Thursday, December 4, 2014

Today's Links

Today's Quote:  "

What do we have to show for Obama’s presidency? We have privatized schools, the ruin of Detroit, endless war, a profit driven health care system, austerity programs and a people who were played for fools. Now the bloom is off the rose, and the fooling should be over. The end of the age of Obama is a very good thing indeed." Margaret Kimberley

  Putin recalled the situation in the 1990s when Russia showed unprecedented openness to international cooperation, but it faced “the support of separatists from abroad: informational, political, financial and from intelligence agencies, was absolutely evident.”
All that was taking place at a time when Russia “considered its recent enemies as close friends and nearly allies,” Putin said.

1---Getting Out of the Box, Gary Leupp, counterpunch

In my opinion, the people who voted for Obama versus McCain in 2008, or Obama versus Romney in 2012, or who will vote Hillary Clinton versus Jed Bush (or whomever) are voting not so much for an individual (whose image is anyway a Madison Ave. creation) as for the system itself. In voting in this county, you vote for an electoral process designed to dissipate your energies and divert you from the (truly meaningful )politics of the factory floor or street. You vote for a cynical ritual, on the basis of perceptions (I won’t say “knowledge”) about the world shaped by the corporate media, for candidates vetted by the backroom kingmakers of the two political parties who have acquired the start-up capital to market their product.

In voting for one of the two—-and in this country it’s always two (or you’re told, if you vote for a third, you’re wasting your vote, since you won’t come out in support of the winning side, as though you were betting on a cockfight)—you are telling the state you believe in it, you support it. That’s what it wants. Even in a state of crisis, that’s it’s minimal goal: to retain legitimacy

2---EU leaders reduce energy security, Bloomberg

Even so, cancellation of the pipeline is likely to stir tension within the EU. Some member countries on the bloc’s eastern rim, such as Bulgaria and Hungary, would be left short of gas if the conflict in Ukraine led Russia to shut off supplies, as it has done in the past. So would Serbia, which wants to join the EU.”These countries are pretty exposed,” says James Henderson of the Oxford Institute for Energy Studies. By contrast, most of Western Europe is sitting on comfortable gas stockpiles during the mildest year on record in the region. “Putin may be trying to fracture the discussion within the EU,” Henderson says.

Ukraine, not surprisingly, expressed relief over the decision. But for most of eastern Europe, “the scrapping of South Stream complicates the region’s energy security, making it all the more dependent on the Ukrainian pipeline,” Andras Deak, an associate fellow at the Hungarian Institute of International Affairs, told Bloomberg News.  “The EU and the IMF effectively will have to finance Ukraine’s gas bill now, if they want to make sure that gas keeps flowing through Ukraine to Europe

3--US Army Sends 100 Tanks To Eastern Europe To "Deter Russian Aggression", zero hedge

4--Exit South Stream, enter Turk Stream, RT

  "Russia still gets to build a pipeline under the Black Sea – but now redirected to Turkey and, crucially, pumping the same amount of gas South Stream would.....Russia also advances a unified gas distribution network capable of delivering natural gas from anywhere in Russia to any hub alongside Russia’s borders.... Bottom line; Russia sells even more gas – to Turkey; and the EU, pressured by the US, is reduced to dancing like a bunch of headless chickens in dark." 

5---Why Putin pulled the plug on EU-South Stream project, RT

What is South Stream?
A gas pipeline that would have delivered 63 billion cubic meters (bcm) to southern Europe from Russia through the Black Sea, traversing across Bulgaria and then onto Serbia, Hungary, Slovenia, Italy, Serbia, Bosnia and Herzegovina, Croatia, and Austria. South Stream had the potential to meet 20 percent of EU gas demand.
What will now be built instead?
Gazprom has officially confirmed that Russia will construct an alternative pipeline using funds and materials intended for the original South Stream project

6---CHAVEZ: A Giant Under the Moon , Eva Golinger

7--Housing Fraud is Back – Real Estate Industry Intentionally Inflating Home Appraisals, zero hedge

Almost 40% of appraisers surveyed from Sept. 15 through Nov. 7 reported experiencing pressure to inflate values, according to Allterra Group LLC, a for-profit appraiser-advocacy firm based in Salisbury, Md. That figure was 37% in the survey for the previous year.

