Saturday, March 30, 2013

Today's links



...while incomes did rebound after the plunge in January, the modest increase represented a rise in the personal savings rate to just 2.6% - the second lowest monthly savings print since 2007, excluding only the abysmal January 2.2% print. In other words, there is hardly much if any new room for additional spending with the savings rate nearly at record lows, and with US consumer continuing to reduce their outstanding revolving credit, the Q1 retail sales miracle will hardly be repeated in future months as US consumers seek to rebuild some cash buffer.
For those claiming there is something called a "recovery" underway, perhaps they can point out just where on this chart of Real Disposable Income per capita one can find said recovery.

1.) The “Monsanto Protection Act” effectively bars federal courts from being able to halt the sale or planting of controversial genetically modified (aka GMO) or genetically engineered (GE) seeds, no matter what health issues may arise concerning GMOs in the future
3---Wall Street's role in the Cyprus crisis, counterpunch

The ‘excess savings’ view of global investment hides the role of Wall Street in the creation and distribution of credit. For example, Deutsche Bank, the large German bank, was one of the largest creators and distributors of garbage financial products on Wall Street in the 2000s. So banks both create money through credit finance and the financial products to be bought with the money thus created—literally a license to print money. And both the creation of credit and the production and distribution of garbage financial products pay bankers extremely well while coincidentally increasing the risk of economic catastrophe through cash-flow leverage now distributed globally....

Put another way, what better system could be conceived to loot and plunder the globe than that where bankers get to create credit and also the financial products representing claims on ‘real’ assets that can be bought with it? Currently hedge funds in the U.S. are buying bulk houses at pennies on the dollar because private (bank) credit was used to inflate house prices in a credit-fueled boom that went bust. Foreclosed upon home ‘owners’ still owe tens of billions to the banks even though their houses are long gone and the bulk house purchases will be leveraged (using bank credit) to cash the hedge fund investors out and residual value will be sold to shadow banks that have created ‘cash-flow’ economics that depend more on low funding costs and continuing credit expansion than on the values of the underlying houses. And this same dynamic is playing out with ‘state’ assets across peripheral Europe as economies are crashed by bankers (with the help of Central Banks and state actors like Angela Merkel and Barack Obama) and assets are purchased at pennies on the dollar against captive cash flows (think public water and power systems)......

Finance capitalism is fatally flawed in theory and in practice. Its ultimate product is that which is before us: a global plutocracy dependent on state capture, power and control to plunder and loot what will become, by necessity, increasingly resistant populations. The post-War ‘moderation’ cited by mainstream economists worked to the extent it did by limiting private debt creation. However, the base imperative of finance capitalism today is infinitely expanding (private) debt—it is the source of its political and economic power. Those in the U.S. who remain in the Democrat / Republican divide are blind to where real power lies. Events in Cyprus have provided a glimpse for those who care to see. 

4---Destruction of Cyprus Economy Proceeding Ahead of Schedulehttp://www.nakedcapitalism.com/2013/03/destruction-of-cyprus-economy-proceeding-ahead-of-schedule.html#ZcWoSFrlrQCBzE6p.99 , naked capitalism


When I first heard about the Cyprus ritual execution bailout, I had thought that the widespread predictions that the island nation’s economy would contract by 20% to 30% over the next two years were off base.
I thought it would happen much faster, on the order of two to three months. An estimated 45% (mind you, 45%!) of the economy is banking, and almost all of that international banking. So if you generously assume 200% of the 900% of GDP was bona fide domestic assets (remember you have a lot of retirees), the other 7/9 goes poof. And that’s before you get to the fact that a lot of the services provided to foreign customers (the higher-end accounting and legal services) will have no future in a purely domestic banking business. So assume 90% of that 45% disappears in short order.

5---North Korea in ‘State of War’ With South Koreahttp://news.antiwar.com/2013/03/29/north-korea-in-state-of-war-with-south-korea/, antiwar.com


The U.S. housing market will see no surge at the start of spring, as fewer buyers signed contracts to purchase existing homes in February. An industry index of so-called pending home sales fell 0.4 percent from January but is up 8.4 percent from February of 2012. While the number of for-sale listings increased more than the seasonal norm, Realtors still say a lack of supply is keeping many potential buyers from desired deals. Pending home sales are a one to two month forward indicator of closed sales.

7--Record Food stamp usage in US, WSWS 

8---US provokes N Korea in senseless standoff, info clearinghouse

9---Successful loan modifications require increasing borrower entitlementshttp://ochousingnews.com/news/successful-loan-modifications-require-increasing-borrower-entitlements, oc housing news


10---Cyprus and the deepening EZ depression, marketwatch

The Cyprus debacle will deepen the depression now starting to grip the European economy. This is no longer a financial crisis — it is an economic crisis. And the collapse of Cyprus will make that a whole lot worse.

The so-called rescue will push one more country into a catastrophic recession. It will provoke an outflow of global funds from the euro-zone. And it will encourage small businesses and depositors to hoard cash. A modern economy can’t function without a healthy banking system. And after Cyprus, no bank in the euro zone can be regarded as safe anymore.....
Markets might rally on the deal, a sudden Cypriot exit would have been a traumatic event. But the so-called rescue is still a disaster of the euro-zone economy. It was already shrinking. By the autumn it will be in a full-scale depression. And that means the euro itself and European equity markets will be falling for the rest of this year


Bernard Madoff, who admitted in 2009 to running a multibillion-dollar Ponzi scheme, told media outlets this week that the government-appointed trustee for his firm’s investors is refusing to act on evidence showing the complicity of major banks in his activities.
“Although I have offered the bankruptcy trustee the information that I possessed that would demonstrate in detail the complicit behavior of banks like JPMorgan, Bank of NY, HSBC, Citicorp and other, the trustee seems unwilling to act on my offer,” Madoff said in an email to Fox Business and MarketWatch.
“Therefore, I am offering this information to the appropriate governmental committees in the hope that this information will prove helpful in future regulation of the appropriate institutions,” he added.



The increasing chasm between ordinary Americans and the elite that is celebrating stock market records is not the outcome merely of impersonal economic processes. The growth of social inequality since the 2008 financial crash is the product of definite policies pursued first under Bush and then under the Obama administration. The political establishment has pursued a bipartisan policy of class warfare against the working class while bailing out Wall Street and assisting its continued plundering of social resources.
The US Federal Reserve is pumping $85 billion a month in virtually free money into the financial system, fueling the stock market boom. This is more money in a month than the $76.6 billion the federal government spent all of last year to provide SNAP benefits to 47.8 million impoverished Americans.
Despite the explosive growth of the food stamp rolls and the obvious need for more funding for SNAP, even the minimal expansion of the program under the Obama administration’s 2009 stimulus bill is set to expire on October 31, cutting food stamp benefits by about $8 per month per recipient.


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