Saturday, February 28, 2015

Today's links

1-Greece seeks negotiations on ECB bond repayment, Reuters

Greece called into question on Saturday a major debt repayment it must make to the European Central Bank this summer, after acknowledging it faces problems in meeting its obligations to international creditors.
Finance Minister Yanis Varoufakis said Athens should negotiate with the ECB on 6.7 billion euros ($7.5 billion) in Greek government bonds held by the Frankfurt-based bank that mature in July and August.
Varoufakis did not say what he hoped to achieve in any talks, but he accused the ECB of making a mistake in buying the bonds around the time Greece had to take an EU/IMF bailout in 2010.
"Shouldn't we negotiate this? We will fight it," he said in an interview with Skai television. "If we had the money we would pay ... They know we don't have it." ...

Varoufakis argued that if the bonds had remained in investors' hands, their value would have been cut by 90 percent under a restructuring of Greece's privately held debt in 2012, reducing the burden on the state.
The ECB bought the bonds at a deep discount and made large profits because their value rose as the euro zone debt crisis eased. Under Greece's second bailout deal, these profits were due to be returned to Athens to help it repay debt.
Athens received a partial payment in 2013 but euro zone countries are withholding a further 1.9 billion euros pending the review of Greece's economic plans. Varoufakis wants this money sent directly to the IMF to meet the March payment.

2---Greece debt: PM Alexis Tsipras rules out third bailout, BBC

Greece will not need a third international debt bailout when its current programme ends in four months, the country's prime minister has said.

Alexis Tsipras vowed his government would "start working hard" to change the country, which is saddled with a debt 175% of its GDP.

3--Greece runs out of funding options despite euro zone reprieve, Reuters

 despite the acceptance of the reform plan by the euro zone, it has been criticized by two major creditors - the ECB and the IMF - for lacking detail and it is not clear how much flexibility Athens has in veering from its original bailout. ....

Shut out of debt markets and faced with a steep fall in tax revenues, Athens is expected to run out of cash by the middle or end of March. Its finance minister has warned that Greece will struggle to repay creditors starting with a 1.5 billion euro IMF loan repayment due in March....

Other options all appear to have problems. One possibility - the transfer of 1.9 billion euros worth of profits that the European Central Bank made on buying Greek bonds - will not be allowed until Greece has completed the bailout program.
Greece had also hoped it could tap the almost 11 billion euros of leftover money in the Greek bank stabilization fund, but euro zone finance ministers have decided the money would be returned to the Luxembourg-based euro zone bailout fund.

While it would still be available for Greek banks, it could only be released on the say-so from the ECB.
The only source of quick cash left to the Tsipras government now is issuance of Treasury bills, or short-term debt that matures in three or six months. But Athens' creditors have set a 15 billion euro cap on such debt and it has already been reached.
The euro zone has so far ruled out any raising that ceiling, partly on concerns that it is tantamount to central banks financing governments. That's because Greek banks have been using the T-bills as collateral to tap central bank funding and then using the cash to invest in more T-bills, helping the state cover short-term needs.

One person familiar with ECB thinking said that any extension of the T-bill limit was "very unlikely". A senior Greek banker said the expectation in Athens remained that the ECB would relent and allow some leeway on T-bills.
"The Greek state is pinning all its hopes on the ECB allowing an extra T-bill auction," the banker said.

4--The Incredible Debacle Left Behind By NATO In Libya, ZH

In retrospect, Obama’s intervention in Libya was an abject failure, judged even by its own standards. Libya has not only failed to evolve into a democracy; it has devolved into a failed state. Violent deaths and other human rights abuses have increased severalfold. Rather than helping the United States combat terrorism, as Qaddafi did during his last decade in power, Libya now serves as a safe haven for militias affiliated with both al Qaeda and the Islamic State of Iraq and al-Sham (ISIS). The Libya intervention has harmed other U.S. interests as well: undermining nuclear nonproliferation, chilling Russian cooperation at the UN, and fueling Syria’s civil war.?

As bad as Libya’s human rights situation was under Qaddafi, it has gotten worse since NATO ousted him. Immediately after taking power, the rebels perpetrated scores of reprisal killings, in addition to torturing, beating, and arbitrarily detaining thousands of suspected Qaddafi supporters. The rebels also expelled 30,000 mostly black residents from the town of Tawergha and burned or looted their homes and shops, on the grounds that some of them supposedly had been mercenaries. Six months after the war, Human Rights Watch declared that the abuses “appear to be so widespread and systematic that they may amount to crimes against humanity.”?

As a consequence of such pervasive violence, the UN estimates that roughly 400,000 Libyans have fled their homes, a quarter of whom have left the country altogether. ?

5--Fed Minutes: Janet Yellen Walks a High Wire Greased With Oil , WSOP

Secondly, the Fed’s happy talk about the solid growth in the U.S. economy that may warrant a rate hike sometime this year just doesn’t comport with the reality of the situation. On February 10, Steve Ricchiuto, Chief U.S. Economist at Mizuho Securities USA, who has a Masters Degree in Economics from Columbia University, appeared on CNBC to succinctly explain that reality. Ricchiuto had this to say:

“…I keep hearing over and over again in the financial press about this acceleration in economic growth. That isn’t happening. Last month we had a horrible retail sales number. We had a horrible durable goods number. We’re likely to have a very disappointing retail sales number coming forward. This month we’ve had a strong payroll number – we say everything’s great. It’s not great. It’s running where it’s been. It’s been the same thing for the last five years. There’s no improvement in the economy.”

The unprecedented nature of this period has been captured by David Papell and Ruxandra Prodan, Professor of Economics and Clinical Assistant Professor of Economics, respectively, at the University of Houston. Writing at Econbrowser, the pair had this to say:

“While the Great Recession of December 2007 to June 2009 ended over five years ago, the recovery has been characterized by very slow growth. The Congressional Budget Office has recently released projections of real (inflation adjusted) GDP growth through 2025. If these projections turn out to be correct, real GDP for the U.S. will never return to its pre-Great Recession growth path. This projected decrease in potential GDP is unprecedented, as almost all postwar U.S. recessions, postwar European recessions, slumps associated with European financial crises, and even the Great Depression of the 1930s were characterized by an eventual return to potential GDP.”
The authors do not offer answers as to why GDP growth cannot be restored to pre-financial- crisis levels but we, as many others, believe it is a result of the unprecedented wealth and income inequality in the U.S. Until Congress takes decisive action to rebalance the gap, we’ll remain in this economic twilight zone.

6---Repo Blues: "It’s sobering to be six years beyond the crisis and still be trying to solve its core problem. Repowatch

Director Richard Berner explained in his blog:
The project focuses on repurchase agreements, or repos, which are a major source of short-term funding for the financial system. A repo is essentially a collateralized loan — one party sells a security to another party with an agreement to repurchase it later at an agreed price.
Repos are instrumental in providing funding and liquidity — the lubrication that helps to keep the global financial system operating. The U.S. repo market efficiently provides more than $3 trillion in funding every day.

However, vulnerabilities in repo markets can also contribute to risks to financial stability. The concern arises because of the potential for shocks to the financial system during times of market turbulence to cause repo liquidity to dry up.

The repo market is divided into three parts: (1) the triparty repo market, where transactions are centrally settled by two large clearing banks; (2) the general collateral financing, or GCF, market, where interdealer repo transactions are centrally cleared; and (3) the bilateral market, where repo transactions are conducted privately between two firms....
It summarizes:
... several threats to financial stability have risen over the past year. This report highlights three specific risks. First, we see material evidence of  excessive risk-taking during the extended period of low interest rates and low volatility. Second, markets have become more brittle because liquidity may be less available in a downturn and the risk of asset fire sales and runs in short-term wholesale funding markets remains unresolved. Third, we are concerned that financial activity is migrating toward areas of the financial system where threats are more difficult to assess because information is not available, and that activity may be consequential. Gaps in analysis, data, and policy also persist, despite progress in narrowing them. If left unaddressed, these threats could adversely affect financial stability. 

