agreed upon amount…. And the German Supreme Court has stated this cannot be done without a popular vote (referendum) !!! Also bear in mind that the German Supreme Court has ruled there should not be a permanent bailout fund at all…. Which add to the already constitutional issue."....

Does it matter that sovereign debt is risk-free? It very much does. If sovereign debt is no longer a safe haven, then the ability of governments to implement counter-cyclical policies is impaired. Fiscal policy is becoming at best neutral, at worst pro-cyclical. At a time when growth is rapidly slowing, the economic cost may be high.

Weakening the quality of government credit means weakening the fiscal backstop from which banks benefit. This risks resulting in an accelerated de-leveraging of bank balance sheets, with equally costly economic consequences.

Pandora’s Box has been opened. Only fiscal integration accompanied by centralised financing of governments can bring about full stabilisation of the market in Europe, in our view. The alternative could eventually be a resumption of the run on governments and a wave of public and private defaults...

Martin Sibileau's view we indicated back in October when discussing circularity issues:

"What would be a solution for the EU? We have repeatedly said it: Either full fiscal union or monetization of the sovereign debts. Anything in between is an intellectual exercise of dubious utility."...

"We remain fundamentally negative on European markets for 2 reasons: a) the negative impact on the European economies from austerity measures which will be implemented by the governments, and b) the financial institutions’ deleveraging which will drastically reduce the funds available to the various agents of European economies. In addition to this, the sovereigns 2012 massive funding needs will result in a deadly competition between the protagonists to raise whatever money is available, resulting in much higher funding costs and the collapse of those with weaker balance sheets."

7--Bundesbank rejects Europe's IMF funding ruse, Telegraph

Excerpt: Germany's Bundesbank has raised serious objections to EU summit plans to shore up Italy and Spain by channelling up to €200bn (£170bn) from central bank reserves through the International Monetary Fund (IMF)....

Europe's leaders agreed in Brussels to mobilise the reserves of the 17 national banks of the eurozone system to finance the IMF, hoping that this will then lever fresh money from China, Japan, and other global powers.

Andreas Dombret, a Bundesbank board member, said Germany's central bank cannot take part in any form of covert funding for EMU states in trouble through the bank-door of the IMF, saying further money can be used only to support the normal operations of the Fund.

"The money cannot migrate into some sort of special pot that is used exclusively for Europe. That would be a clear breach of the prohibition of monetary financing of states. The German Bundesbank has explicitly ruled this out," he told the Handelsblatt newspaper....

"One cannot channel money in a way to circumvent the treaty provisions. If the IMF were to use this money to buy exclusively European bonds, we think is not compatible with the treaty," Mr Draghi said.

Adding to complications in Germany, Bundestag president Norbert Lammert has demanded that the summit package should undergo scrutiny by Germany's constitutional court, warning that new powers for European commissars to intrude in national budgets might conflict with German fiscal sovereignty.

8--Merkel's Teutonic summit enshrines Hooverism in EU treaty law, Telegraph

Excerpt: Angela Merkel’s summit has sealed a 1930s outcome for Europe, further entrenching Germany’s misguided and contractionary policies without offering any viable way out of the crisis at hand....

It is not remotely a fiscal union. There will be no joint debt issuance, no EU treasury, no shared budgets, and no fiscal transfers to regions in trouble. "The agreement hard-wires pro-cyclical fiscal austerity into the institutional framework of the eurozone, with no quid quo pro to move gradually to debt mutualisation." said Simon Tilford from the Centre for European Reform.

Nor was there any change in the mandate of the ECB, not even a tweak towards growth, nor a hint that financial stability (not manipulating short-term prices) is the ultimate duty of a central bank. They are rewriting the Treaties, yet still refuse to correct the most dangerous single failure in the construction of monetary union: the lack of a lender of last resort. Why bother to put pen to paper at all?

This then is Europe’s "fiscal compact" to anchor fiscal discipline. Markets have a touching faith that the ECB’s Mario Draghi will take this as his cue to launch a blitz of sovereign bond purchases, although he could hardly have been clearer on Thursday.

