Saturday, May 31, 2014

Today's Links

1--No, China Isn't Really Rebalancing, Bloomberg

Beijing is pulling out all the stops to do what Xi and Li have vowed not to do. The People's Bank of China, for example, is asking lenders to approve mortgages faster and seems poised to continue “targeted easing,” including reserve-ratio cuts for some banks and bond purchases. Those are hardly the actions of monetary authority withdrawing excessive liquidity. What's more, economists at Nomura and Standard Chartered are predicting a nationwide reserve-ratio cut next quarter. Barclays thinks the odds of a significant monetary easing in coming weeks, such as “targeted” interest-rate or reserve-ratio reductions, are rising.

2---The Big Hoax Of The Wall Street Hype Machine , Testosterone Pit

The S&P 500 index keeps bumbling from one all-time high to the next as corporations are issuing record amounts of debt to spend record amounts on buying back their own shares: $160 billion in the first quarter alone, according to CapitalIQ. Borrowing money to buy back shares and hyping it ceaselessly as “returning value to the shareholders” is the most effective way to manipulate up the stock, even if revenues are declining quarter after quarter....

for Q1 this year, the S&P 500 companies that have reported earnings so far generated an adjusted ex-bad-items pro-forma earnings growth of 2.1%. After inflation, there isn’t much left.
Nevertheless, analysts are currently estimating earnings growth of 10.1% in Q4 this year, a number they pulled out of thin air. But they’ll be busy over the next few months lowering their numbers to something that the most the companies can actually exceed, to give their stocks the momentum needed to rise to the next new high. Meanwhile, these “forward” EPS estimates, like today’s 15.4 for the S&P 500, are bandied about passionately as rationalization for the gravity-defying large caps that make up the index. Beneath the slick surface, momentum stocks and small-cap stocks are already re-experiencing the vertigo-inducing effects of gravity – the game doesn't work forever.

3---US moves towards sanctions as Venezuela charges coup plot, wsws

4---VA secretary resigns amid push to privatize US veterans’ health care, wsws

Rep. Jeff Miller (Republican of Florida), chairman of the House Veterans Affairs Committee, stated, “We have an opportunity now to transform the way the VA does business.” His committee, which has already moved legislation through the House giving the VA secretary greater authority to fire or demote senior VA executives, says he intends to bring legislation that would allow veterans who have been waiting more than 30 days for an appointment to receive medical care through private doctors and hospitals.

Under the “Veterans Choice Plan” being promoted by Rep. Andy Harris (Republican of Maryland), veterans could either choose to continue receiving care through the VHA or go to a private provider of their choosing. In what amounts to a voucher system, the federal government would cover the cost of insurance premiums and some out-of-pocket costs, depending on a veteran’s priority ranking.
Harris, who will send his plan to the House Veterans’ Affairs Committee within the week, believes it would be “budget neutral” or might even reduce veterans’ health spending. In other words, the VHA would be deprived of funds while money is diverted directly into the pockets of the private insurers and health care industry.

House Minority Leader Nancy Pelosi (Democrat of California), voiced her support Thursday for privatizing more health care services for veterans. “I don’t have any problem with that,” she told reporters in the Capitol. Commenting on Rep. Miller’s plan, she said, “It isn’t a panacea, but I would certainly be open to that because of volume [at the VHA] and because of geography.”

Pelosi said she was not concerned that Republican proposals threatened the dismantling of the VA system in favor of the private health care sector. “I don’t think that’s how they see it,” she said, urging others in Congress to “think in a bigger way” about medical care for veterans.....

These privatization plans are strikingly similar to the proposal by House Budget Committee Chairman Paul Ryan (Republican of Wisconsin) to set up a voucher system for Medicare. His plan, which would provide a stipend for individuals to purchase private insurance, is aimed at gutting and ultimately dismantling the government-run national insurance program for the elderly and disabled.

A number of veterans groups are opposed to moves to privatize veterans’ health care precisely because they threaten funding for the current VHA system and the specialized care the network of hospitals and clinics was designed to provide. Joe Violante, national legislative director for Disabled American Veterans, told, “The more money we spend out on the private sector on veterans, the less money there is to care for those that are within the system.”...

The moves to privatize veterans’ health care underscore the hypocrisy of the bipartisan glorification of soldiers and veterans. It also sets a precedent for privatizing Medicare and Medicaid, the federal-state health care program for the poor.

