Friday, September 12, 2014

Today's Links

1--Lavrov: West may use ISIS as pretext to bomb Syrian govt forces, RT

2--Strelkov; Press conference, Saker

3--Naftogaz: Ukraine Needs to Either Save Gas or Buy It From Russia in Winter, RIA Novosti

4---Obama announces open-ended war in Iraq and Syria, wsws

5---OSCE observers register no troops, amunition crossing Russia-Ukraine border, Itar Tass

Observers from the Organization for Security and Cooperation in Europe (OSCE) have registered no troops, ammunition or weapons crossing the Russian-Ukrainian border over the past two weeks, the OSCE report said on Wednesday.
“Throughout the week, the Observer Teams noticed a net increase of young people (both men and women) wearing military-style dress crossing the border in both directions but did not observe any weapons among these groups,” the OSCE Special Monitoring Mission’s report covering a period from August 20 to September 3 said.

The observers said they had regular interactions with supporters of the self-proclaimed republics. “Some discussed openly with the OSCE while others expressed their total mistrust toward the OSCE. At both Border Crossing Points, some supporters of the self-proclaimed republics explained that they are not allowed to cross the border with weapons,” the report said.
The observers registered a decrease in helicopter sightings compared to last week but they were still observed at border crossing points flying at low altitude along the border.
“In either case, in as far as could be seen, the aircraft did not violate the Ukrainian.

6--Nonsense!’ Moscow mocks Kiev’s ‘intelligence’ on killed Russian troops in Ukraine, RT

7---Abe needs more stimulus to raise sales tax, adviser Itoh says, JT

8--‘Smart Money’ Unloads, Sits on Cash, Waits for Stocks to Swoon, wolf street

9--George Soros Warns "This Is The Worst Possible Time" For Scottish Independence, zero hedge

10--Russia, US stress importance of preserving INF Treaty, itar tass

11---Obama’s speech on ISIS: Perpetual war in Iraq, Syria and beyond, wsws

In his speech Wednesday night to the American people, President Obama presented a perspective of open-ended and unlimited military conflict throughout the Middle East and beyond.
“This counterterrorism campaign will be waged through a steady, relentless effort to take out ISIL wherever they exist,” Obama said, thereby declaring that there is no geographical limitation to the new US military intervention. Besides Iraq and Syria, Jordan, Lebanon, Saudi Arabia and Turkey are all potential arenas for battle...

The real reasons for the new US intervention in the Middle East are the same as those that drove the Bush-Cheney administration in the previous round of bloodletting: the drive of American imperialism to control oil resources and maintain a dominant strategic position in the Middle East and, more broadly, the entire Eurasian continent....

In pursuing its objectives in the Middle East, Obama’s pledge not to resort to “boots on the ground” has zero credibility. Already, hundreds of US troops and advisors have been dispatched to the region. Even before Obama went on national television, his secretary of state, John Kerry, was telling a Baghdad press conference that US combat troops would not return to Iraq unless “obviously, something very dramatic changes.” As former Democratic congressman Lee Hamilton, a fixture in the foreign policy establishment, observed, “That’s a loophole a mile wide.”....

He argued instead, “If left unchecked, these terrorists could pose a growing threat beyond that region, including to the United States.”
This amounts to a full-scale embrace of the doctrine of preventive war, espoused by Bush and Cheney as the basis for the invasion and conquest of Iraq. This doctrine is in direct defiance of international law, which forbids any country to justify a war of aggression by claiming to be responding to a potential threat arising in the future, rather than in actual self-defense. The launching of such wars is the principal crime for which the Nazi leaders were indicted and convicted at the Nuremberg Tribunal.

Moreover, White House officials have argued that Obama has “all the authority he needs” to escalate the war against ISIS, citing the 2001 Authorization for the Use of Military Force (AUMF) adopted by Congress after the 9/11 attacks. Here again, Obama follows in the footsteps of Bush and Cheney, who used the AUMF as an all-purpose justification, not only for military action overseas, but also for mass surveillance and indefinite detention at home
As always, decisions that effect the lives of hundreds of millions of people have been decided behind closed doors, by a small cabal, with plans drawn up in advance presented as a fait accompli to be rubber stamped by Congress and sold by the media on the basis of lies.
In pursuing its objectives—what Obama referred to as the “core interests” of the United States—the ruling class operates without any legal constraint.

12---Next phase of war on terror---Obama's plan to launch preemptive war against Iran, Syria, Russia in violation of international law, the UN., wsws

The Obama administration is pressing for Congress to authorise $500 million to train and equip anti-Assad militias, which is likely to proceed quickly with bipartisan support. At the same time, US Secretary of State John Kerry is touring the Middle East to enlist political and military support for anti-Assad forces inside Syria....

The presence of the new Iraqi foreign minister is significant because Saudi Arabia branded the previous Baghdad government headed by Prime Minister Nouri al-Maliki as an Iranian puppet and cut diplomatic relations. Washington’s determination to oust Maliki to make way for “a more inclusive government,” formed this week, was aimed at drawing Iraq toward Saudi Arabia and other Arab states, and isolating Iran...

Kerry, who met with new government ministers in Baghdad on Wednesday, underlined how critical Maliki’s removal was to Washington’s war plans. “Now that the Iraqi parliament has approved a new cabinet with new leaders and representative from all Iraqi communities, it’s full speed ahead. A new, inclusive Iraqi government has to be the engine of our global strategy against ISIL.”

While repeating the line that the US would not deploy combat troops, Kerry left the door wide open by adding the rider, “unless, obviously, something very, very dramatic changes.” Dramatic changes are virtually inevitable as the US plunges recklessly into a military conflict in Iraq and Syria. If a sufficiently dramatic event does not emerge, it can always be provoked or manufactured.

The governments in Syria, Iran and Russia understand that they are the targets of this phony new “war on terror.” Syrian National Reconciliation Minister Ali Haidar declared yesterday that “any action of any type without the approval of the Syrian government is an attack against Syria.” Haidar insisted “there must be cooperation with Syria,” but Obama has emphatically ruled that out...

Russia’s foreign ministry warned that any US action, “in the absence of a UN Security Council decision, would be an act of aggression, a gross violation of international law.” Obama has indicated that, while he will seek a UN resolution, the US is prepared to act without it. Already confronted by the intervention of the US and its European partners in Ukraine, Russia now faces the prospect of losing its only ally in the Middle East and access to a Mediterranean port for its naval vessels.

Just as the 2003 invasion of Iraq was never about weapons of mass destruction, so the latest US military intervention in the Middle East has nothing to do with fighting terrorism but is aimed at securing American domination throughout the region. A decade on, under conditions of greatly heightened geo-political tensions, this new expanded war of aggression threatens to embroil the entire region and trigger a far broader conflagration.

13---SCO Declaration demonstrates common views on Ukraine — Putin, itar tass

14---Sergey Lavrov: Throwing Russia off balance is ultimate aim, itar tass

Some partners in the West – not all of them – have been trying to use the deep crisis of Ukrainian statehood for the purpose of "containing" Russia, for isolating us, and thereby tightening their looser grip on the international system. The world is changing, the share of the United States and Europe in the global GDP is shrinking, there have emerged new centers of economic growth and financial power, whose political influence has been soaring accordingly. As concerns economy, there seems to be growing awareness of that. The G20 group has been created. In 2010 the G20 made a decision to reform the International Monetary Fund to redistribute quotas from the Western countries so that new, growing economies can receive a little bit more quotas. Then the crisis began to ease somewhat and the United States and the European Union these days are in no mood to stand by those arrangements. Now they are determined to retain positions within the IMF that are by no means proportionate to their real economic potential in the world. A really tough struggle is underway for keeping unchanged the state of affairs in which the Western civilization determines the shape of the world order. This is a faulty policy with no chances to succeed, objective processes are developing in opposite direction. The world is getting really polycentric. China, India, Brazil, the ASEAN countries, Latin America and, lastly, Africa – a continent with the richest natural resources – all begin to realize their real significance for world politics. There will be no stopping this trend. True, it can be resisted, and such attempts are being made, but it is really hard to go against the stream. This is the cause of many crises.....