7--2014 Continues a 35-Year Trend of Broad-Based Wage Stagnation, EPI

8--Dudley: Why Fed may need to get 'more aggressive', CNBC

"The fact that market participants have set forward rates so low has presumably led to a more accommodative set of financial market conditions, such as the level of bond yields and the equity market's valuation, that are more supportive to economic growth," he said, according tp prepared remarks.
"If such compression in expected forward short-term rates were to persist even after the FOMC begins to raise short-term interest rates, then, all else equal, it would be appropriate to choose a more aggressive path of monetary policy normalization as compared to a scenario in which forward short-term rates rose significantly, pushing bond yields significantly higher," he added.

9--Thus spake Yanis V

Is the memorandum over? It’s over. Allow me to explain what memorandum means to me. Borrowed funs and austerity are permanent darkness. The terms of the memorandum undermine the concept of reform in Greek society. We hit pensioners and hairdressers while reforms were mishandled....

What did you achieve?
We put the humanitarian crisis on the agenda for the first time. I am here because there are kids starving out there.
How will you achieve this? You signed a deal that doesn’t allow you to act unilaterally? You would need the approval of institutions… 
The gang of technocrats won’t be here. It won’t be the same. We have said that there will be no unilateral actions of negative fiscal consequence. For such activities as overdue debts we don’t need approval. We will also move in other directions as we don’t want honest taxpayers to feel duped.
Do you have a plan?
We will finalize it over the weekend. With the agreement we reached, the memorandum ended and unacceptable behavior has ended. We are in a Europe that has undermined itself. I had said earlier that at the Eurogroup there is not even discussion. We are changing Europe. I was in Frankfurt with five secret policemen. I asked to go to the toilet and one of them had to come with me. “I want to thank you because Europe needs to change for us Germans too,” he said

10--Merkel’s Truths Lead Greece to Unavoidable Deal on Euro Bailout, Bloomberg

In office for a month, Tsipras and his finance minister, Yanis Varoufakis, have largely shelved the promises that got them elected, irritated key euro-area collaborators and stoked doubt about their intentions. In return, they got a four-month bailout extension and the certainty they’ll be back at the edge of the financial abyss before the first half of 2015 is over.

“They were amateurs, but they are adapting,” said Theodore Pelagidis, a senior fellow at the Brookings Institution and a professor at the University of Piraeus in Athens. “The negotiation showed that Greece had no leverage.”

11---Don't mention the war, Fawlty Towers

12--GDP, Pending home sales, Chicago ISM, Consumer Sentiment, warren mosler

No ‘surge’ happening and Q1 GDP at risk as well from collapse of oil and gas investment:

GDP Growth Slows to 2.2% in 4Q, revised lower but still better than expected

Latest figures indicate breakout pace of growth in the second and third quarters was unsustainable. The latest figures indicate the breakout 5% pace in the third quarter and 4.6% in the second quarter were unsustainable. For 2014 as a whole, GDP expanded 2.4%, slightly better than the average 2.2% growth of 2010-2013. By comparison, the economy grew an average 3.4% a year during the 1990s. Real personal consumption expenditures increased 4.2% in the 4Q, compared with an increase of 3.2% in the 3Q.

 13--The Self-Enrichment of the Elites--Economic Hegemony and the Federal Reserve, Rob Urie, cp

In his book Globalization and Its Discontents former World Bank economist Joseph Stiglitz details the ignominious history of IMF ‘structural adjustment’ programs inflicted around the globe in the 1990s. While the IMF has admitted that economic austerity is both theoretically flawed and socially destructive it remains a core IMF policy and is currently being forced on peripheral Europe. This institutional persistence is characterized by the Western economic mainstream as an accident of history, as flawed theories driving bad policy decisions. Another explanation that also fits the facts is that the IMF is a tool of Western economic power used to extract wealth from poor countries under the contrived apologetics of the ‘market’ economics it claims as its goal....

Before the 1980s forty percent of corporate earnings or borrowed money was invested in productive capacity—in future economic production. Today less than ten percent is with the difference going into the pockets of executives who borrow money on the corporate dime or use corporate earnings to raise the value of the stock options they have granted themselves.....

Interest rates are the ‘price’ of borrowed money— the lower the price the cheaper that borrowing money is. The premise is that cheap money spurs companies to borrow to invest in their businesses. Left apparently unconsidered is that corrupt insiders would load up ‘their’ companies with cheap debt to enrich themselves while gutting the productive economy. Mason and Lazonick argue that this is precisely what is going on. ....

QE had the added effect of raising financial asset prices by reducing the available supply as I explain here and the Bank of England explains here. The main beneficiaries of rising financial asset prices are the rich who own most financial assets and corporate executives who grant themselves stock options. And central to this self-enrichment are low interest rates that allow companies to fund stock repurchases using cheap debt. This practice leaves a gutted, overleveraged corpse of an economy behind. It also explains the remarkable recovery in the fortunes of the 0.1%.
Graph (3) above: what mainstream economists call a conspiracy theory, the relation of QE to the rise in financial asset prices, was common knowledge on Wall Street within weeks of its inception in 2009. In addition to the ‘portfolio balance channel’ explained by former Fed Chair Ben Bernanke here, stock repurchases funded with cheap debt by self-dealing corporate insiders worked to tie the rise in the Fed’s balance sheet to rising stock prices. Articulation of the ‘portfolio balance channel’ makes it clear that Mr. Bernanke intended to raise financial asset prices with QE— it wasn’t an unintended consequence. Source: St. Louis Fed....

The theoretical frame that supports Federal Reserve (and IMF and ECB) policies works by compartmentalizing causes and effects. The contention that elite self-enrichment is either a market outcome or is socially neutral leaves aside the mechanisms used and the broader effects. The Federal Reserve has always based its policies on banker economics, on ‘managing’ Western economies to protect the value of bank assets from inflation. The result is that economic life is now substantially arranged around what supports Wall Street’s interests.

14---Economist Stephen Roach made a good point in a recent article at Project Syndicate. He said, “In the 22 quarters since early 2008, real personal-consumption expenditure, which accounts for about 70% of US GDP, has grown at an average annual rate of just 1.1%, easily the weakest period of consumer demand in the post-World War II era.” (It’s also a) “massive slowdown from the pre-crisis pace of 3.6% annual real consumption growth from 1996 to 2007.” (“Occupy QE“, Stephen S. Roach, Project Syndicate)

15--No changes to greek programe, wsws

Schäuble’s position was eventually sanctioned by all 19 Eurogroup finance ministers, including Greece’s Yanis Varoufakis. Syriza will now begin to impose more cuts, coming after five years of devastating EU austerity measures adopted by previous Greek governments.
Introducing the vote, Schäuble said, “We’re not talking about new billions for Greece... It is not about changes to the programme, rather it’s about providing or granting extra time to successfully end this programme.”...

Gysi’s claims were belied by his acknowledgment that under Greece’s existing austerity programme, which he just voted to extend, “90 percent of the 240 billion euro for Greece went to the banks and creditors. Among them was also the Deutsche Bank. Among them were also French banks. 90 percent of this sum didn't go to the Greeks; they have seen almost nothing of it.”
The Left Party is in reality now openly behind the demands of the ruling elite that the Greek people be bled dry, in order that its debt mountain of more than €320 billion be paid off. “We must help rebuild Greece, continued Gysi , so it can repay its debts, .....

In March, Athens must make a €1.5 billion loan repayment to the IMF and then pay a further €800 million in interest payments in April. In the summer, €8 billion in debt repayment falls due, including €6.5 billion to the ECB. The Greek state is bankrupt and cannot access funding through international capital markets. Its’ banks remain on the verge of collapse and are being propped up only by temporary access to high interest rate loans from the ECB. Greece is totally reliant on funding from the Eurogroup, ECB and IMF to meet these payments.

