Monday, April 13, 2015

Today's links

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

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. - ...

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.” -

2--Moody’s Has a Cow, Slams GE’s Masterful Financial Engineering  , wolf street

There are some quirks, however.

GE is selling the assets of GE Capital, but it’s not shedding the liabilities: as part of the deal, it will fully and unconditionally guarantee $210 billion in GE Capital debt. So it’s still on the hook for the $210 billion. But most of the assets are gone, and so are the $43 billion in revenues.

To cover up the loss of income from GE Capital on an earnings-per-share basis, it would buy back $50 billion of its own shares by 2018, GE said. This will be the second largest share buyback program ever, after Apple’s $90 billion program announced in early 2014. This comes after GE’s $35 billion buyback announced in December 2012. GE doesn’t have this kind of cash flow, not anywhere near. So it will have to borrow much or all of this money. Hence more debt with fewer assets to support it. To top it off, GE will continue to pay out rich dividends.

Ironically, when GE announced the Alstom acquisition last year, it claimed that it would exercise some restraint in these sorts of things. But that was last year.
Selling $200 billion in financial assets, remaining on the hook for $210 billion in associated debt, incurring $23 billion in costs to do so, and buying back $50 billion in shares mostly with borrowed money amounts to a masterpiece of financial engineering designed to trick up its earnings per share. Not many companies can pull this off.

3--Global Financial Markets Go Nuts , wolf street

corporate earnings look terrible for the first quarter. In the US, quarterly earnings estimates have been slashed by the largest amount since 2009, and are now expected to decline. It’s not just energy. Some of this is merely an effort to lower the bar so far that even companies with crummy earnings can still clear it, and that by “beating” the estimates – no matter how terrible earnings are – shares can still march higher. Either way, it doesn’t look good

4--Irans nukes don't matter to US, not really, Brookings

At heart, this is a fight over what to do about Iran’s challenge to U.S. leadership in the Middle East and the threat that Iranian geopolitical ambitions pose to U.S. allies, particularly Israel and Saudi Arabia.
Proponents of the deal believe that the best way for the United States to deal with the Iranian regional challenge is to seek to integrate Iran into the regional order, even while remaining wary of its ambitions. A nuclear deal is an important first step in that regard, but its details matter little because the ultimate goal is to change Iranian intentions rather destroy Iranian capability.

5---Ukraine: The Truth Becomes Increasingly Apparent, gary leupp 

Moscow’s official line on Ukraine–and it should not be dismissed just because that’s what it is–is that the U.S. spent about $5 billion backing “regime change” in that sad, bankrupt country, resulting in a coup d’etat (or putsch) in Kiev in February 2014 in which neo-fascists played a key role. The coup occurred because the U.S. State Department and Pentagon hoped to replace the democratically elected administration with one that would push for Ukraine’s entry into NATO, a military alliance designed from its inception in 1949 to challenge Russia. The ultimate intent was to evict the Russian Black Sea Fleet from the bases it’s maintained on the Crimean Peninsula for over 230 years

6---Credit crunch?, ZH

There is quite obviously some serious financial stress manifesting in the data and this does not bode well for the growth of the economy going forward. These readings are as low as they have been since the recession started and to see everything start to get back on track would take a substantial reversal at this stage.....For most of the last two years, these readings have been in the mid-50s and above—comfortable territory and generally trending up from one month to the next and now there is a very disturbing trend downward.

7--Abenomics’ fails to get households spending, JT

But when it comes to household budgets, it is a different story. The weaker yen and last April’s consumption tax hike have combined to push up living costs for consumers and thus lowered their wages in real terms, effectively keeping the overall economy sluggish after two years of the radical monetary policy, experts said.

According to labor ministry data for January, nominal wages climbed for an 11th straight month, but the average real wage, or inflation-adjusted wage level, dropped for a 19th straight month.
Average household spending accordingly declined 2.9 percent in February from a year earlier, down for an 11th straight month, Internal Affairs and Communications Ministry data show.