Everybody knows the root causes of the crisis: we were not being listened to, Kiev was forced into signing arrangements with the European Union, which had been drafted behind the scene and, as it eventually turned out, were undermining Ukraine's obligations on the CIS free trade area. When Viktor Yanukovich took a pause for a closer look at the situation, the Maidan protests were staged. Then there followed the burning tires, the first casualties and an escalation of the conflict…

 For our western partners “the law is an axle – it turns the way you please if you give it plenty of grease,” as a Russian saying goes. I would like to drive the message home: international law requires both development and interpretation. Someone said with a good reason there are as many opinions as there are lawyers. But certain things are indisputable. Either you refrain from supplying weapons to Libya and thereby honor the UN Security Council resolution, or you sell them… It was both NATO countries and some countries of the region that have abused the embargo. The United States is positioning itself as the citadel of freedom, but quite often it is very far from truth, to put it mildly... In other words, the international system is in commotion, its basics are being shaken loose and rather strongly…

President Obama, Secretary of State John Kerry, and the entire western media claim that there Russian soldiers in Ukraine fighting the Ukrainian Army. In contrast, the official observers from the Organization for Security and Cooperation in Europe (OSCE) whose task is to monitor the border between Russia and Ukraine say they have "no proof" of  troops, ammunition or weapons crossing the Russian-Ukrainian border over the past two weeks.
“Throughout the week, the Observer Teams noticed a net increase of young people (both men and women) wearing military-style dress crossing the border in both directions but did not observe any weapons among these groups,” the OSCE Special Monitoring Mission’s report covering a period from August 20 to September 3 said.

The observers said they had regular interactions with supporters of the self-proclaimed republics. “Some discussed openly with the OSCE while others expressed their total mistrust toward the OSCE. At both Border Crossing Points, some supporters of the self-proclaimed republics explained that they are not allowed to cross the border with weapons,” the report said.
The observers registered a decrease in helicopter sightings compared to last week but they were still observed at border crossing points flying at low altitude along the border.
“In either case, in as far as could be seen, the aircraft did not violate the Ukrainian

Russia had pressed for the ceasefire to avoid further sanctions. It was an offer to the "western" side to step back from the cliff of an economic war. Obama and NATO tried to sabotage the ceasefire through false claims of a Russian invasion and other propaganda. But the Ukrainian president had to ignore the pressure from Washington and Brussels or he would have lost another city, Mariupol, to the insurgents.
The main Russian reason to support the ceasefire, to hold back sanctions, has now vanished.....This is another catastrophic and escalating EU move with regards to Ukraine and Russia. This turns the conflict into an economic war between the EU and Russia in which no side can win
Ukraine: As Economic War Escalates, Fighting May Resume Soon

Obama did not tell Americans that Qatar, Kuwait, the UAE and Saudi Arabia all have a hand in the financial growth of ISIS....
Obama did not tell Americans that Russia and Iran sternly oppose a violation of Syrian sovereignty without coordination with Damascus.....
Obama did not tell Americans that Russia will go to war if the U.S. attacks Syria...

Wednesday, September 10, 2014

Today's Links

1---The Buyback Party Is Indeed Over: Stock Repurchases Tumble In The Second Quarter, zero hedge

QE has been an essential driver for the equity market, providing the fuel for the heavy corporate bond issuance being used for share buybacks. Companies themselves have been the only substantive buyers of equity, but the most recent data suggests that this party is over and as profits also stall out, the equity market is now running on fumes."

We have now done the math and compiled the Q2 earnings for the S&P 500 and we can indeed confirm that (at least in the second quarter) the buyback part is not only over but has ended with a thud, with the total notional amount of buybacks completed in Q2 plunging by 27% in Q2 to "only" $117 billion - the lowest since Q1 of 2013!

This is what Edwards said in his latest note:
Much has happened over the summer, but two landmark firsts have occurred only recently, with the S&P500 breaking above 2,000 and the 10y bund yield breaking below 1%. Our Ice Age thesis has long called for sub-1% bond yields and I see this extending to the US and UK in due course. It is the equity markets where I have been consistently surprised. QE has been an essential driver for the equity market, providing the fuel for the heavy corporate bond issuance being used for share buybacks. Companies themselves have been the only substantive buyers of equity, but the most recent data suggests that this party is over and as profits also stall out, the equity market is now running on fumes
In other words, while QE has been the permissive factor enabling companies to engage in zero cost debt-funded stock repurchases, it was corporate CFOs and Treasurers who, in lieu of traditional retail and institutional buyers, have been the marginal buyers of stocks in the tail end of the most ridiculous, rigged, and as CNBC likes to call it, "unloved" rally of all time
For when the funding for corporate bond issuance stops (for whatever reason, i.e. QE ends), share buybacks also stop and one of the biggest drivers for the equity bull market is removed.

The equity bubble has disguised the mountain of net debt piling up on US corporate balance sheets (see charts below). This is hitting home now QE has ended. The end of the buyback bonanza may well prove to be decisive for this bubble. Indeed - is that a hissing I can hear?

2---Chart of the Day - US High Yield issuance and debt outstanding , macronomy

We often hear about strong balance sheets of US corporates and their "cash" levels as the second main driver (after the Fed) for the current low volatility environment. It is indeed the case but, one must not forget about the on-going massive releveraging taking place, notably to fund buybacks via debt issuance.

As long as cash flows and margins stay on current levels, the rising gross debt levels on balance sheets do not affect ratios such as Debt/Ebitda as per the below graph from the same UBS report:
- source UBS

But, should the US experience a strong economic slowdown, you have to remember that this high level of debt can back and haunt you, particularly in the High Yield segment as in the period 2002-2003

4--2---Piling on the leverage , Bloomberg

With more banks driving down the cost of borrowing, investors are loading up with debt. Loans now account for about 40 percent of the purchase price in transactions of more than $500 million, up from about 25 percent before the crisis, said Nicolas Lanel, managing director and European head of private capital advisory at Evercore in London. ...

If an investor buys a portfolio of leveraged-buyout funds at face value, using debt to fund about 40 percent of the purchase price, the return could be more than 1.6 times the original investment, compared with 1.3 without, said Thomas Liaudet, a partner in London at Campbell Lutyens, which advises investors on secondary transactions.
“The increase in returns is largely a result of the increase in leverage being put into transactions,” he said.

5---Dutch report into Ukraine jetliner disaster continues cover-up, wsws

not one word of anything reported regarding the fate of flight MH17 can be taken at face value. All of those involved in the investigation and its coverage have a vested interest in asserting Russia’s responsibility, at least indirectly, for the plane being shot down.....

The DSB does not address the absence of any satellite imagery or radar data, or any other evidence supplied by US intelligence agencies, which operate the most powerful global surveillance network. It is implausible, to say the least, to imagine that Washington’s vast apparatus was paying no attention to the war zone of eastern Ukraine, which is also a regular flight path for many commercial airline flights.

Moreover, the US was heading a 10-day NATO exercise in the adjacent Black Sea, which concluded the day MH17 was downed. This operation specifically involved commercial traffic monitoring with sophisticated electronic intelligence and “reaction to asymmetric threat warnings, anti-submarine warfare and artillery firing.”
In sharp contrast, following the bombing of Pan Am Flight 103 over Lockerbie, Scotland, in 1988, photographs of the area taken by a French satellite were delivered to the investigators within hours. The US Department of Defence and NASA also provided the investigation with high-resolution photographs from spy satellites.
The DSB’s report states that, in accordance with the stated “sole objective” of “the prevention of similar accidents and incidents,” it does not “apportion blame or liability in respect of any party”—something that the capitalist media downplays or ignores.

