Sunday, November 30, 2014

Today's Links

1--OPEC Presents: QE4 And Deflation, Illargi


Some may say and think deflation is a good thing, but I say deflation kills economies and societies. Deflation is not about lower prices, it’s about lower spending. Which will down the line lead to lower prices, but then the damage has already been done, it’s just that nobody noticed, because everyone thinks inflation and deflation are about prices, and therefore looks exclusively at prices....


Lasting deflation would force more companies out of business, reduce already stagnant wages and raise unemployment further [..] The inevitable rise in its public debt could eventually lead to a default and a forced exit from the euro.

2--Mexican President Peña Nieto announces police-state plan as more bodies are discovered, wsws


Since 2008, over 27,000 have been reported missing in Mexico. The National Bank of Genetic Data contains 25,884 DNA samples, yet only 542 bodies have been positively identified.
Under these conditions, president Peña’s new proposal would give Congress the authority to dissolve city and state governments that are deemed infiltrated by drug gangs and give states control over municipal police forces that are likewise supposed to be corrupt. As if pretending to be a leopard changing his spots, Peña made it clear that his proposal was in response to the Ayotzinapa killings and disappearances: “its cruelty and savagery have shocked Mexico.” In reality, this incident is by no means an isolated one. A recent report by the French magazine FRANCE24 uncovered the kidnapping of 31 high school students on July 7 in Cocula, Guerrero.


With this proposal, the Mexican ruling class is moving toward a police state. In addition to giving Congress the authority to interfere with elected governments and to militarize police forces under federal control, the government would create a national identity card that all Mexicans would be required to carry.


To begin with, federal police and security forces are to be sent to the states of Guerrero, Michoacán, Jalisco and Tamaulipas, considered the most violent. Federal troops and special security forces already operate in Michoacán and Guerrero at will. While it is not entirely known how much they knew, infantry forces (the 27th Battalion) stationed in Guerrero refused to come to the aid of injured students, and took a hands-off attitude toward the massacre. The 27th Battalion has a sinister history of repression and human rights violations that go as far back as Mexico’s “dirty war” of counterinsurgency in the 1970s and 1980s. In addition to atrocities, the army carried out the “forced disappearance of hundreds,” according to a recent report in the Mexico City daily La Jornada .


Peña Nieto would put such forces in charge in cities and states deemed too corrupt or unsafe. It is no coincidence that the Mexican president announced his police state-plan the day after a telephone conference with US president Obama. Following the telephone call, a US government press spokesman used nearly the same phrase (“a tragic and barbaric crime”). One could expect that Peña received Obama’s backing on his police-state measures, and advice and support for measures already taken.


3--Coming: The End of Fiat Money, Barrons


Stephanie Pomboy, founder of MacroMavens, sees the world hurtling toward a day in which money will again be backed by gold or other hard assets. Until then, she also sees plenty of trouble...


Economics is so dull! You have to inject a little levity when you can. We know that the Bank of China, India, and major emerging-market economies have been slowly diversifying out of their dollar reserves into hard assets. When you get to the point that the Bank of Kazakhstan is thinking: "We really need to figure out a way to diversify out of dollars," it is a pretty profound statement about the quality of the dollar. Here in the U.S., it doesn't seem like any investor is concerned about the risk of the demise of fiat money. I'm sure most people think I should be fitted for a straitjacket.


The real urgency for QE is not the economic outlook, but that the Fed has made itself the only natural buyer of Treasuries; during QE2 they were 61% of the market. At the peak of the housing bubble and globalization nirvana, foreigners absorbed 82% of Treasury issuance; today, it's 26%. While we are enjoying a short flight-to-safety bid, courtesy of Germany's Angela Merkel and the euro-zone crisis, that's not a sustainable financing strategy. Now people are paying for the privilege, after inflation, of owning that paper. We have over $1 trillion annually in Treasury issuance, and our foreign creditors are buying $300 billion. That's being absorbed by the flight-to-safety bid, as hedge funds cover short positions and bond managers extend duration.....


I don't see it in the next 12 months. I think a five-year time horizon is very, very realistic. I envision a gold-backed currency system. We are going back to hard money, rather than a fiat system where debtors can silently default by inflating their debts away....


 the rules of prior recoveries don't apply anymore. We've got secular deleveraging and a slower pace of consumer spending, a broad deceleration in nominal spending growth, for as long as it takes households to feel more comfortable with their balance sheets. It's a muddle-through scenario. On the corporate side, if they can no longer pass on higher prices, the margin squeeze intensifies. If the Fed at the same time introduces quantitative easing again, commodity price pressures might reaccelerate, squeezing margins further. Right now, the estimates for growth, even as they come down, are probably too high. Ditto for profit growth.....