16--The anti-Marxism of Yanis Varoufakis, Nick Beams, wsws

17--US economy in deflation and slump, wsws

18--William Engdahl on Operation Gladio, Fethullah Gülen & One World Government, Boiling Frogs

So in a true sense we can say that the Gülen Cemaat is the nothing more than the projection of an idea from Langley Virginia CIA headquarters, an idea from essentially stupid people there who believed they could use him and they could abuse religion as a cover to advance their design for global control, what David Rockefeller calls One World Government. Unlike the CIA’s Mujahideen Jihadists like Hekmatyar in Afghanistan or Naser Oric in Bosnia, the CIA decided to give Fethullah Gülen a radically different image. No blood-curdling, head-severing, human-heart-eating Jihadist.
No, Fethullah Gülen was presented to the world as a man of “peace, love and brotherhood,” even managing to grab a photo Op with Pope John Paul II, which Gülen featured prominently on his website. The Gülen organization in the US hired one of Washington’s highest-paid Public Relations image experts, George W. Bush’s former campaign director, Karen Hughes, to massage his “moderate” Islam image - See more at:

In the USA and Europe, CIA-influenced media like CNN gave him beautiful free publicity to overcome opposition to open his schools across America. For the CIA it was one more tool to destroy not only an independent secular Kemalist Turkey, but to advance their Afghan drug trade worldwide and to use Gülen’s people to destabilize opponent regimes that CIA network in Washington, the “deep state” wanted to get rid of. Sibel Edmonds, former FBI Turkish translator and “whistleblower,” named Abramowitz, along with Graham E. Fuller, as part of a dark cabal within the US Government that she discovered were using networks out of Turkey to advance a criminal “deep state” agenda across the Turkic world, from Istanbul into China. The network that she documented included significant involvement in heroin trafficking out of Afghanistan. -...

Graham E. Fuller had been immersed in the CIA’s activities in steering Mujahideen and other political Islamic organizations since the 1980’s. He spent 20 years as CIA operations officer in Turkey, Lebanon, Saudi Arabia, Yemen, and Afghanistan, and was one of the CIA’s early advocates of using the Muslim Brotherhood and similar Islamist organizations like Gülen Cemaat to advance US foreign policy. - See more at:

How does CIA work via Gulen schools at Middle-Asia? WE: First it should be noted that Russia moved swiftly to ban the Gülen schools when the CIA began the Chechyn terror in the 1990’s. In the 1980’s when the Iran-Contra scandal broke in Washington (a scheme authored by Fuller at CIA), he “retired” to work at the CIA and Pentagon-financed RAND think-tank. There, under RAND cover, Fuller was instrumental in developing the CIA strategy for building the Gülen Movement as a geopolitical force to penetrate former Soviet Central Asia. Among his RAND papers, Fuller wrote studies on Islamic fundamentalism in Turkey, in Sudan, in Afghanistan, Pakistan and Algeria. His books praise Gülen lavishly. After the fall of the USSR, Fetullah Gülen’s cadre were sent to establish Gülen schools and Madrasses across newly-independent former Soviet states in Central Asia. It was a golden chance for the CIA, using the cover of Gülen religious schools, to send hundreds of CIA agents deep inside Central Asia the first time. In 1999 Fuller argued, “The policy of guiding the evolution of Islam and of helping them against our adversaries worked marvelously well in Afghanistan against the Russians. The same doctrines can still be used to destabilize what remains of Russian power, and especially to counter the Chinese influence in Central Asia.” - See more at:

 I believe that Turkey today can play a very positive role in a new world that is emerging to replace the world of CIA wars, terror and chaos. Turkey is a geopolitical crossroads which has the possibility to play a very positive role in the emerging Eurasian system of China and Russia, the countries of the Shanghai Cooperation Organization, in building energy and rail infrastructure. By herself, Turkey will be isolated and broken as Ukraine, and by the same people. In a principled economic and political alliance with Russia and China, she can play a pivot role in building a new world free of the debt of the collapsing Dollar System that also included the stagnating Europe. Turkey has a beautiful opportunity to partner with Russia and change the world power balance. It will require a lot of will. But if done in a good open way, Turkey could enjoy prosperity as never before and be a genuine “good neighbor.” - See more at:

Friday, February 27, 2015

Today's Links

1--Ukraine Prepares for an Attack Against Russia , Zuesse
Can this be trusted?

2--Stocks skyrocket while economy languishes, zero hedge
US stocks have soared by around 100% since early 2011. Corporate buybacks and debt issuances have surged too. US corporations are piling on new debt and buying back their shares. In 2014, S&P 500 companies are estimated to have spent 95% of profits on buy-backs and investor payouts.4

As you can see, stock buybacks have been on the rise since the crisis.

Buy Backs

These buybacks are in part fueled by historically low interest rates, allowing companies to borrow cheaply. Around $1.7 trillion in buybacks occurred from 2011 to 2014.5 New corporate debt has increased by around $1.4 trillion during that time – as you can see in the chart below.6

Corporate Debt

Sustained low interest rates have also boosted the bond market and helped the housing market where the availability of financing for purchases is crucial.

US stocks, bonds, and other assets are getting a lift from low interest rates… We have even seen some jobs growth in the last year. This has fueled an optimistic ‘recovery’ story...
There is no recovery

3---Q4 GDP Revised Down To 2.2% From 5.0%: Full Breakdown, zero hedge

There was much hope that when Q3 GDP soared to 5%, primarily on the back of Obamacare spending recalendarization and a massive consumption/personal saving data revision, that the US economy would finally enter lift-off mode. Those hopes were reduced by about 60% when moments ago the BEA announced that Q4 GDP was revised from the original 2.64% print to only 2.18%, which while better than expected, was the lowest economic growth rate since the "polar vortex."

4--Panic Must Be Stopped" Ukraine Central Bank Head Says, Boosts Capital Controls, ZH
Good job, Obama!

And as we noted in the "Endgame" article, Ukraine now faces an even bigger problem: running out of cash.
The central bank needs to strengthen bank owners’ responsibility as a prerequisite for the International Monetary Fund-led bailout, Gontareva said. The country can drop capital controls when hryvnia is “back to fundamentals,” she said, adding hryvnia should trade around 20 per dollar.

Depositors have withdrawn 17.2 billion hryvnia from banks this year, Gontareva said. Ukraine’s reserves stood at $6.4 billion as of Jan. 31, down from $20.4 billion at end-2013 before the country’s pro-Russian insurgency began.

Ukraine has lost two percentage points of its gross domestic product from the annexation of Crimea and 15 percentage points due to losing control over rebel-held areas in eastern Ukraine, she said
5---ECB Warns UK: Excluding Russia From SWIFT "Could Undermine Confidence In The Whole System", ZH

6--Maestro speaks, ZH

When real interest rates start to move up, that's when the crisis could hit." The interview is somewhat stunning in its honesty (for a central banker) as he warns global "effective demand is extraordinarily weak - tantamount to the late stages of the great depression."
Some other excerpts...
"Lower long-term rates is not a conundrum, its an indication of how weak global economic growth is."

"effective demand is extraordinarily weak - tantamount to the late stages of the great depression."

"Monetary policy is not responsible for economic weakness - it's a fiscal issue."

The Fed is responsible for the inflation of the stock market

"Almost all the problems are due to a lack of long-term capital investment" - reflecting perfectly on our detailed explanations of company's preference for shareholder enhancement through buybacks rather than investing in the corporate growth of the economy... "nobody wants to invest in the long-term because nobody knows what is going to happen."
7--2 Years Of Abenomics Later: Joblessness Jumps As Retail & Household Spending Slump, ZH

8--US Aggression Against Venezuela, Golinger, CP

9--Tspiras accepts its chains, Bloomberg

The chancellor explained to Greek Prime Minister Alexis Tsipras what an aide in her office called reality. There wasn’t much time to reach the deal needed to keep Greece afloat and Germany wasn’t going to budge, Merkel told him in a 50-minute phone conversation on Feb. 19. It was their first substantive exchange since he’d won election Jan. 25.