The only basis on which the media can again repeat their assertions that pro-Russian separatists were responsible is the report’s statement that “The damage observed in the forward section of the aircraft appears to indicate that the aircraft was penetrated by a large number of high-energy objects from outside the aircraft” (emphasis added).

But the report never once identifies what it means by “high-energy objects.” It also claims that, even though enough of the wreckage was recovered to confirm that the aircraft appears to have been particularly badly hit above the level of the cockpit floor, DSB investigators supposedly failed to recover or study any of the objects that penetrated the plane....

The report as issued is equally compatible with radar and satellite data presented July 21 by the Russian military, indicating that a Ukrainian SU-25 fighter jet was in the immediate vicinity and ascending towards MH17 as it was shot down. Missiles and machinegun rounds fired by an SU-25 are also “high-energy objects.” This possibility has not been addressed, let alone refuted by Kiev, Washington or anyone else involved in the investigation.
On August 9, the Malaysian New Straits Times published an article effectively charging the Kiev regime with shooting down MH17. It stated that evidence from the crash site indicated that the plane was shot down by a Ukrainian fighter with a missile followed by heavy machine gun fire. The report was subsequently ignored by the world’s media

6--Why Big Business like high unemployment, NC

Michal Kalecki’s 1943 Essay on Politics and Ideology gave a clear and cogent explanation of why the investing classes are opposed to full employment policies....

The dislike of business leaders for a government spending policy grows even more acute when they come to consider the objects on which the money would be spent: public investment and subsidizing mass consumption.
The economic principles of government intervention require that public investment should be confined to objects which do not compete with the equipment of private business (e.g. hospitals, schools, highways). Otherwise the profitability of private investment might be impaired, ...

One might therefore expect business leaders and their experts to be more in favour of subsidising mass consumption (by means of family allowances, subsidies to keep down the prices of necessities, etc.) than of public investment; for by subsidizing consumption the government would not be embarking on any sort of enterprise. In practice, however, this is not the case. Indeed, subsidizing mass consumption is much more violently opposed by these experts than public investment. For here a moral principle of the highest importance is at stake. The fundamentals of capitalist ethics require that ‘you shall earn your bread in sweat’ — unless you happen to have private means.

4. We have considered the political reasons for the opposition to the policy of creating employment by government spending.....‘discipline in the factories’ and ‘political stability’ are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the ‘normal’ capitalist system.
It is vital to understand that high unemployment and low wage growth are solvable problems. But powerful and well placed people believe it is in their interest to keep them unsolved. It will take considerable pressure to change their minds.

7--Time to end the bloody Ukraine conflict, Katrina vanden Heuvel, WA Post

Logic aside,” writes John Mearsheimer in Foreign Affairs, “Russian leaders have told their Western counterparts on many occasions that they consider NATO expansion into Georgia and Ukraine unacceptable, along with any effort to turn those countries against Russia — a message that the 2008 Russian-Georgian war also made crystal clear.”....

There would not have been such a concerted Russian nationalist response to the crisis had the West not sowed the seeds of suspicion and mistrust over the past 18 years by growing NATO’s presence in Eastern Europe, in spite of the assurances that Russia ostensibly received from the George H.W. Bush administration that “NATO will not expand one inch to the east.” Russia clearly views NATO expansion not only as provocative but also as a betrayal of an agreement, and it perceives NATO’s push toward its borders as an act of aggression — and Western leaders know it.

In this sense, NATO expansion is not a consequence of tension with Russia; it is the cause. As George Kennan, known as the “father of containment,” warned some 16 years ago, NATO’s willful expansion would create lasting tension. “I think it is the beginning of a new cold war,” Kennan said in a 1998 interview with Thomas Friedman, reacting to the alliance’s pending additions of Poland, Hungary, and the Czech Republic. “I think the Russians will gradually react quite adversely and it will affect their policies. I think it is a tragic mistake.”

In 2004, NATO admitted seven new members, including the Baltic States along the Russian border. Four years later, the George W. Bush administration failed to win acceptance for Georgia and Ukraine — a bid that faced significant opposition from Germany and France — but the alliance symbolically declared that the countries “will become members of NATO.”  Those actions have inevitably colored any developments.

8---Russia disappointed by U.S. vote against resolution condemning glorification of Nazism, ria novosti

The United States was the only nation to vote against a draft resolution condemning the glorification of Nazism...

Russia is disappointed that the United States voted against a draft resolution condemning the glorification of Nazism, and a number of states, including all members of the European Union, abstained from voting on the draft, the Russian Foreign Ministry said Wednesday.
Russia introduced to the UN a resolution condemning the glorification of Nazism and the desecration of World War II monuments in November.
The resolution condemns the construction of memorials in honor of former Nazis and Waffen-SS soldiers and the holding of public pro-Nazi demonstrations. It also includes recommendations to prevent the proliferation of neo-Nazi ideas on the Internet.

 Last year 124 countries voted in favor of the resolution, while 55 delegations abstained. The United States was the only nation to vote against it.
Parades in honor of Waffen-SS veterans, involving veterans from the Latvian Legion and the 20th Estonian SS Division and their supporters, are held annually in Latvia and Estonia. Russia has repeatedly criticized the Baltic States for allowing these parades to take place.
In April 2007, a Soviet war memorial was dismantled in the Estonian capital of Tallinn just before the May 9Victory Day celebrations in Russia. The move led to street protests in which over 1,000 people were arrested and one Russian national was killed

9---Lavrov: Shanghai Cooperation Organization May Begin to Expand Later This Year,

Pakistan, India and Iran may be able to join the Shanghai Cooperation Organization (SCO) in the near future, Russian Foreign Minister Sergei Lavrov said.
Lavrov recalled that Pakistan, India and Iran have already expressed their wish to become full members of the organization.
The minister noted that Russia intends to give priority to further enhancement of the SCO’s efficiency, the consolidation of efforts in order to ensure an adequate response to the events in the region and the whole world.
SCO’s true priority is still the regional security, in particular – the increase in opportunities for joint fight against terrorism, extremism, drug trafficking, especially against in the light of the situation in Afghanistan, the minister said.
On September 11-12, an SCO summit will be held in Dushanbe. It will be attended by the leaders of Kazakhstan, Kyrgyzstan, China, Russia, Tajikistan and Uzbekistan, heads and representatives of observers and guests of the summit, as well as international organizations. Immediately after the meeting, Russia will become the chairman of the organization for one year, till the next summit.

10---MH17 crash investigation report hides truth, Pravda

"The Malaysian Boeing MH-17 was shot down from a gun of a MiG-29 aircraft, rather than a missile."

1--- There were no holes that could have been caused by shrapnel.
2-- "MiG-29 of the Ukrainian army are armed with GSh-301, 30-millimeter gun, with a rate of 1,500 rounds per minute. The gun was loaded with 150 shells containing tungsten alloy. These shells go through targets, leaving traces of perfectly circular shape.

3---30-millimeter gun inserts also a few explosive-incendiary shells, which explodes inside the cockpit, producing fragments with high velocities that get out of the fuselage of aircraft in the cockpit area, like shrapnels produced by detonation of the warhead of a surface-to-air missile.
4---There was no thick plume or white condensation at an altitude of ten kilometers from the surface, which should have been left from the launch of an air-to-air missile.