4--Stephanie Pomboy: The Fed Will Have to Reverse Course, Barrons


unbeknownst to many, the reason why Treasury yields are 2.6% is in part due to the economy, but it is largely due to the fact the Fed has just been sopping up all of the surplus supply that foreigners are leaving behind. ....


It is scary to imagine, because if you look at a chart of nominal consumer spending, which is 70% of GDP [gross domestic product], it has continued to decelerate, even in this period of unprecedented monetary accommodation and rampant financial-asset inflation....


One chart that really summarizes my entire view compares net worth with consumer spending. Of the $25 trillion expansion in household net worth since March 2009, $21 trillion was financial assets, and $3 trillion was real estate. So the $21 trillion helps a very small segment of the population, while the $3 trillion has a much broader impact. But it is a massively disproportionate benefit for the high end. Even though people in that group are the marginal drivers of the economy because they spend a lot more, overall consumer-spending growth has continued to slow. In the past 50 years, we have never seen household net worth increase this much without spending growth accelerating materially as well. This time, though, spending growth has decelerated, and each year it takes another step down. With asset prices still not girding spending, we need income gains. And unfortunately, employment isn't ready to take the handoff. While the latest employment figures have fueled the hope that things are returning to normal, the numbers are skewed by people holding more than one job. Jobs have increased, but hours have not. This is reflected in the gap between the household survey—where they ask if you are employed—versus the payroll survey, which adds up each payroll.

What are some of your key concerns about consumers?
The increase in spending—punk as it is—is almost entirely due to higher prices—not higher demand or unit sales. Fully 90% of the increase in discretionary spending from the precrisis level is explained by inflation. In other words, people aren't spending more because they want to. They are spending more because the price of all the stuff they buy has gone up—hardly a sign of consumer strength....

 I was right on interest rates. What I missed was the flight to risk against a backdrop of weakening growth, and I admittedly worshipped at the altar of the fundamentals. Liquidity can only take you so far, and at some point, the fundamentals win out, as they did ultimately in 2008. You could have asked me that question in 2006 or 2007, and I would have said, "Look at what all the economic data are telling you–people are defaulting on their mortgages, etc., and the hit is coming." And, eventually, it did. At some point, the fundamentals will be undeniable, especially at a time when the Fed is taking away liquidity by tapering....

And the Fed can't continue to taper Treasury purchases, considering that foreign purchases of Treasuries have collapsed in the past several years. We used to rely on foreign financiers to fund our borrowing, but those days are long gone. They are buying Treasuries at a rate not much above $100 billion a year, down from $800 billion 3½ years ago


When all else fails, central-bank monetization of debts is the usual answer -- but not a good one...

According to the Journal's crunching of the numbers, dollar assets comprised 54% of Beijing's $3 trillion-plus reserves as of last June 30, down from 74% as recently as the end of 2006. That's based on data on China's foreign-exchange reserves and the U.S. Treasury's latest survey international holdings of U.S. securities. Those numbers show an outright increase in China's holdings of U.S. securities, by $115 billion in the latest 12 months, to $1.726 trillion.....


But more recent Treasury data show China has been selling Treasuries outright. And while the markets have been complacent to the point of snarkiness, MacroMavens' Stephanie Pomboy thinks that's wrong. Unlike other Cassandras, she's been right in her warnings -- notably in the middle of the last decade that the U.S. financial system was dangerously exposed to a bubble in U.S. real estate. Hers was a lonely voice then because everybody knew, of course, house prices always rose.
As for the present conundrum, there's an $800 billion gap between the $1.1 trillion the Treasury is borrowing to cover the budget gap and the roughly $300 billion overseas investors are buying, Pomboy calculates. Banks, corporations and households have been doing little to fill that gap, preferring higher-yielding securities, so "it would appear the heavy lifting has been done by long-only bond managers extending duration and specs rushing to cover their shorts," she writes.
But Pomboy has little doubt that the Fed will step in to fill the gap left by others. In other words, debt monetization, a fancy term for printing money to cover the government's debts, which in polite circles these days is called "quantitative easing."...