“If you thought what was happening before was an embarrassment, wait until the second time around,” said Joan Trice, Allterra’s chief executive and founder of the Collateral Risk Network, which represents appraisers employed by lenders and other companies and has been meeting with regulators to discuss concerns about appraisers being pressured into inflating values.

– From the Wall Street Journal article: Dodgy Home Appraisals Make a Comeback
When in doubt, just make shit up...

The WSJ reports:
Home appraisers are inflating the values of some properties they assess, often at the behest of loan officers and real-estate agents, in what industry executives say is a return to practices seen before the financial crisis.

An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more, according to data provided to The Wall Street Journal by Digital Risk Analytics

8---Cold Turkey: Ankara Buckles Against Western Pressure, Turns to Russia, Sputnik

Russia has abandoned the troubled South Stream project and will now be building its replacement with Turkey. This monumental decision signals that Ankara has made its choice to reject Euro-Atlanticsm and embrace Eurasian integration.

In what may possibly be the biggest move towards multipolarity thus far, the ultimate Eurasian pivot, Turkey, has done away with its former Euro-Atlantic ambitions. A year ago, none of this would have been foreseeable, but the absolute failure of the US’ Mideast policy and the EU’s energy one made this stunning reversal possible in under a year. Turkey is still anticipated to have some privileged relations with the West, but the entire nature of the relationship has forever changed as the country officially engages in pragmatic multipolarity.

Turkey’s leadership made a major move by sealing such a colossal deal with Russia in such a sensitive political environment, and the old friendship can never be restored (nor do the Turks want it to be). The reverberations are truly global.

9---Unbelievable. US state Dept employee appointed Ukrainian finance minister, NC

The new finance minister of Ukraine, Natalie Jaresko, may have replaced her US citizenship with Ukrainian at the start of this week, but her employer continued to be the US Government, long after she claims she left the State Department. US court and other records reveal that Jaresko has been the co-owner of a management company and Ukrainian investment funds registered in the state of Delaware, dependent for her salary and for investment funds on a $150 million grant from the US Agency for International Development. The US records reveal that according to Jaresko’s former husband, she is culpable in financial misconduct.

Natalie Jaresko was appointed on Monday, and approved by a vote of the Verkhovna Rada on Tuesday evening. A presidential tweet and an announcement from the office of President Petro Poroshenko say a decree has been signed granting Jaresko Ukrainian citizenship to qualify her to take office. The legality of the decree was challenged today by the head of Poroshenko’s bloc in parliament, Yury Lutsenko.

On Tuesday at the State Department, spokesman Marie Harf was asked: “apparently a U.S. national has been appointed finance minister. Has Washington something to do with this appointment?” Harf replied: “No, this is a choice for the Ukrainian people and their elect [sic] representatives. This is their decision. Certainly, I don’t think we had anything to do with it at all… the Ukrainian people and their representatives are able to pick whoever they want to be part of their government. That’s the beauty of how this process works.”...

According to a recent Ukrainian community paper from Chicago, “Jaresko has worked more than 20 years in Ukraine as a venture capitalist, bringing countless foreign investments to Ukraine.”

10---Sinking wages allow Fed to keep rates low for Wall Street,, NYT

A Labor Department report showed compensation per hour increased at a tepid 1.3 percent rate in the third quarter rather than the 2.3 percent pace reported last month, and fell at a 0.9 percent rate in the second quarter instead of rising at a 2.3 percent pace as previously reported.
The steep revisions brought compensation in line with the government’s gauge of average hourly earnings and allayed any concerns that wage growth might be rising a bit faster than the Fed had expected.
“That implies the Fed may not be facing demands to raise rates anytime soon,” said Joel Naroff, chief economist at Naroff Economic Advisors.