Given the weakness in private consumption, which accounts for around 60 percent of gross domestic product, Japan technically fell into a recession last year. GDP shrank an annualized real 6.4 percent in the April-June quarter last year, followed by a 2.6 percent July-September fall.
Although GDP grew 1.5 percent in the October-December period, the recovery has been slow, experts said.

According to the latest opinion poll conducted by the BOJ every three months, the ratio of respondents who said the economy has deteriorated compared with the previous year increased for the fourth consecutive time, to 38.8 percent in January from 19.6 percent in March 2014.
To be sure, much of the weak private consumption can be attributed to the negative impact of last April’s sales tax hike from 5 to 8 percent.

8--Under ‘Abenomics,’ rich thrive but middle class on precipice, JT

The country’s relative poverty rate has also edged up over the last 30 years, especially with single mothers and fathers raising children, although the latest data are for 2012.
On the other hand, data also show that the rich became even wealthier under Abe’s tenure.
Their numbers and the amount of their assets surged in 2013 and are still rising mostly due to sharp gains in stocks triggered by the Bank of Japan’s aggressive monetary easing, which started in April 2013, experts said.

According to the Nomura Research Institute, the number of wealthy households jumped 24.3 percent, with the amount of their total financial assets rising 28.2 percent in 2013, compared with 2011 figures.
And as the stock market uptick continues, so too will the number of wealthy people grow.
“Since stocks account for a larger portion of their assets, both the number of wealthy people and their assets are on the rise,” said Hiroyuki Miyamoto, general manager of Nomura Institute’s financial business consulting department.

9---Households feeling little benefit from higher stocks, JT

While the benchmark Nikkei 225 average briefly topped 20,000 for the first time in about 15 years on Friday, Japanese households are feeling little benefit from the higher stock market.
The strong performance of the Nikkei suggests that stock market players continue giving high marks to “Abenomics,” the economic policy package of Prime Minister Shinzo Abe, some two years and three months after his administration was launched.
But the economy has lost momentum since the consumption tax was raised to 8 percent from 5 percent in April 2014, analysts said, noting that the recovery in consumption remains slow among middle-class households.

According to recent data from the Internal Affairs and Communications Ministry, average household spending in February fell a real 2.9 percent compared with a year ago, down for the 11th straight month.
Households are staying budget-minded in response to the decline in real incomes resulting from the consumption tax hike and the inflation prompted by the Bank of Japan’s weakening of the yen.
According to the Central Council for Financial Services Information, stocks and other securities account for less than 20 percent of the financial assets held by households with two or more members.

Hadi: A Hollow President Whose Masters in Riyadh are
Killing Us

And where is this Iran Hadi speaks of? Here in Yemen we only see American drones and now foreign war planes destroying our country. Has Iran ever attacked Yemen? Sent troops? Bombed Yemeni factories? Ask a Yemeni what Hadi achieved during his two years in office and the answer will invariably be the same: nothing. Instead of building institutions, Hadi allowed the government to rot, the old regime to resurface, and his allies to loot what remained of the country’s resources.

A hollow president, Hadi has called on foreign powers to do his fighting for him, destroying Yemen’s infrastructure and army in the process. In 1994, when civil war broke out between north and south Yemen, Hadi betrayed his fellow southerners and fought alongside former president Ali Abdullah Saleh in the north. On 25 March 2015 when he fled to Riyadh, Hadi betrayed the entire country.

In contrast to Hadi, the Houthis, a politically ambitious movement from north Yemen, have decided to fulfil the goals of the 2011 revolution and deliver on their promises: removing and bringing corrupt criminals to justice, stopping US drone strikes and forming a new government. At the same time they have continued fighting Al-Qaeda in the Arabian Peninsula (AQAP), a violent group that flourished under the rule of Saleh.

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