Wednesday, May 6, 2015

Today's Links

When growth is slower-than-expected, stocks go down. When inflation is higher-than-expected, bonds go down. When inflation is lower-than-expected, bonds go up." - Ray Dalio

Once you bring the rapid change in major benchmark prices and a change in the architecture of the global financial system together, you could end up with outcomes that are pretty painful, and certainly unknowable.”...

1--London bankers plotting to bring down the Eurozone, says Juncker
2--5-star resort opens for ISIS supporters in Iraq

3--Ayatollah Khamenei further described the US government as the most “disgraced government in the world,” adding that one reason for this loss of honor is the explicit US support for the Saudi aggression against Yemen.
“The Americans are supporting the massacre of the Yemeni people without any shame, but they accuse Iran, which is after (sending) medical aid and food to the Yemeni people, of interfering in this country and sending weapons,” the Leader said.

4--Saudi war on Yemen has failed: Hezbollah chief

“They claimed that they want to fight terrorism but they are offering arms to al-Qaeda and bombing the popular committees to prevent them from reaching the regions where al-Qaida is operating. They have prevented any humanitarian aid from reaching Yemen,” he stressed

the Americans have revealed their true intentions through their attempt to bestow legitimacy on the fragmentation of Iraq, and this is what the US Congress is trying to do, he noted.
The draft of a US annual defense bill, which was released on April 27 by the House Armed Services Committee, urges the US government to recognize separate Kurdish and Sunni states and provide them with at least 25 percent of the USD-715-million aid money allegedly planned to be given to the Iraqi government to help it fight the ISIL terrorist group.
The draft bill also says the figure could even amount to 60 percent of the money, about USD 429 million.
The bill mandates that “the Kurdish Peshmerga, the Sunni tribal security forces with a national security mission, and the Iraqi Sunni National Guard be deemed a country,” adding that doing so “would allow these security forces to directly receive assistance from the United States.”

5--First Quarter GDP Likely Negative as Trade Deficit Soars

7--Liquidity drought could spark market bloodbath, warns IIF
Evaporating liquidity and higher US interest rates will cause huge market swings with potentially catastrophic consequences, Institute of International Finance warns

Corporate bond inventories have fallen by 75pc in the US and 50pc in Europe since 2007, according to IIF data. While much of this has been driven by banks unwinding large credit books, regulation has also discouraged them from holding large quantities of bonds that could help cushion violent swings in prices.
Mr Adams said a “dramatic revolution” of the players and risks of market making had also pushed risk “out into the shadows” of non-bank lending.

“We’ve rewired and re-engineered the global financial regulatory system and as a result we’re having profound impacts on institutional arrangements. At the same time we’ve had this rapid change in benchmark prices such as a 50pc drop in the price of oil, a rapid change in the dollar and other exchange rates and another drop in commodity prices,” he said.
“Once you bring the rapid change in major benchmark prices and a change in the architecture of the global financial system together, you could end up with outcomes that are pretty painful, and certainly unknowable.”...

Credit to non-bank borrowers outside the United States has grown to $9 trillion, from $6 trillion since the financial crisis, according to the Bank for International Settlements (BIS). IIF data show emerging market dollar denominated debt has more than doubled to $2.6 trillion in a decade.
The BIS measure, which includes lending through banks registered in other jurisdictions, shows the figure is closer to $4.5 trillion today, leaving the world more sensitive to changes in interest rates by the Federal Reserve.
Meanwhile, global bond markets have grown from $30 trillion in 2000 to almost $90 trillion. However, the IIF has highlighted that trading volumes in US bond markets have fallen by 20pc compared with 2005.

8--Economic Policy Turned Inside Out, Stephen Roach, Project Syndicate

The world economy is in the grips of a dangerous delusion. As the great boom that began in the 1990s gave way to an even greater bust, policymakers resorted to the timeworn tricks of financial engineering in an effort to recapture the magic. In doing so, they turned an unbalanced global economy into the Petri dish of the greatest experiment in the modern history of economic policy. They were convinced that it was a controlled experiment. Nothing could be further from the truth....

Despite the abject failure of Japan’s approach, the rest of the world remains committed to using monetary policy to cure structural ailment...

But fear not, claim advocates of unconventional monetary policy. What central banks cannot achieve with traditional tools can now be accomplished through the circuitous channels of wealth effects in asset markets or with the competitive edge gained from currency depreciation....

