Monday, August 25, 2014

Today's links

1---BOJ’s Kuroda Sees Pickup in Global Growth, Japanese Exports, wsj


(More of the same)  We at the Bank of Japan do not think it is necessary to change our economic forecast for coming years,” Gov. Haruhiko Kuroda told reporters Friday on the sidelines of the Kansas City Fed’s conference in Jackson Hole, Wyo., even though exports have stalled of late and the economy stumbled more than expected in the second quarter after the introduction of consumption taxes.
Mr. Kuroda also said he felt that, at this point, the aggressive stimulus program launched shortly after he took over in April 2013 was sufficient, even as many investors expect the central bank to expand its campaign later this year.
“We will continue our current monetary policy, but if there is anything which could derail our course toward 2% inflation target we would not hesitate to change or adjust our monetary policy,” he said....


Japan’s economy contracted at a 6.8% annual rate in the second quarter after rising at a 6.1% rate in the first.


2--Abenomics: Japan's chronic lack of demand, JT


When it was proved that the zero interest rate and quantitative easing since 2001 failed to cure the deflation, they concluded that the Bank of Japan’s expansionary monetary policy was not expansionary enough. Hence they have brought an even more expansionary QQE (quantitative and qualitative monetary easing) into Abenomics.
They don’t seem to notice the structural stagnation of advanced economies. To explain it, former U.S. Treasury Secretary Lawrence Summers quotes Alvin H. Hansen, who asserted in the 1930s that the U.S. economy was in secular [long-term] stagnation, because consumption was largely saturated and investment opportunities were largely exhausted.


During the Japanese bubble of the 1980s and the U.S. bubble prior to the 2008 crisis, general prices remained stable. It was a sign of “chronic demand shortfall.” As the natural rate of interest (the interest rate that realizes full employment) is significantly below zero, even zero interest rate is too high. Paul Krugman calls it a “liquidity trap” situation. It is not a temporary state of affairs now, but “the new normal...


I would point out that his QQE has inherent risks that could defeat the objectives of Abenomics, which are sustainable economic growth and consolidation of the government’s debts.
First, inflation is bound to lead to higher interest rates. BOJ policy board member Takehiro Sato said in February, “It is highly possible that the long-term interest rate could rise well before the exit of QQE.” When it does, it would increase interest payments on government debt and could seriously hamper consolidation of government debt


3---Mortgage crisis is back, Dave Dayen


All told, research firm Black Knight estimates that two million modifications will face interest rate resets in the coming years, and 40 percent of those homes remain “underwater,” where the borrower owes more on the house than it is worth. Underwater homes are highly correlated with defaults and foreclosures, and this represents a giant heap of them, which will soon see what is commonly known as “payment shock”a big reset in their monthly payment. 


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Predictably, when the temporary relief fades, homeowners often go back into default. Author Keith Jurow explains that anywhere between 40 and 80 percent of modified loans have re-defaulted over the past several years.
the foreclosure crisis was never solved; it was deferred. And next year, the clock begins to run out on that deferral. 
The problem comes from many different angles. First, as the Los Angeles Times reported recently, home equity lines of creditsecond mortgages that homeowners took out during the bubble years, essentially using their homes as an ATMwill start to feature increased payments, as borrowers must pay back principal instead of just the interest. TransUnion, the credit rating firm, estimates that between $50 and $79 billion in home-equity loans risk default because of the increased payments, which could add hundreds or even thousands of dollars to payments a month.


4---Cornel West Blasts Obama Is A "Brown-Faced Clinton", , zero hedge


5---UK Islamist suspected of slaying US journalist ‘identified’, RT


6---Lavrov Says Unclear Why Kiev Not Releasing Air Traffic Recordings of Malaysia Airlines, RIA Novosti


Russia has still not received a clear explanation of why Kiev has not presented the recordings between the air traffic controllers and the crew of the downed Malaysia Airlines passenger airplane, Russian Foreign Minister Sergei Lavrov said Monday.


“There has been nothing clear in regard to the reasons of why the full presentation of recordings from the black boxes, or reasons of why the Ukrainian side with all of its airplanes that were flying along the same echelon over the region [have not been provided], and there’s nothing clear of the reasons for the inability to present this information,” Lavrov said during a briefing.
Malaysia Airlines flight MH17 crashed in eastern Ukraine on July 17 while en route from Amsterdam to Kuala Lumpur. All 298 people on board, including 283 passengers and 15 crew members, died in the crash....


Earlier in August, Malaysian Transport Minister Liow Tiong Lai said that a preliminary report on the black box findings from the MH17 crash is expected to be handed over to the United Nations in September.


7---Foley execution used to call for UK military action in Iraq, wsws


Britain’s intelligence agencies, MI5, MI6 and GCHQ, have invested billions of pounds in order to spy on every man, woman and child in the UK and have special units dedicated to all those deemed “extremists”. Following each act of terrorism committed by Islamic fundamentalists in the UK, it has soon emerged that the intelligence services knew the perpetrators in advance. This was the case in the London bombings of July 2007 and the killing of soldier Lee Rigby in May last year.
The closest relations were developed with the radical Islamist preacher Abu Hamza al-Masri, who was protected for years by the secret services before being tried and sentenced to jail in 2006. The Finsbury Park mosque in London, where Hamza preached, was heavily infiltrated by intelligence agents.
The reality is that many of those Britons who travelled to Syria to fight against Assad were allowed to do so by the British government, which was then preparing for war against Syria in alliance with the United States. The jihadists were used as the key detachment of an “internal opposition” to Assad’s regime, to destabilise Syria in preparation for a direct military intervention.
With the turn by ISIS into Iraq and its capture of large swathes of territory, this strategy was thrown into crisis. The death of James Foley is only one tragic expression of this
.....
The domestic threat from ISIS-related terrorism, for which the ruling elite is entirely responsible, is once again being used to justify further attacks on democratic rights. Home Secretary Theresa May wrote in the Telegraph, “We will be engaged in this struggle for many years, probably decades. We must give ourselves all the legal powers we need to prevail. I am looking again at the case for new banning orders for extremist groups that fall short of the legal threshold for terrorist proscription, as well as for new civil powers to target extremists who seek to radicalise others.”