"We have a treaty and Article 123 prohibits financing of governments. We shouldn’t try to circumvent the spirit of the treaty" he said -- as he must to avoid a fatal show-down with the Bundesbank....

At the end of the day, it always comes down the one core problem, the euro itself. Monetary union itself blocks any plausible solution. We have not advanced on inch.



9--No writedowns for bondholders, Bloomberg

Excerpt: European Union leaders dropped their demand that investors share the cost of bailouts as Germany abandoned a campaign that helped deepen the two-year-old financial crisis.

Limiting so-called private-sector involvement to the terms accepted in International Monetary Fund bailouts was part of a package agreed upon in Brussels early today as leaders met to forge tighter economic bonds to stem the crisis.

“As regards private-sector involvement, we have made a major change in our doctrine: from now on we will strictly adhere to the IMF principles and doctrines,” EU President Herman Van Rompuy told reporters at a briefing. “Or, to put it more bluntly, our first approach to PSI, which had a very negative effect on debt markets is now officially over.”

That marks a defeat for German Chancellor Angela Merkel who wanted to expose bondholders to losses in debt restructurings as her electorate resented writing the biggest bailout checks. Her push, which began last year, drew criticism from a European Central Bank concerned it would fan contagion and was blamed for some investors for driving up bond yields and forcing Ireland and Portugal to seek aid packages.

10--Europe’s New Budget Rigor, ECB’s Challenge, Bloomberg

Excerpt: The summit’s fiscal pact sets Europe on the path to a “lastingly stable euro,” German Chancellor Angela Merkel, who drove the push for stricter budget rules, told reporters. “The breakthrough to a stability union has been achieved.”

U.K. Excluded

In a clash that may reshape Europe’s balance of power, the euro users took the novel approach of enshrining the debt rules in a new treaty that leaves out the U.K. instead of amending EU agreements that date back to the 1950s. Nine of the 10 non-euro members -- Denmark, Poland, Bulgaria, Hungary, Sweden, the Czech Republic, Latvia, Lithuania and Romania -- indicated they may follow suit after consulting with their parliaments.

The trigger was the refusal by U.K. Prime Minister David Cameron to back a 27-nation pact without ironclad guarantees of a British veto right over future financial regulations. Cameron called them a threat to London’s standing as Europe’s leading financial center. ...

Euro Debts

Euro-area governments have to repay more than 1.1 trillion euros of long- and short-term debt in 2012, with about 519 billion euros of Italian, French and German debt maturing in the first half alone, data compiled by Bloomberg show. European banks have about $665 billion of debt coming due in the first six months, according to Citigroup Inc., based on Dealogic data.

Holger Schmieding, chief European economist at Berenberg Bank in London, said the “avalanche” of refinancing needs in the next two months means the crisis could worsen and “the ECB would then finally be forced to step up its anti-crisis response to save the euro and itself.”

Given his view that the ECB is unlikely to drive yields much lower or cap them, Citigroup economist Juergen Michels said he expects a “deep euro-area recession and strained financial markets” in 2012 with the region’s economy contracting every quarter...

The new fiscal accord goes beyond a toughening of rules already slated to take effect next week. It would curb structural deficits at 0.5 percent of gross domestic product and require each country to establish an “automatic correction mechanism” when budgets stray from the target. This “golden rule” will be anchored in national constitutions.

The blueprint also foresaw a near-automatic disciplinary procedure for wayward countries and “more intrusive control” of taxing and spending by governments that overstep the deficit limit of 3 percent of GDP. It caps a three-month drive by Merkel to lock tighter budget discipline into treaties as part of what she calls the “deeper integration” needed to support the euro.

11--Corporate warnings bode ill for earnings, Reuters

Excerpt: On top of euro zone debt troubles, Wall Street now has to worry about sagging sales from Europe as a recession in the region seems more likely.

Warnings from companies such as chemical maker DuPont (DD.N) and chip maker Texas Instruments (TXN.N) suggest the crisis may already be taking its toll on corporate America.