Although the Fed expanded its balance sheet from less than $1 trillion in late 2008 to $4.5 trillion by the fall of 2014, nominal GDP increased by only $2.7 trillion. The remaining $900 billion spilled over into financial markets, helping to spur a trebling of the US equity market. Meanwhile, the real economy eked out a decidedly subpar recovery, with real GDP growth holding to a 2.3% trajectory – fully two percentage points below the 4.3% norm of past cycles.
Indeed, notwithstanding the Fed’s massive liquidity injection, the American consumer – who suffered the most during the wrenching balance-sheet recession of 2008-2009 – has not recovered. Real personal consumption expenditures have grown at just 1.4% annually over the last seven years. Unsurprisingly, the wealth effects of monetary easing worked largely for the wealthy, among whom the bulk of equity holdings are concentrated. For the beleaguered middle class, the benefits were negligible.

It was as if a limb body was banging against the inner walls of the cell in the van as it drove along.
When I got in the van I didn't hear nothing,  It was a smooth ride. We went straight to the police station. All I heard a little banging for about 4 seconds, and I'm thinking he's banging his head the whole time. Now I know they did something to him and his body been wobbling back there, yo. Cuz he can't hurt himself in the back of no paddy wagon.
He goes on to describe how Officers at the station claimed that Freddie "must have swallowed something" once he was revived by paramedics which is what we've heard via an anonymous police sources who spoke with Megyn Kelly.
According to the preliminary autopsy report, Gray was unresponsive by the time he reached the police station, which is exactly the period in which Mr. Allen was also in the van. He could not have been intentionally banging his head because he wasn't conscious to intentionally do anything at that time.  Also the severity of the force as far greater than that which a man handcuffed in a tiny cell could have manually inflicted on himself and Miller later described to Chris Hayes, and she had previous stated on Morning Joe.
The force of this injury is akin to a car accident. That is much more force you would get than trying to bang your head against the wall of a van,” Miller during an appearance on MSNBC’s Morning Joe on Thursday, pointing out that Gray was also unresponsive and therefore unable to bang his head against the wall of the van in the first place.

11--Greenwald on Lynch

I found the reaction to Loretta Lynch nomination to be genuinely remarkable, because if you look at the people who are demanding her confirmation and cheering her confirmation and what they believe, there’s a universe of distance between their beliefs and the things that she believes and what she has done in her career.

She is essentially a fairly conservative, pro-security state, pro-penal state federal prosecutor who has spent her career supporting and upholding this evil system of mass incarceration. To cheer her simply because of the historic nature of her appointment — which, of course, is significant, her being the first African-American woman to serve in that position — without regard to the things that she’s actually going to do in pursuit of these policies, I think is mind-numbingly irrational....

Is there a connection between the era of mass incarceration and the era of the burgeoning national security state?
Oh they’re completely connected and inextricably linked. There’s so many different similarities that bind them together, but the most important one is just the mentality. Part of the War on Terror is how we’re taught to think that once you have a group of people who are identified as some kind of menace or threat to security, essentially anything can be done to them. They can be killed or brutalized or imprisoned without any real due process, and that’s all justified because they’ve demonstrated themselves to be a threat 

By Patrick Martin
6 May 2015
The Middle East is a powder keg, and American imperialism is the leading arsonist, both in deploying its own military forces and selling vast (and highly profitable) caches of weapons to its client states throughout the region. That list, of course, includes the state of Israel, the most heavily armed in the region, with an estimated stockpile of at least 250 nuclear bombs, along with missiles, warplanes and submarines capable of delivering them.
The opening of the war games in Jordan follows reports in the New York Times and Washington Post that members of the US-led “coalition” against ISIS are pressing for an extension of military operations against the Islamists into other countries, including Libya and the Sinai region of Egypt, as well as unspecified repressive measures in Jordan, Lebanon, Saudi Arabia, Tunisia and Yemen.... 
Some ten thousand troops began military exercises in Jordan on Tuesday, in the fifth annual “Eager Lion” war games led by the Pentagon. The drills are in preparation for a greatly expanded military conflict in Syria, Iraq and elsewhere in the Middle East.
A total of nine Arab countries—Jordan, Kuwait, Bahrain, Qatar, Saudi Arabia, Egypt, the UAE, Lebanon, and Iraq—join the US, Britain, France, Italy, Canada, Belgium, Poland, Australia and Pakistan for the exercise.
But the US military will dominate Eager Lion, supplying 5,000 of the 10,000 troops, including headquarters, air, land, sea and special operations forces. During the two-week-long exercise, from May 5 through May 19, there will be more American troops in Jordan than in neighboring Iraq, where President Obama has dispatched some 3,000 troops to train Iraqi forces and conduct special operations warfare and airstrikes against Islamic State in Iraq and Syria (ISIS).