"Having pushed interest rates to zero, launched QE1 and QE2, there's no reason to believe that the Fed is going to allow free-market forces to destroy the fragile recovery it has worked so hard to coax forth now. And make no mistake, at $800 billion, allowing the markets to resolve the shortfall in demand would send rates to levels that would absolutely quash this recovery…if not send the economy in a real depression."
But her real concern is a bigger one. "The Fed's 'need' to take on an even more active role as foreigners further slow the purchases of our paper is to put the pedal to the metal on the currency debasement race now being run in the developed world -- a race which is speeding us all toward the end of the present currency regime." That is, the dollar-centric, floating exchange-rate system of the past four decades since the end of Bretton Woods system, when the dollar's convertibility into gold was terminated.


7--Taliban brings war to Afghan capital, threatening stability and endangering foreigners, WA Post
13 years of war and the US still cannot secure the Capital


8--AP: U.S. Mercenaries Working With Al-Qaeda No Scandal - Just A "Difficulty, MOA


US openly working with al Qaida


9--QE in one chart, Burning Platform
Proof the QE works....for the 1 percent



10--Mexican President Peña Nieto announces police-state plan as more bodies are discovered, wsws


11---UN report documents torture, police violence in US, wsws
"We tortured a few folks" "We pulled out a few folks fingernails"


Washington; Capital of global torture
The report subjected a major country to a wide-ranging critique, indicting it for a long list of human rights violations including:
  • Refusal to prosecute officials who engage in or sanction torture of prisoners
  • Detaining prisoners indefinitely without trial or other judicial proceeding, or any hope of release
  • Kidnapping individuals overseas and torturing them in secret prisons
  • Approving a manual for interrogation of prisoners that includes methods classified as torture under the Geneva Conventions
  • Imprisoning immigrants under degrading conditions and refusing to acknowledge their claims as refugees fleeing persecution
  • Imposing the death penalty on hundreds of prisoners, many of them from oppressed racial and ethnic minorities, many of them demonstrably innocent or unfairly tried
  • Widespread use of solitary confinement, considered a form of torture, at all levels of the prison system
  • Severe abuse of juveniles, pregnant women and other vulnerable groups both in police custody and in prisons
  • Maintaining a regime of police violence, particularly against young men from racial and ethnic minorities, and refusing to restrain or punish police who kill, wound or torture
6---OPEC might get the last laugh on oil , marketwatch


13--Could oil collapse cause next credit crisis?, cnbc


14--Oil price slump to trigger new US debt default crisis as Opec waits, Telegraph


15--There's Trouble In US Energy Junk Bonds, BI


16--Beer Watch, Newspapers take sides on ‘Abenomics’, JT


attempting to show how Abenomics really worked. Explaining that 99.7 percent of Japanese companies are small or medium-sized and that these companies employ 70 percent of Japan’s workers, Asahi talked to a small factory owner in Fukuoka who makes car parts. Encouraged by the prime minister’s zeal he boosted the wages of his 20 employees by ¥10,000 a month in anticipation of the fruits of Abenomics, but on balance has been losing money while his clients, Toyota and Nissan, enjoy record profits, and for the same reason: The low yen that makes his materials so expensive helps the big automakers sell their products.
For contrast, the Asahi went to the city of Toyota in Aichi Prefecture, where everyone works for Toyota and local retailers are reaping the windfall. The town’s economic well-being is exceptional, the implication being that only huge export-driven companies do well under Abenomics, since the promised trickle-down effect is limited. Many of these companies moved production overseas when the yen was high and, as the president of Panasonic told reporters last April, they aren’t coming back.


Tokyo Shimbun did something similar with regard to the investor class, which consists of people who are already well off and buy stocks as a matter of course. In 2013, the number of people with assets of more than ¥120 million increased by 420,000, while everyone else faces declining prospects. Nonregular employees now account for 37 percent of the work force, their number increasing by 930,000 from 2012 to 2013.


It is these people, most of whom are younger members of Japan’s vast middle class, who need to comprehend what’s at stake in this so-called referendum, and the Asahi tried to reach them with language they could understand. Columnist Takayuki Yasui’s Nov. 23 piece quoted the president of Kirin Beer, Yoshinori Isozaki, who, unlike other business leaders, was not surprised when Japan’s GDP registered negative for two quarters in a row. He had seen over the summer how sales of premium beer rose while those of every other beer and beer-like beverage dropped. Since the premium-beer market is small and the regular-beer market big, “I could tell the economy was bad,” he said. In other words, the haves had it good, while the have-nots didn’t. Even a 10-year-old could see that.


