Monday, December 1, 2014

Today's links

1--Putin's golden trap, word press




2---'There Is No American Dream', economists view


UC Davis Economics Professor: There Is No American Dream: A UC Davis economics professor has determined there is no American Dream. ...
“America has no higher rate of social mobility than medieval England, Or pre-industrial Sweden,” he said. “That’s the most difficult part of talking about social mobility is because it is shattering people s dreams.”
Clark crunched the numbers in the U.S. from the past 100 years. His data shows the so-called American Dream—where hard work leads to more opportunities—is an illusion in the United States, and that social mobility here is no different than in the rest of the world. ...


3--New lending standards could kickstart mortgages, HW
(Housing sales increase due to "get out of jail free" card to lenders)


New, easier lending guidelines from Fannie Mae and Freddie Mac go into effect today, and most mortgage lenders plan to take advantage of them, hoping to offset the long-term slowdown in mortgage activity.
The new standards offer clarification on when lenders can be penalized for making mistakes in the mortgage they sell to the government-sponsored enterprises.


Many lenders say the lack of clarity in requirements have made them tighten their own lending rules too much, making it harder for the average buyer to qualify for a home mortgage.
Laurie Goodman, director of the Housing Finance Policy Center at the Urban Institute, tells the Wall Street Journal that the changes are “going to be big,” but that it will take time to assess the full impact of the changes.


4---Housing losing momentum? Not if but when, HW


Moderation (slowing) in the housing market is now in its 11th straight month, according to the latest home data index from Clear Capital....


They also warn that improvements in the broader economic landscape have not instilled confidence in traditional homebuyers (first-time, move-up, second home owners). The general lack of demand in the performing-only segment, coupled with a dwindling supply of distressed inventory, leaves the future of home prices squarely in the hands of traditional homebuyers, who have yet to show any signs of re-engaging.


5--Malaysia Becomes Angry About Exclusion from MH17 Investigation, smirking chimp


6--Saudis risk playing with fire in shale-price showdown as crude crashes, Telegraph


A deep slump in prices might heighten geostrategic turmoil across the Middle East


7---Retail Disaster: Holiday Sales Crater by 11%, Online Spend Declines: NRF Blames Shopping Fiasco On "Stronger Economy", zero hedge


8--Moody’s Downgrades Japan’s Credit Rating, wsj
(Ratings agency enforces neoliberal rule)


Firm Cites Concern Over Delay in Sales Tax Increase
8--Euro zone factory growth stalls in November as new orders sink: PMI, Reuters


9---Saudi Arabia Declares Oil War on US Fracking, hits Railroads, Tank-Car Makers, Canada, Russia; Sinks Venezuela , wolf street


During the closed-door meetings in Vienna, Saudi oil minister Ali al-Naimi told OPEC members that OPEC had to combat the US fracking boom. If OPEC cut output to raise the price of oil, it would lose market share, he argued. The way to win would be to allow overproduction to depress prices to the point where they would destroy the profitability of North American producers. And they’d have to cut production, rather than OPEC....


The oil price move is already cascading through American industry. Bondholders are next. The US fracking boom was built with debt, much of it junk rated. And this pile of debt is now at the confluence of the collapsing price of oil, high costs of production, and sharp decline rates of fracked wells that force drillers to continue drilling just to maintain their revenues. It’s a toxic mix.