While holiday shopping has started on an upbeat note, the corporate warnings could sour the cheer for some investors.

"We are now beginning to see the collateral damage of the events in Europe with the earnings guidance cuts," wrote Peter Boockvar, equity strategist at Miller Tabak & Co. in New York.

Fourth - and first-quarter earnings growth estimates for Standard & Poor's 500 companies have come down sharply since July, underscoring worries about the outlook for companies.

Earnings are now expected to increase 10.1 percent for the fourth quarter, down from a growth estimate of 15 percent at the start of October and from an estimate of 17.6 percent in July, according to Thomson Reuters data.

The data also showed that negative preannouncements by companies are outpacing positive ones by the biggest ratio since the second quarter of 2001.

12--Disaster Can Wait, Barry Eichengreen, Project Syndicate via economist's view

Excerpt: Nowadays there is no shortage of pundits, economic or otherwise, warning of impending disaster. ... My view is different: 2012 ... will be a year of muddling through.

Many people think that 2012 will be the make-or-break year for Europe – either a quantum leap in European integration,... or the eurozone’s disintegration, igniting the mother of all financial crises.

In fact, neither scenario is plausible. The collapse of the eurozone would, of course, be an economic and financial calamity. But that is precisely why the European Central Bank will overcome its reluctance and intervene in the Italian and Spanish bond markets, and why the Italian and Spanish governments will, in the end, use that breathing space to complete the reforms that the ECB requires as a quid pro quo. ...

While the eurozone is unlikely to collapse in 2012, there will be no definitive answer to the question of whether the euro will survive, because there will be no quantum leap in European integration. Treaty revisions take time to draft – and more time to ratify. ...


13----"A Mixed Bag From Europe", Tim Duy, Economist's View

Excerpt: In short, I think Europe is rushing full speed to a Japanese outcome, with slow growth coupled with an appreciating currency. And it is that promise of slow growth and a strong currency will be what eventually tears the Eurozone apart. And this is truly sad given that deficits are not really the problem to begin with.

Why will the Eurozone fail? Because we still see nothing that addresses the internal imbalances between the core (largely Germany), and the periphery. That is the result of failing to commit to a real fiscal union. Such a union would include automatic internal fiscal transfers that are essential to maintaining regional economic stability. For example, economic distress in a US state results in an automatic relative transfer of resources via decreased tax revenue from and increased transfer payments to that state. Lacking such a mechanism, a slow growth, hard money regime will increasingly ratchet up the levels of economic distress in the periphery. And eventually the costs of staying in the Euro will exceed the costs of exit.

If Europe was serious about saving the Euro, they would commit to issuing more safe assets (more sovereign debt), using the ECB backstop to create such assets, and engage in direct fiscal transfers to reduce economic pain in the periphery while encouraging continuing structural and budget reforms in recipient economies. I don't think we are anywhere near such a plan - and are arguably moving in the opposite direction.

Bottom Line: I remain a Europessimist. The ECB is moving aggressively to preventing an imminent financial collapse. That should be seen as good news. But there remain unresolved deeper issues. At the core of those issues is the inability to see Europe as one large, fiscal unified economy rather than a combination of separate, fiscally austere economies. And in that remains the long-term vulnerability of the Euro experiment.

14--Britain and the EU, The Failure of a Forced Marriage, Der Speigel

Excerpt: Was the outcome of the Brussels summit a bad one for the EU? Not at all. The British were never completely dedicated to European unity and the ongoing project of greater fiscal integration is better off without them....

In the 1960s, the empire was history, with one colony after the other declaring independence. But instead of turning toward Europe, Britain looked west to the US. And to this day, the UK feels much closer to America than it does to the frogs and the krauts on the other side of the English Channel. One could see the strength of that bond as recently as 2003, when then-Prime Minister Tony Blair joined President George W. Bush in his Iraq adventure despite grave misgivings on the Continent.

