Tuesday, May 21, 2013

Today's news

1---Poverty in U.S. Suburbs Exceeds Urban Areas, democracy now

A new study shows more people are living in poverty in U.S. suburbs than in urban areas. According to the Brookings Institution, the number of low-income residents in the suburbs rose 64 percent to 16.4 million from 2000 to 2011. Urban areas saw an increase of 29 percent to 13.4 million during the same period.

2--US tightens North Korea chokehold, Greenleaf

containment--rollback

The U.S. is putting a pause to what several officials described as a step-by-step plan the Obama administration approved earlier this year, dubbed "the playbook," that laid out the sequence and publicity plans for U.S. shows of force during annual war games with South Korea. The playbook included well-publicized flights in recent weeks near North Korea by nuclear-capable B-52 and stealth B-2 bombers, as well as advanced F-22 warplanes.
"The U.S. stepped back from the plans this week, as U.S. officials began to worry that the North, which has a small nuclear arsenal and an unpredictable new leader, may be more provoked than the U.S. had intended, the officials said

Obama refuses to enter direct talks until the North commits to giving up nuclear weapons. It's a formula for not talking at all--which is, in fact, Washington's policy. The Wall Street Journal recently summarized the real meaning of "strategic patience": "Obama administration officials have said they have no current intention of reengaging with the North. Instead, the White House has pursued a policy of heightened economic sanctions against the communist country, both unilaterally and through the United Nations; new efforts to missile defense in Asia; and new measures to joint-military capabilities with South Korea and Japan."

3---"The Unimaginable Has Happened": Massive Tornado Kills Dozens, Flattens Suburb of Oklahoma City, democracy now

JON WELSH: If you guys can see this, I don’t know how to explain it, how to describe it. This is—this is terrible. This is war-zone terrible. This school is completely gone. If you guys are still with me here, this damage path is right there on the top right of your screen. There’s the school. I’m un-for-sure the exact name of it, but that’s—that’s going to be on—it’s going to be south of—south of Fourth Street, it’s going to be east of Santa Fe. Whatever school that is, it’s going to be—it is, like you see, completely destroyed, as kids run up to hopefully their loved ones. But this whole area right here, guys, is—it’s completely destroyed. The houses are destroyed.

4---Corporate cash balances still growing - and so is debt , sober look

5---Abe’s Resurgent Japan Hurt by Lack of Business Spending, Bloomberg

Japan is beginning to feel the pain of a weak yen without prospects for solid wage growth,” said Tetsufumi Yamakawa, head of Japan research at Barclays Plc. in Tokyo and a former central-bank official. “Japan can’t keep injecting fiscal and monetary stimulus. If Abe fails to boost economic growth with innovative measures, the dependence on monetary easing will end up distorting the economy.”

“If Japan doesn’t manage to implement a powerful package of structural reforms to release sustainable domestic demand, Abe’s policies become yet another attempt to export their way out of the vast problems of the domestic economy,” said Kenneth Courtis, founder of Tokyo-based advisory company Next Capital Partners and former Asia vice chairman at Goldman Sachs Group Inc. “To release domestic demand that would stimulate long-term growth, Japan will have to melt the vast regulatory barriers which clog the economy, open the gates to substantial immigration and privatize sectors still in government hands.”
Abe created an Industrial Competitiveness Council in January to devise strategies for his third arrow. The council has a list of 37 topics so far, including low-tax special economic zones and a Japanese version of the U.S. National Institutes of Health medical-research center, according to an outline released by the group on May 14.

Labor Key

His growth efforts will be “disappointing” if they don’t tackle labor laws, the social-security system and energy policy, said Naoki Iizuka, a Citigroup Inc. economist in Tokyo.

6---The Housing Unrecovery Is Here: Lumber Enters Bear Market, zero hedge

7---Goldman Confirms 'Recovery' Hopes Have Gone As 'Slowdown' Deepens, zero hedge

8--Wealthy bank depositors to suffer losses in EU law, Reuters

9--Antiwar.com sues FBI on surveillance, antiwar

10---BOJ Target at Risk as Spreads Show Tame G-7 Prices: Japan Credit, Bloomberg

11---‘US opened Pandora’s box in Iraq, regional sectarian violence almost impossible to stop now’, RT

Yes, the country is disintegrating. As I say, Americans have to take the blame for that because of the system they imposed in Iraq, giving independence to Kurds in the North, who of course were allies with them against Saddam Hussein, and then they are suggesting they would split the Shia alliance in the rest of Iraq and that opened up a Pandora’s box, which really is almost impossible to stop now. But this is not going to stop sectarian violence. I think people across the world should be absolutely clear the responsibility for that does lie on Americans and what they did in 2003 and the subsequent occupation of that county.

 12--Financial bubbles creating conditions for new crash, wsws

The statistics on price levels are among the most significant. These show that rather than prices increasing—a sign of recovery in so-called “normal” conditions—deflationary pressures are intensifying.

In the US, consumer prices fell by 0.4 percent in May, the biggest decline since late 2008, following a 0.2 percent decline in April. In Europe, excluding food and energy costs, consumer prices in the 17-member euro zone rose by just 1 percent in April from a year earlier.

The downtrend has far-reaching implications. Confronted with falling prices for their products, major firms and corporations seek to make profits not by investing and expanding production, as they would seek to do if a recovery were underway, but by savage cost-cutting coupled with financial speculation. The consequent cuts in pay and jobs lead to a reduction in consumer demand, further fueling the deflationary trend.

Other economic data highlight this process. Last month, US industrial production fell by 0.5 percent, compared to a projected decline of 0.2 percent, prompting predictions that results for the second quarter would be even worse than the last quarter of 2012, when the US economy showed virtually no expansion....

rather than expressing a “recovery,” the booming share markets are a fever chart of the deepening crisis of the capitalist system. Never in the history of world capitalism has there been such a divergence of financial markets from underlying economic processes.
The unprecedented rise in global markets has sparked concerns that the conditions are being created for a crash. As Financial Times columnist Gillian Tett noted, “[W]hile the flood of central bank liquidity is enabling the system to absorb small shocks, it is also masking a host of internal contradictions and fragilities that could surface if a shock hits” with the “potential for… future violent instability rising apace.”...

Last week, economists at the International Monetary Fund published an analysis warning that ending easy money policies could result in the central banks suffering severe losses as interest rates spiked and bond prices fell. The Federal Reserve could experience a loss equivalent to as much as 4 percent of GDP ($628 billion), the Bank of Japan could lose 7.5 percent of GDP, and the Bank of England almost 6 percent.

13---Vital Signs Chart: Car-Loan Delinquencies Tick Up, WSJ

Some Americans are falling behind on their car loans. The share of auto loans outstanding with payments overdue by 30 days hit 2.36% in the first quarter, up slightly from 2.33% a year earlier. A surge in loans to car buyers with lower credit scores has raised concerns among regulators, but delinquency rates remain far below their prerecession level of 2.60% in the first quarter of 2006.
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