17---Abenomics exposed, JT


What is the point of this gambit other than to divert attention from Abe’s accumulating failures and unpopular policies? .....Abenomics has disappointed most Japanese and is now in intensive care, with life-support provided by the Bank of Japan.


All he has done is ignite the stock market, but it is hard to campaign on delivering welfare for the wealthy....
Many experts were surprised when the economy slipped back into recession, but it didn’t come as a surprise to most Japanese, who have seen household incomes fall. Additionally, almost all new employment is in poorly paid, dead-end jobs with little job security. The public reaction has been harsh with polls indicating that 75-85 percent think Abenomics is a flop.
Then there was the fiasco surrounding the Cabinet reshuffle, leading to two ministers’ resignations, followed by Okinawans’ repudiation of Abe’s U.S. Marine air base deal. Moreover, an overwhelming majority of Japanese oppose the prime minister’s signature policies on collective self-defense, nuclear reactor restarts, state secrecy legislation and arms exports. Empty pledges, unpopular policies and a sputtering economy are finally catching up with Abe, his popularity plunging by 8 percent in a November poll....


Abe wants to cut a deal on the Trans-Pacific Partnership — certainly big business hopes he will — and with elections behind him he will have more leeway to make concessions that will anger farmers.


18--Japan slides back into recession, wsws


preliminary figures showed a contraction at an annualised rate of 1.6 percent. Coming on top of the 7.1 percent fall in the second quarter, the new figures mean that Japan is officially in recession.
This is the fourth recession experienced by the world’s third largest economy since the global financial crisis of 2008-2009. Together with near-zero growth in the euro zone, it signifies that the tendencies toward stagnation and outright recession in the world economy as a whole are intensifying.





Friday, November 28, 2014

Today's links

"I am all for getting our nose out of the rest of the world’s problems and taking care of our myriad problems here at home. That said, if our idiot “leaders” are bound and determined to blunder into another war, I’d much rather they bomb the hell out of Saudi Arabia (and the rest of those crappy little Sunni sheikdoms along the Persian Gulf) rather than Iran and Syria. They’ve been a pain in our ass for 40 years. In 20-20 hindsight, we should have let Saddam take Kuwait — and then helped him roll right on into Riyadh as well. Why do we keep destroying modern, secular Arab countries (Iraq, Libya, Syria) and protect the medieval religious fanatics that finance and export Wahhabi terrorism to the world?? After all, bin Laden was Saudi, as supposedly were most of the 911 hijackers. Cut off the head of the snake — send all the Gulf “royals” to see Allah and get their 70 virgins! That would go a helluva long ways toward solving a lot of the world’s problems."  6th-generation Texan, comments section, Naked Capitalism 

 "Bravo! Except the head of the snake resides in Washington DC."  EoinW, Naked Capitalism




1--Malaysia excluded from MH17 probe – for 'not pointing fingers at Russia'?, RT


2--Oil plunge could trigger financial crisis, wsws


the drive to wipe out higher-cost US shale producers could have far-reaching consequences for global financial markets. Energy projects in the United States have been heavily financed through the issuing of high-risk or junk bonds. In 2010, energy and materials companies made up 18 percent of the US high-index yield, a measure of so-called sub-investment grade borrowers. Today they account for 29 percent, as a result of massive borrowing by drilling companies.


Research carried out by Deutsche Bank showed that should the price fall to $60 per barrel, which is eminently possible, there could be a default rate as high as 30 percent among some US borrowers.
A report published earlier this month in the British Telegraph warned that the “rush to pump more oil in the US has created a dangerous debt bubble in a notoriously volatile segment of corporate credit markets, which could pose a wider systemic risk in the world’s biggest economy.”


Evidence of the oil price slide’s impact on major banks came to light in an article published in yesterday’s Financial Times. It reported that two major banks, Barclays and Wells Fargo, faced “potentially heavy losses on an $850 million loan made to two oil and gas companies, in a sign of how the dramatic slide in the price of oil is beginning to reverberate through the wider economy.”
The report also noted that of the 180 distressed bonds in the Bank of America Merrill Lynch high-yield index, some 52, or nearly 29 percent, were issued by energy companies.