In Brussels, which has for decades been depicted in the British press as little more than a bureaucratic monster, London has mostly played but a single role from the very beginning: that of a spanner in the works. There has hardly been a decision aimed at greater European integration that Britain hasn't sought to block. And it was a role that even brought financial benefits. Ever since Prime Minister Margaret Thatcher famously demanded "I want my money back," Britain has had to contribute less to the EU than the size of its economy would otherwise require....

But the UK and the EU was a source of frustration for decades. On the long term, a member cannot demand all of the benefits of a community while refusing to shoulder its share of the burdens. One can't constantly seek to thwart all efforts at greater European integration while at the same time demanding a say in all decisions.

Great Britain is an EU member that never truly wanted to be part of the club...

15--Orwellian Currency Area, Paul Krugman, NY Times

Excerpt: Kevin O’Rourke has a very good point: what European leaders are describing as “fiscal union” is very nearly the opposite:

With this in mind, the most obvious point about the recent summit is that the “fiscal stability union” that it proposed is nothing of the sort. Rather than creating an inter-regional insurance mechanism involving counter-cyclical transfers, the version on offer would constitutionalize pro-cyclical adjustment in recession-hit countries, with no countervailing measures to boost demand elsewhere in the eurozone. Describing this as a “fiscal union,” as some have done, constitutes a near-Orwellian abuse of language.

Maybe it was always thus, but the relentless wrong-headedness of the Europeans, their insistence on seeing their crisis as something it isn’t, and responding with actions that deepen the real crisis, has been a wonder to behold. In the 1930s policy makers had the excuse of ignorance; there was nobody to explain what was happening. Now, their actions amount to a willful disregard of Econ 101.

16--BERNANKE’S OBFUSCATION CONTINUES: THE FED’S $29 TRILLION BAIL-OUT OF WALL STREET, L. Randall Wray, Economonitor

Excerpt: There is a fascinating new study coming out of the Levy Economics Institute of Bard College. Its titled “$29,000,000,000,000: A Detailed Look at the Fed’s Bail-out by Funding Facility and Recipient” by James Felkerson. The study looks at the lending, guarantees, facilities and spending of the Federal Reserve.

The researchers took all of the individual transactions across all facilities created to deal with the crisis, to figure out how much the Fed committed as a response to the crisis. This includes direct lending, asset purchases and all other assistance. (It does not include indirect costs such as rising price of goods due to inflation, weak dollar, etc.)

The net total? As of November 10, 2011, it was $29,616.4 billion dollars — (or 29 and a half trillion, if you prefer that nomenclature). Three facilities—CBLS, PDCF, and TAF— are responsible for the lion’s share — 71.1% of all Federal Reserve assistance ($22,826.8 billion).

One comment about some of the folks pushing back against this massive total: Yes, there is a big difference between a $100 lent for 3 days, and a $100 lent overnight rolled over 2 more times. And there is an enormous difference when temporary overnight lending lasts for three years.

Overnight lending, by its definition, is temporary, short term, lower risk, modest impact. It exists to allow slightly over-extended banks to meet their reserve requirements. But rolling overnight lending repeatedly for 3 years is none of those things. And it makes a mockery of these same reserve requirements, and the protective purposes they are supposed to serve.

The amount of overnight lending reflects how broken our financial system really is. A well capitalized, moderately leverage system does not require this massive liquidity from a central bank — interbank lending should be sufficient. What the data reveals is that the financial sector remains dangerously under-capitalized and overleveraged.

To pretend these were merely minor overnight loans, rolled over once or twice, is foolish, dangerous nonsense.

17--Eurozone leaders deluded if they think this 'sticking plaster' treaty can solve the debt crisis, Telegraph

Excerpt: This Brussels summit was an unseemly combination of law-bending and posturing. The coup de grace, for me, was the quiet agreement to drop any requirement for private sector holders of dodgy eurozone sovereign debts to incur losses. So much for moral hazard.