5--If such a large aircraft like Boeing-777 of Malaysia Airlines had been hit by surface-to-air missile, the crew would have been able to warn traffic control services of the situation on board
6--The  Fighter airplane MiG-29 was approaching to fire its guns in the perpendicular direction to flight MH-17--(the MH-17 was flying on heading118°. Fighter airplane MiG-29 was approaching to fire its guns in the perpendicular direction to flight MH-17 (118 + 90 = 208)

7--Ukrainian fighter was less than 5 km away.(Lieutenant General Andrey Kartopolov and Igor Makushev proved the existence of a Ukrainian aircraft that would have stopped the fight of Malaysia Airlines, three minutes before the accident, estimating the distance that separated him from Malaysia Airlines to 3-5 km.
8-- The Ukraine fighter should have been at least 9.3 km. away from MH17, when it was actually 3 km away.  (The Boeing 777 (weight 299,370 kg) belongs to the category of aircraft heavy (H - Heavy). Between this category of airplanes and fighter jet like MiG-29 (weight 10-20 t), Doc. 4444 requires air traffic controllers should create a gap of at least 9.3 km. Was it a mistake or a deliberate action of air traffic controllers of Ukraine and the Ukraine fighter aircraft 3 km far from flight MH-17?.....the normal separation for category H aircraft, followed by fighter jet is at least 11.1 km

9---The fighter was perpendicular to MH17 when it was downed  (The best way to hit the cockpit was to approach almost perpendicular to the direction of flight MH-17. In this caseŠ± the pilot of the fighter jet had the right conditions to get ready to fire from the distance of 900 m at B -777. If the approach speed of the Ukrainian jet fighter was about 280-300 meters per second, the repetition of the attack was impossible, and the Ukraine fighter pilot had 3-4 seconds for all these maneuvers. This could be a result of dozens of hours of training in simulators and flight conditions similar to those when flight MH-17 was shot down

11---Rebirth of Nazism to Become Real Threat for Future Europe: White Book, RIA Novosti

“The renaissance of Nazism is a rather possible and imminent reality of the future Europe,” the White Book distributed at the International Information Agency Rossiya Segodnya press conference says.
“In an effort to prevent the rebirth of the man-hateful ideology and practice 70 years after the end of the war it is necessary to acknowledge that there is such a threat and introduce a common system of measures aimed against the influence of radicals on the power and also ensure against its use for international policy goals what is currently seen in the Ukrainian crisis,” the survey says....

The growing political influence of neo-Nazis and ultranationalists in Ukraine has raised concerns among the country’s Russian speakers and other national minorities, prompting several eastern and southeastern regions to demand greater autonomy

12---Ex-CIA Analyst: Ukraine, Malaysia, Netherlands Conspiring to Hide Truth on MH17 Crash

McGovern said that the United States and Russia know what in fact had happened, while Ukrainian President Petro Poroshenko and his advisers may not be aware of the details, and in particular, on the air defense system and SU-25 fighter jets in the crash area

13--Unidentified Fragments Found in Bodies of MH17 Crew: Dutch Safety Board, RIA Novosti

September 10 (RIA Novosti) – Unidentified fragments have been found in the bodies of Malaysia Airlines flight MH17 pilots, their origin is currently being established, a Dutch Safety Board (DSB) spokeswoman told RIA Novosti Wednesday.
“Some fragments are found in the bodies of flight crew, pilots. We have to investigate them to see if they are fragments of the plane. If they are not, it might be fragments of the objects, coming from outside. We’re not sure yet what these pieces are fragments of. Experts are working with bodies,” DSB spokeswoman Sara Vernooij said.

On Tuesday, the DSB released a preliminary report on the MH17 crash. According to the report, the flight broke up in the air probably as the result of structural damage caused by “a large number of high-energy objects” that penetrated the aircraft from outside.
The analysts said that groundbreaking results should not have been expected as the investigation into the crash was hampered by the Kiev’s military operation in the region. Investigators also did not have rapid access to the crash site.

The DSB aims to publish the final report within a year of the date of the crash.
Flight MH17, flying from Amsterdam to Kuala Lumpur, crashed on July 17 in Ukraine’s eastern region of Donetsk, killing all 298 people on board. Kiev accuses independence supporters in eastern Ukraine of shooting it down but cannot provide any evidence. The local militia leaders insist that they do not have weapons capable of shooting down a plane flying at 32,000 feet.

Resurgent Nazism in Ukraine: Swastikas, SS badges and other Nazi regalia noticed among Ukrainian troops, RT

The troops from Ukrainian Azov and Donbass battalions were reportedly noticed wearing Nazi symbols – swastikas and SS badges.
According to a video on German TV station ZDF, Ukrainian soldiers were shown wearing swastikas and the “SS runes” of Adolph Hitler’s elite corps. The footage was shot by a camera team from Norwegian broadcaster TV2....

The Wolfsangel (Wolf’s Hook) Nazi symbol can be commonly seen on uniforms worn by men from the Azov battalion. It was originally used by the SS and the Hitler Youth, as well as various modern-day neo-Nazi groups.
Another militia group under Kiev’s control, the Donbass battalion, was created in Odessa in April to fight against the supporters of the People's Republic of Donetsk. In May the Ukrainian news portal published a video showing a member of Donbass battalion killed in the fighting who has a Nazi swastika on his chest.

Far-right Right Sector party which first came to international spotlight at the end of November 2013, is considered very active in the violence which triggered the ouster of President Viktor Yanukovich. Right Sector fighters used clubs, petrol bombs, and firearms against Ukrainian police while wearing Nazi insignia.

Tuesday, September 9, 2014

Today's Links

In 1994, George Kennan called the expansion of NATO into the old Soviet bloc “a strategic blunder of potentially epic proportions.” ...Yet we not only brought into NATO all the Warsaw Pact nations, George W. Bush brought in the Baltic republics.

"The ceasefire is an enormous step forward and with that comes the possibility of a political solution...There is quite a strong appetite across Europe for saying we want a political solution here, we don't want a ramping up of the economic pressure," British opposition MP and peace campaigner Jeremy Corbyn told RT.

1---Let’s cut to the chase: There were 1,446,000 fewer people working full time in August 2014 than in August 2008, according to the Bureau of Labor Statistics household survey (CPS)., Lee Adler

Since August 2009, near the bottom of the recession, the US economy has added 6.25 million full-time jobs, a 5.5% increase. That amounts to $588,000 in Fed QE per added full time job. But that’s ok. It’s been great for bankers, securities brokers, and hedge funds. While the number of full time jobs increased 5.5%, stock prices soared 175%. It’s all good!

Or not. I have argued for a long time that the Fed’s policies have rewarded financial engineering at the expense of job creation. The Fed has made it profitable for corporations to borrow free money to buy back the stock options that they issue to their executives rather than investing in expanding their businesses and creating jobs. The Fed’s policies have enabled corporate executives and their financial enablers to conduct a massive skimming of the US economy and wealth transfer at the expense of everybody else. By promoting this behavior, not only has Fed policy been ineffective in stimulating real growth, it has been a moral outrage, decimating the middle class and robbing the elderly of their life savings as they’re forced to consume principal....

In terms of a recovery in the number of jobs that might support a family, the Fed hasn’t supported recovery, it has suppressed it.

2---Britain faces storm as giant global investors awaken to break-up dangers, Telegraph

3---The Wrath of Abenomics Crushes Japanese Consumers, Eviscerates Economy , wolf street

The wrath of Abenomics – inflation without compensation...

Goods inflation in July jumped 4.3% year over year, with vendors passing on a big part of the tax hike to consumers. Service inflation was up only 1.7%, indicating that service providers, also covered by the consumption tax, have eaten the tax hike and absorbed it in their margins rather than passing it on to their customers, at least for the time being. Which will cut into their profits, and into their ability to grow and invest and spend and pay their employees more – and thus into their ability to push the economy forward.
And inflation in August? The Statistics Bureau uses inflation in the Tokyo area for an early indicator of what inflation might look like a month later for the country as a whole. And in August, year-over-year goods prices in the Tokyo area jumped 5.1%.

