Wednesday, November 26, 2014

Today's Links

“Clouds are gathering over the global economic outlook, presenting the darkest picture seen since the global financial crisis. Companies’ hiring and investment intentions have both fallen to post-crisis lows alongside the bleakest outlook for future business activity seen over the past five years.”  Chris Williamson, Markit Chief Economist


“No matter what our Western counterparts tell us, we can see what’s going on.  NATO is blatantly building up its forces in Eastern Europe, including the Black Sea and the Baltic Sea areas. Its operational and combat training activities are gaining in scale.” Russian President Vladimir Putin


1--Abenomics: Stocks up, wages down, JT
(That's how it works)


Tokyo share prices have surged and big corporations’ profits ballooned since the LDP returned to power.
But real wages have not kept up with the inflation generated by a massive Bank of Japan stimulus program and an initial consumption tax rise to 8 percent last April, part of a plan to curb the mountain of public debt. Abe said last week he will postpone for 18 months plans to raise the consumption tax to 10 percent from next October.


2--Abenomics: More tax cuts for corps, subsidies, and tax hikes on workers, JT


The ruling Liberal Democratic Party on Tuesday officially pledged to cut the consumption tax on daily necessities by fiscal 2017 in a bid to ease the impact of another hike planned for April that year.
The party also promised that it would not delay the consumption tax hike to 10 percent from 8 percent again, after announcing last week a delay to April 2017....


The party also vowed to support the Bank of Japan’s monetary policies, and to cut the 35 percent effective corporate tax rate to below 30 percent within a few years...
Steps to boost housing investment will also be introduced by providing government subsidies for energy-saving equipment.


3--Global Business Outlook: “Darkest Picture since Financial Crisis.” US Deterioration “of Greatest Concern” , wolf street


The plunging price of oil since June has been a leading indicator: global economic growth is in trouble, despite six years of unprecedented central-bank free-money policies that caused asset prices to soar but has accomplished little else. This scenario has now been confirmed by businesses that help drive the economy forward – not by economists and Wall Street hype mongers: their outlook for the next 12 months has plummeted since June to the worst level since crisis year 2009....


the outlook of US companies about future activity – “reflecting domestic concerns and a subdued external demand environment” – dropped to the worst level since the survey began in 2009. While hiring intentions remained positive, expectations for corporate profits fizzled, and the already weak link in the US economy, plans for capital expenditures, established a new post-crisis low.
The net balance of US businesses expecting an increase in activity over the next 12 months plunged from 69% in February 2012, when post-crisis hopes of escape velocity were at their peak, and from 51.4% in June this year, to 31.2% now, the worst on record...


“Clouds are gathering over the global economic outlook, presenting the darkest picture seen since the global financial crisis,” explained Markit Chief Economist Chris Williamson. “Companies’ hiring and investment intentions have both fallen to post-crisis lows alongside the bleakest outlook for future business activity seen over the past five years.” And the rapid deterioration in US business optimism and expansion plans was “of greatest concern.”


The plunge in business outlook since June parallels the plunge in the price of oil, indicating that businesses expect a tough slog going forward, even in the US, the engine, presumably, of global economic growth. None of this, nor anything else other than central-bank jawboning and the continued flood of free money, seems to have any impact on the stock markets where the shares of these increasingly gloomy companies are being traded at record high prices


4--Who’s still being held at Guantánamo , Herald


Of the 142 captives, 73 are approved for transfer in one fashion or another; 59 others are in a continue-to-detain status but have not been charged with a crime; nine are being handled through military commission proceedings (two through plea bargains); and one is a convicted war criminal, currently serving a life sentence.


5--Saudi, UAE signal no push for OPEC oil cut, Reuters


6--Biderman Discusses Major Disconnect Between Stock Market and Economy on CNBC - video


7---Political lessons of the Ferguson whitewash, wsws


A state (the US) that has organized wars in every region of the globe, invariably justified on the basis of defending human rights, employs the most brutal forms of repression against opposition within its borders.


