Saturday, November 30, 2013

Today's Links

1---Obamacare: Government-coerced profit-delivery system, wsws

It has already become clear that for millions of working people, Obamacare will mean higher premiums, deductibles and co-pays and/or reduced access to doctors, medical procedures and drugs. What is being exposed is the fact that the entire scheme is little more than a government umbrella for increased profit-making by the health care industry as well as cuts in government health care spending....

With every tortured turn, the failure of the web site has underscored the fact that the ACA has nothing in common with providing “affordable,” “near-universal” health care for ordinary Americans. Rather, it is aimed at rationing and cutting care while boosting the profits of private insurers and the entire health care industry....

It is clear that the Obama administration defines “success” not as the ability of working families to obtain quality, affordable health care, but as the web site’s ability to sign up a sufficient number of new customers for the private insurance companies to make the pro-corporate Obamacare enterprise viable.

2---Here We Go Again: Zero down mortgages eligible for gov-guaranteed MBS, Dean Baker

.... the latest proposed rules would allow mortgages with zero down payment to be placed into pools with no requirement that banks maintain a stake. This change would mean that banks would have the same incentive as in the housing bubble years to put junk mortgages in MBS. If this rule is coupled with the Corker-Warner proposal for having a government guarantee for MBS, it will mean that banks will likely find it far easier to pass on junk and fraudulent mortgages going forward than they did in the years of the housing bubble.

Further facilitating this process is the gutting of the Franken amendment. This amendment (which passed the Senate with 65 votes) would have required investment banks to call the Securities and Exchange Commission (SEC) to pick a bond rating agency for a new MBS. This removed the conflict of interest where bond rating agencies would have an incentive to give a positive rating in order to get more business. In the conference committee, the amendment was replaced by a requirement that the SEC study the issue. After two and a half years the SEC issued its study and essentially concluded that picking bond rating agencies exceeded its competence. This left the conflict of interest in place.
If Congress wants to set up the conditions for another housing bubble fueled by fraudulent mortgages it is doing a very good.

3---Abenomics: inflation without compensation, Testosterone Pit

Incomes of the all-important “workers’ households” rose a measly 0.1% from a year ago to ¥482,684. In nominal terms. But adjusted for inflation – yes, here is where the benefits of Abenomics are kicking in – incomes fell 1.3%. Disposable incomes fell 1.4%. The details were ugly: “Current income” (salaries and wages) dropped 1.2% and “temporary bonuses” plunged 19.5%. Income from self-employment and piecework plummeted 20.8%.

So these strung-out workers’ households whose belts are being tightened by Abenomics and whose real incomes are being whittled away by inflation, how can they spend more to perk up the economy? Turns out, they don’t. Spending rose a scant 0.4% in nominal terms from a year ago – but adjusted for inflation, spending fell 1.0%.

And this despite rampant frontloading of big-ticket purchases. The consumption-tax hike from 5% to 8%, to take effect on April 1, is motivating households to buy big-ticket items now and save 3%. It has turned into a frenzy. Durable goods purchases, the primary target of frontloading, jumped 40.4% in October from a year ago. While it’s goosing the economy now, it will create a hole starting next spring. Japan has been through this before.

When the consumption tax hike from 3% to 5% was passed in 1996, Japanese consumers went out on a buying binge of big-ticket items to avoid paying the extra 2% in taxes, and the economy boomed. The hangover came around April 1, 1997, when the tax hike became effective. The economy skittered into a recession that lasted a year and a half. Now Japanese households are frontloading to avoid an additional 3% in consumption tax. The hangover next year is going to be painful.

4---The bloody disaster of Libya, Iraq and Afghanistan is laid bare, Guardian

Bombs and militia violence make clear the folly of Britain's wars – the removal of law and order from a nation is devastating...
Forty-three people died on Friday in clashes between militias in Libya, as did 22 on Sunday from bombs in Iraq. In Helmand, a return of the Taliban to power is now confidently expected. Why should we care? Why should it feature on our news?
The answer is that we helped to bring it about. Britain's three foreign wars in the past decade were uninvited military interventions to topple installed governments. All have ended in disaster.

5--NSA SEXINT is the Abuse You’ve All Been Waiting For , just security

NSA uses blackmail.

6---Israel implements "transfer" policy: Day of rage’: UK protests Israeli plan to remove 70,000 Bedouins, RT

Ethnic cleansing

7--Stock Bubble Driven by Central Banks to Burst in 2014, Analyst Warns, WSJ

Fed officials don’t offer predictions of future equity price movements. But they do believe that rising asset prices boost the so-called wealth effect. As consumers feel richer, they feel emboldened to spend more, which lifts the broader economy. To that end, they have been pursuing very aggressive bond-buying policies while offering guidance on short-term rates that suggest monetary policy will be very easy for years to come.

Over the course of this year, speculation about the Fed easing back on its bond buying generated considerable market volatility. Some officials welcomed this because they said it helped correct market complacency about future Fed policy while flushing out some pockets of excess in some corners of the bond market. But Fed officials also came to lament the move as they saw higher borrowing costs creating fresh headwinds for an economy that wasn’t growing fast enough to begin with.

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