Sunday, January 13, 2013

Today's links

1--Three-quarters of deficit reduction to date has been spending cuts, Big Picture (graph)

2---Americans feel austerity's bite as payroll taxes rise, Reuters

Americans are beginning to feel the pinch from Washington's decision to embrace austerity measures aimed at bringing down the nation's budget deficit.
Paychecks across the country have shrunk over the last week due to higher federal tax rates, and workers are already cutting back on spending, which will drag on the economy this year.
In Warren, Rhode Island, Ben DeCastro got his first paycheck on Friday in which taxes on his wages rose by 2 percentage points. That works out to about $30 a week.
"You sit back and do the calculation, and that's $30 I'm not going to spend at a restaurant," said DeCastro.

He said he worries that people hit by higher taxes will spend less at the chain of furniture stores where he works as a marketing manager.
Politicians in Washington made much hubbub last week about a bipartisan deal to soften or postpone some $600 billion in scheduled tax hikes and government spending cuts. President Barack Obama said the deal would shield 98 percent of Americans from a middle-class tax hike.

Nevertheless, for most workers, rich and poor alike, taxes went up on December 31 as a temporary payroll tax cut expired. That cut - a 2 percentage point reduction in a levy that funds Social Security - was put in place two years ago to help the economy, which was still smarting from the 2007-09 recession.
About 160 million workers pay this tax, and the increase will cost the average worker about $700 a year, according to the Tax Policy Center, a Washington think tank.
"It stinks," said Beverly Renfroe, an accountant for a realty firm in Jackson, Mississippi. "I definitely noticed a decrease."

3---U.S. now on pace for European levels of austerity in 2013,  WA Post

But after this week’s fiscal cliff deal, the United States is now on pace to engage in about as much fiscal consolidation in 2013 as many European nations have been doing in recent years — and more than countries like Britain and Spain.

A back-of-the-envelope calculation suggests Congress has enacted around $304 billion in tax hikes and spending cuts for the coming year, an austerity package that comes to about 1.9 percent of GDP. (That’s merely the size of the cuts and taxes; it’s not necessarily the effect on growth

This includes the expiration of the payroll tax cut, which will raise about $125 billion this year. It includes $50 billion in scheduled cuts to discretionary spending from the caps in the 2011 Budget Control Act, as well as $24 billion in new Obamacare taxes and $27 billion in new high-income taxes. It also includes about $78 billion from the now-delayed sequester cuts — assuming that these either take effect or are swapped with other cuts.*

4---The Government’s Entire Bailout Strategy Was to Cover Up the Truth, Big Picture

5---5 ways Obama is just like George W. Bush, Salon
From drone strikes to proxy detentions to warrantless wiretapping, he's kept the U.S. on permanent war footing

6---The Middle East in 2013, wsws

Assad’s downfall is a key element in longstanding US efforts to secure hegemony in the Middle East that were dramatically stepped up in response to the overturn in 2011 of its key regional allies Ben Ali in Tunisia and Hosni Mubarak in Egypt. US policy combines aggressive military intervention such as that carried out in Libya with securing an alliance of Sunni Arab regimes and movements against the Shiite theocracy in Iran and its allies. The goal is to secure regime-change in Damascus and Tehran, sow divisions throughout the region to prevent common action by the working class, and to build up the authority of the Islamists as a bulwark against social revolution.
...
Iran is presently the target of sanctions that are having a crippling and destabilising impact—leading to a 55 percent fall in crucial oil imports and a collapse in the value of its currency. But a military strike has been repeatedly threatened by Israel.

7---The U.S. Military Swarms Over Africa, global research

8---On The Disruptiveness of the Platinum Coin, Fed Watch economists' view

And then we come to the platinum coin, which threatened to expose the illusion that cash and debt are different at the zero bound. By extension, the platinum coin threatened to expose as folly any near-term deficit reduction plan. If you could issue a coin to support near term spending without inflationary consequences, what exactly is the rational for tighter policy now? There is none - but that would run directly contrary to the conventional wisdom among Very Serious People on both sides of the aisle that the debt needs to be addressed right now.
And just think about what it would mean for the Fed if it became evident that, even if only temporarily at the zero bound, deficit spending could be monetized with no impact on inflation. The lines between monetary and fiscal policy would blur further, threatening the existing state of affairs in Washington. Monetary policymakers would face an increasingly hard time defending their need for independence as akin to an Eleventh Commandment....

Bottom Line: The platinum coin idea was ultimately doomed to failure because neither the Federal Reserve nor the Treasury could allow for even the remote possibility it might be successful. Its success would not just alter the political dynamic by removing the the debt ceiling as a threat. The success of a platinum coin would fundamentally alter the conventional wisdom about the proper separation of fiscal and monetary policy and the need to control the debt immediately.