The fundamental problem remains that Europe’s banks remain locked-out of traditional funding markets, leaving them reliant on the ECB – which, in turn, is now increasingly reliant on covertly printed money and whatever the Chinese and others will ultimately chip-in. Faced with a funding freeze, banks are shrinking their balance sheets and strangling growth by refusing to lend, a problem the ECB’s “special measures” will do nothing to address.

The use of the ECB’s emergency lending facility rose last Wednesday to €9.4bn, the highest daily total since early March, pointing to deep-seated banking sector distress. Such distress relates, above all, to a lack of trust. Eurozone banks can’t raise cash, and won’t even lend to each other, due to crippling fears of counter-party risk, given that many continue to hide massive liabilities in so-called “special purpose vehicles”. Lawmakers, after all, still lack the courage to force them to fully disclose their losses.

18--EU treaty: David Cameron can't safeguard the City by 'floating off into the Atlantic', warns Lord Heseltine, Telegraph

Excerpt: Lord Heseltine has warned David Cameron that his attempts to protect Britain's key financial services industry by cutting Britain off from Europe will fail.

Excerpt: "He can't safeguard the City, because it is markets that will determine how Britain features in the evolving Europe," he told BBC Radio 4's Today programme.

And warned: "You can't protect those interests by floating off into the Atlantic."

The former Conservative Party Cabinet Minister said there was a "very real fear" that the Europeans could create rules for the eurozone that would make it difficult to trade outside it in financial service activities.

While acknowledging that the Prime Minister was unable to act on Thursday because of his lack of a majority in Parliament, he stressed Britain still needed to be in Europe and any decision to leave the EU risked "potential damage to hundreds of thousands of British jobs and tax revenues".

"This is not the end of the story," he said, adding there would have to be a discussion about the relationship of the City with eurozone countries

19--Mutually Assured Destruction vs Mutually Assured Respect, Ron Paul, antiwar.com

Excerpt: Maintaining world domination is based on an intellectually and financially bankrupt idea that generates dependency, war, loss of civil liberties, inflation, and debt, all of which contribute to our economic crisis.

Saddest of all, this policy of American domination and exceptionalism has allowed us to become an aggressor nation, supporting pre-emptive war, covert destabilization, foreign occupations, nation building, torture, and assassinations. This policy has generated hatred toward Americans and provides the incentive for almost all of the suicide attacks against us and our allies.

To continue to believe the fiction that the militants hate us for our freedoms and wealth may even result in more attacks against us — that is, unless our national bankruptcy brings us to our knees and forces us to bring our troops home.

Expanding our foreign military intervention overseas as a cure for the attacks against us, tragically, only guarantees even more attacks. We must someday wake up, be honest with ourselves, and reject the notion that we’re spreading freedom and America’s goodness around the world. We cannot justify our policy by claiming our mission is to secure American freedoms and protect our Constitution. That is not believable. This policy is doomed to fail on all fronts.

20--Yakutian Hachiko in bitter vigil for dead mate, RT

Excerpt: A stray dog in Russia’s Far East stood on guard beside his dead mate in biting cold for over two weeks. The “Yakutian Hachiko” tried to warm her up with his own body.

The two stray dogs had been guarding local garages until one of them was allegedly poisoned. The other refused to leave his dead pal’s side even when the temperature dropped to -50 degrees Celsius.

He was nicknamed the "Yakutian Hachiko" after a Japanese dog remembered for his remarkable loyalty to his dead owner, waiting for him at a train station for seven years.

After the story was posted online, Yakutian animal lovers started bringing food to the dog. Later, they decided to take him to a shelter until new owners could be found, fearing he might die of cold.

However, after only a few hours, “Hachiko” broke free, pulling out a metal net barrier complete with nails. He was later found at the same very spot, beside his frozen mate, far from his temporary shelter.

Local residents then abandoned attempts to re-home the dog and built a warm kennel at the site. And buried his husky pal.

Soon afterwards, the dog started a slow recovery. He is now eating normally and plays eagerly with local puppies.

Meanwhile, a woman from Koeln (Cologne) in Germany has posted on a forum offering to adopt the dog after reading about his astonishing loyalty.

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