Tuesday, June 9, 2015

Today's Links

1---Kiev hopes to sell state-run companies to US investors - PM, RT


Ukraine’s Prime Minister Arseny Yatsenyuk hopes to sell the country’s state-owned companies to the US. American investors will get the assets “on the most transparent conditions” if they decide to invest, he said.
The statement comes ahead of a Ukrainian-American investment conference in Washington on July 13.
“We want to start the privatization process… We want to see American owners on the territory of Ukraine, they will bring not only investment, but also new standards, new ways of managing the companies, and a new investment culture,” Yatsenyuk was cited as saying during his meeting with the representatives of Ukraine’s diaspora in Washington, UNIAN reported on Tuesday. Yatsenyuk and Ukraine’s Finance Minister Natalia Jaresko are in the US capital on a working visit which will last until June 10.


2-- Why the economy's days are numbered, David Stockman


During the 27 years after Alan Greenspan became Fed chairman in August 1987, the balance sheet of the Fed exploded from $200 billion to $4.5 trillion. Call it 23X.

Let’s see what else happened over that 27 year span. Well, according to Forbes, Warren Buffet’s net worth was $2.1 billion back in 1987 and it is now $73 billion. Call that 35X.
During those same years, the value of non-financial corporate equities rose from $2.6 trillion to $36.6 trillion. That’s on the hefty side, too—- about 14X.
Corporate Equities and GDP - Click to enlarge
Corporate Equities and GDP – Click to enlarge
When we move to the underlying economy that purportedly gave rise to these fabulous gains, the X-factor is not so generous. As shown above, nominal GDP rose from $5.0 trillion to $17.7 trillion during the same 27-year period. But that was only 3.5X
Next we have wage and salary compensation, which rose from $2.5 trillion to $7.5 trillion over the period. Make that 3.0X.
Then comes the median nominal income of US households. That measurement increased from $26K to $54K over the period. Call it 2.0X.
Digging deeper, we have the sum of aggregate labor hours supplied to the nonfarm economy. That metric of real work by real people rose from 185 billion to 235 billion during those same 27 years. Call it 1.27X.

Further down the Greenspan era rabbit hole, we have the average weekly wage of full-time workers in inflation adjusted dollars. That was $330 per week in 1987 and is currently $340 (1982=100). Call that 1.03X

Finally, we have real median family income. Call it a round trip to nowhere over nearly three decades!

OK


3--Tenth Anniversary of Greenspan's "Froth" Testimony

For fun ... tomorrow is the tenth anniversary of then Fed Chairman Alan Greenspan's "Froth" testimony on June 9, 2005:
Although a "bubble" in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels....

 Speculation in homes is largely local, especially for owner-occupied residences. ...

The U.S. economy has weathered such episodes before without experiencing significant declines in the national average level of home prices. ...

Although we certainly cannot rule out home price declines, especially in some local markets, these declines, were they to occur, likely would not have substantial macroeconomic implications.


4--G7 leaders escalate war threats against Russia


The hypocrisy and recklessness of Obama and his G7 counterparts is breathtaking. They are denouncing Russian “aggression” in Ukraine, which they plunged into civil war by backing a fascist-led putsch last year that toppled a pro-Russian government. Now, US and NATO armed forces are conducting air, sea and ground exercises all along Russia’s borders. In Eastern Europe, the Caucasus, Scandinavia, the Baltic Sea, and the Black Sea, the US and its allies are rehearsing the opening stages of an all-out war with Russia.
Last week, US defense officials testifying before the US House of Representatives indicated that the Pentagon is considering launching pre-emptive strikes against Russian targets, including with nuclear weapons (see: US officials consider nuclear strikes against Russia). These statements are no doubt now being carefully studied by the Russian military....


The second main priority of the assembled leaders was to coordinate the imposition of austerity measures that have already set in motion the collapse of large parts of the European economy.
Even as Obama denounced Putin for “wrecking his country’s economy,” the social cuts, mass layoffs and other “economic restructuring” measures dictated by the Western banks and financial institutions are pushing millions into poverty and ravaging key social infrastructure across Southern and Eastern Europe.
In its official communique, the G7 powers demanded that the Ukrainian government continue to implement austerity policies that, as in Greece, are pushing broad layers of the population into poverty. The Kiev regime must “decisively continue the necessary fundamental transformation in line with IMF and EU commitments,” the joint G7 communique demanded Monday.


5---The US Government’s Not-So-Secret Support for Al Qaeda and ISIS


Investigative journalist Nafeez Ahmed excellently summarized the biggest revelations from that report:
“In a strikingly prescient prediction, the Pentagon document explicitly forecasts the probable declaration of ‘an Islamic State through its union with other terrorist organizations in Iraq and Syria.’
Nevertheless, ‘Western countries, the Gulf states and Turkey are supporting these efforts’ by Syrian ‘opposition forces’ fighting to ‘control the eastern areas (Hasaka and Der Zor), adjacent to Western Iraqi provinces (Mosul and Anbar)’:
‘… there is the possibility of establishing a declared or undeclared Salafist Principality in eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran).’
The secret Pentagon document thus provides extraordinary confirmation that the US-led coalition currently fighting ISIS, had three years ago welcomed the emergence of an extremist ‘Salafist Principality’ in the region as a way to undermine Assad, and block off the strategic expansion of Iran. Crucially, Iraq is labeled as an integral part of this ‘Shia expansion.