3--Oil price slump could trigger another US debt default crisis as frackers face bankruptcy, Irish Independent


West Texas Intermediate crude is currently trading at multi-year lows of around $75 per barrel, down from $107 per barrel in June.
"A shock of that magnitude could be sufficient to trigger a broader high-yield market default cycle, if materialised," warn Deutsche strategists Oleg Melentyev and Daniel Sorid in their report.
Five years ago at the beginning of what has become known as the US shale oil revolution, drillers started to load up on debt to fund their operations and acquire new acreage as vast areas of North America started to open up for exploration.


In 2010, energy and materials companies made up just 18pc of the US high-yield index - which tracks sub-investment grade borrowers - but today they account for 29pc of the measure after drilling firms spent the past five years borrowing heavily to underwrite the operations.
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The result of this debt splurge has been a spectacular rise in US oil and gas output.
This rush to pump more oil in the US has created a dangerous debt bubble in a notoriously volatile segment of corporate credit markets, which could pose a wider systemic risk in the world's biggest economy.


Should oil prices fall for a prolonged period of time many frackers forced to borrow at a higher rate could be forced out of business and ultimately default. According to research from JP Morgan Asset Management, of the 12 largest shale oil basins in the US, 80pc are barely profitable.


4--Saudi Arabia Carries Out 61st Execution Of 2014, mpn


5--An Economic Recovery for the 1%, moyers


Average income growth in US recoveries: top 10% versus the bottom 90%. (Graph:  Pavlina Tcherneva)
Average income growth in US recoveries: top 10% versus the bottom 90%. (Graph: Pavlina Tcherneva)


6---Despite earlier claims that US had no intention of supplying Ukraine with weapons, a recent leak of government documents has revealed plans to supply weapons to Kiev. The leak was published online by Ukrainian hackers group CyberBerkut, sputnik


7---Why the US is to blame for trouble in Mexico, FP


8---Guest Post: The Coming Collapse Of The Petrodollar System, zero hedge


9--The Geopolitics of Gas and the Syrian Crisis: Syrian “Opposition” Armed to Thwart Construction of Iran-Iraq-Syria Gas . global research


10--Big investors pull back on housing, cnbc


11--America: your days as a global superpower are numbered, Telegraph


We've seen it before: the Roman empire fell, then the British. America's economic dominance could be about to end - and China is taking its place.
Based on current trends China’s economy will overtake America’s in purchasing power terms within the next few years,” Tim Reid of Deutsche Bank wrote in a research note. “Given this analysis it strikes us that today we are in the midst of an extremely rare historical event – the relative decline of a world superpower.”
The US’ economic prowess has been waning since the 1950s, but the downturn has sharpened over the last 15-or-so years. Part of this is due to internal political and economic issues in the US. Political polarization in the US is at its highest level in decades, economic confidence is drooping and most Americans are no longer in favour of international military intervention - once one of the pillars of American freedom and might.


But this is not just the story of America’s decline. China is on the way up - and could account for more of global GDP than the US by 2018, according to the IMF's World Economic Outlook index.
Another report, released earlier this week, said that China's nominal GDP will overtake that of the US by 2024, buoyed by a three-fold increase in consumer spending.
“China has begun to return to the position in the global economy it occupied for millenia before the industrial revolution,” Reid wrote, adding that China is on its way to overcoming the “centuries-long economic underperformance” that has held it back until recently.


12---U.S. 10-year yield slumps below 2.17% as oil collapses, marketwatch


13--Abenomics’ hit by more lackluster data, JT


The government released a string of lackluster economic data Friday showing that inflation hit its lowest level for more than a year, dealing another blow to the Abe administration’s attempts to conquer years of falling prices and tepid growth


Adjusted for the hike, however, the core inflation rate came in at 0.9 percent, compared with 1.0 percent the previous month — its lowest level since October 2013.
The weak reading makes the Bank of Japan’s 2.0 percent inflation target — which it initially aimed to hit in 2015 — look increasingly out of reach.


The BOJ shocked markets last month by saying it would expand its asset-buying stimulus program to about ¥80 trillion annually in a bid to overcome deflation and kick-start the economy.
“Even despite the BOJ’s surprise move, we maintain our view that there is a very long way to go before achieving the plus 2.0 percent target,” Credit Agricole said.

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
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