Saturday, August 31, 2013

Today's Links

1---The war against Syria and American democracy, WSWS (Today's "must read")

The media today functions openly as a mouthpiece of the government, seeing its central purpose as disseminating state lies and covering up for government secrets. It has been transformed through a process of corporatization, of “embedding” journalists in the military, of the purging of anyone who displayed an ounce of critical thought (e.g., NBC’s firing of Peter Arnett in 2003 over his critical coverage of the Iraq invasion).

The generally authoritarian sentiment that prevails in the media today was expressed by the New York Times’ Roger Cohen in his column Friday advocating war against Syria. Popular sentiment be damned, the liberal columnist wrote. “War fatigue in the United States and Britain is not an excuse for the surrender of a commodity of enduring strategic importance—national credibility—to an ephemeral one—public opinion.”

Ten years after the war against Iraq, launched on the basis of complete fabrications, not a single major corporate-controlled newspaper or media outlet has questioned the litany of lies and unsubstantiated claims emanating from the White House.

How is this transformation to be explained? The crisis over Syria is revealing the deeper reality of political life in America. In May 2003, the WSWS noted that “the massive and blatant character of the lies upon which [the Iraq] war was based, and the indifferent and cynical response of the media, are significant manifestations of the general breakdown of bourgeois democratic norms. The political life of the United States reflects in ever more grotesque forms the increasingly oligarchic character of the American state.”

Ten years later, these tendencies have only metastasized. The corporate and financial aristocracy has utilized the crisis that began in 2008 to concentrate in its hands an even greater proportion of the nation’s wealth. Government policy is determined by the interests of the top one percent of the population.

Foreign policy is inseparably linked to domestic policy. The complete indifference of the institutions of the state to all the social concerns of the masses—poverty, unemployment, the destruction of social services—finds its natural complement in foreign policy. What the lower 90 percent income bracket thinks amounts to nothing, with the media assigned the role of attempting to manipulate this thinking with propaganda and lies

2---Obama has "no proof" Assad used chemical weapons. There is abundant proof that US has used them, wsws

Washington is launching a war based on unconfirmed allegations and speculation that it has fashioned into a pretext for military aggression. Moreover, it has no interest in confirming its trumped-up charges, dismissing the investigation on the ground in Syria by UN weapons inspectors as “irrelevant,” even as they began interviewing Syrian soldiers suffering the effects of “rebel” gas attacks....

One could not convict an individual of a third-rate burglary on the basis of such evidence in a US court of law, where the standard is proof beyond a reasonable doubt. Yet the United States government is proposing to use it as the justification for launching a bombardment on Damascus in which thousands will lose their lives.

Not one word of this is to be believed. If one really wanted to know what happened on that day, it would require the interrogation of the CIA, Mossad and Qatari and Saudi intelligence agents who are arming and directing the murderous operations of the anti-Assad forces and undoubtedly played the leading role in organizing the chemical weapons provocation to lay the groundwork for US military action.
Kerry’s remarks Friday only underscored that a principal qualification for the office of US Secretary of State is being a skilled liar and forger. With his aristocratic manners, Kerry reminds one of no one so much as Hitler’s foreign minister Joachim von Ribbentrop, and the objective content of his speech consisted of a global arrogance and criminality that goes beyond that of the German Nazi regime....

What were napalm and Agent Orange, massively deployed during the war in Vietnam that claimed over 3 million lives, if not chemical weapons? And it is US imperialism alone that has employed the most horrific of weapons, the atomic bomb, killing nearly a quarter of a million Japanese civilians in Hiroshima and Nagasaki.
Every war it has waged over the past period has been based on lies, from the fabricated Gulf of Tonkin incident in Vietnam to the nonexistent weapons of mass destruction in Iraq. The impending war on Syria is no exception.

The claim that Washington is only carrying out a “limited” and “tailored” action is false on its face, as the CIA and the Pentagon have been involved over the past two years in fomenting a sectarian civil war and arming the Al Qaeda gangs that are tearing Syria apart. If the Obama administration were truly interested in stopping the bloodshed than it would get the hell out of Syria and stop interfering in its affairs.