Tsipras tweeted that they forged an interest “in finding a mutually beneficial solution.” The next day, finance ministers struck a provisional deal in Brussels to keep aid flowing.
In office for a month, Tsipras and his finance minister, Yanis Varoufakis, have largely shelved the promises that got them elected, irritated key euro-area collaborators and stoked doubt about their intentions. In return, they got a four-month bailout extension and the certainty they’ll be back at the edge of the financial abyss before the first half of 2015 is over.

“They were amateurs, but they are adapting,” said Theodore Pelagidis, a senior fellow at the Brookings Institution and a professor at the University of Piraeus in Athens. “The negotiation showed that Greece had no leverage.”...

As talks deteriorated in the run-up to the 11th hour agreement, there were no figures and no commitments and people stopped listening, an official said.
After securing approval from euro peers for his plans to collect more tax, consolidate pension funds and maintain state-asset sales, Tsipras declared victory against austerity. He now must keep onside his party faithful.
For Varoufakis, the next watershed is already on the horizon. Greece has until April to hone the details of its measures. It can’t access more bailout funds, including the next tranche of about 7 billion euros, unless it passes the review. It also needs to raise money before next month to repay the International Monetary Fund.

“I’m pretty confident we won’t have a cash-flow problem, because we all struggled very hard through long hours of discussions with our partners, with institutions to come to this stage,” Varoufakis said in a Feb. 25 interview in Athens

10--"V" is for Varoufakis, funny video

11--Here Is What Americans Spent Their "Gas Savings" On, ZH

Source: BEA

12--Chicago’s Abu Ghraib, wsws

13--USW blocks way forward for striking oil workers, wsws

The USW has continuously operated behind the backs of workers, ignoring their demands for a national strike of all 30,000 refinery workers and seeking a sellout deal to end the strike and preserve the interests of the union apparatus. Top USW and AFL-CIO officials have maintained close communication with the Obama administration which, fresh from threatening to break a strike by West Coast dockworkers, wants the oil strike shut down before it becomes a catalyst for a much wider struggle by the working class...

Gerard paints a picture of intransigent employers who have stonewalled any proposals to improve safety, agreeing to “meet and discuss” these issues only to give “the impression that they are actually bargaining.” The companies have “shut down discussion” about contracting out work and overtime and fatigue standards, he says while grueling schedules keep workers from their families and imperil their lives. Fires are an almost weekly occurrence and 27 oil workers have recently lost their lives, Gerard says, yet “equipment is old and in need of maintenance, but the company considers [it] too costly to take off line and fix properly because it might slow production.”

The union’s proposals for a minor reduction in huge out-of-pocket health care costs “is not even pennies on a dollar, but they insist they will not budge on this matter.” The multi-billion dollar industry has also resisted any improvement in wages....

Instead, in the most slavish manner, Gerard begs the oil bosses to “recognize” that “we are an efficient and productive workforce.” Leaving aside the fact that Gerard is not part of this workforce—instead he makes $217,000 plus perks from sitting on various corporate and government boards—the oil companies are well aware of how much profit they squeeze from workers—and they want even more!
Even as oil workers are facing the fight of their lives, the USW opposes any struggle that would upset relations with its corporate “partners” and the Obama administration. Instead it is looking to establish more “labor-management safety committees” and an agreement on a minimal number of USW workers the oil companies will employ. The latter is so the USW bureaucracy can tell its accountants how much dues money it can rely on to fund the bloated staff of 900 officials at its Pittsburgh headquarters.

14--Record global stock prices reflect growth of financial parasitism, wsws

World equity markets are close to their highest levels in history, as measured by the FTSE All-World Index. The FTSE 100, Britain’s index of leading shares, surpassed its previous high, achieved at the end of 1999 on the eve of the bursting of the share market bubble, to join Wall Street’s Dow and the German DAX in record territory.

This is an extraordinary phenomenon given that large areas of the global economy, most notably Europe and Japan, are either stagnant or in recession; China and the so-called “emerging markets,” which have been the main centre of global growth, are slowing down; and the much-vaunted US growth is still below historical trends.

All of the major reports on the state of the world economy in the recent period—from the World Bank, the International Monetary Fund, and the Organisation for Economic Cooperation and Development—have downgraded previous growth projections and warned that the economy is increasingly characterised by a vicious cycle.

Investment has fallen to historic lows because of the lack of demand and profit opportunities. The decline in investment is leading, in turn, to a further decline in demand and profit expectations.
Notwithstanding these powerful trends, the stock markets continue to power on, providing a graphic demonstration of the degree to which the accumulation of wealth by global financial elites has become divorced from the actual process of production

15--Feudalism? CP

One of the most graphic features of the HSBC saga is the description of one of its services to clients. Many of these clients are hiding money from their governments’ tax departments, so avoiding a paper trail is critical. They can’t just wire $50,000 to their client’s bank account. So the bank would package used, small denomination bills in “bricks” which the client would pick up in person and then courier to their home address in the US, Britain, France — or Canada.
The amount of lost revenue stashed away in tax havens is truly staggering. The International Consortium of Investigative Journalists estimates that it amounts to $7.6 trillion, and a loss to governments around the world of some $200 billion in revenue every year.
HSBC’s Swiss office accounts for $100 billion of the total deposits

Summing up the deal Thursday Bloomberg News wrote, “[G]reece has diluted at least five of its key electoral promises in the face of implacable German-led opposition to its stance. There’s been no extension of the country’s debt repayment timetable; Greece is still a ward of the troika, even if its guardians now go by a different name (they’re now referred to as the ‘institutions’); there’s no rollback of the previous government’s economic reforms; cash allocated to the domestic banking system won’t be diverted to alleviating economic hardship; and the need to achieve a sensible budget surplus has been acknowledged.”

16--Complete and utter capitulation, wsws

Finance Minister Wolfgang Schäuble told German radio, “The question now is whether one can believe the Greek government’s assurances or not. There’s a lot of doubt in Germany—that has to be understood.” He said later, “Greece will not get a single penny until it complies with its obligations.”

Syriza is committed to the immediate imposition of austerity, and a sharp confrontation with the working class, under conditions where billions of euros in foreign debts fall due in days. Some €1.6 billion is due to be paid to the International Monetary Fund in March. On Wednesday Varoufakis said Athens would be seeking emergency finance in the form of the €1.9 billion in profits from Greek bonds held by the European Central Bank and would look into issuing short-term debt in the form of Treasury bonds (T-bills). However, the Eurogroup agreement stipulated that the €1.9 billion in bond profits can only be disbursed at the end of the four months agreed by Athens and on condition that it implement agreed to austerity

17---The Decline in Unionization and Inequality

18--Is the memorandum over? Interview Yanis Varoufakis
It’s over. Allow me to explain what memorandum means to me. Borrowed funs and austerity are permanent darkness. The terms of the memorandum undermine the concept of reform in Greek society. We hit pensioners and hairdressers while reforms were mishandled.
Is it full of vagueness? 
It is. We are very proud of the level of vaguenessness. I use the term creative vagueness. I want to be the first finance minister to never refer to the numbers unless I am sure I can achieve them. I told the EU partners that if I give you an amount for revenue or revenue from tax evasion then I would be lying.
Will VAT increase?
It won’t increas on islands, tourism, pharmaceutical supplies, border regions, food and books. We will find a product and increase VAT there.
What did you achieve?
We put the humanitarian crisis on the agenda for the first time. I am here because there are kids starving out there.
How will you achieve this? You signed a deal that doesn’t allow you to act unilaterally? You would need the approval of institutions… 
The gang of technocrats won’t be here. It won’t be the same. We have said that there will be no unilateral actions of negative fiscal consequence. For such activities as overdue debts we don’t need approval. We will also move in other directions as we don’t want honest taxpayers to feel duped.
Do you have a plan?
We will finalize it over the weekend. With the agreement we reached, the memorandum ended and unacceptable behavior has ended. We are in a Europe that has undermined itself. I had said earlier that at the Eurogroup there is not even discussion. We are changing Europe. I was in Frankfurt with five secret policemen. I asked to go to the toilet and one of them had to come with me. “I want to thank you because Europe needs to change for us Germans too,” he said.
Do you have secret police with you here too?
No. If I need it then it’s time to resign.