Wages are one of the key factors that will determine when the Fed will start raising benchmark overnight interest rates, which it has kept near zero since December 2008.
With compensation sluggish, unit labor costs — the price of labor for any given unit of production — fell at a 1 percent rate in the third quarter, a further sign of the lack of inflation and profit pressure.
Unit labor costs previously had been reported to have increased at a 0.3 percent pace.
The Labor Department also said productivity, which measures hourly output per worker, expanded at a 2.3 percent annual rate in the third quarter

11--Yield Curve Casts Doubt on "Robust Recovery" Theory

12---The Fake recovery: 4 million homeowners still underwater, Mish

13--Ferguson’s Reckoning for Obama, Black Agenda Report

In the week since the grand jury announcement was made, Barack Obama has done nothing but insult the intelligence of millions of black people. His grand announcement for federal funding of police body cameras should be met with loud derision. After all of the hope placed in Obama, the end result of his presidency is nothing but a proposal that every school child knows. The constitutional lawyer in chief who commanded such love and loyalty once again comes up empty when black people are in need.
There is nothing mysterious or complicated about improving police and community relations. There is no need for more task forces or advisory commissions. The police must stop killing black people with impunity and nothing will make that less likely to happen than the sight of Wilson and his partners in crime sitting in federal prisons. ...

What do we have to show for Obama’s presidency? We have privatized schools, the ruin of Detroit, endless war, a profit driven health care system, austerity programs and a people who were played for fools. Now the bloom is off the rose, and the fooling should be over. The end of the age of Obama is a very good thing indeed.

14-- Bill Cosby and Michael Brown,  Margaret Kimberley, BAR

“Looking at the incarcerated, these are not political criminals. These are people going around stealing Coca Cola. People getting shot in the back of the head over a piece of pound cake! Then we all run out and are outraged, “The cops shouldn't have shot him.” What the hell was he doing with the pound cake in his hand?” – Bill Cosby
“He really only cared about pleasing white people.”

15--Corporate Bond Bubble Comes Unglued at the Bottom, Investors Begin to Bleed , wolf street

Companies are taking advantage of enticingly low borrowing costs while they still can. And they don’t waste their energy investing the proceeds in productive activities, such as capital expenditures or expansion plans. Instead, they’re using the money to buy back their own shares, pay dividends, and acquire other companies.

Timing couldn’t be better. In this super-expensive market, they’re overpaying for their own shares; and they’re overpaying for other companies by adding huge premiums to already inflated stock prices. Wall Street, which gets fat from the fees, provides the requisite hoopla.

It’s a perfect use of debt. Instead of creating something that will generate an income stream with which to service and pay off the debt, corporations are blowing the proceeds. This works wonderfully as long as ever cheaper new debt is available to service and pay off old debt...

Prices of junk bonds (rated BB or lower) have been falling from record levels in June, and the yield has zigzagged up nervously from 4.2% in June to 4.98% on Tuesday. Among junk bonds rated CCC or lower, the underbelly of over-indebted corporate America, outright ugliness is starting to spread: the yield jumped from 7.94% in June to 10.69% on Tuesday, the highest yield since December 2012, higher even than during the nerve-racking taper tantrum last year.

The swoon in junk bonds is in part due to the rout in the oil and gas sector. The fracking revolution was largely funded with debt, based on a scenario of ever increasing oil prices. But oil prices have plunged nearly 40% since June. And the bloodletting is spreading [read… Saudi Arabia Declares Oil War on US Fracking, hits Railroads, Tank-Car Makers, Canada, Russia; Sinks Venezuela].
Yield-desperate investors are beginning to bleed. They’d been pushed into this stuff by the Fed’s increased determination back in 2012 to create the biggest credit bubble in history by unleashing QE3. Wall Street touted it ingeniously as “QE infinity” to let investors know that this period of near-zero yield would last forever, and that they’d have to close their eyes and hold their noses and blindly trust Wall Street and pick up even the riskiest junk to earn any yield at all. And it worked wonderfully.