3---Washington’s drive to war is laying the foundations for a terrorist attack on the American public that could dwarf 9/11, wsws

The implausibility of this government carrying out such an action on the very day that United Nations weapons inspectors began their work in Damascus—at the invitation of Assad—is passed over in silence. So too is the extensive evidence that the so-called “rebels,” murderous US-backed militias in which Al Qaeda-linked Islamist formations play the leading role, have access to and have repeatedly used chemical weapons.

In the PBS interview, Obama painted Washington as merely a horrified bystander to the violent struggle that has wracked Syria for the past two years, supposedly limiting itself to diplomatic appeals and humanitarian assistance. This is a bald-faced lie. The CIA has coordinated the massive flow of arms and Islamist foreign fighters into Syria, unleashing a bloody sectarian civil war with the aim of achieving regime change. It has armed and trained anti-government forces in Jordan and sent them back into Syria under effective US command to carry out mayhem.

Despite this massive and barely covert intervention, the war for regime change has turned into a debacle, in large measure because the Syrian people are hostile to both imperialist intervention and the attempt to break up a largely secular society and impose an Islamist regime by means of sectarian slaughter....

Why the US, which slaughtered nearly a quarter of a million Japanese in the atomic bombings of Hiroshima and Nagasaki, is the natural enforcer of “international norms” in the use of weaponry is never questioned by the media. More recently, the Pentagon used depleted uranium and white phosphorous in Iraq to slaughter thousands and leave a legacy of birth defects for generations to come......

Washington’s drive to war is laying the foundations for a terrorist attack on the American public that could dwarf 9/11.
This new war based on lies is being prepared in an atmosphere of political crisis and desperation in Washington that reflects the intense internal contradictions plaguing US imperialism. While the initial target of US cruise missiles may be Damascus, the strategic aims that underlie it lead to an ever-broadening conflict that threatens to engulf Iran, Russia and the entire planet

4---Syria: The path of the pipeline, Daily Paul

In all likelihood, the case of the gas is the "background" most of the war against Syria and especially the war that hit the region of Homs. The daily Al-Akhbar has received information from reliable sources that can be summarized that there is a Qatari plan, approved by the U.S. administration, whose goal is the establishment of a new gas pipeline to transport Qatari gas to Europe, Turkey and Israel are parties.

Increasingly, it is likely that the gas is the real bottom line of the war against Syria. This is from leakage from a Western oil giant that the daily Al-Akhbar obtained reliable information, giving details of a Qatari project, supported by the United States, and for the construction of a new pipeline that would transport gas from Qatar to Europe via the Syrian region of Homs. The city and its region are the "node" or "geographical heart" of the project, which, in turn, would provide strategic advantages to Turkey and Israel in the equation of global gas trade.
This new pipeline would take a "land" which starts of Qatar, through Saudi territory and Jordanian territory avoiding Iraqi territory to arrive in Syria and specifically to Homs. From Homs pipeline would branch off into three directions: Latakia on the Syrian coast, Tripoli in northern Lebanon, Turkey.

The main goal of this project is to route the Israeli and Qatari gas to the European continent for distribution throughout Europe, with a threefold objective. The first: break the Russian gas monopoly in Europe. The second: to liberate Turkey from its dependence on Iranian gas. The third: give Israel a chance to export its gas to Europe by land and cost.
Why Homs?
Overall, the above objectives can not be achieved if the route of the pipeline dream did not pass through the region of Homs to be "the main crossroads in the project," because the Qatari gas has no alternative to reach Europe, except that of using large aircraft by sea, which would be longer, a higher cost, not safe for certain areas of the course.

According to information from the same Western oil company, Qatar also plans to buy miles to develop its maritime cargo transport fleet of gas with the ambition to become involved in a much larger U.S. project to revise the equation the global gas trade. At stake, two significant changes. The first is a function of gas discoveries in the Mediterranean by Israel Sea. The second is based on the potential use of the events in Syria, after creating a political situation that would be the main hub of Homs export of Qatari and Israeli gas to Europe.

5---Most news bad for emerging markets, Reuters

The last few weeks have conclusively demonstrated the idiocy of one of the key investment themes since the 2008 Great Recession – namely that with developed economies burdened with excessive debt and in the throes of multiyear deleveraging, investing in emerging markets would not only produce superior returns but was also less risky,” wrote Albert Edwards, a global strategist at Societe Generale, in a note to clients on Wednesday.

