Saturday, March 16, 2013

Today's links

1--17  Signs Of A Full-Blown Economic Depression Raging In Southern Europe, zero hedge

2---911 commission report: Mostly Bullshit, washington's blog

According to NBC News:
Much of the 9/11 Commission Report was based upon the testimony of people who were tortured
At least four of the people whose interrogation figured in the 9/11 Commission Report have claimed that they told interrogators information as a way to stop being “tortured.”
One of the Commission’s main sources of information was tortured until he agreed to sign a confession that he was not even allowed to read
The 9/11 Commission itself doubted the accuracy of the torture confessions, and yet kept their doubts to themselves
In fact, the 9/11 Commission Report was largely based on third-hand accounts of what tortured detainees said, with two of the three parties in the communication being government employees.

As the 9/11 Commission Report itself states:
Chapters 5 and 7 rely heavily on information obtained from captured al Qaeda members. A number of these “detainees” have firsthand knowledge of the 9/11 plot. Assessing the truth of statements by these witnesses-sworn enemies of the United States-is challenging. Our access to them has been limited to the review of intelligence reports based on communications received from the locations where the actual interrogations take place. We submitted questions for use in the interrogations, but had no control over whether, when, or how questions of particular interest would be asked. Nor were we allowed to talk to the interrogators so that we could better judge the credibility of the detainees and clarify ambiguities in the reporting.
In other words, the 9/11 Commissioners were not allowed to speak with the detainees, or even their interrogators. Instead, they got their information third-hand

3---U.S. Ambassador in Rome Criticized For Endorsement Of Beppe Grillo, uruknet

4---Yipee, The Big Picture
Stockmarkets are back to (or close to) their pre-crisis levels

Source: Economist

Positives:
1. The Dow notched 10th straight days of gains — first time since 1996.
2. Retail sales crush, 1.1% vs expectations of 0.5% (largest beat since December ’09).
3. VIX falls to it’s lowest level in six years.
4. 16 of the 18 largest fin institutions pass stress tests + capital plans approved by the Fed.
5. Jobless claims fall to 332k, the second lowest weekly reading in the post-recession period.
6. Euro-zone Q4 employment falls to lowest levels since Q1 2006.
7. AAII Bulls rose to 45.4 from 31.1, 6 week high (Bears fell to 32 from 38.5, a 4 week low)
8. DAX index is now within 1.07% away from making an all time high.
9. Australian companies added 71.5k jobs in February, the biggest monthly gain since July 2000.
10. Only 9th time in the history DJIA has closed at an all-time high 8 days in a row.
11. NFIB small business optimism index was 90.8 — up 1.9 points in February.
 
5----When austerity succeeds, NYT

 

6---- ---- JP Morgan Chase & Co ignored risks, misled investors, fought with regulators, IFR

JP Morgan Chase & Co ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in a derivatives portfolio, a Senate report alleged in a damning review of the largest US bank’s management.
 
Senior managers at the bank were told for months about the bad derivatives bets that ended up costing the bank more than $6.2 billion but did little to rein them in, according to the Permanent Subcommittee on Investigations report on Thursday.
The Senate report came on the same day the U.S. Federal Reserve separately asked JP Morgan to improve its capital planning process as part of an annual “stress tests” of banks. (Full Story)

The barrage of bad news for JP Morgan, long seen as the safest and best-managed U.S. bank, could taint the reputation of the bank, as well as Chief Executive Jamie Dimon. Dimon has been one of the most outspoken critics of Washington’s attempts to tightly regulate Wall Street after the 2007-2009 financial crisis.

The report also gives ammunition to advocates calling for stricter financial reform regulations. In particular, the 301-page Senate report will likely give new energy to regulators crafting the Volcker rule, which proposes to put limits on banks betting with their own funds.

7---Draghi lectures eurozone leaders about labour costs, IFR

8---IFR Comment: Central bankers stole my market, IFR

A functioning banking sector relies on confidence – first order confidence that banks can borrow in the market, second order confidence that the central bank will be there if not.

Central bank borrowing is the only reliable source for many financial institutions, and it is drying up other pools of liquidity

Where it is not drying up liquidity in secured funding, it is drowning other markets. Yields are farcically low across much of unsecured credit, and legitimate doubts can be raised about how much credit work is being done by investors.

Funding through government-insured sight deposits, it seems, is the liability structure of a safe bank, while dangerous banks venture out to the capital markets (where casino banking happens) to secure five-year or ten-year funding.

Unsurprisingly big banks are cutting business lines that rely on wholesale funding, while competing vigorously for the UK’s pool of deposits. Over-leveraged UK consumers are obligingly doing their best to cut debt and boost savings

9---The politics of fiscal austerity in Europe may have changed but the hard economics remain pretty much the same, IFR

In the EU summit’s draft communiqué, the term “growth-friendly fiscal consolidation” figures prominently in the first paragraph. There’s even talk of “short-term targeted measures to boost growth and jobs” and the need to “balance productive public investment needs with fiscal discipline objectives”.