Alas, compensation has done the opposite. It has declined further. The Statistics Bureau reported that the average of monthly household income in July dropped 2.4% before inflation from the previous year – and plummeted 6.2% in real terms. Inflation without compensation..

4--Wages and benefits as a percentage of corporate income are near their lowest level since 1950, Mark Gongloff

5---U.S. consumer credit soars in July with biggest gain since '01, Reuters

Subprime auto and student loans (Yawn)

6---Time to break up the EU, Ilargi

The EU has become a straight-jacket that restricts the freedom of far too many people, and they’re going to break free. It’s only a matter of time. Of course it more likely that the UK will opt to leave the EU than for Scotland to be put out on the curb, but that’s fine by me: what’s important right now is that somebody starts rattling the cage, and starts calling out for freedom. It’s inevitable that it will take place, and the sooner that happens the better, because we don’t want violent unrest to erupt.

In yet another twist of irony, I am most likely to see my wish of an EU break-up fulfilled by someone I have grave doubts about: Marine Le Pen of the Front National in France. She called yesterday on President Hollande – and his 13% approval rating – to dissolve parliament, and she leads in all the polls. Le Pen would take France out of the EU in only a few simple steps, and that would be the end, since without France there is no EU.

7---Underwater: Japan's Gross domestic product shrank an annualized 7.1 , Bloomberg

Japan’s economy contracted the most in more than five years, highlighting the challenge for Prime Minister Shinzo Abe in steering the nation through the aftermath of a sales-tax increase.
Gross domestic product shrank an annualized 7.1 percent in the three months through June, the most since the first quarter of 2009, the Cabinet Office said today in Tokyo. The median forecast of 25 economists surveyed by Bloomberg News was for a 7 percent drop....

Honda Motor Co. Japan’s No. 3 automaker, plans to cut capital outlays 10 percent this fiscal year, while NTT Docomo Inc., the nation’s largest mobile-phone carrier by subscribers, forecasts spending will drop about 2 percent....

Private consumption dropped an annualized 19 percent from the previous quarter, compared with the initial estimate for a 18.7 percent drop, today’s report showed...

8---Russia, China agree to settle more trade in yuan and rouble, Reuters

9---EU adopts new sanctions against Russia to come into force in 'next few days', RT

10---Judge With Anti- Drinking and Driving Message Arrested For Hit & Run on a Bus While Drinking and, free thought

Judge Dean L. Wilson of Perry County, Ohio got in a car accident while drunk last week, and was charged with a DUI. Wilson is well known in his community for being harsh on drunk drivers, and even goes so far as to conduct court cases in schools so students can see drunk drivers get prosecuted.
Each year, Wilson moves his court room to New Lexington High School specifically for drunk driving cases, to set an example for the children.

Late last Sunday night, Wilson was driving home and crashed his Mercedez-Benz into a bus, and continued to drive away from the scene. He engaged in a high speed chase with police, which eventually ended with a police helicopter following him and tracking his vehicle down.

11--"the US and the EU are no longer in the position to make these types of grandiose, unconditional threats" RT

RT: Russia has helped broker the truce that is currently in place in the eastern Ukraine. Why did the EU still go ahead with approving the additional sanctions?
John Griffin: That is a great question, and in the connection with the US and its involvement in Ukraine I really think that this is utterly ridiculous. The hypocrisy inherent in this move is palpable. The US and its European allies invade countries for any and every reason, and Russia has a legitimate energy interest in preserving peace and stability in Ukraine. Its pipeline is the sole pipeline to supply oil and natural gas to most of Western Europe, so this is highly counterproductive to the interest of both the EU, the US and Russia itself. And I think many of us across the pond would like to see us move in the other direction.

RT: EU officials also said that the actions will take affect or will be revised only after a few days after assessment of how this ceasefire in eastern Ukraine holds up. How can this then affect the peace efforts on the ground?
JG: Well, beyond the issue of peace is the fact that we have instability in financial markets and the Russian Federation has said that it will be forming a currency zone with China and it would be diversifying away from the dollar, and this could ripple throughout the US market, the European markets and cause substantial financial turmoil and this is something we need to be thinking about in the EU and the US before we advocate and pursue new sanctions.
As far as peace on the ground, I think that Russia wants peace

12---Western media conceals involvement of Nazi extremists in Ukrainian gov, itar tass

 evidence is mounting that the Kiev regime has waged its so-called “anti-terrorist operation” against ethnic Russians in eastern Ukraine by using out-of-control paramilitaries, some guided by Nazi ideology. This behavior, fitting with the far-right political extremism previously known to EU leaders, also violates norms agreed to by the Ukrainian government in its commitment to the OSCE.

Ukraine has intentionally dispatched far-right militias, some waving neo-Nazi banners, to attack towns and cities in eastern Ukraine. Though this reality has drawn spotty recognition even in the Western media, there has been little criticism of the Kiev regime for these tactics.
Instead the typical response - especially from US officialdom and media - has been to dismiss claims about the close association between the Ukrainian government and neo-Nazi extremists as “Russian propaganda.

13---The collapse of household income in the US, wsws  (That should be good for demand)
The US Federal Reserve’s latest Survey of Consumer Finances, released last Thursday, documents a devastating decline in economic conditions for a large majority of the population during the so-called economic recovery.
The report reveals that between 2007 and 2013, the income of a typical US household fell 12 percent. The median American household now earns $6,400 less per year than it did in 2007.

Much of the decline occurred during the “recovery” presided over by the Obama administration. In the three years between 2010 and 2013, the annual income of a typical household fell by an additional 5 percent.
The report also shows that wealth has become even more concentrated in the topmost economic layers. The wealth share of the top 3 percent climbed from 44.8 percent in 1989 to 54.4 percent in 2013. The share of wealth held by the bottom 90 percent fell from 33.2 percent in 1989 to 24.7 percent in 2013

14---CIA employed “medieval” torture that brought prisoners “to the point of death”, wsws

15---The New Enemy Creation Process , counterpunch

Groups like ISIS, as Patrick Cockburn and Tom Engelhardt, have made clear, don’t just appear out of thin air. They’re built, constructed out of wrong-headed Western (especially US) foreign policies stretching from the invasions of Afghanistan and Iraq (along with irresistible assistance to warlords and sectarians) to the failure to enthusiastically support Arab Spring democrats. Add the waging of indefinite counterterrorist and counterinsurgency wars and we have the New Enemy Creation Process.

Al-Qaeda was insufficient, US elites needed to war against the Talibans in both Afghanistan and Pakistan. Saddam Hussein was not enough, George Bush’s “bring ‘em on” engendered new and revitalized old Sunni and Shia militias. The PLO was an inadequate boogieman, American policy demonized Hamas too. Columbian drug runners were inadequate, Washington added the FARC. When Muammar Ghaddafi had to go, NATO got tribal gunmen (and “Benghazi”) in the bargain. When Bashar al-Assad’s time was up, the jihadis poured forth.

Propagating an endless steam of new enemies transforms war into a permanent enterprise that generates trillions in debt, billions in profits, and millions of security clearances. New bureaucracies are built. Old ones are strengthened and expanded.  Militarization transforms formerly civilian police forces and once quiet international borders...

What’s changed is that the American way of war—once subject to the constraints of time and space—has been liberated from its earthly shackles. American war has, like much of the US economy, gone digital, global, untethered by democratic control. US foreign and defense policy has become a New Enemy Creation Process: always hungry, ever alert. The Islamic State is almost too good to be true for the War on Terror-Industrial-Complex.