8---Imperialist war in search of a pretext, wsws


the Obama administration has decided to use the Foley murder as a justification for expanding the current US air war on ISIS to targets in Syria. “If you come after Americans, we are going to come after you,” deputy national security adviser Ben Rhodes told a press conference Friday. “We’re not going to be restricted by borders.”......These reports point to the basic fact that the fundamental aim of US imperialism in the Middle East is not defeating ISIS—which, after all, is its own creation—but reinforcing its control over the entire region. Just one year ago, plans for bombing the Syrian government were put off. These plans, however, have not gone away....US imperialism seeks to maintain its domination of the oil-rich region, one of the most valuable prizes in world geo-politics
 
The Obama administration is moving rapidly towards launching air strikes against the Islamic State in Iraq and Syria (ISIS) on both sides of the Iraq-Syria border, in a major escalation of US military intervention in the oil-rich Middle East.
Reports indicate that the initial form of such attacks is likely to be drone-fired missiles aimed at Abu Bakr al-Baghdadi and other leaders of ISIS, on the model of those already carried out in Afghanistan, Pakistan, Yemen and Somalia.


“For weeks, the US military’s Central Command, which oversees Middle East operations, has advocated a more expansive, near-term air campaign targeting Islamic State commanders, equipment and military positions that US intelligence has pinpointed in Iraq,” the Wall Street Journal reported Thursday, quoting one top official’s mantra: “Hunt while the hunting’s good.”
The drive to war is a measure of the crisis facing US imperialism in the Middle East, after a quarter century of escalating intervention, characterized by the combination of recklessness and brutality that is the particular specialty of the American ruling class....


the US directly aided, armed and trained Syrian “rebel” fighters who went on to form the core of ISIS, seeking to deploy them to overthrow the Assad government there.
Perhaps the most important feature of the political crisis facing the Obama administration in Iraq and Syria is that no amount of government-media war propaganda has been able to shift US public opinion. The American people are adamantly opposed to new military adventures in the Middle East, a sentiment that reflects both the thoroughly justified mistrust of the warmongers in Washington, and the mounting social crisis within the United States itself.
This deep-rooted social opposition means that the Obama administration’s plans for Syria and Iraq remains a war in search of a pretext. Over the past month, a series of provocations have been staged in an increasingly desperate effort to manufacture support for wider military action in the Middle East


9---Outrage To a Beheading: Shared Callousness and the Modern War Zone, eric Margolis


Was Foley’s head really cut off? Hard to tell. We have been fed so much fake government war propaganda in recent decades – from Kuwaiti babies thrown from incubators to Saddam’s hidden nukes – that we must be very cautious.
Look at the horrifying pictures of victims from Gaza: babies with heads blow open and bodies torn into pieces by heavy 155mm shells. What’s the difference between this and a decapitation? Only distance between killer and victim.
....


 on the same day Foley was allegedly being decapitated, 19 people in Saudi Arabia, a close US ally, were publicly beheaded for various crimes. One of the men was executed for witchcraft. There was no outcry at all over this medieval horror. Saudi Arabia is suspected of charging political opponents of the monarchy with drug offenses, which carry the penalty of beheading by a sword-wielding executioner. Not a peep about this in the US media trumpeting the Foley story.


10---Why Washington’s War on Terror Failed, counterpunch


Jihadi groups ideologically close to al-Qa‘ida have been relabeled as moderate if their actions are deemed supportive of U.S. policy aims. In Syria, the Americans backed a plan by Saudi Arabia to build up a “Southern Front” based in Jordan that would be hostile to the Assad government in Damascus, and simultaneously hostile to al-Qa‘ida-type rebels in the north and east. The powerful but supposedly moderate Yarmouk Brigade, reportedly the planned recipient of anti-aircraft missiles from Saudi Arabia, was intended to be the leading element in this new formation. But numerous videos show that the Yarmouk Brigade has frequently fought in collaboration with JAN, the official al-Qa‘ida affiliate. Since it was likely that, in the midst of battle, these two groups would share their munitions, Washington was effectively allowing advanced weaponry to be handed over to its deadliest enemy. Iraqi officials confirm that they have captured sophisticated arms from ISIS fighters in Iraq that were originally supplied by outside powers to forces considered to be anti-al-Qa‘ida in Syria.


11---NYT presses for regional war in ME, NYT


ISIS has received financing from donors in Kuwait and Qatar. Saudi Arabia funneled weapons to Syrian rebels and didn’t care if they went to ISIS. Turkey allowed ISIS fighters and weapons to flow across porous borders. All of that has to stop...


Creating a regional military force may be required, including assistance from the Gulf Cooperation Council countries and Turkey. It certainly will require money, intelligence-sharing, diplomatic cooperation and a determined plan to cut off financing to ISIS and the flow of ISIS fighters between states. France’s suggestion for an international conference deserves consideration.

No matter how many American airstrikes are carried out — Mr. Obama is also considering strikes against ISIS in Syria — such extremists will never be defeated if Muslims themselves don’t make it a priority. To their credit, some leaders are speaking out. Among them is Saudi Arabia’s highest religious authority, the grand mufti, who called ISIS and Al Qaeda the “enemy No. 1 of Islam.”
But they must go further and begin a serious discussion about the dangers of radical Islam and how ISIS’s perversion of one of the world’s great religions can be reversed.

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