“Regular readers will know we have long railed against this idea, having dubbed the BRIC story a Bloody Ridiculous Investment Concept.”
With an extended selloff under way, emerging market central banks are making apparently frantic efforts to buy stability.

The Reserve Bank of India on Thursday engineered a bounce in the hard-hit rupee from recent all-time lows, unveiling a deal whereby it would provide dollars directly to state-run oil companies, which use them to purchase oil abroad. The Brazilian central bank hiked rates yet again, this time by half a percentage point, to 9 percent, its fourth hike in four meetings. Bank Indonesia also hiked by half a percent in a relatively rare inter-meeting move, taking benchmark rates to 7 percent.

India particularly showed a note of panic in its attempts to counteract the 20 percent fall in the rupee. Having unveiled a host of other measures to support the rupee, India is mulling a scheme to have banks buy gold from households, according to a Reuters report.
As with oil, India is a big consumer but not a producer of gold, and must send dollars abroad to bring it home. The idea would be to persuade households, many of which keep substantial wealth in gold, to part with it in exchange for rupees. The gold could then be smelted and reused domestically, thereby avoiding the need to send dollars abroad.

Sound desperate to you?

6---Putin:  Obama wants to attack Syria because US-backed rebels are losing, RT

Russian President Vladimir Putin has declared ‘utter nonsense’ the idea that the Syrian government has used chemical weapons on its own people and called on the US to present its supposed evidence to the UN Security Council.
Putin has further called the Western tactic a ‘provocation...

Syrian government forces are advancing, while the so-called rebels are in a tight situation, as they are not nearly as equipped as the government,” Putin told ITAR-TASS. He then laid it out in plain language:
“What those who sponsor the so-called rebels need to achieve is simple – they need to help them in their fight… and if this happens, it would be a tragic development,” Putin said.
Russia believes that any attack would, firstly, increase the already existing tensions in the country, and derail any effort at ending the war.

"Any unilateral use of force without the authorisation of the U.N. Security Council, no matter how 'limited' it is, will be a clear violation of international law, will undermine prospects for a political and diplomatic resolution of the conflict in Syria and will lead to a new round of confrontation and new casualties," said the Russian Foreign Ministry’s spokesman, Aleksandr Lukashevich, adding that the threats issued by Washington “in the absence of any proof” of chemical weapons use.

On Friday, Washington said a plan for a limited military response was in the works to punish Assad for a “brutal and flagrant” chemical attack that allegedly killed more than 1400 people in the capital Damascus 10 days ago.

The Syrian government has been denying all allegations, calling the accusation preposterous and pointing its own accusations against rebel forces, especially Al-Qaeda-linked extremists who have wreaked havoc on the country in the two years since the start of the civil war.

7---Summers, the bankers' best friend, yahoo (Turning the Fed over to Wall Street)

Summers, on the other hand, is safe and reliable, the bankers’ best friend in politics. From the bankers’ point of view, his record is perfect. Summers late 1990s' advocacy of financial deregulation is of course legendary. In the Obama years, he championed the bank bailouts while also fighting attempts to cap the bankers’ bonuses and to set limits on risky bank behavior, including Summers’ opposition to the Volcker rule to limit banks from trading on their own account.

Summers not only shot down proposals by Senator Dodd and others to limit Wall Street bonuses, but took an even more audacious stand: that the AIG unit that helped trigger the entire calamity by writing reckless credit default swaps should also get their mega-bonuses after the fact. Summers explained to a shocked nation that he did not want to “violate the contracts” of these employees, even as the world economy lay in ruins at their handiwork. Even Gordon Gekko would not have had such audacity.

When Summers left the Obama White House, he made a beeline back to Wall Street, just as he had done after leaving the Treasury in 2001. In a normal moral universe, a leading candidate for the Fed Chairmanship would hesitate to pass through the Washington-Wall Street revolving door so quickly and boldly, for fear of triggering public concerns about financial conflict of interest. Yet Summers quickly took up not just one Wall Street position but many, including with DE Shaw, Citigroup, NASDAQ, and other companies....

Many cynics have put the Fed issue far more succinctly. Since the banking lobby is already so powerful in the White House and Congress, why not simplify matters and just turn the Fed over to Wall Street. In fact, Obama seems on the verge of doing so.