16---Top Russia Expert: Ukraine Joining Nato Would Provoke Nuclear war, zero hedge

This is a horrific, tragic, completely unnecessary war in eastern Ukraine. In my own judgment, we have contributed mightily to this tragedy. I would say that historians one day will look back and say that America has blood on its hands. Three thousand people have died, most of them civilians who couldn’t move quickly. That’s women with small children, older women. A million refugees
Russia has about, I think, 10,000 tactical nuclear weapons, sometimes called battlefield nuclear weapons. You use these for short distances. They can be fired; you don’t need an airplane or a missile to fly them. They can be fired from artillery. But they’re nuclear. They’re radioactive. They’ve never been used. Russia has about 10,000. We have about 500. Russia’s military doctrine clearly says that if Russia is threatened by overwhelming conventional forces, we will use tactical nuclear weapons. So when Obama boasts, as he has on two occasions, that our conventional weapons are vastly superior to Russia, he’s feeding into this argument by the Russian hawks that we have to get our tactical nuclear weapons ready.

17---The Reasons Bankers Weren't Busted, Ritholtz

18---Stated income loans make comeback as mortgage lenders seek clients, Reuters

19---Mortgage equity withdrawal should be regulated like retirement account loans , oc housing

In Texas the total loan-to-value ratio on any cash-out or HELOC can’t exceed 80% by state law; it’s actually written into the State constitution. People can borrow more to purchase a property, but then they must wait until they have more than 20% equity before they can even consider mortgage equity withdrawal. This effectively puts a lockbox on home equity.

20--Why the US needs a major war in Europe, Saker (video) 

21---Alexey Mozgovoi: I Will Continue to the End! ...from Gleb Bazov's Slaviangrad website

Novorossiya shall be! Oligarchs out! Power to the real, common people! This is our [first] chance in many decades to build an equitable, human and humane society. ....

If we are fighting for the interests of the people, is it not up to the people themselves to decide the outcome of this struggle? See it through completely…

right now, we are witnessing another attempt, by means of negotiations, to stop the resistance and to prevent the destruction of the oligarchic power in Ukraine.....

....What guarantees can be discussed with people that have eliminated the word TRUTH from their vocabulary?

Only Kiev’s capitulation can resolve the current situation. Only a separation of business interests from government can offer the chance to build a state with a human face. And only the prosecution of those who hold power, of the world “elite” can enable the people to regain their dignity. Otherwise it was all for naught—all the slogans and all the victims.

Do we want to remain as marionettes in the hands of the armchair intellectuals? I am not satisfied with such a prospect! We did not take up arms just to stop halfway.

There always was and always will be fear. Right now, many are afraid of the coming winter. But this is animal fear. I am much more afraid of staying as a serf—of remaining an animal in the hands of the glossy feudal lords.

I will continue to the end! Until we reach the intended target! Until the full and unconditional victory of the free and proud Russian Slavic World!!!

That is another curious omission of the report - the blackbox must have recorded the sound of the explosion.
Like described here
"It would have recorded the sound of the explosion, which under forensic analysis, would reveal what type of explosion it was," aviation security expert and commercial pilot, Desmond Ross said. The sound of the explosion would allow forensic analysts to determine if the missile fired at MH17 was indeed the SA-11 BUK. The BUK has been identified as the weapon that shot down MH17 by preliminary US intelligence reports.

Meanwhile, the rebel leader of the self-proclaimed Donetsk People's Republic, Aleksandr Zakharchenko, insisted the separatists did not have the capability to shoot down the plane.'
but does it really? claim is its missile 'shrapnel'.....BBC naturally makes no mention of jets nearby....and the dutuch didnt visit the site to question, conclusive report? no way Jose

Russian statement from end of August
Antonov said Russia had established that a Ukrainian Su-25 military aircraft was in the vicinity of the Malaysian airliner. "Where is the transcript of the recordings of conversations between the pilot of this plane and his command? How did a military aircraft come to be alongside a civilian one?
"If people are saying today that a rocket was fired from the ground towards that military plane, then I'd like to look that military pilot in the eye who used a civilian plane as cover, if of course that's what happened," Antonov said.
His comments appeared to allow for the possibility that rebels might have downed the airliner in a failed attempt to hit a Ukrainian military plane, although he said these were only "working versions" of what may have happened.
Antonov said his ministry was pressing for answers about the tragedy from the United States, Ukraine and European countries.

The blackbox data indeed were not published. Just some minutes of conversations with air traffic controls

Wednesday, September 3, 2014

Today's Links

1---Fed: US consumers have decided to 'hoard money', cnbc

Much of that liquidity, however, has sat fallow. Banks have put away close to $2.8 trillion in reserves, and households are sitting on $2.15 trillion in savings-about a 50 percent increase over the past five years.
"So why did the monetary base increase not cause a proportionate increase in either the general price level or (gross domestic product)?" economist Yi Wen and associate Maria A. Arias asked in the St. Louis Fed paper. "The answer lies in the private sector's dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money."...

 Factoring in the growth in the money supply against output, inflation should have grown at a whopping 33 percent annually, when in fact it has been rising less than 2 percent. ...

During the first and second quarters of 2014, the velocity of the monetary base was at 4.4, its slowest pace on record. This means that every dollar in the monetary base was spent only 4.4 times in the economy during the past year, down from 17.2 just prior to the recession. This implies that the unprecedented monetary base increase driven by the Fed's large money injections through its large-scale asset purchase programs has failed to cause at least a one-for-one proportional increase in nominal GDP. Thus, it is precisely the sharp decline in velocity that has offset the sharp increase in money supply, leading to the almost no change in nominal GDP....

The hoarding of money, then, is attributed to two factors:
A (gloomy) economy after the financial crisis.
The dramatic decrease in interest rates that has forced investors to readjust their portfolios toward liquid money and away from interest-bearing assets such as government bonds ...

The risks of continued low interest rates when measured against market benchmarks such as corporate bond spreads and volatility suggest to us that the longer the (Fed Open Market Committee) continues current policy, the more likely we are to see an adverse event in the financial markets when interest rate policy does change," Whalen said in a note. "We believe that the Fed's refusal to normalize interest rates now, during a time of high investor demand for assets, and relative economic stability and growth, could lead to adverse market conditions in the future."

2---Fed Watch, Bottom Line:  The baseline path for interest rates is a delayed and gradual rate hike scenario beginning mid-2015.  It seems reasonable, however, to believe that the risk is that this baseline is too dovish given the general progress toward the Fed's goals, a point made repeatedly by Fed hawks. Internal dissension to the baseline would only intensify in the face of another six months of generally solid economic news, especially on the labor front.  Yellen would not want to risk the recovery, however, on an overly aggressive approach, especially in the face of low inflation. Considering the path of the data relative to the various policy factions with the Fed, I believe the risk is that the Fed pulls forward the date of the first rate hike as early as March - still seven months away! - while maintaining expectations for a gradual subsequent rate path.  

3---​Russia to adjust military doctrine due to NATO expansion, Ukraine crisis, RT

4---Ukraine ceasefire: Putin lays out 7-step plan to stop hostilities in E. Ukraine, RT

5--Obama: more accusations, zero hedge

Russia did this... "These are facts, provable," President Obama declared... we let him continue...

6---U.S., allies to stage exercises in West Ukraine as battles rage in East , Reuters

As fighting between the army and Russian-backed rebels rages in eastern Ukraine, preparations are under way near its western border for a joint military exercise this month with more than 1,000 troops from the United States and its allies.
The decision to go ahead with the Rapid Trident exercise Sept. 16-26 is seen as a sign of the commitment of NATO states to support non-NATO member Ukraine while stopping well short of military intervention in the conflict.