But now, “QE infinity” has been tapered out of existence, and the Fed is threatening to raise rates in 2015. The scheme is coming unglued. The money for junk bonds is drying up for individual companies, leaving bondholders to grapple with the sordid meaning of “junk.”

16---They should have let the system collapse in 2008, Dean Baker

Let's assume that President Obama let the market work its magic and sink Goldman Sachs, Citigroup, Bank of America and the other Wall Street behemoths that were tottering at the time. It is undoubtedly true that the initial downturn would have been worse. A paper by Mark Zandi and Alan Blinder estimated that a financial collapse, with no offsetting fiscal or monetary response, would have raised the unemployment rate to 15 percent.

But then what? The Zandi and Blinder paper has a prolonged period of double-digit unemployment because there is no fiscal or monetary response. But why in the world would there be no fiscal or monetary response? Would Ben Bernanke be sitting around at the Fed celebrating the fact that inflation is under control?
And why would we not have any fiscal policy to stimulate the economy? In this world would Obama really be able to get zero stimulus through Congress...

In short, the Second Great Depression story rests on an absurd counter-factual where for some reason the people in positions of authority would just sit on their hands as tens of millions of people were out work. We have never seen anything like this in the post-war period. (The first stimulus was signed by President George W. Bush when the unemployment rate was 4.7 percent.)

The advantage of going this route would have been that we would have allowed the market to accomplish the goals of financial reform almost immediately, by eliminating the too big to fail banks and wiping out the speculators. An enormous albatross would have been removed from the economy. Would it have been worth the pain of millions more losing their jobs? That's not easy to answer, but given that the economy is still down by close to 7 million jobs from its full employment level of output (applying demographically adjusted employment to population ratios from the pre-recession period) it is very plausible that financial crash route would have been better than the one chosen by the Obama administration. (It would have been best to have engineered an orderly restructuring of the banks that would not have required a collapse, but this would have been difficult politically.)

17--Hungary fuming after McCain calls PM Orban ‘neo-fascist dictator’, RT

Last month, AFP reported Orban as saying that Hungary's relations with Russia have become “entangled in geopolitical and military and security policy issues.” The PM said that the US was retaliating for Budapest's willingness to endorse the South Stream gas pipeline, as well as a deal that would see Russian firm Rosatom develop Hungary’s nuclear power

18--Cutting Russia out of SWIFT banking system would mean ‘war’ – head of VTB, RT

SWIFT is a global banking transactions system connected to more than 10,000 financial institutions in 210 countries. The daily turnover of payments made via SWIFT is around $6 trillion. Russia is the world’s second largest SWIFT customer after the US.

19--ABM is a threat to US itself , RT

Further deployment of America’s global anti-ballistic missile defense poses a threat to the US and those European countries that agreed to host it, because it builds up a dangerous illusion of invincibility, Putin said.

“This [ABM] constitutes a threat not only to the security of Russia, but to the whole world, in view of the possible destabilization of the strategic balance of powers. I believe this is dangerous for the US itself, as it creates a dangerous illusion of invulnerability and reinforces the tendency of unilateral, often ill-considered decisions and additional risks,” Putin said...

The European Phased Adaptive Approach, a centerpiece of the US missile defense shield in Europe, implies deployment of Arleigh Burke-class guided-missile destroyers, all of which are fitted with the Aegis weapon and radar system, interceptor batteries in Poland and Romania, radar in Turkey, and a command center at Ramstein, Germany, a US Air Force base.
Russia considers the system to be a major threat to its own security and has threatened to increase its own arsenals and missile shield piercing capabilities in response.