19---The sound of china crashing, wolf street
The hard-landing watchers are now wondering whether the Chinese stimulus machinery can actually accomplish anything at all, given that a tsunami of global stimulus – from negative interest rates to big bouts of QE – is already sloshing through the globalized system. And look what it is accomplishing: Stocks and bonds are soaring, commodities – a demand gauge – are crashing, and real economies are languishing.

20--Perfect storm? wolf street

Bond specialist Martin Fridson, Chief Investment Officer at Lehmann Livian Fridson Advisors, summarized it this way, via S&P Capital IQ LCD:
A perfect storm is hitting the high-yield market. Secondary issues are extremely overvalued, and covenant quality is at a record low.
Energy junk bonds have gotten slammed since last summer in concert with the plunging price of oil, and investors are still licking their wounds. But the rest of the junk bond pile? A beauty to behold.
Based on Fridson’s econometric model, junk bonds have re-surged to an “extreme valuation,” after the scare of last September faded away. The model determines a “fair value” of the BofA Merrill Lynch US High Yield Index, expressed in its option-adjusted spread (OAS) over the corresponding Treasury yield. This fair value currently is an option-adjusted spread of 616 basis points (6.16 percentage points).

21--Equity markets can stay at lofty valuation levels for a very long time. ...Fifty-one months during the Tech bubble (that’s over FOUR YEARS) wolf street

  • High valuations lead to large stock market declines during recessions.
  • During secular bull markets, modest overvaluation does not produce large stock market declines.
  • During secular bear markets, modest overvaluation still produces large stock market declines....
  • Beginning with the market peak before the epic Crash of 1929, there have been fourteen recessions as defined by the National Bureau of Economic Research (NBER). The table above l ists the recessions, the recession lengths, the valuation (as documented in the chart illustration above), the peak-to-trough changes in market price and GDP. The market price is based on the S&P Composite, an academic splicing of the S&P 500, which dates from 1957 and the S&P 90 for the earlier years (more on that splice here).
    I’ve included a row for our current valuation, through the end of January, to assist us in making an assessment of potential risk of a near-term recession. The valuation that preceded the Tech Bubble tops the list and was associated with a 49.1% decline in the S&P 500. The largest decline, of course, was associated with the 43-month recession that began in 1929.

    Here’s an interesting calculation not included in the table: Of the nine market declines associated with recessions that started with valuations above the mean, the average decline was -42.8%. Of the four declines that began with valuations below the mean, the average was -19.9% (and that doesn’t factor in the 1945 outlier recession associated with a market gain).

    22--Ukraine Risks Losing IMF Support for Aid If War Escalates, Bloomberg

    Ukraine risks losing support from IMF member countries for a proposed $17.5 billion bailout if the conflict in the former Soviet republic continues to escalate, according to two people familiar with the matter. ...

    No Condition

    Gerry Rice, an IMF spokesman, said last week that the proposed aid for Ukraine isn’t conditioned on an end to the fighting. “The conflict is something that we are concerned about and monitor, but the new program makes very conservative assumptions in its baseline scenario for 2015 to buffer a further impact of the ongoing conflict in the east,” he told reporters. ...

    The Ukrainian economy ended up shrinking as much as 7.5 percent in 2014 as the conflict took a “significant toll on the industrial base and exports,” undermining confidence and putting pressure on the financial system, the IMF said this month. The economy will probably contract 5.5 percent this year, Finance Minister Natalie Jaresko said Feb. 16. ...

    The IMF-led program totals $40 billion when including bilateral deals with nations as well as about $15 billion in savings expected from negotiations the country is pursuing with bond investors. Achieving that level of savings from a bond restructuring is probably too optimistic, Schneider said.

    23--Russian President Vladimir Putin said Wednesday the decision of the Ukrainian authorities to halt gas supplies to Donetsk amid the ongoing humanitarian catastrophe “bear hallmarks of genocide”.
    24--Ukrainian President Petro Poroshenko has come back from the UAE, and is reported to have racked up nearly 20 contracts on the supply of weaponry to Ukraine.

    25---Greece to stop privatisations as Syriza faces backlash on deal, AEP

    26--The US recovery story is a fraud: SocGen bear, cnbc

    "The downturn in U.S. profits is accelerating and it is not just an energy or U.S. dollar phenomenon – a broad swathe of U.S. economic data has disappointed in February," he said in a research note published Thursday.

    U.S. indexes have continued to hit all-time highs this year and the Nasdaq is also looking to break through a level last seen at the peak of the tech bubble in 2000.
    However, Edwards said that, rather than concentrating on these corporate earnings or dismal economic data points, market participants were too focused on the "pillow talk" about decent payroll data from the U.S. Federal Reserve.

    27---Dudley: Why Fed may need to get 'more aggressive', cnbc

    "The fact that market participants have set forward rates so low has presumably led to a more accommodative set of financial market conditions, such as the level of bond yields and the equity market's valuation, that are more supportive to economic growth," he said, according tp prepared remarks.

    "If such compression in expected forward short-term rates were to persist even after the FOMC begins to raise short-term interest rates, then, all else equal, it would be appropriate to choose a more aggressive path of monetary policy normalization as compared to a scenario in which forward short-term rates rose significantly, pushing bond yields significantly higher," he added.

    28--U.S. Pushes For Escalation, Arms Kiev By Laundering Weapons Through Abu Dhabi, MoA

    29--Existing home sales hammered; 2015 housing hopes pounded oc housing news

    30--The investor buying party in real estate: In last four years institutional investors have purchased over half a million homes. 2014 was a four year low in investor buying. Dr Housing Bubble

    There are two main driving forces pulling investors away.  The first is cap rates are not looking all that attractive.  Next, prices have been driven up to a point where yields are looking inflated.  You can see that price gains are coming off their lofty 2013 pace:
    case shiller
    Nationwide home prices were going up 13 percent at some point in 2013.  The latest point has them up by 4 percent.  Investors are in it to make money.  It should be telling that many pulled back dramatically in 2014.
    One thing that is clear is that we are in a renting trend.  1 million fewer homeowner households and 10 million more renter households over the last ten years.  That speaks volumes.

    31--FHA wants to allow banks to make more bad loans
    , oc housing

    Tuesday, February 24, 2015

    Today's Links

    1--Revolt In Athens: Syriza Central Committee Member Says "Leadership Strategy Has Failed Miserably, zero hedge
    Brilliant but wrong

    2--Former Ukraine Deputy PM Says "Another Coup Can Not Be Ruled Out" Among Currency Implosion, Central Bank Charges, zero hedge

    3--Missing from the Greek deal: figures, Paul Mason

    As flagged before it looks like they will be allowed to carry out the humanitarian aspect of Syriza’s so-called Thessaloniki Programme – ie anti-poverty measures. This, plus one of the most aggressive anti-tax avoidance offensives ever planned in the western world, is the centrepiece of Varoufakis’ plan. -

    Reversing privatisations, for example, was always going to be low on Syriza’s list; letting those underway go through sounds like a retreat. But privatising a port where workers have guaranteed union rights, moral support from the ruling party and where the government refuses to take kickbacks  from vested interests, is quite different from the old system. My hunch is that such privatisations that are underway will go very slowly.
    On pensions, limiting the Greek tradition of early retirement is going to require a “guaranteed basic income” for the over 50s – a one line promise but radical no less.
    Another promise – universal access to healthcare in a country where tens of thousands have lost it – would be a major reform. It would free up the labour market for young people because setting up as self-employed involves crippling self-insurance costs to keep access to healthcare.

