Sunday, October 14, 2012

Today's links

1--European governments prepare to suppress working class resistance, WSWS

Now the Greek bourgeoisie is turning toward the methods utilised by the ruling class in Europe in the 1930s: fascist terror and authoritarian rule. They are mobilising the most backward social layers to intimidate and suppress the working class.

The police torture of demonstrators protesting against the fascist party Chrysi Avgi (Golden Dawn) is a warning to workers internationally. Things that have occurred in Athens prisons recall the torture at Abu Ghraib and crimes last witnessed in Europe under fascist dictatorships in Greece, Spain and Portugal in the 1960s and 1970s.

In recent months, state forces have worked to build up Golden Dawn, providing political cover for its attacks on immigrants and left-wing opponents of the government. It is well known that a large percentage of the police in Greece are members or supporters of the fascist Party.

All of this is silently tolerated by the representatives of the EU. While the German press reacts with concern to swastikas brandished this week by some anti-Merkel protesters, it says nothing about the activities of the fascists in Greece. This is because all European governments are preparing to forcibly suppress working class resistance. In Germany, the Federal Constitutional Court recently threw out a previous ruling and now permits the German army to intervene domestically.

2--Bernanke Says Easing Won’t Destabilize Emerging Markets, Bloomberg

Federal Reserve Chairman Ben S. Bernanke tried to refute arguments the U.S. central bank’s record stimulus is causing destabilizing flows of capital to emerging-market economies.

It is not at all clear that accommodative policies in advanced economies impose net costs on emerging market economies,” Bernanke said today in prepared remarks for a seminar in Tokyo on the last day of International Monetary Fund annual meetings.

His comments contrasted with those of IMF Managing Director Christine Lagarde, who told the same audience that such easing is likely to cause large and volatile flows that risk leading to “overheating, asset-price bubbles and the build-up of financial imbalances” in emerging economies, even as she applauded Fed efforts to boost growth.

Divisions between policy makers over such issues underscore the challenge of forging a unified response to what Lagarde described today as the global economic “malaise.” South Korea’s Finance Minister Bahk Jae Wan said yesterday that the IMF meetings failed to secure agreement and the world has a “leadership problem.”

3--Banks see a housing rebound, LA Times

At Wells Fargo, mortgage business revenue rose 55% to $2.8 billion during the third quarter from $1.8 billion in the year-earlier period. The San Francisco bank posted an overall profit of $3.94 billion, which easily surpassed Wall Street projections.
JPMorgan's mortgage business posted a 71% increase to $2.4 billion from $1.4 billion last year. This led the bank to beat expectations with an overall profit of $5.7 billion.
Americans have been scrambling to take advantage of a low rate environment in which the 30-year fixed loan this month hovered at about 3.4%, down from 4.1% a year ago. In 2008, the rate was well above 6%.

4--August housing sales "above trend", CEPR

The other data on the housing market continue to be overwhelmingly positive. If anything, the 4.8 million pace for existing home sales reported for August is somewhat above trend. (The annual rate of sales was around 3.5 million in the mid-90s, before the bubble started driving the market.) The inventory of unsold homes is just over six months' supply at the current sales rate. A continuing flow of distressed sales into the market is not likely to radically change the picture.

While both sales rates and prices are pretty much back to their trend levels, construction remains far below trend; although, even here the picture is improving. The rate of 750,000 starts reported in August is 29.1 percent above the rate from a year ago. With the vacancy rate falling back sharply from its peaks in 2009 and 2010, starts are almost certain to continue to rise. Residential construction can be expected to provide a substantial boost to the economy through the rest of 2012 and through 2013. Starts are not likely to get back to the 2 million peaks of the bubble years, but we will likely get to at least a 1.3-1.4 million range by 2014.

5--Growing world slump overshadows IMF-World Bank meeting, WSWS

6--Banks Will Always Suck At Trading, Badly Need A Volcker-Like Rule: Study, Mark Gongloff, Huff Post

7--Global Economic Distress 3.0 Looms as Emerging Markets Falter, Bloomberg

There is a concern that in the near term the engine of growth that provided such a great support seems to be slowing,”said Jacob Frenkel, chairman of JPMorgan Chase International and Fischer’s predecessor in Israel. “They still continue to grow, but we’re seeing a slower pace than anticipated all over the world.” ...

Investors may still not be fully tuned into the risks, said Barry Eichengreen, an economics professor at the University of California, Berkeley. While U.S. stock benchmarks last week fell the most since June, the Standard & Poor’s 500 Index (SPX) is still up 17 percent from a year ago.
“I’m worried that stock markets in the United States in particular have gotten ahead of economic growth,” Eichengreen said in an interview in Tokyo.

The size of the latest shock may be underscored this week, when China will report its economy probably grew 7.4 percent last quarter, according to the median estimate in a Bloomberg News survey. Such a pace would be the slowest in three years.
If unchecked, the fading could deal a blow to already-weak rich nations, warn economists.

8--Financial Fraud Enforcement Task Force Members Reveal Results of Distressed Homeowner Initiative First Law Enforcement Effort Focused on Crimes Against Struggling Homeowners; 530 Criminal Defendants Charged, 73,000 Victims, and Losses of More Than $1 Billion, Dept of Justice

9--Land of the Ever-Less Free--How Obama Expanded the National Security State, counterpunch
During his election campaign in 2008, Barack Obama promised to close the prison at Guantánamo, repeal the Patriot Act of 2001 that authorised new domestic surveillance, and protect military and intelligence whistleblowers against government reprisals. It was a pledge to rein in much of the security state apparatus that had been expanded after 11 September 2001 into an enormous, often unaccountable, bureaucracy.

But four years later, Guantánamo is still open, its military tribunals have resumed and Obama has approved the renewal of the Patriot Act. His Department of Justice has launched six Espionage Act prosecutions of security whistleblowers — twice as many as all previous administrations combined. Also the no-fly list of individuals prohibited from air travel — a designation that is often arbitrary and always opaque — has more than doubled since last year, to 21,000. In 2011, the president signed the National Defense Authorization Act (NDAA), which gives the federal government the power to imprison indefinitely US citizens accused of terrorism, a major erosion of habeas corpus rights. The administration has authorised the assassination of an unknown number of US citizens abroad who are not directly engaged in armed hostilities but who have been designated as “terrorists”, with minimal legal process. Last September, American drones in Yemen hunted and killed radical cleric Anwar al-Awlaki and Al-Qaida propagandist Samir Khan; two weeks later, a separate American drone strike killed Awlaki’s 16-year old son: all were US citizens. Obama has also radically expanded the ostensibly “secret” killing of non-US citizens by drone strikes in Pakistan, Yemen and Somalia; as many as a third of the victims are non-combatant civilians, according to the Bureau of Investigative Journalism.

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