13--Reporter: what will prevent another Freddie Gray?Mosby: Accountability. R:There hasn't been any for so long. Mosby:You're getting it now.
I heard your calls of 'No justice, no peace,'" Mosby told her city on Friday. "However, your peace is sincerely needed as I work to deliver justice on behalf of Freddie Gray."

If there is to be a turning point in the national conversation on police brutality against unarmed black men, Mosby may have delivered just that.
Must read....

14--Lynch visits Baltimore

She also took pains to meet face-to-face with Baltimore’s embattled cops, calling them “the face of law enforcement” and laying a wreath at a police memorial in Washington.

Attorney General Loretta Lynch went to Baltimore on Tuesday looking for ways to calm roiling national tensions over police violence. Her visit showed just how difficult that will be.
Lynch, who was sworn in just hours before the Maryland city exploded into riots, had a packed day of meetings with a family looking for justice, police officers looking for respect, and community activists looking for swift action that can help their city heal....

Opening a pattern-and-practice investigation has the problem of creating tension with the police force at a time I’m sure they feel under siege...

Lynch met with representatives of the strife-ridden community who demanded more aggressive action from the Justice Department, including the launching of a Civil Rights Division “pattern-or-practice” probe into the Baltimore Police Department.
She also took pains to meet face-to-face with Baltimore’s embattled cops, calling them “the face of law enforcement” and laying a wreath at a police memorial in Washington....

Lynch began her trip with a closed-door meeting with Gray’s family. Lynch then met with community leaders, religious leaders and members of the Maryland congressional delegation. While some in the room have been pressing for a larger DOJ investigation into Baltimore police practices, the attorney general held her cards close to her vest, sounding more like a counselor than a prosecutor.
“We’re here to hold your hands and provide support,” she told the group.
Within minutes, Lynch was on her way to Baltimore police headquarters, where she saluted officers as heroes, including one injured when the windshield of his police car was shattered during the violence last week.
“Thanks to all of you, I’m looking at the hardest-working police officers in America,” she declared. “We are here to help you work through these struggles.”
When Lynch moved on to a visit at Mayor Stephanie Rawlings-Blake’s office, the talk was about “partnership,” not investigation or confrontation.

15--Loretta Lynch thanks Baltimore cops for their service during riots

16--No Justice in Baltimore: Margaret Kimberley

There should be no celebrating unless all of the police responsible for Freddie Gray’s death are convicted. There should be no celebrating until Allen Bullock is released from jail. There should be no congratulations to the mayor, congressman or state attorney until they explain why the police prevented children from leaving school and helped to provoke the events which were then so loudly condemned.

The toll of police murder in this country is horrific and proves that claims of American justice and democracy are blatant lies. In 2014 alone, 1,100 people were killed by police. These police are rarely even charged, much less prosecuted successfully. Freddie Gray died in police custody in Baltimore, Maryland and a medical examiner has ruled his death a homicide. The State’s Attorney has brought charges against six officers, but that by no means gives any assurance of justice....

Black life itself is criminalized in this country. Driving while black, bike riding while black, walking while black, are all potential justifications for police execution. The idea of white rights over the lives of black people has been completely normalized and accepted. That is why even murders committed on camera are not punished and that is why charges against the officers who killed Freddie Gray are not yet cause for celebration.
Police are modern day slave patrollers and they are given carte blanche to mete out any treatment they choose to black people.”...
many of the protesters who originally took to the streets were criticized by the press and politicians. Those who damaged property were singled out for condemnation and some were singled out for punishment. Allen Bullock is an 18-year old who was photographed vandalizing a police car. His parents wanted him to do “the right thing” and turn himself in to the police.As every black person ought to know, that is always a bad idea. Young Mr. Bullock has been charged with eight misdemeanors but he is still in custody and must post $500,000 bail in order to be released. None of the six officers charged had such a high bail amount. The killers are walking the streets and a young man who made an unwise decision will sit in jail for as long as the system chooses.

17--Ukraine: Donetsk Republic Nationalizes Banks, Draws Ire Of NATO and World Banking Cartel


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