    4--Buy Moar Stawks: Fed Warns Equity Valuations "Appear Stretched", P/E Ratios Are "Somewhat Elevated", zero hedge

    5--US arming Kiev would ‘explode’ situation in E. Ukraine – Russian Foreign Ministry, RT
    More red lines

    6--US slaughter in Afghanistan rages on, wsws

    7--Stock markets rise after Greece signs new austerity agreement, wsws

    Reuters reported Monday evening that a government official said Syriza’s list “will include reforms to fight tax evasion, corruption” and “measures to reform [the] public sector, [and] cut bureaucracy”. Also included are “reforms to regulate tax arrears and bad loans.”
    Syriza uses these standard euphemisms (“reforming public sector, cut bureaucracy”) because, like the right-wing New Democracy government before it, it is a reactionary bourgeois party trying to cover up its plans to cut workers’ jobs and pay and increase productivity.

    8--Subprime Pump-and-Dump Frenzy Heats Up , wolf street

    9--Ready for Nuclear War over Ukraine?, SC

    Not Since Adolf Hitler
    No European government, since Adolf Hitler’s Germany, has seen fit to dispatch Nazi storm troopers to wage war on a domestic population, but the Kiev regime has and has done so knowingly. Yet, across the West’s media/political spectrum, there has been a studious effort to cover up this reality, even to the point of ignoring facts that have been well established.

    The New York Times and the Washington Post have spearheaded this journalistic malfeasance by putting on blinders so as not to see Ukraine’s neo-Nazis, such as when describing the key role played by the Azov battalion in the war against ethnic Russians in the east....

    refusal to include meaningful background about the Azov battalion, which is known for marching under Nazi banners, displaying the Swastika and painting SS symbols on its helmets.
    .... Indeed, there’s a powerful irony in this portrayal of Nazis as the bulwark of Western civilization against the Russian hordes from the East. It was, after all, the Russians who broke the back of Nazism in World War II as Hitler sought to subjugate Europe and destroy Western civilization as we know it.
    That the Nazis are now being depicted as defenders of Western ideals has to be the ultimate man-bites-dog story. But it goes essentially unreported in the New York Times and Washington Post as does the inconvenient presence of other Nazis holding prominent positions in the post-coup regime, including Andriy Parubiy, who was the military commander of the Maidan protests and served as the first national security chief of the Kiev regime.

    10--This changes everything: U.S. Pushes For Escalation, Arms Kiev By Laundering Weapons Through Abu Dhabi, MoA

    11-- Gas prices soar in Ukraine, sputnik

    Starting April 1, gas prices in Ukraine will increase by four times, according to the country’s Minister of Energy and Coal Industry Volodymyr Demchyshyn, RT reports.

    Currently, Ukrainians pay 1,089 hryvnia for one cubic meter of gas, but starting April 1, people will have to shell out 4,138 hryvnia for the same amount of gas

    12--The housing recovery is faltering, CR

    The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.

    Monday, February 23, 2015

    Today's links

    1--Existing Home Sales Plunge, zero hedge

    2--Greece: A debt colony with a bit of ‘home rule’, Paul Mason

    On Friday night the Greek finance minister, Yanis Varoufakis, averted total surrender to a German led demand for Greece to implement the total austerity programme of its former conservative government. He did so by signing up immediately to a compromise that, in his mind, retained about 20 per cent of the programme Syriza was elected on. -

    3--Existing Home Sales in January: 4.82 million SAAR, Inventory down slightly Year-over-year calculated

    4--Throw Your Grandma Under The Bus, automatic Earth

    Merkel and Schäuble decided to save Wall Street mogul and derivatives behemoth Deutsche Bank at the cost of the Greek people. Not for economic reasons, but because Deutsche has much more political power inside the European Union than the entire Greek nation. Now you know what’s so inherently wrong in that union. Same story for France, where BNP, SocGen and Crédit Agricole had humongous amounts of debt outstanding in Athens. Where’s all that debt now, where’s it gone? Well, check your wallet.

    When the decision came to throw either their own biggest banks, or the grandmas of a co-member nation of the currency union under the bus, I don’t think they even hesitated; they probably only went looking for the most efficient way to do it. And they have control over the perfect vehicle for such tasks: the ECB. A allegedly neutral institution that in reality peddles political influence in a way that guarantees the poorer countries will always wind up footing the bill.

    5--Why Germany Might Not Be Bluffing in Greece, Bloomberg

    When the European debt crisis first flared up in 2010, Germany's finances were closely linked to those of the euro area's more economically fragile members. Its banks' claims on Greece, Italy, Portugal and Spain -- including money lent to governments and companies -- amounted to more than 350 billion euros ($400 billion), about  equal to all the capital in the German banking system. If the periphery countries had forced losses on private creditors, which they arguably should have done, Germany would have had to recapitalize its banks or face an immediate meltdown.

    The picture is very different now. The European Central Bank, the International Monetary Fund and other taxpayer-backed creditors have pumped hundreds of billions of euros of loans into the periphery countries, making it possible for German banks to extract themselves with minimal damage. Thanks in part to this back-door rescue, the banks have also been able to raise some capital. As a result, they are in much better shape to withstand a Greek disaster. As of September 2014, their claims on Greece, Italy, Portugal and Spain had declined to about 216 billion euros, or 46 percent of capital.
    The upshot: Greece is left with more debt than it can pay, and Germany -- with its banks effectively bailed out -- has one less pressing reason to give Greece a break. Hardly the right incentives for a happy ending.

    6---Is Oil Returning to $100 Or Dropping To $10?, oil price

    7---The capitulation of Syriza and the lessons for the working class, International Committee of the Fourth International

    It has taken less than one month for the Syriza government in Greece, led by Prime Minister Alexis Tsipras, to repudiate its anti-austerity election program and betray, totally and utterly, the impoverished working people whose votes placed it in power.

    Even in the entire squalid history of “left” petty-bourgeois politics, it is difficult to find an example of deceit, cynicism and truly disgusting cowardice that quite matches that of Prime Minister Tsipras. Certainly, from the standpoint of the time that elapsed between election and betrayal, the Syriza government has probably set a new world record....

    From the standpoint of the interests of the working class, the agreement signed by the Syriza government is a criminal betrayal. But from the standpoint of the real social and economic interests represented by the Syriza regime—sections of the Greek ruling elite and the affluent upper middle class—the deal is no more than a disappointment. Notwithstanding Tsipras’ demagogy—intended mainly to deceive and disorient the working people of Greece—the negotiating strategy of Syriza was determined entirely by its subordination to capitalist interests.
    The Greek ruling class and the upper middle class may have hoped to achieve an easing of conditions that inhibited the access of Greek-owned businesses to financial credits. But they had no desire for a confrontation with EU bankers and were utterly opposed to any measures that might destabilize European capitalism, let alone threaten their own corporate and financial interests in Greece.

    The events of the past month constitute a major political experience for the working class in Greece, Europe and internationally. The role played by Syriza is a devastating exposure of the essentially reactionary character of a form of “left” middle class politics that developed amidst the ruins of the radical student politics of the 1960s and 1970s. While the working class was led to defeat after defeat by the old Stalinist, social democratic and reformist labor organizations, sections of the middle class benefited, directly and indirectly, from the explosive rise in global stock exchanges following the accession of Thatcher and Reagan to power and the international ascendancy—especially after the dissolution of the Soviet Union and the restoration of capitalism in China—of neo-liberal policies....

    The World Socialist Web Site’s characterization of these parties as pseudo-left is not a rhetorical exercise but a precise political definition. They are bourgeois parties representing elite sections of the middle class that are bitterly hostile to the workers. They are not allies but relentless enemies. Working people must break with them, and seek to destroy any political influence they have over the working class.

    8--European Union leaders hail Syriza austerity agreement, wsws

    The Economist bluntly summed up the harsh terms to which Syriza is now committed as follows:
    Syriza “was elected on a pledge to tear up Greece’s bail-outs and leave austerity behind… It is difficult to square these promises with last night’s agreement. Greece has secured no change to the terms of its epic debt, which stands at over 175% of GDP. Its behaviour will continue to be supervised by the institutions formerly known as the troika. It is obliged to refrain from passing any measures that could undermine its fiscal targets; that appears to torpedo vast swathes of its election manifesto, which included all manner of spending pledges.”...