The annual exercise, to take place in the Yavoriv training center near Ukraine's border with Poland, was initially scheduled for July, but was put back because early planning was disrupted by the crisis in the eastern part of the country.
"At the moment, we are still planning for (the exercise) to go ahead," U.S. Navy Captain Gregory Hicks, spokesman for the U.S. Army's European Command said on Tuesday.
NATO stepped up military activity in its eastern member states after Russia's annexation of Crimea in March, and is expected to agree at a summit in Wales this week to create a new rapid reaction force of several thousand troops.

In addition to staging air force exercises, the United States is moving tanks and 600 troops to Poland and the Baltic states of Estonia, Latvia and Lithuania for joint maneuvers in October, replacing a more lightly armed force of paratroopers.
But Rapid Trident will entail the first significant deployment of U.S. and other personnel to Ukraine since the crisis erupted.

7---'Mortgage crisis' is coming this winter: Bove, cnbc

Bove envisions a scenario in which long-term financing, like the ubiquitous 30-year mortgage, that has come with fixed interest rates is endangered as mortgage buyers dry up.

"This means there will be less money available to fund housing, and the terms of the available funds will be considerably more onerous than what was available under 30-year, fixed-rate loans," Bove said in a report he sent to clients Tuesday. "This means higher monthly payments and lower housing prices. It means a crisis in the mortgage markets—and the economy."

8---Russian bank hires two former U.S. senators, center for public integrity
U.S. sanctions against Russia are becoming a boon for Washington's lobbyists

Gazprombank GPB (OJSC), a Russian bank targeted with sanctions by President Obama over the Ukraine crisis, has hired two former U.S. senators to lobby against those sanctions, according to a new disclosure filed with the Senate.

Gazprombank is controlled by Russia’s state-owned energy company Gazprom, the country’s largest gas producer; it supplies about a third of Europe’s natural gas.
In a filing submitted Friday and effective that day, former Senate Majority Leader Trent Lott, R-Miss., and former Senator John Breaux, D-La., are listed as the main lobbyists under the Gazprombank account for the firm Squire Patton Boggs, lobbying on “banking laws and regulations including applicable sanctions.”

Gazprombank GPB (OJSC) is a subsidiary of Gazprombank, Russia’s third largest bank. On July 16th, the U.S. Treasury Department added it to a list of Russian firms barred from debt financing with U.S. institutions.
Lott and Breaux left public service almost a decade ago and are among more than 300 members of Congress who’ve become lobbyists, and begun petitioning former colleagues on behalf of clients, according to the Center for Responsive Politics. In 2008, they started a lobbying firm with their sons, Breaux Lott Leadership Group, which was acquired by D.C.-lobbying powerhouse Patton Boggs in 2010. Patton Boggs merged with Squire Sanders to form Squire Patton Boggs in June.

9---Subprime Blows up on Retailer, CEO Warns on ALL Subprime, Hits Auto Sales , wolf street

10---Oops! There goes Mr Greenback! Russia’s Gazprom Neft to Sell Oil for Rubles, Yuan, RIA novosti

August 27 (RIA Novosti) - The Russian oil company Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers, the Russian business daily Kommersant reported Wednesday.
The Russian government and several of the country’s largest exporters have widely discussed the possibility of accepting payments in rubles for oil exports.

Last week, Russia began to ship oil from the Novoportovskoye field to Europe by sea. Two oil tankers are expected to arrive in Europe in September. According to Kommersant, the payment for these shipments will be received in rubles.
Gazprom Neft will not only accept payments in rubles; subsequent transfers via the ESPO may be paid for in yuan, the newspaper reported.
According to the newspaper, the change in currency was made because of the Western sanctions against Russia.

In March, in response to Crimea’s reunification with Russia, the United States and the European Union introduced a number of targeted sanctions against Russia.
As the Ukrainian crisis escalated, the United States introduced several new rounds of sanctions targeting Russia’s defense, energy and banking sectors, and persuaded its allies to blacklist several Russian citizens and companies.
As a protective measure, Russia decided to avoid making its payments in US dollars, which can be tracked and controlled by the United States government, Kommersant reported.

11--How America Made ISIS: Their Videos and Ours, Their "Caliphate" and Ours, smirking chimp

12---Military Victories by Ukraine's Separatists Cause Heads to Explode at the New York Times, smirking chimp

In addition to cunning and deceit, the Times editorial makes a statement of fact without a shred of evidence to support that fact. Although the coup regime in Kiev refuses to release the communications that took place between Kiev’s air traffic controller and the crew of Malaysia Airlines Flight MH17; although international investigators have yet to release the flight’s black box data; and although U.S. intelligence cannot rule out the possibility that Ukrainian troops shot down MH17, the Times recklessly asserts that “the rebels shot down a Malaysian jetliner.” Should we blame the editorial board for stupidity — or dishonesty?

Worse, a few days later, the International New York Times sank to a new low in anti-Russia hysteria, when it published Ben Judah’s essay titled, “Arm Ukraine or Surrender.” It is an abomination that gives both the paper and the author a self-inflicted black eye.
First, Mr. Judah asserts that “Mr. Putin is not rational.” Forget that his assertion cannot be proved. Instead, consider how this sleazy ad hominem attack reveals far more about Mr. Judah’s panic, desperation and fear mongering over the turn of events in Ukraine than it does about Mr. Putin. Had he kept his wits about him, Mr. Judah would have recalled the recent words of Henry Kissinger: “The demonization of Vladimir Putin is not a policy; it is an alibi for the absence of one.”

Second, Mr. Judah admits that “unlimited European Union and NATO expansion have meant war with Russia by proxy.” Thus, he explicitly blames the West for provoking Russia’s reaction. Perhaps, he read John Mearsheimer’s recent article in Foreign Affairs (“Why the Ukraine Crisis is the West’s Fault”) and could no longer deny the obvious.
Yet, his article is dishonest, insofar as it fails to mention the illegal anti-Russia coup which was supported by the U.S. State Department and CIA, as well as the European Union, but spearheaded by Ukrainian neo-Nazis.

13---Robert Parry on Fire (Ukraine; The lies of the media) smirking chimp

“You need to know that accusations of a major Russian ‘invasion’ of Ukraine appear not to be supported by reliable intelligence." Veteran Intelligence Professionals for Sanity....

Indeed, for the past eight months, we have seen arguably the most one-sided coverage of a major international crisis in memory, although there were other crazed MSM stampedes, such as Iraq’s non-existent WMD in 2002-03, Iran’s supposed nuclear bomb project for most of the past decade, Libya’s “humanitarian crisis” of 2011, and Syria’s sarin gas attack in 2013......the U.S. mainstream news media’s distortion of the Ukraine crisis is something that a real totalitarian could only dream about. Virtually absent from major U.S. news outlets – across the political spectrum – has been any significant effort to tell the other side of the story or to point out the many times when the West’s “fair and factual version of events” has been false or deceptive, starting with the issue of who started this crisis.....

the Post and other mainstream U.S. outlets have ridiculed the idea that neo-Nazis played any significant role in the putsch that ousted Yanukovych on Feb. 22 or in the Kiev regime’s brutal offensive against the ethnic Russians of eastern Ukraine.
However, occasionally, the inconvenient truth has slipped through. For instance, shortly after the February coup, the BBC described how the neo-Nazis spearheaded the violent seizure of government buildings to drive Yanukovych from power and were then rewarded with four ministries in the regime that was cobbled together in the coup’s aftermath.
When ethnic Russians in the south and east resisted the edicts from the new powers in Kiev, some neo-Nazi militias were incorporated into the National Guard and dispatched to the front lines as storm troopers eager to fight and kill people whom some considered “Untermenschen” or sub-human.