8---Banks earn record profit in second quarter on lower loss reserves , LA Times

The nation's banks posted a record $42.2-billion profit in the second quarter as the improving housing market allowed them to set aside less money for losses on mortgages and other loans, the Federal Deposit Insurance Corp. said Thursday.
Profits were up 22.6% in the April-through-June period compared with a year earlier. It marked the 16th straight quarter that total profits at the nation's approximately 7,000 federally insured banks increased year over year, FDIC Chairman Martin J. Gruenberg said

9---How Stimulatory Are Large-Scale Asset Purchases?, SF Fed

Here's the conclusion to a FRBSF Economic Letter from Vasco C├║rdia and Andrea Ferrero on the question of How Stimulatory Are Large-Scale Asset Purchases?:
... Asset purchase programs like QE2 appear to have, at best, moderate effects on economic growth and inflation. Research suggests that the key reason these effects are limited is that bond market segmentation is small. Moreover, the magnitude of LSAP effects depends greatly on expectations for interest rate policy, but those effects are weaker and more uncertain than conventional interest rate policy. This suggests that communication about the beginning of federal funds rate increases will have stronger effects than guidance about the end of asset purchases.

10---Cooler Spending in U.S. Signals Slow Start for Quarter: Economy, Bloomberg

11---Vital Signs: Saving Rate Is Slipping, WSJ

Weak income growth is forcing many consumers to choose between maintaining a current lifestyle or saving more for the future. So far in 2013, households are choosing to spend now and save less.
According to Commerce Department data, consumers had been socking away between 5% and 6.5% of their aftertax income in 2011 and 2012. (Income brought forward into December 2012 for tax reasons caused the rate to spike at the end of last year.) But the saving rate has fallen this year, holding at 4.4% in July.

 One reason that some households are saving less is that they are reaping in new wealth from rising equity and home values. But many households have little financial cushion should a job loss or emergency expense occur.

12---NYSE margin debt just below all-time high, prag cap

The latest reading on NYSE margin debt was just shy of an all-time high.  Borrowing to execute securities trades has not waned much at all in recent months as the July data showed borrowing of $382.1B which was slightly below the all-time record of $384.3B seen in April of this year.  The July reading is up from $376B in June.  Clearly, there’s still a lot of confidence in the minds of traders who are borrowing to execute trades as NYSE margin debt balances certainly appear to have a long-only bias:

13---The decline of the Union; 11.3%: The share of U.S. workers who were union members in 2012, WSJ

The decline in unionization has coincided with a period of stagnant wages for many Americans. As a share of the economy, wage and salary payments have been trending downward for a decade. But economists are divided over whether the erosion of unions is a cause of weak wage growth or a symptom of broader economic and societal shifts.

14---The no growth, low inflation economy, WSJ

Both overall prices and core prices (excluding food and energy) rose a tepid 0.1% in July from a month earlier, a slower pace than in June, according to the Fed’s preferred inflation gauge, the Commerce Department‘s price index for personal consumption expenditures. From a year earlier, overall prices rose 1.4% while core prices rose just 1.2%.

The year-over-year increase in core prices has remained at 1.2% for four consecutive months now. That’s well below the Fed’s target of 2% inflation. Overall prices have gradually risen year-over-year since April, but also are still below the Fed’s target.

Rising prices often signal that the economy is strengthening, indicating that companies have more leverage to charge more for their products and services, and Americans have more money to spend.
The Fed has been looking for signs of higher inflation as it considers scaling back its $85 billion-a-month bond-buying program, perhaps as early as its Sept. 17-18 meeting. There are some signs that prices have been slowly rising in recent months after stagnating earlier in the year. However, inflation still remains very soft by historical standards.

15---Abenomics; Flat wages, slow growth, and higher prices, WSJ

The key now is whether this greater economic activity will push companies to raise worker wages. For now, wages have failed to rise along with the broader economy. With other data today showing consumer prices are rising strongly, a failure of wages to keep pace could hurt consumer confidence down the road....
GDP grew a weaker-than-expected 2.6% in the quarter according to preliminary data released earlier this month. An upward revision, which is common in Japan these days, would add more weight to the recovery story.

16---It's the consumer, stupid, zero hedge

17---Personal Income, Spending Miss; Employee Compensation Plunges, zero hedge


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