Thursday, November 13, 2014

Today's Links

1---The illegitimate US election, wsws

Obama has since presided over the most rapid growth of social inequality in American history, a systematic assault on jobs, wages and social programs, endless and expanding wars, and the strengthening of a police-state apparatus of spying and repression.

Tens of millions of people in the United States have drawn the conclusion that the electoral process is a sham and no amount of participation will impact the stranglehold of the financial aristocracy.

A qualitative turning point has been reached. Unable to find any solutions within the established system, millions of workers and youth will—and are already beginning to—seek other means to defend their interests, including strikes, demonstrations and other forms of social struggle.

2--Democratic Party Favorable Rating Falls to Record Low, Gallup
Dems follow the Great One off the cliff

After the midterm elections that saw the Democratic Party suffer significant losses in Congress, a record-low 36% of Americans say they have a favorable opinion of the party, down six percentage points from before the elections. The Republican Party's favorable rating, at 42%, is essentially unchanged from 40%. This marks the first time since September 2011 that the Republican Party has had a higher favorability rating than the Democratic Party.
Republican and Democratic Party Favorables, 1992-2014

 3---QQE has had almost no impact on real economy, macronomyWhat effect has QQE had in the 18 months since it began? It has clearly had a major influence on the forex and equity markets, where surprises can be very effective tools, but has had almost no impact on the real economy.
Figure 1 shows Japan’s monetary base, the money supply, and domestic bank lending before and after QQE. If we rebase these aggregates to 100 at the point just before Mr. Kuroda became head of the BOJ and announced QQE, we can see that while the monetary base had surged to 187 as of this October, the money supply—the money actually available for the private sector to use—had risen only to 105, while bank lending stood at 104. Indeed, the money available for the private sector to use is expanding no faster than it did under Mr. Kuroda’s predecessor, Masaaki Shirakawa, in spite of QQE. In other words, QQE had no effect on the growth rates for either of these aggregates....

For the past 20 years, Japan’s private sector has not only stopped borrowing money but has actually been paying down existing debt and increasing its savings in spite of zero interest rates.
Traditional economics never envisioned this kind of behavior, but the collapse of debt financed bubbles in Japan in 1990 and the West in 2008 left many businesses and households owing as much or more than they owned, prompting them to focus on repairing their damaged balance sheets.
QE without private demand for funds only generates mini-bubbles
While Japan’s private sector finally cleaned up its balance sheet around 2005–06, the debt trauma lingered on. That, together with the collapse of Lehman Brothers in 2008, led to a situation in which Japan’s private sector is still saving 5.7% of GDP in spite of zero interest rates and aggressive quantitative easing....

While the mainstream media continues to tout that the economy is on the mend, real (inflation-adjusted) median net worth suggests that this is not the case overall.
6---Real Estate Professionals Optimistic About Homeownership Comeback....It’s so bad, it can only get better, right?, DS News

7---The choice of the century, Robert Reich
If you want a single reason for why Democrats lost big on Election Day 2014 it’s this: Median household income continues to drop. This is the first “recovery” in memory when this has happened.

Jobs are coming back but wages aren’t. Every month the job numbers grow but the wage numbers go nowhere.
Most new jobs are in part-time or low-paying positions. They pay less than the jobs lost in the Great Recession.
This wageless recovery has been made all the worse because pay is less predictable than ever. Most Americans don’t know what they’ll be earning next year or even next month. Two-thirds are now living paycheck to paycheck.

So why is this called a “recovery” at all? Because, technically, the economy is growing. But almost all the gains from that growth are going to a small minority at the top.
In fact, 100 percent of the gains have gone to the best-off 10 percent. Ninety-five percent have gone to the top 1 percent.

8---Martha Stewart: Prison time was 'terrible', Today

9--Big Banks Busted Massively Manipulating Foreign Exchange, Precious Metals … And Every Other Market, zero hedge

10--Ukrainian Neo-Nazi Commander: “The US is Training and Funding Us”, global research

11---Clashes at protest over Mexico student deaths

Masked protesters, demonstrating over suspected killing of 43 students in September, clash with riot police in Acapulco.

, al Jazeera

Aided and abetted by QE, the last three years has seen the MSCI World Index rise by 38% whilst reported profits have risen by just 3%. This complete disconnection with fundamentals has been painful for short-funds looking to generate returns out of companies with weak business models.
With the global equity markets up almost 150% since the 2009’s low, fuelled by cheap money and central bank QE, it is little wonder investors have lost interest in shorting. Indeed, many dedicated short funds have simply closed up shop recently or have returned investor’s cash whilst awaiting richer pickings or at least some return to a market more focused on fundamentals, rather than central bank largesse

14---Fake, you say?, NYT

The anger of the investing class has curdled into paranoia.
Paul Singer, the head of the $25 billion hedge fund Elliott Management, had an Edvard Munch moment in his most recent letter to his investors. “Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,” he wrote. Some commenters think the economy is improving, but he wrote, “We do not think this optimism is warranted, and we think a lot of the data is cooked or misleading.”

15--Mortgage bond issuance the lowest since 2000, sober look
The availability of residential mortgage bonds in the United States has been shrinking. Private mortgage securitization markets are nonexistent since the financial crisis and the GSEs are not generating enough new supply. The reason of course is the lack of mortgage loan growth in the US. While corporate, consumer, and commercial real estate loan balances are rising, residential loans have stalled.

16---Japan's QE-driven inequality will continue to grow , sober look

17--Air controller’s data backs claims MH17 shot down from air, RT

New radar data indicating that military aircraft were in the air near Malaysia Airlines flight MH17 when it crashed in eastern Ukraine on July 17 has been released by a Russian air safety consultancy.
The consultancy provided a snapshot representing the readings taken by a radar station located in Russia’s Rostov, near the Ukrainian border, shortly before and about 20 minutes after the MH17 crash. The snapshot was given to Moskovsky Komsomolets newspaper.

According to Sergey Melnichenko, CEO of Aviation Safety consultancy, there were one or two warplanes in the air close to the Malaysian airliner. The data casts doubt on the version of the tragedy favored by Western nations, which claims the plane was shot down from the ground by rebel forces with a sophisticated surface-to-air missile.

The data “came from an air traffic control center in Rostov,” Melnichenko said, declining to reveal which one and whether it was civilian or military. He assured that “we have full trust in the sources, which helped us make it available to the public.”
“The data clearly shows that at the moment of the crash and after it there were planes moving north of the Boeing course. Most likely, they were military, because the spots are very close to each other. The conclusion is that there were either one or two aircraft there,” Melnichenko told the daily...

Another indication that the planes in question were military aircraft is the fact that they didn’t respond to being scanned, Melnichenko said. Civilian planes always reply to signals from radar, while military aircraft are “usually unequipped with transmitter-responders or the pilots turn them off during combat flights,” he explained.

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