8--HSBC, Goldman Rigged Metals’ Prices for Years, Suit Says, Bloomberg


9---Markets Love Central-Bank Gifts, Bloomberg


Central-bank anxiety about economic growth won’t matter much to markets in the short-term. After all, investors have been conditioned to bet that monetary stimulus will boost financial-asset prices. And while investors recognize that central banks haven't been able to do much to deliver a growth breakthrough, this doesn’t matter much in the short-term as long as central banks are willing to lower rates or use other stimulus tools at every sign of weakness.


Beyond the immediate market exuberance, investors would be well advised to keep three points in mind as they prepare for further central-bank support.


-- With every new round of central-bank leverage, markets are increasing their bet on two untested phenomena. The first is immaculate growth, or the idea that central banks might succeed in establishing new growth engines even though they don't have the tools to do so; and the second is the effectiveness of untested measures aimed at limiting the collateral damage from excessive risk-taking...


Considerable risk-taking in the financial markets has yet to be matched by a willingness by corporations to take on more risk. Even companies with plenty of cash on their balance sheets generally prefer to use it for dividends, share buybacks and defensive acquisitions. Until that changes, and unless sales and earnings growth accelerate, markets will struggle to validate inflated financial-asset prices.


10--Why Is Russia Banning GMOs While the US Keeps Approving Them?--Russia sees GMOs as threat


11--PCR, counterpunch
As Nomi Prins and Pam Martens have made clear, QE is not over. The Fed is rolling over its interest and principal payments on its $4.5 trillion bond inventory into new bond purchases, and the banks now infused with $2.6 trillion in cash from the Fed are purchasing the bonds in place of the Fed’s QE purchases


12--Japan Is Running Out of Options, Bloomberg


13--Owner-occupant sales activity continues to slide as prices rise, HW
http://www.housingwire.com/articles/32173-median-home-price-in-october-increases-to-highest-since-sept-2008


This U.S. recovery is largely being driven by investors, and as the lower-priced, often distressed inventory most appealing to investors dries up in a given market, investor activity will slow down in that market and move to other markets with more ideal inventory available,” said Daren Blomquist, vice president at RealtyTrac. “This has created a ripple-effect recovery moving out from traditional investor hot spots such as Phoenix, Atlanta and many California markets and into markets such as Charlotte, Columbus, Ohio, Dallas and Oklahoma City.
“More than 32% of all single family homes and condos purchased so far in 2014 are non-owner occupied compared to 68% that are owner-occupied,” Blomquist said. “That is the highest share of investor purchases since we began tracking in 2001.”

14--
Profit Share Drops and No One Notices Dean Baker Print
 
The gods of national income accounting gave us some good news for Thanksgiving but it seems no one noticed. The data on corporate profits released in yesterday's GDP report showed that the slight downward trend in shares in recent quarters is continuing. The profit share of net corporate income was 20.5 percent in the third quarter, down from a peak of 21.2 percent in the second quarter of 2013. Quarterly data are erratic but if we take a four quarter moving average we get the share was 20.2 percent in the four quarters ending with the third quarter, down from 21.0 percent in the four quarter average ending in the fourth quarter of 2013. That still up considerably from the 16.7 percent average since 1950, but clearly a step in the right direction. (Most of the drop is on the financial side, the profit share in the non-financial sector is still close to its peak.)


The shift away from profits could mean that workers will finally start to see some of the benefits of growth. However, there are two important cautions. First, most of the upward redistribution from 1980 to the present was not from wages to profits but rather from wages to high end workers. CEOs and hedge fund managers are getting labor income, or at least it is classified that way in the national income accounts.
The other point is that the economy is still not growing especially fast, in spite of what you read in the newspaper. GDP is up just 2.4 percent from the third quarter of last year. That is better than nothing, but with the labor force growing by close to 2.0 percent over this period, that doesn't leave much room for wage growth even without upward redistribution.