9--Why are Banks Allowed to Manipulate the Oil Markets?, oil price

This is why when nobody takes physical delivery prices do not go down an equal amount on rollover, as less than .005% take physical delivery, this way prices aren`t negatively affected after a large amount of money comes into a futures contract in an equally large rollover effect on exiting.
Related Article: As Canadian Crude Plummets, Find the Natural Gas Opportunity
It is because the side which has pumped the futures contract with a bunch of cash, makes the other side who rationally would be short based upon the normal price history and abundance of supplies, has to cover thus buying the contracts from the pumpers in this case, thus avoiding a large rollover effect when they have to exit because the contract ends after a month.
There is a whole art to the manipulating game in the oil market, and the big banks play it quite well. And given how inept congress is, who has investigated them twice in the last five years every time prices run up and has done nothing, the big banks think they are invulnerable on this issue.
If you haven`t clamped down on us yet, and you cannot even get your own house in order, then there is no way you can figure out how we are manipulating the oil markets.
Trading Records Last 4 Weeks
But enough is enough, this is blatant criminal behavior, and it is pretty easy to know who the culprits are just pull the last 4 weeks trading records and see who bought large positions. The fundamentals never materially changed in fact they got more bearish as the products` supplies grew at a substantial rate, and there were no Middle East supply disruptions, or strategic hot spots that were in danger of having supply disruptions, nada.
“Asset Class” Euphemism for Roulette Table
Prices are not determined by the fundamentals in a manipulated market they are determined by oil being an “Asset Class” which is code word or a euphemism for giant Casino in New York instead of Vegas.
So we cannot legally play poker online in this country, but you can pull up your internet connection, and place your wager on the price of oil, such hipocracy in this country. The price of oil, and as such gas is determined not by supply and demand factors, but by whether Goldman Sachs (NYSE: GS) or Morgan Stanley (NYSE: MS) or J.P. Morgan (NYSE: JPM) puts $400 million on Black or Red, the literal Oil Roulette game of the big banks.
If Goldman Sachs puts $400 million on Black prices go up, if they put $400 million on Red prices go down, as simple as that, this is actually how the price of oil is determined, nothing more and nothing less....

The Cheating isn`t even hidden anymore
Literally the CFTC only has to pull up a trading Dom watch it for five minutes and watch all the flashing fake large orders that appear and disappear as price reacts to their presence to know that these markets are infested with manipulation termites. They obviously purposely look the other way, or avoid looking at all!...

Are You Kidding Me?
So let me get this straight, the gasoline market went from a tight, to a well-supplied market in six weeks, and consumers are going to be punished 30 cents more for this ridiculous build in more supplies? All these gasoline supplies are building in storage because there is not enough consumer demand for the product, and prices are going substantially higher not lower?
This is the exact opposite of how efficient markets are supposed to work in a non-rigged market, this very fact, should be a wake-up call for regulators. Hello CFTC, what is going on in the gasoline RBOB market? Do you think you should start investigating, you do exist for a reason, there is a blatant, clear cut case of price manipulation in the RBOB gasoline market, now get to work and do your job!

10--US involvement in coup against Chavez, venezuelanalysis

..... the United States had all sorts of contact with the coup plotters before they made their move against Chavez in 2002. According to the State Department (7/02):
It is clear that NED [National Endowment for Democracy], Department of Defense (DOD) and other U.S. assistance programs provided training, institution building and other support to individuals and organizations understood to be actively involved in the brief ouster of the Chavez government.
And the CIA, as was reported by Forero himself (New York Times, 12/3/04), knew of the coup plotting.
“The Central Intelligence Agency was aware that dissident military officers and opposition figures in Venezuela were planning a coup against President Hugo Chávez in 2002, newly declassified intelligence documents show. But immediately after the overthrow, the Bush administration blamed Mr. Chávez, a left-leaning populist, for his own downfall and denied knowing about the threats.”
Scott Wilson, who was the Washington Post foreign editor at the time, told Oliver Stone for his film South of the Border:
“Yes, the United States was hosting people involved in the coup before it happened. There was involvement of U.S.-sponsored NGOs in training some of the people that were involved in the coup. And in the immediate aftermath of the coup, the United States government said that it was a resignation, not a coup, effectively recognizing the government that took office very briefly until President Chavez returned.”
And we know that the United States made quick efforts to have the coup government recognized as legitimate. The Bush government, immediately after the coup, blamed it on Chavez. And some of the coup plotters met with officials at the U.S. embassy in Caracas before they acted.


 

 

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