Yugoslavia-style disintegration scenario for Russia failed
Russia has fought off attempts to initiate its disintegration, similar to the scenario applied to the former Yugoslavia, Putin said.
“They would make us follow the Yugoslavian scenario, with its disintegration and dismemberment of territory, with great relish and with all the resultant tragic consequences for the peoples of Russia. No way. We prevented it,” he said....

The more we retreat and offer excuses, the more impudent become our opponents, acting in the most cynical and aggressive manner,” Putin said....

Putin recalled the situation in the 1990s when Russia showed unprecedented openness to international cooperation, but it faced “the support of separatists from abroad: informational, political, financial and from intelligence agencies, was absolutely evident.”
All that was taking place at a time when Russia “considered its recent enemies as close friends and nearly allies,” Putin said.

20--Obama to name Ashton Carter as Pentagon chief, wsws

The position of defense secretary in the final two years of a beleaguered administration was apparently none too attractive, especially amidst complaints that control over military policy had been largely shifted to the White House National Security Council staff....

Carter stands on the right wing of the Democratic foreign policy establishment. He was a supporter of the 2003 invasion and occupation of Iraq, as well as an advocate of preventive war against North Korea, which he advocated in 2006 in a notorious commentary co-authored by his long-time mentor, former Clinton administration Defense Secretary William Perry.
Senate Republicans who will conduct confirmation hearings immediately praised Carter as a nominee likely to receive a near-unanimous vote....

He began his Pentagon career in the Reagan administration as a civilian analyst in the nuclear weapons program. He was involved in studies on missile defense systems and programs to ensure “continuity of government” in the event of nuclear war—essentially the establishment of military dictatorship in the United States.
These programs were developed more broadly in several administrations, notably by Reagan’s National Security Council under Lt. Col. Oliver North in the form of plans for mass arrests of opponents of a future military intervention in Central America. Similar plans were developed after the 9/11 attacks under the auspices of Vice President Dick Cheney.

Carter switched back and forth between the Pentagon and Harvard University, taking higher level positions in the Clinton administration and ending as assistant secretary of defense for international security policy, where his main focus was the integration of former Soviet bloc countries into NATO, as well as the dismantling of the nuclear arsenals of the former Soviet republics of Ukraine, Belarus and Kazakhstan. This experience suggests he could become the point man for the current US-NATO campaign against Russia....

In 2006, after North Korea successfully tested an atomic bomb, Carter and former defense secretary Perry wrote a joint op-ed for the Washington Post advocating a US missile strike to destroy North Korea’s long-range Taepodong missile. “Should the United States allow a country openly hostile to it and armed with nuclear weapons to perfect an intercontinental ballistic missile capable of delivering nuclear weapons to US soil?” they asked. “We believe not.”
Two years later, in 2008, Carter wrote a think tank report on possible US air strikes on Iran’s nuclear fuel production facilities....

Carter is hardly likely to oppose expanded US military intervention in the Middle East. He has spent the year since he left the Pentagon at Stanford University, serving as a guest lecturer at the Hoover Institution, a leading right-wing think tank and stronghold of the neo-conservatives who spearheaded the US attacks on Afghanistan in 2001 and Iraq in 2003 and are currently beating the drums for war against Syria and Iran.

21---After elections, Washington plans escalation of Middle East war, wsws

The process upon which the White House and Congress are embarking is a demonstration not of popular unity behind war, but rather a united conspiracy to foist upon the American people another war based on lies. On the pretext of suppressing the Islamic State of Iraq and Syria (ISIS)—one of the principal Syrian “rebel” militias that the US and its allies armed and funded—American imperialism is embarking on a new bid to militarily impose its hegemony over the oil-rich Middle East....

Language is required to encompass military operations against not just ISIS, but an ever-increasing array of enemies and potential enemies, as well as wars for regime-change and extra-judicial assassinations—including of American citizens—by drone missile attacks ordered from the White House. What is needed is a bill that will provide pseudo-legal cover for a political reality in which war and military violence have become the principal instruments through which US imperialism seeks to advance its global interests and resolve its deepening internal contradictions

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