15--Whitewashing fascism, crosstalk
US support for Nazis in UN vote


16--Surge in US armored vehicles next to Russian borders, RT


“I don't think that Russia has any intention of some sort of a conventional attack into NATO territory because they know that would generate an Article 5 response by the rest of the alliance,” Hodges said, as cited by the Military Times.
The fact that NATO 28-nation military bloc is concentrating forces closer to Russian borders has brought repeated and strident objections from Moscow.


“We shall provide an adequate and well-measured response to NATO’s expansion towards Russia’s borders, and we shall take note of [the West] setting up a global missile defense architecture and building up its arsenals of precision-guided weapons,” Russian President Vladimir Putin said at the emergency Security Council meeting in Moscow on July 22.
“No matter what our Western counterparts tell us, we can see what’s going on. As it stands, NATO is blatantly building up its forces in Eastern Europe, including the Black Sea and the Baltic Sea areas. Its operational and combat training activities are gaining in scale,” Putin said


17--Thus Spake Lavrov, Saker "The idea of creating a single economic and humanitarian space from Lisbon to Vladivostok can now be heard here and there and is gaining traction."


Formerly, when sanctions were applied (I worked at the Russian mission to the UN at the time) our Western partners, when discussing the DPRK, Iran or other states, said that it was necessary to formulate the restrictions in such a way as to keep within humanitarian limits and not to cause damage to the social sphere and the economy, and to selectively target only the elite. Today everything is the other way around: Western leaders are publicly declaring that the sanctions should destroy the economy and trigger popular protests. So, as regards the conceptual approach to the use of coercive measures the West unequivocally demonstrates that it does not merely seek to change Russian policy (which in itself is illusory), but it seeks to change the regime -- and practically nobody denies this....


 I have spoken about it more than once and we have ample proof of the fact that American ambassadors and envoys across the world seek meetings at the highest level to argue that the corresponding countries are obliged to punish Russia together with them or else face the consequences. This is done with regard to all countries, including our closest allies (this speaks volumes about the kind of analysts Washington has). An overwhelming majority of the states with which we have a continuing dialogue without any restrictions and isolation, as you see, value Russia’s independent role in the international arena. Not because they like it when somebody challenges the Americans, but because they realise that the world order will not be stable if nobody is allowed to speak his mind (although privately the overwhelming majority do express their opinion, but they do not want to do so publicly for fear of Washington’s reprisals).

Many reasonable analysts understand that there is a widening gap between the global ambitions of the US Administration and the country’s real potential. ...



In attempting to establish their pre-eminence at a time when new economic, financial and political power centres are emerging, the Americans provoke counteraction in keeping with Newton’s third law and contribute to the emergence of structures, mechanisms, and movements that seek alternatives to the American recipes for solving the pressing problems. I am not referring to anti-Americanism, still less about forming coalitions spearheaded against the United States, but only about the natural wish of a growing number of countries to secure their vital interests and do it the way they think right, and not what they are told “from across the pond.” ...


A new world order can only be polycentric and should reflect the diversity of cultures and civilisations in today’s world. ...


I can’t fail to mention Russia’s comprehensive partnership with China. Important bilateral decisions have been taken, paving the way to an energy alliance between Russia and China. But there’s more to it. We can now even talk about the emerging technology alliance between the two countries. Russia’s tandem with Beijing is a crucial factor for ensuring international stability and at least some balance in international affairs, as well as ensuring the rule of international law. We will make full use of our relations with India and Vietnam, Russia’s strategic partners, as well as the ASEAN countries. We are also open to expanding cooperation with Japan, if our Japanese neighbours can look at their national interests and stop looking back at some overseas powers...


Russia is about to assume BRICS and SCO presidency. The two organisations will hold their summits in Ufa. These are very promising organisations for the new age.





, global research
Read more here: http://www.miamiherald.com/news/nation-world/world/americas/guantanamo/article2203501.html#storylink=cpy

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