10---The Business Tycoons of Airbnb, NYT


11---Revisiting the Japanese Experiment in Quantitative Easing, Matt Stoller,


For some reason, liberal technocrats seem to think that printing gobs of money when money can’t flow into the real economy has some sort of impact for wage earners. In the United States, it’s called quantitative easing and we’re doing it to the tune of trillions. The signature example for this isn’t the U.S., it’s Japan, where the printing presses are really going hot.
Is it working?
Well, Paul Krugman wrote this about Japan in January, 2013.
Enter Mr. Abe, who has been pressuring the Bank of Japan into seeking higher inflation — in effect, helping to inflate away part of the government’s debt — and has also just announced a large new program of fiscal stimulus. How have the market gods responded?
The answer is, it’s all good. Market measures of expected inflation, which were negative not long ago — the market was expecting deflation to continue — have now moved well into positive territory. But government borrowing costs have hardly changed at all; given the prospect of moderate inflation, this means that Japan’s fiscal outlook has actually improved sharply. True, the foreign-exchange value of the yen has fallen considerably — but that’s actually very good news, and Japanese exporters are cheering.
In short, Mr. Abe has thumbed his nose at orthodoxy, with excellent results.
How’s the experiment going?
In short, not good. This is a headline picked out at random, but they all say the same thing: Japan’s economy makes surprise fall into recession


In short, not good. This is a headline picked out at random, but they all say the same thing: Japan’s economy makes surprise fall into recession


There’s a lot to say about this policy. Printing money isn’t a bad thing, per se. It is what governments need to do. It’s probably true that QE is juicing some lending in some areas of the economy. The problem is that the financial system is at this point only very marginally connected to the real economy, so when you print more money, it goes into corporate treasuries and from there into speculation. Japanese exporters, for instance, are just keeping the extra money they are making from a lower yen rather than investing it into factories.




This money piles up, and since corporations can’t put it into regular deposits, they stick it into the shadow banking system via money market funds, fancy things called ‘repos’ (which are basically just uninsured deposits), the central bank and some government and corporate debt. From there, the money is lent to hedge funds, pension funds, or other funds who buy financial assets. The stock and credit markets go up.
At no point does this money touch the real economy or the hands of consumers, it just inflates financial markets.


The main function of a credit system should be to put funds to work in useful endeavors. That’s not happening, for a lot of reasons, but on a fundamental level because Japanese corporations are too powerful and stagnant, and no one else can get access to money. That is why Japan is in recession. We face the same problem




12---Over half Britain’s crime chiefs accused of impropriety, RT


13--Gearing up for war: Russia launches ‘wartime government’ HQ in major military upgrade, RT


14--No worries?  Cheaper oil takes Russian ruble to new lows; officials say no reason to worry, RT


15---Afghan regime hit by wave of Taliban attacks, wsws


Taliban insurgents have launched an offensive against the US-backed regime in Afghanistan, invading a major military base in Helmand province in the south, hitting targets in the south, east and north of the country, and staging attacks in several parts of Kabul, the capital city.
The wave of attacks appears, at least in part, to be timed to the decision Thursday by the Afghan parliament to ratify a Status of Forces Agreement that will give foreign soldiers immunity from prosecution for war crimes for as long as the US-NATO forces remain.....


The escalating bloodshed comes amid Washington’s efforts to consolidate military and financial support for the newly installed Afghan stooge regime, headed by President Ashraf Ghani, a former World Bank official, and Abdullah Abdullah, a former Afghan foreign minister.
The Afghan parliament ratified a bilateral security agreement with the US and a Status of Forces Agreement with NATO on Thursday, giving legal authorization to the continued occupation of Afghanistan by US-NATO forces after December 31. The treaties include provisions ensuring that US and NATO soldiers cannot be tried in Afghan courts for atrocities committed against Afghan civilians, one of the key demands of the Pentagon.


Ghani and Abdullah were to travel to Brussels, Belgium on Monday for NATO meetings and then to a conference in London on Wednesday with “donor” countries—i.e., their paymasters among the imperialist powers that supply the money to keep the Afghan government and military running.
Meanwhile, Reuters News Agency reported that the Obama administration was planning to raise the number of US troops in Afghanistan in 2015 above the level of 9,800 previously set by the president last May. Washington will provide anywhere from a few hundred to 1,000 more troops to make up for a shortfall in the number supplied by NATO member countries, where the Afghanistan deployment is widely unpopular

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