You might think that unleashing Nazi storm troopers on a European population for the first time since World War II would be a big story – given how much coverage is given to far less significant eruptions of neo-Nazi sentiment in Europe – but this ugly reality in Ukraine disappeared quickly into the U.S. media’s memory hole. It didn’t fit the preferred good guy/bad guy narrative, with the Kiev regime the good guys and Putin the bad guy.
Now, the Washington Post has gone a step further dismissing Putin’s reference to the nasty violence inflicted by Kiev’s neo-Nazi battalions as part of Putin’s “Big Lie.” The Post is telling its readers that any reference to these neo-Nazis is just a “fantasy.”

The original lie behind Official Washington’s latest “group think” was that Russian President Vladimir Putin instigated the crisis in Ukraine as part of some diabolical scheme to reclaim the territory of the defunct Soviet Union, including Estonia and other Baltic states. Though not a shred of U.S. intelligence supported this scenario, all the “smart people” of Washington just “knew” it to be true.....

One former U.S. intelligence official who has examined the evidence said the intelligence to support the claims of a significant Russian invasion amounted to “virtually nothing.” Instead, it appears that the ethnic Russian rebels may have evolved into a more effective fighting force than many in the West thought...

Yet, the once-acknowledged – though soon forgotten – reality was that the crisis was provoked last year by the European Union proposing an association agreement with Ukraine while U.S. neocons and other hawkish politicos and pundits envisioned using the Ukraine gambit as a way to undermine Putin inside Russia.
The plan was even announced by U.S. neocons such as National Endowment for Democracy President Carl Gershman who took to the op-ed page of the Washington Post nearly a year ago to call Ukraine “the biggest prize” and an important interim step toward eventually toppling Putin in Russia.
Gershman, whose NED is funded by the U.S. Congress, wrote: “Ukraine’s choice to join Europe will accelerate the demise of the ideology of Russian imperialism that Putin represents. … Russians, too, face a choice, and Putin may find himself on the losing end not just in the near abroad but within Russia itself.”

In other words, from the start, Putin was the target of the Ukraine initiative, not the instigator. But even if you choose to ignore Gershman’s clear intent, you would have to concoct a bizarre conspiracy theory to support the conventional wisdom about Putin’s grand plan.
To believe that Putin was indeed the mastermind of the crisis, you would have to think that he somehow arranged to have the EU offer the association agreement last year, then got the International Monetary Fund to attach such draconian “reforms” that Ukrainian President Viktor Yanukovych backed away from the deal.

Then, Putin had to organize mass demonstrations at Kiev’s Maidan square against Yanukovych while readying neo-Nazi militias to act as the muscle to finally overthrow the elected president and replace him with a regime dominated by far-right Ukrainian nationalists and U.S.-favored technocrats. Next, Putin had to get the new government to take provocative actions against ethnic Russians in the east, including threatening to outlaw Russian as an official language.

14---Used Car Loans at All-Time High, Average Monthly Payment Now $355, NBC

15---The Declining U.S. Reliance on Foreign Investors, Big Picture

Tuesday, September 2, 2014

Today's Links

1---Japan's 'Abenomics' feared in trouble as challenges build, Reuters

2---Ukraine, Iraq and a Black Sea Strategy, George Freidman , Stratford

The United States ought to adopt the policy of the Cold War. That consisted of four parts. First, allies were expected to provide the geographical foundation of defense and substantial forces to respond to threats. Second, the United States was to provide military and economic aid as necessary to support this structure. Third, the United States was to pre-position some forces as guarantors of U.S. commitment and as immediate support. And fourth, Washington was to guarantee the total commitment of all U.S. forces to defending allies, although the need to fulfill the last guarantee never arose.

The United States has an uncertain alliance structure in the Greater Black Sea Basin that is neither mutually supportive nor permits the United States a coherent power in the region given the conceptual division of the region into distinct theaters. The United States is providing aid, but again on an inconsistent basis. Some U.S. forces are involved, but their mission is unclear, it is unclear that they are in the right places, and it is unclear what the regional policy is.

Thus, U.S. policy for the moment is incoherent. A Black Sea strategy is merely a name, but sometimes a name is sufficient to focus strategic thinking. So long as the United States thinks in terms of Ukraine and Syria and Iraq as if they were on different planets, the economy of forces that coherent strategy requires will never be achieved. Thinking in terms of the Black Sea as a pivot of a single diverse and diffuse region can anchor U.S. thinking. Merely anchoring strategic concepts does not win wars, nor prevent them. But anything that provides coherence to American strategy has value.

The Greater Black Sea Basin, as broadly defined, is already the object of U.S. military and political involvement. It is just not perceived that way in military, political or even public and media calculations. It should be. For that will bring perception in line with fast-emerging reality.

3---U.S., allies to stage exercises in West Ukraine as battles rage in East , Reuters

As fighting between the army and Russian-backed rebels rages in eastern Ukraine, preparations are under way near its western border for a joint military exercise this month with more than 1,000 troops from the United States and its allies.

4---Somali officials say U.S. struck where al Shabaab were meeting, Reuters

5---​Russia to adjust military doctrine due to NATO expansion, Ukraine crisis, RT

6--This is why it feels like the recession never ended, WA Post

Take a look at this chart. It shows everything you need to know about why Americans are still so down on the economy.
From the start of the recession in 2007 to today, the average price of the things you buy - clothes, food, housing - has risen by 15 percent. This, in itself, isn't a problem at all. The problem is that wages haven't kept pace with that increase. In fact, for all but the top wage earners, real (inflation-adjusted) earnings are actually down over the same period.

Let's put it another way. Say that you're a median wage earner, right in the 50th percentile. And let's say that in 2007 you could buy a week's worth of groceries for $100. Fast forward to today: those exact same groceries cost $115, but you only have $112 dollars in your pocket

7---Frothy again, Economist

8---Factory activity in Europe, Asia cools; demand lull a concern, Reuters

9---Russia’s Gazprom Neft to Sell Oil for Rubles, Yuan, RIA Novotsi

10--U.S. Consumer Spending Flat in August, Gallup
Spending about the same as the $95 average in August 2013

11---QE and the Investor Class---Central Bankers in a Deep Hole, counterpunch

This year’s meeting was particularly important, as the Federal Reserve continues winding down its more than US$4 trillion Quantitative Easing (QE) bond buying program that was launched in 2009, and, even more importantly, as debates intensify within the Fed itself over when and how to raise interest rates after holding them near zero levels after more than five years.

The consequences of the Fed’s US$4 trillion QE program of the past five years are now abundantly clear: QE has done little to stimulate real investment in the USA economy, while contributing increasingly toward creating financial asset bubbles in the US stock, corporate junk bond, leveraged loans, and other global financial securities markets.

QE is always about bailing out bankers and wealthy investors and restoring losses to banks’ and investors’ balance sheets. All the public spin about QE—i.e. that it is about reducing unemployment, creating jobs, stimulating recovery of the housing sector, etc.—is largely ‘ideological cover’ for QE’s real objective: banker-investor balance sheet subsidization and bailout.

The Fed began winding down QE over the past year not because jobs are being created in the USA, but because bankers and investors are now more than fully bailed out and, equally important, because continuing the massive direct liquidity injections into the economy via more QE is now having contradictory, negative effects: it is causing financial asset bubbles to grow worldwide.

Although it won’t be revealed until well into 2015, at Jackson Hole the Fed has decided, this writer believes, that the contradictions  of five years of excessive liquidity injections have reached such a point that it is not sufficient just to phase out QE.  The excess liquidity of five years of QE and near zero rates must somehow also be retracted by the central bank if the financial bubbles are not to explode in yet another financial crash like 2008. And that liquidity retraction will be accomplished by raising interest rates, according to the Fed.

12---Federal reserve’s bad-debt preservation policies weakened the economy, oc housing