5---Japan's working poor left behind by Abenomics, Reuters

6---America's homeless: The rise of Tent City, USA, CNN

7--Everything put forward by Obama is a repudiation of international law and an endorsement of the policy of aggressive war practiced by the Nazis three-quarters of a century ago., wsws

“The United States will use military force, unilaterally if necessary, when our core interests demand it—when our people are threatened, when our livelihoods are at stake, when the security of our allies is in danger… International opinion matters, but America should never ask permission to protect our people, our homeland, or our way of life.”...
When he speaks of “our livelihoods” and “our way of life,” he is referring not to the ever-declining living standards of the American worker, but to the eight-figure compensation packages of American CEOs, whose fortunes are founded on the exploitation of the working populations and resources of the entire planet.
The US president went on to assert the right to launch wars even where no case could be made that there was any threat posed to the US, but rather where there were issues that “stir our conscience...

while touting “America’s support for democracy and human rights” wherever Washington seeks to carry out regime-change, Obama included a specific exception for the Sisi regime in Egypt, which overthrew an elected president, has murdered thousands, jailed tens of thousands and outlawed the country’s largest political party. “In countries like Egypt, we acknowledge that our relationship is anchored in security interests,” he said...

The speech comes in the immediate wake of congressional testimony in which administration officials asserted that the president has unlimited powers to launch wars and carry out drone assassinations, including against American citizens, with no need for either congressional authorization or judicial approval. This only makes explicit what is already Washington’s modus operandi, in which Congress is nothing more than a rubber stamp for the US war machine.

The executive, embodying the power of the military-intelligence apparatus, has the right to do virtually anything. But what rights are left to the American people? Those that remain are being rapidly erased. The last vestiges of democracy must be dispensed with in order to impose conditions of war, inequality and economic austerity opposed by the vast majority of the population.

8---New Allende Overthrow Info Reconfirms US Suppresses Economically-Rebellious Democracies , Truthout

The placement of Pinochet in power led to a brutal reign that resulted in the imprisonment, torture and murder of thousands of Chilean citizens considered Allende supporters.
In addition, Henry Kissinger (in his roles as National Security Advisor and then Secretary of State) oversaw US support for the heinous and barbaric Operation Condor.  This was a US-approved (although Kissinger denies it, of course) backing of military governments in the Southern Cone nations in South America. The result was a murderous purge of anyone suspected of sympathizing with alternative economic systems to capitalism or even of populist governments that were run by the non-ruling elite.

In Argentina, the unimaginable horrors included torturing pregnant women until they gave birth. After a woman delivered, she was killed and her child given up for adoption to a military family.  Argentina also flew regular flights over the the Rio de la Plata during which suspected "subversives" were bound, drugged and then dropped from a high altitude into the water below.

Many families in Chile still do not know the fate of the "disappeared ones," who were often taken from their homes at night and never heard from again. Estimates of persons tortured and executed during Operation Condor in the Southern Cone countries range up to 50,000 (a firm figure is not available due to the covert nature of the atrocities).
This is only a sampling of the horror that the US unleashed in aiding the suppression of populist democracies in South America in the '70s

The US seems caught in a Japan-style trap, endlessly masking the effect by stealing a little extra growth from the future with artificial stimulus...

The Fed has cut its bond purchases from $85bn to $45bn a month, and is expected to halt quantitative easing altogether by October as it pares back $10bn at each meeting. The taper is clearly chipping away at a key prop of the economy. The stock of narrow M1 money has not grown for four months, and M1 velocity has fallen to an all-time low of 6.3.

John Hathaway, from the Tocqueville Gold Fund, said the Fed may find it cannot extricate itself from QE without aborting the recovery. “The US economy is quite anaemic. There's a good chance that they may have to reverse their course on tapering,” he told CNBC

10---Rob Urie, Counterpunch
Graph (5) above: Part of the explanation that the Federal Reserve gives for policies favoring the rise in financial asset prices is the ‘wealth effect,’ the tendency for people to spend more because they feel richer when stock prices rise. While some statistical analyses suggest that this may be true, who benefits from rising stock markets are the people who own stocks. As is illustrated above, the richest twenty-percent of households own almost all of the stock market. Again, as with income distribution, the true concentration of ownership of financial assets is at the very top of the top ten percent

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