6--The Geopolitics of American Global Decline: Washington Versus China in the Twenty-First Century


In 2003, when the U.S. invaded Iraq, imperial historian Paul Kennedy returned to Mackinder’s century-old treatise to explain this seemingly inexplicable misadventure. “Right now, with hundreds of thousands of U.S. troops in the Eurasian rimlands,” Kennedy wrote in the Guardian, “it looks as if Washington is taking seriously Mackinder’s injunction to ensure control of ‘the geographical pivot of history.’” If we interpret these remarks expansively, the sudden proliferation of U.S. bases across Afghanistan and Iraq should be seen as yet another imperial bid for a pivotal position at the edge of the Eurasian heartland, akin to those old British colonial forts along India’s Northwest Frontier.


In the ensuing years, Washington attempted to replace some of its ineffective boots on the ground with drones in the air. By 2011, the Air Force and the CIA had ringed the Eurasian landmass with 60 bases for its armada of drones. By then, its workhorse Reaper, armed with Hellfire missiles and GBU-30 bombs, had a range of 1,150 miles, which meant that from those bases it could strike targets almost anywhere in Africa and Asia.


Significantly, drone bases now dot the maritime margins around the world island — from Sigonella, Sicily, to Icerlik, Turkey; Djibouti on the Red Sea; Qatar and Abu Dhabi on the Persian Gulf; the Seychelles Islands in the Indian Ocean; Jalalabad, Khost, Kandahar, and Shindand in Afghanistan; and in the Pacific, Zamboanga in the Philippines and Andersen Air Base on the island of Guam, among other places. To patrol this sweeping periphery, the Pentagon is spending $10 billion to build an armada of 99 Global Hawk drones equipped with high-resolution cameras capable of surveilling all terrain within a hundred-mile radius, electronic sensors that can sweep up communications, and efficient engines capable of 35 hours of continuous flight and a range of 8,700 miles ...


After decades of quiet preparation, Beijing has recently begun revealing its grand strategy for global power, move by careful move. Its two-step plan is designed to build a transcontinental infrastructure for the economic integration of the world island from within, while mobilizing military forces to surgically slice through Washington’s encircling containment.


The initial step has involved a breathtaking project to put in place an infrastructure for the continent’s economic integration.  By laying down an elaborate and enormously expensive network of high-speed, high-volume railroads as well as oil and natural gas pipelines across the vast breadth of Eurasia, China may realize Mackinder’s vision in a new way.  For the first time in history, the rapid transcontinental movement of critical cargo — oil, minerals, and manufactured goods — will be possible on a massive scale, thereby potentially unifying that vast landmass into a single economic zone stretching 6,500 miles from Shanghai to Madrid. In this way, the leadership in Beijing hopes to shift the locus of geopolitical power away from the maritime periphery and deep into the continent’s heartland....


Though massive, these projects are just part of an ongoing construction boom that, over the past five years, has woven a cat’s cradle of oil and gas lines across Central Asia and south into Iran and Pakistan. The result will soon be an integrated inland energy infrastructure, including Russia’s own vast network of pipelines, extending across the whole of Eurasia, from the Atlantic to the South China Sea.
To capitalize such staggering regional growth plans, in October 2014 Beijing announced the establishment of the Asian Infrastructure Investment Bank. China’s leadership sees this institution as a future regional and, in the end, Eurasian alternative to the U.S.-dominated World Bank
...
In May, Beijing escalated its claim to exclusive control over the South China Sea, expanding Longpo Naval Base on Hainan Island for the region’s first nuclear submarine facility, accelerating its dredging to create three new atolls that could become military airfields in the disputed Spratley Islands, and formally warning off U.S. Navy overflights. By building the infrastructure for military bases in the South China and Arabian seas, Beijing is forging the future capacity to surgically and strategically impair U.S. military containment....


Lacking the geopolitical vision of Mackinder and his generation of British imperialists, America’s current leadership has failed to grasp the significance of a radical global change underway inside the Eurasian land mass. If China succeeds in linking its rising industries to the vast natural resources of the Eurasian heartland, then quite possibly, as Sir Halford Mackinder predicted on that cold London night in 1904, “the empire of the world would be in sight.”


7---Afghan Taliban say informal talks took place in Norway


"We appreciate these are non-government talks, they are not representing the government of Afghanistan," the statement said.
The Norwegian Foreign Ministry confirmed the discussions had taken place between "Afghans of different political backgrounds ... expressing their personal views."
The meeting is the third face-to-face contact between Taliban and Afghan officials in recent months, though both sides have stressed their informality.


Ghani has prioritized bringing the Taliban to the negotiating table and ending their insurgency. He has promised transparency in all dealings with the insurgents, who have been fighting Kabul for 14 years — since being ousted from power by a U.S.-led invasion in December 2001


8--Why the Housing Market Collapse is Set to Resume
June 2, 2015, by Keith Jurow


9--UN warns about worsening humanitarian situation in Yemen

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