    The most ludicrous statement was issued by the Communist Tendency, which is part of Syriza’s Left Platform and a section of the International Marxist Tendency (IMT).
    Describing the “request to the Troika for a six-month extension of the loan agreement” as a “grave political mistake,” the statement called for, “No more retreats! The government must formulate an alternative collision plan with the blackmailers and their local lackeys, a plan that favours the working masses!”
    In the most obsequious terms possible they declare, “We call upon our comrade, the Prime Minister, and the leftist ministers, to formulate an alternative plan to finance and implement the Thessaloniki programme [Syriza’s election manifesto] without relying on the loans of the extortionist ‘partners’.”

    9--Obama administration forces five-year agreement on West Coast dockworkers, wsws

    10--1 in 3 Americans on verge of financial ruin, marketwatch

    11--Why Greece will never repay its debt, cnbc

    12---OC new home sales fall a frightening 41%  oc housing

    13-Southern California home sale volume for January slowest since 2008: The stalemate accelerates with Orange County seeing a monthly median price drop of $28,500., Dr housing Bubble-


    Friday, February 20, 2015

    Today's links

    Today's quote:   "Nobody who voted for SYRIZA  has reason to ever trust them again, and their Eurozone partners will trust them for only so long, and to the degree, that they demonstrate what a subjugated people they have become. I expect that in Greece, as in American politics, nobody will vote for the equivalent of Republican-Lite Democrats when you can get the real thing without quite so much phony blather."

    1--I may get out of US stocks: Nobel-winner Shiller, cnbc

    2--YANIS VAROUFAKIS:  The Greek economy is finished. The Greek economy is in a great, great depression... There is no power, no force within the Greek economy, with Greek society that can avert – it’s like – imagine if we were in Ohio in 1931 and we were to ask: what can Ohio politicians do to get Ohio out of the Great Depression? The answer is nothing.

    3--Germany Gives Greece Just Enough Rope: Varoufakis Says If Troika Rejects Reforms "The Deal Is Dead And Buried", zero hedge

    Notes:  V and T are going to have to publicly denounce everything they promised in the election.The germans have them over a barrel  from zero hedge:  "As usual, the fine print of any European "deal" is revealed not only after the agreement, but after the US market close. So for all those waiting for the real punchline, here it is - it also is the reason why Greece got until Monday to reveal the list of "reforms" it would undertake:

    "We’re in trouble next week if creditors don’t accept Greece’s reforms", Greek Finance Minister Yanis Varoufakis says. "If our list of reforms is not backed by the institutions, this agreement is dead and buried."

     under the conditionality of the Troika's approval, the Tsipras government now has to walk back essentially all the promises it made to the Greek people - promises which by some accounts amount to over €20 billion in additional spending - or the Troika, pardon Institutions, will yank the entire deal and the Grexit can then commence.
    4---How Greece Folded To Germany: The Complete Breakdown, zero hedge

    5---Greece Capitulates On Bailout, Reaches Four Month Deal, naked capitalism
    My big fat Greek sellout
    The Open Europe blog (hat tip Stephen M) has a good summary of the deal terms. Key items:
    What points has Greece capitulated on?
    Completion of the current review – Greece has basically agreed to conclude the current bailout. Any funding is conditional on such a process…
    Remaining bank recapitalisation funds – Greece wanted this money to be held by the Hellenic Financial Stabilisation Fund (HFSF) over the extension period, and possibly be open for use outside the banking sector. However, this has been denied and the bonds will return to the EFSF, although they will remain available for any bank recapitalisation needs.

    Role of the IMF – The Eurogroup statement says, “We also agreed that the IMF would continue to play its role”…

    No unilateral action – According to the statement,+
    The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.

    In light of this, a large number of promises that SYRIZA made in its election campaign will now be hard to fulfil. In the press conference given by Eurogroup Chairman Jeroen Dijsselbloem and EU Economics Commissioner Pierre Moscovici, it was suggested that this pledge also applied to the measures which were announced by Greek Prime Minister Alexis Tsipras in his speech to the Greek parliament earlier this week – when he announced plans to roll back some labour market reforms passed by the previous Greek government.

    Four months rather than six months – Greece requested a six-month extension, but the Eurogroup only agreed to four months. This is a crucial point: it means the extension expires at the end of June. As the graph below shows, Greece faces two crucial bond repayments to the ECB in July and August which total €6.7bn. This is a very tough hard deadline. There is limited time for the longer term negotiations which will take place – provided that a final agreement on the extension is reached. It is very likely we will be back in a similar situation at the end of June….
    As we said yesterday, Greece has folded this hand but the game of poker continues. Greece is now short stack and living hand to hand (day to day). It continues to be in a very tough position and how the evaporation of the vision which SYRIZA sold at the election is a crucial and potentially explosive unknown

    6---Since 9/11, The U.S. Has Been Involved In More Than 5 Wars … And They’ve All Been Disasters, WA blog

    7--Paul Mason, Guardian...Greece gets its deal.. But if the detail’s wrong ‘we’re finished’
    Here’s why. The draft does not give Germany everything it wanted. It allows Greece to vary its fiscal target this year – meaning it can run a lower surplus, as yet unspecified. In addition, according to Varoufakis, there is “creative ambiguity” about the surpluses

    Greece is required to run beyond this year. Second it maintains the words Varoufakis proposed on Thursday: that Greece will not rollback old measures or unilateral policies “that would negatively impact fiscal targets, economic recovery or fiscal stability” – however with the addition of the words “as assessed by the institutions”. This clarifies who gets to decide whether the revised Greek programme threatens these things. By

    Monday Greece has to submit a list of measures, in order to get the money to recapitalise its banks, and roll over its loans. Varoufakis spun this at a press conference as something that would be assessed jointly – so effectively the power game between Germany, Greece and everybody in between now continues, but with the IMF – whose methodologies are considerably less doctrinaire than the ECB on what Syriza proposes to do – in the loop. In addition, the word “bridge” appears in the agreement. Dijsselbloem indicated that it would be a bridge to any future arrangement – and in that sense, the German opposition to any signal of the possibility of a transition phase was overcome - See more at:

    Wednesday, February 18, 2015

    Today's Links

    1--Obama Destroyed Libya, SC

    Libya in 2009 was prosperous. As citizens of a major oil- and natural gas-exporting nation, Libyans enjoyed high salaries, low living expenses, generous social benefits, not to mention law and order. It seems like a mirage today.
    Looking back, many Libyans miss their former tyrant. “Muammar Gaddafi inherited one of the poorest nations in Africa,” notes Garikai Chengu of the Du Bois Institute for African Research at Harvard University. “However, by the time he was assassinated, Libya was unquestionably Africa’s most prosperous nation. Libya had the highest GDP per capita and life expectancy in Africa and less people lived below the poverty line than in the Netherlands.”...

    The New York Times describes Libya as “veer[ing] toward complete chaos.”
    In 2015, the UK Guardian reports, Libya is in danger of meeting the official international definition of a failed state: “Libya is wracked by violence, factionalism and political polarization – and by the growing menace of jihadi extremism. Two rival governments, parliaments, prime ministers and military forces claim legitimacy. One side is the Islamist-dominated Libya Dawn coalition in Tripoli, the capital. The other camp, Dignity, which is recognized internationally, is based in Tobruk and Bayda. Hundreds of rival militias exist across the country. In recent months the homegrown fighters of Ansar al-Sharia have been challenged by Islamic State (Isis), who released a video showing the beheading of 21 Egyptian Christians. Oil production, the source of most state revenues, has declined massively. Cash is running out and basic services are facing collapse as the financial situation deteriorates. Hopes for change generated by the Arab spring and the demise of Gaddafi’s dictatorship have faded into despair and dysfunction.”

    2--De-Dollarization Accelerates: Russia Launches SWIFT-Alternative Linking 91 Entities, zero hedge

    Almost 91 domestic credit institutions have been incorporated into the new Russian financial system, the analogous of SWIFT, an international banking network.

    The new service, will allow Russian banks to communicate seamlessly through the Central Bank of Russia.

