Non-RW listeners in largest and most progressive media markets to be almost completely unserved over our publicly-owned airwaves
 
3---Abenomics update: Weak Yen policy could Doom Japan, WSJ
 
Japan may still be the world’s largest creditor nation, but it is likely to starting losing some of its wealth within the next couple of years, as its broadest trade measure lurches closer to its first annual deficit in more than 30 years.....
 
Japan has posted a current account surplus every year since 1981, on the back of its strong exports and overseas investment income.
While the monthly figures so far this year suggest the current account will stay in the black in 2013, economists see a trend of regular deficits becoming clearer over the next couple of years.
Part of Japan’s current account problems stem from the surge in imports of fossil fuels needed to make up for the loss of nuclear power, after reactors were shut down following the tsunami-triggered Fukushima nuclear accident. Those imports are weighing heavily on the trade balance. But other factors are also in play behind the changes in Japan’s current account balance.
 
In October, foreigners were net buyers of Japan stocks to the tune of ¥814.8 billion. In November, their net buying reached a whopping ¥2.6 trillion, the biggest since April, amid continued hopes for Abenomics — Prime Minister Shinzo Abe’s bold pro-growth policies. The inward flow of money helped boost the volatile capital account, which together with the current account comprises the balance of payments. The overall capital account recorded a surplus of ¥407.3 billion.
But the scale of such flows into Tokyo stocks can’t continue indefinitely.

At the same time, though, a fall in Japan’s income should also lead to a fall in consumption, a factor that could ease current account fears. But that’s not the case at the moment.
Takashi Shiono, economist with Credit SuisseCSGN.VX -0.30%, notes that Japan’s consumption remains buoyant.
“Retired people are supporting consumption growth by running down their savings,” Mr. Shiono said.

Still, he notes that consumption is likely to be hit by two increases in the sales tax over the next couple of years. That means the longer-term trend of current account deficits may not become clearer until the beginning of 2016, Mr. Shiono said.

The long-run consequences of regular current account deficits could be profound. With fewer domestic savings to invest in bonds, Japan could become more reliant on foreign investors to finance its debt. That might not present a problem if there is sufficient overseas demand for Japanese bonds. But if that’s not the case, interest rates would rise.

4---US corporate spreads lowest in 6 years, sober look

More confirmation of asset bubbles

5---Japan disinflation spreads to US, Bloomberg

The opposite is happening in the U.S. Since reaching a three-year high of 3.9 percent in September 2011, consumer price gains have slowed. In October, prices rose 1 percent from a year earlier, according to a Nov. 20 Labor Department report.
The Fed’s preferred measure of U.S. inflation, the personal consumption expenditures deflator, showed last week that prices rose 0.7 percent in October, the least since 2009. The gauge has failed to meet the Fed’s 2 percent target for 18 months.

Going Long

“The Japanese have experience with 15 years of disinflation,” Hideo Shimomura, who oversees about $59 billion as chief fund investor at Mitsubishi UFJ Asset Management Co. in Tokyo, part of Japan’s largest publicly traded bank, said in a telephone interview Nov. 26. “Now it is spreading to the U.S. It’s worthwhile to take long-end risk in portfolios.”.....

Honed by 15 years of falling consumer prices that burnished the appeal of fixed-income assets in Japan, the Asian nation’s bond buyers are amassing long-term Treasuries (BUSY13) as disinflation emerges in the U.S.
Led by Mizuho Asset Management Co., at least five money managers that oversee a combined $236 billion are snapping up Treasuries due in about a decade as inflation-adjusted yields approach the highest level since 1998 relative to Japanese government bonds. Japan’s holdings of U.S. debt rose by $98.2 billion last quarter, the second-largest increase since the Treasury Department began releasing the data in 2000. ...

While Pacific Investment Management Co.’s Bill Gross is recommending short-term U.S. debt, Japanese bond investors are finding value in longer-dated Treasuries as U.S. consumer prices rise the least since 2009. Prime Minister Shinzo Abe’s stimulus policies are also weakening the yen by the most in three decades this year, bolstering the allure of dollar-based assets.
“There’s tremendous deflationary pressure in the U.S.,” Yusuke Ito, a senior fund manager at Mizuho Asset, which oversees about $32 billion, said in a telephone interview from Tokyo on Dec. 4. “For bonds, the longer the maturity, the better” as slowing inflation preserves the purchasing power of fixed-rate interest payments.
Ito said the firm held most of its U.S. debt in Treasuries due in five years and more and predicts yields on the 10-year notes will fall to 2.1 percent by the middle of 2014 from 2.86 percent last week. Mizuho Asset’s holdings also had a longer average maturity than those in the benchmark index it uses to gauge performance, he said.

Foreign Demand

Increased foreign demand may help temper any selloff in Treasuries when the Fed curtails its $85 billion in monthly purchases of Treasuries and mortgage-backed debt. ...