No shift

Yet as EU leaders reconvened on March 15, it was clear that German-led creditor countries, while agreeing that growth-supportive measures were necessary, were unwilling to countenance any shift away from balanced budgets. Moreover, there was no discussion of large-scale fiscal stimulus measures...

The new mantra of “growth-friendly fiscal consolidation” in Europe is a fiction. There has been too much across-the-board austerity since the crisis erupted which has made the prospects for meaningful growth even bleaker.

Many eurozone – and non-eurozone – economies are confronted with the worst of both worlds: very limited room for manoeuvre in fiscal policy and extremely weak domestic and external demand.
The outcome of this week’s EU summit provides little hope that European leaders are able to overcome their policy differences and come up with a more convincing remedy for Europe’s ills.

10--Lie back and thank Bernanke, IFR

They might like to consider some other US economic numbers that I was made aware of last week. Yes, the Dow is back to 2007 levels, but other stats are very different:
  • GDP Growth: Then +2.5%; Now +1.6%
  • Gas Price: Then US$2.75; Now US$3.73
  • Americans Unemployed (in Labour Force): Then 6.7m; Now 13.2m
  • Americans On Food Stamps: Then 26.9m; Now 47.69m
  • Size of Fed’s Balance Sheet: Then US$0.89trn; Now US$3.01trn
  • US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
  • US Deficit: Then US$97bn; Now US$975.6bn
  • Total US Debt Outstanding: Then US$9.008trn; Now US$16.43trn
  • Consumer Confidence: Then 99.5; Now 69.6
  • S&P Rating of the US: Then AAA; Now AA+
  • VIX: Then 17.5%; Now 14%.
There is of course an element of cherry-picking in these particular statistics – and we should bear in mind the adage (usually assigned to anyone vaguely quotable) that there are lies, damned lies and statistics – but one does get quite a shock looking at the comparison.
It tells us little about the reasons and justifications for a Dow at 14,539 points, but it does lay bare the staggering deterioration in the nation’s overall financial position. It also makes us aware of just how impossible it will be for the Fed to embark on a tightening cycle, irrespective of what insipid inflationary pressures might rear their ugly heads. Fed Chairman Ben Bernanke’s near-zero interest rate policy is the glue that holds these divergent but scary figures together.

11---The “Dirty War” Pope, wsws

It was Thomas Jefferson’s well-founded opinion that “In every country and in every age, the priest has been hostile to liberty. He is always in alliance with the despot, abetting his abuses in return for protection to his own.”

Jefferson’s view—and the reactionary character of the media’s sycophantic coverage—finds no more powerful conformation than in the identity of the new pope, officially celebrated as a paragon of “humility” and “renewal.”

Placed on the papal throne is not only another hard-line opponent of Marxism, the Enlightenment and all manner of human progress, but a man who is deeply and directly implicated in one of the greatest crimes of the post-World War II era—Argentina’s “Dirty War.”....

But some of Bergoglio’s harshest critics come from within the Catholic Church itself, including priests and lay workers who say he handed them over to the torturers as part of a collaborative effort to “cleanse” the Church of “leftists.” One of them, a Jesuit priest, Orlando Yorio, was abducted along with another priest after ignoring a warning from Bergoglio, then head of the Jesuit order in Argentina, to stop their work in a Buenos Aires slum district.

During the first trial of leaders of the military junta in 1985, Yorio declared, “I am sure that he himself gave over the list with our names to the Navy.” The two were taken to the notorious Navy School of Mechanics (ESMA) torture center and held for over five months before being drugged and dumped in a town outside the city.

Bergoglio was ideologically predisposed to backing the mass political killings unleashed by the junta. In the early 1970s, he was associated with the right-wing Peronist Guardia de Hierro (Iron Guard), whose cadre—together with elements of the Peronist trade union bureaucracy—were employed in the death squads known as the Triple A (Argentine Anti-Communist Alliance), which carried out a campaign of extermination against left-wing opponents of the military before the junta even took power. Adm. Emilio Massera, the chief of the Navy and the leading ideologue of the junta, also employed these elements, particularly in the disposal of the personal property of the “disappeared.”
Yorio, who died in 2000, charged that Bergoglio “had communications with Admiral Massera, and had informed him that I was the chief of the guerrillas...

The collaboration with the junta was not a mere personal failing of Bergoglio, but rather the policy of the Church hierarchy, which backed the military’s aims and methods. The Argentine journalist Horacio Verbitsky exposed Bergoglio’s attempted cover-up for this systemic complicity in a book that Bergoglio authored, which edited out compromising sentences from a memorandum recording a meeting between the Church leadership and the junta in November 1976, eight months after the military coup.

The excised statement included the pledge that the Church “in no way intends to take a critical position toward the action of the government,” as its “failure would lead, with great probability, to Marxism.” It declared the Catholic Church’s “understanding, adherence and acceptance” in relation to the so-called “Proceso” that unleashed a reign of terror against Argentine working people.

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