    It should be noted that Russia's Central Bank initiated the development of the country's own messaging system in response to repeated threats voiced by Moscow's Western partners to disconnect Russia from SWIFT.....Joining the global interbank system in 1989, Russia has become one of the most active users of SWIFT globally, sending hundreds of thousands of messages per day. In general, SWIFT provides a secure communication network for more than ten thousands of financial institutions around the world, approving transactions of trillions of US dollars.

    3--Russia Dumps Most US Paper Ever As China Reduces Treasurys Holdings To January 2013 Levels, ZH

    4---Rejecting Austerity, Greece Squares Off with Its Creditors & Risks Future in Eurozone, democracy now video

    5--Naked capitalism comments: 
    At the Guardian, a very thought-provoking piece by Varoufakis from a lecture he gave in 2013. Long form: How I Became an Erratic Marxist.
    …Marx’s brilliant insight into the essence of capitalist crises was precisely this: the greater capitalism’s success in turning labour into a commodity the less the value of each unit of output it generates, the lower the profit rate and, ultimately, the nearer the next recession of the economy as a system. The portrayal of human freedom as an economic category is unique in Marx, making possible a distinctively dramatic and analytically astute interpretation of capitalism’s propensity to snatch recession, even depression, from the jaws of growth….
    His analysis that the left has ceded ‘freedom’ to the neoliberals, which has been a fatal error, is among many very insightful observations in this piece.
    As I read this piece, Varoufakis sees the inhumanity of current financialized capitalism. But he also recognizes that simply to object to it leaves entire populations vulnerable to the rise of neo-Nazism, and other far right authoritarian forces.

    6---Germany v Greece is a fight to the death, a cultural and economic clash of wills, Paul Mason Guardian

    7--Greece's fight against "fiscal waterboarding" will halt economic recovery , sober look

    8--Ukraine's impending debt restructuring, sober look

    9--Mathew D. Rose: Greece – It’s a Revolution, Stupid!, NC

    10--The "West's" Dilema After Debaltseve: What To Do About Poroshenko?, MoA

    11--The strategic implications of the battle for Debaltsevo , saker

    Monday, February 16, 2015

    Today's Links

    1--Obama administration intervenes against West Coast dock workers, wsws

    2--Harper government to criminalize Canadian Pacific railway strike, wsws

    3--Hostilities ease in eastern Ukraine on first day of cease-fire, wsws

    Ahead of the ceasefire deadline, Aleksandr Zakharchenko, prime minister of the separatist Donetsk People’s Republic (DPR), had insisted that the terms of the ceasefire did not apply to the soldiers trapped in Debaltseve as they were considered to be on separatist-held territory. “Any attempt of the Ukrainian armed forces to unblock Debaltseve will be regarded as violation of the Minsk agreements; such attempts will be suppressed, adversaries will be eliminated,” Zakharchenko said.
    The pro-Russian separatists have sent cell phone text messages to the several thousand Ukrainian soldiers it has encircled in Debaltseve, calling on them to turn in their weapons and surrender.

    Eduard Basurin, a spokesman from the DPR defense ministry, reported that, while hostilities had largely ceased elsewhere, rebel-held positions northwest of Debaltseve had also come under attack by machine gun and rocket fire from Ukrainian forces early Sunday morning shortly after the ceasefire deadline. Basurin stated that separatist forces “were forced to open fire in response.”
    “Over the past night and during the day on Sunday, the situation in the DPR was calm for the first time in months,” Basurin told reporters. “The ceasefire regime there did not come into force in due time. Ukrainian troops blocked in Debaltseve keep on trying to break the encirclement,” he continued. “Our positions, primarily at Logvinovo, were shelled from the town all through the night.”

    Shortly after the ceasefire came into effect, Dmytro Yarosh, head of the fascist Right Sector militia and a member of parliament who has been leading fighting in the east, published a statement on the website of the National Guard of Ukraine indicating that the forces under his command were still fighting despite the ceasefire. He reported that two of his “finely armed and equipped battalions continue offensive near Debaltseve and have serious achievements militarily.” His statement was removed from the website several hours later.

    In a statement published on his Facebook page Friday, Yarosh had denounced the ceasefire agreement and declared that the Right Sector militia “reserves the right to extend the active hostilities under its own operational plans.”
    In southeast Ukraine the fascist Azov Battalion held positions it had gained before the ceasefire in operations against rebel-held positions east of the city of Mariupol. Three of the battalion’s fighters were killed and another 50 injured during fighting in the village of Shyrokyne on Saturday before the ceasefire took effect.
    The government reported shelling in the government controlled village of Zolote northwest of Luhansk early Sunday morning. An elderly couple in the nearby city of Popasna was killed Sunday morning after a Grad rocket struck and collapsed their house.

    4--A revealing Financial Times comment on the Greek debt crisis, wsws

    Following the rejection of the Greek proposal at a meeting of the Eurogroup last Thursday, Münchau wrote that the Greek finance minister could expect a frosty reception when he once again confronted his colleagues in a “high noon” showdown.

    “My advice to Yanis Varoufakis,” he continued, “would be to ignore the exasperated looks and veiled threats and stand firm. He is a member of the first government in the euro zone with a democratic mandate to stand up to an utterly dysfunctional policy regime that has proved economically illiterate and politically unsustainable. For the euro zone to survive with the current geographic remit, this regime needs to go.”

    The publication of such a vigorous comment in one of the world’s major financial dailies points both to the considerable opposition in financial centres to the policies of the German government and to the fact that the Syriza program, far from representing some far-left agenda, is a thoroughly bourgeois program enjoying some measure of support in ruling political and financial circles....

    Münchau does not make the point, but the position of Cochrane is significant. The University of Chicago is the centre of the most right-wing “free market” tendency in bourgeois economists, associated with Milton Friedman. The so-called “Chicago boys” were notorious for their restructuring of the Chilean economy under General Pinochet after the CIA-backed overthrow of the Allende government in 1973. The fact that representatives of this tendency should be considering ways in which Greece can defy the dictates of the EU is some measure of the opposition to German policies in US financial and economic policy circles.....

    The German opposition is not fundamentally based on these factors. Rather, it is grounded in the fear among sections of the ruling elites that if it relents on austerity then it will have to ultimately take on responsibility not only for the debts of Greece but possibly, Spain, Portugal or even Italy. Such an outcome would seriously weaken Germany’s global economic position, especially in relationship to US finance capital, which inflicted considerable damage on the German financial system through the sub-prime crisis in 2007.

    5--The War Next Door: Can Merkel's Diplomacy Save Europe?, Der Spiegel

    6--Greece rejects six-month extension of EU bailout, talks stall, Reuters

    "Some people's insistence on the Greek government implementing the bailout is unreasonable and cannot be accepted," the official said. "Those who keep returning to this issue are wasting their time. Under such circumstances, there cannot be a deal today."
    European Commission Vice-President Valdis Dombrovskis told reporters after the talks broke up after less than four hours that euro zone partners were willing to resume talks with Greece if and when it changed its position.
    "It was clearly decided that if and once this request for an extension of the bailout is there, if there are certain commitments from the Greek authorities to stick to the programme, then the chairman of the Eurogroup will announce the next Eurogroup," Dombrovskis said...

    Failure to reach a deal would raise fears that Greece could be forced out of the euro zone. The European Central Bank is due to review on Wednesday how much longer it is prepared to allow the Greek central bank to continue providing emergency funds to keep Greek banks afloat.
    As the meeting in Brussels broke up, a senior Greek banker said Greece's stance boded ill for the markets and the banks.
    “It is a very negative development for the economy and the banks. The outflows will continue. We are losing 400-500 million every day and that means about 2 billion every week. We will have pressure on stocks and bond yields tomorrow.”
    An opinion poll showed 68 percent of Greeks want a "fair" compromise with euro zone partners while 30 percent said the government should stand tough even if it means reverting to the drachma currency. The poll found 81 percent want to stay in the euro.

    7---Greek ‘revolution’ woke up Europeans, spreads like wildfire’, RT