The U.S. has relied on foreigners, who own about 50 percent of America’s obligations, to help finance deficits as increased government spending since the credit crisis more than doubled the debt outstanding to a record $11.8 trillion.
Yields on 10-year Treasuries have climbed more than a percentage point this year, after reaching an all-time low of 1.38 percent in 2012, on signs the economy is strengthening enough for the Fed to start scaling back its stimulus.
The U.S. 10-year note yield rose 0.11 percentage point last week, according to Bloomberg Bond Trader prices, as a government report showed the jobless rate fell to a five-year low of 7 percent in November and employers added more workers than forecast. The price of the 2.75 percent bond due in November 2023 fell 30/32, or $9.38 per $1,000 face amount, to 99 3/32. Treasuries were little changed today as of 12:43 p.m. in Tokyo.

Fleeing Japan

With the annual inflation rate at 1 percent in the U.S., real yields for 10-year Treasuries are now about 1.85 percent, data compiled by Bloomberg show. That’s about 2.3 percentage points more than in Japan, where the inflation rate exceeds the 10-year bond yield by 0.43 percentage point. ...

Japanese holdings of U.S. government debt rose last quarter by the most since they boosted investments by a record $102.4 billion in the same period in 2011, Treasury Department data compiled by Bloomberg show. That lifted the total stake to an unprecedented $1.18 trillion. Japan trails only China as the largest foreign owner of Treasuries.

6---Governments Admit They Carry Out False Flag Terror, washingtons blog

7---Democrats wouldn't reject U.S. budget deal over jobless aid: senator, Reuters

8---Fed closer to strategy for tapering bond buying, FT

The US Federal Reserve is closer to a strategy for the wind down of its $85bn-a-month asset buying programme, although the odds of a December slowing are finely balanced.
The nature of the plan under discussion would see the Fed add extra monetary easing by another means, at the same time as winding down asset purchases, with a goal of a broadly neutral effect on financial conditions....

Other complications in making a decision to taper include reaching an agreement on an offsetting policy action, lower market liquidity near Christmas, and weakening inflation data. The Fed's preferred inflation measure is up by only 0.7 per cent on a year ago


9---Blow for Abenomics as Japan downgrades growth, Telegraph

Japan is now thought to have grown 1.1pc in the July to September quarter, down from earlier estimates of a 1.9pc expansion....

Japan's economy grew less than previously thought in the July to September quarter.
GDP grew by 0.3pc in the third quarter of the year, against an initial estimate of 0.5pc and lower than expectations of 0.4pc.
The revision brings annualised growth to 1.1pc in the July to September quarter, down from earlier estimates of a 1.9pc expansion.
 
The downgrade is a blow to prime minister Shinzo Abe, especially since the earlier, higher, estimate had credited large scale public investment, the first of his so-called "three arrows" for boosting the sluggish economy.
Mr Abe swept into power last year on promise to catapult the Japanese economy out of a decades-long slump, but his policies have met with mixed success.

The other two "arrows" of his strategy, known as Abenomics, are aggressive monetary easing and structural reforms.
In April the Bank of Japan unleashed a massive ¥60 - ¥70 trillion (£355 - £415bn) a year stimulus, in an bid to double the country's money supply and get inflation to a 2pc target within two years. The move sent the yen to a five-year low against the dollar and has boosted exports.

However, Mr Abe disappointed markets with his third arrow - structural reforms - with a lack of detail in how he would go about achieving his stated goal of boosting incomes by 3pc every year.
Meanwhile in China, inflation posted a surprise drop in November, giving the central bank more breathing space to keep monetary policy loose.
Consumer prices fell for the first time in six months in November, down 0.1pc. Year-on-year inflation eased to 3pc, down from an eight-month high of 3.2pc in October. 

10---Crisis in Ukraine, wsws

Ukraine is one of Europe’s poorest countries, with the world’s second-highest mortality rate (15.75 per 1,000, second after South Africa). Social anger is rising after a budget crisis led the Yanukovich government to cut off unemployment insurance to hundreds of thousands of workers in June.

The major banks and financial markets have cut off lending to Ukraine, which is expected to need $18 billion in emergency financing by March. The state currently has enough financing only for two months of operations. There is rising fear of a possible new devaluation of the national currency, the hryvnia, which collapsed during the hyper-inflation of the early 1990s, following the dissolution of the USSR in 1991 and the restoration of capitalism by the Stalinist bureaucracy.

The EU is working with the International Monetary Fund (IMF), demanding deep austerity measures—a 40 percent increase in gas and heating prices, state budget cuts, and freezes on minimum and average wages—in exchange for a $15 billion loan. These cuts aim to deepen the exploitation of the working class and make Ukraine more profitable for European businesses that would set up operations after Ukraine established closer relations with the EU.

The pro-EU and pro-Russian oligarchic factions are both maneuvering to keep the billions they looted from the theft of state property and the restoration of capitalism and to place the full burden of the financial crisis on the working class. This is the more fundamental reason why the Yanukovich government has not sought to mobilize other social layers against the right-wing, pro-EU protests.

The feuding between these different oligarchic factions offers free play for manipulation by European imperialism, which—while it savagely loots Greece and tramples on mass popular opposition to austerity at home—hypocritically poses as the defender of democracy in Ukraine.

11--Mission Accomplished?  Al-Qaeda Surging Across Iraq, antiwar

Solidifying Hold on Syria Towns, AQI Aims to Carve Out Iraqi Territory