Wednesday, July 29, 2015

Today's Links

1--US, EU 'Give Up' Ukraine to Seek Russian Political Support

The United States and the European Union (EU) are "selling out" Ukraine to Russia to gain the Kremlin's support in dealing with Iran's nuclear program and looking for Moscow's approval of taking out Syrian leader Bashar al-Assad, the Atlantic Magazine reported.
According to Brian Whitmore, over the past few weeks, the Europeans and Americans have been busy trying to strike a political deal with Vladimir Putin.
"The United States and Europe might give up Ukraine in exchange for Russia's support of securing a deal to curb Iran's nuclear program. Additionally, Washington has been seeking Moscow's backing in securing a managed, orderly, and negotiated exit for Syrian leader Bashar al-Assad," Whitmore said in the Atlantic.

Then, US Deputy Assistant Secretary of State Victoria Nuland went to Kiev and persuaded Ukrainian lawmakers to make changes in their constitution to recognize the special status of the Donetsk and Lugansk People's Republics. Something that Kiev has been long opposed to, Whitmore argued.

2--AKP, MHP reject inquiry about ISIL, PKK terror

A proposal for the establishment an inquiry commission by the Republican People’s Party (CHP) was rejected by votes from the Justice and Development Party (AKP) and the Nationalist Movement Party (MHP).

Meanwhile, the Peoples’ Democratic Party (HDP) supported the proposal. CHP and HDP lawmakers then protested the AKP-MHP rejection of the establishment of the commission.

Lawmakers from the four political parties came together upon the initiative of the CHP, with the intention of discussing a terror wave by the Islamic State of Iraq and the Levant (ISIL) and the Kurdistan Workers’ Party (PKK) in the last 10 days.

“We warned the government about the birth of the ISIL and we have submitted necessary motions to the parliament for an in-depth examination but all have been rejected by the government,” deputy parliamentary group leader of the CHP, Levent Gök said in his address to parliament. “If we do not form a commission to inquire into the ISIL threat, what else will we do?”

3---On the Causes of Investment Decline in the US Economy , Jack Rasmus

the chronically stagnant US economic recovery since 2009 (predicted in my 2010 book, ‘Epic Recession: Prelude to Global Depression’), the result of insufficient income growth for most households—that is then necessary to stimulate consumption demand that, in turn would result in real investment that would create jobs? Or has the escalation of financial asset prices since 2009—itself the consequence of $10-$15 trillion of Fed and central bank liquidity injections— resulted in lower real investment in the US and thus the failure of job and income growth?

To restate more simply: does the lack of wage and income growth determine real asset investment; or are the expanding opportunities for more profitable financial asset speculative profits globally driving the decline of US real asset investment (and thus jobs, wages, and income growth)?
Which is the more primary causal relationship? If one believes lack of income is the primary cause of declining real investment today in the USA, then the solution is simply to raise wages and income of households that typically spend by whatever means—tax cuts, subsidies, etc. The problem is simply an insufficient level of income.

4--Turkey stepped up its offensive against Kurdish militias in northern Iraq early Wednesday, pounding targets in six locations from the air, officials said.
The Iraqi government condemned the airstrikes, calling them “a dangerous escalation and an assault on Iraqi sovereignty.”
Turkish officials said the airstrikes were carried out in response to a string of terrorist attacks in Turkey by militants of the Kurdistan Workers’ Party, or P.K.K., a separatist group that waged a 30-year insurgency against Turkish rule. The office of Prime Minister Ahmet Davutoglu said in a written statement that the strikes on Wednesday were against shelters, depots and caves used as hide-outs by the group. No information was released concerning casualties

5---Restoring peak housing prices required record low mortgage rates during a period of weak growth and a falling home ownership rate

It’s time to celebrate! National home prices reached the peak of 2006. Surviving homedebtors are regaining equity, surviving lenders have collateral backing behind the bad debt they’ve preserved for the last decade, and new homeowners are stretched to the max to repay the bad debts of previous generations, albeit at lower rates.
Since the housing market peaked in 2006, the powers-that-be resisted the price decline with a variety of government relief programs, and most importantly, record low mortgage rates. The recession caused by the 2006-2009 housing market crash left many people unemployed and underemployed, removing their demand from the housing market, and millions of foreclosures caused the home ownership rate to plummet — not the conditions one would expect to cause a robust price rally in house prices.

However, house prices did go up — a lot. When the market manipulations finally worked in 2012, house prices went nearly vertical. While economic fundamentals were slowly improving in the background, there was no significant fundamental support for the rally that reflated the housing bubble, certainly not a level of economic improvement commensurate with the dramatic increase observed in prices.
The entire rally was fueled by record low mortgage rates engineered by the federal reserve. Plus, changes in policy at the major banks held back the tide of foreclosures and greatly restricted the MLS inventory. Demand was up slightly, mostly due to investors as owner-occupants remained absent from the market, and first-time homebuyer participation fell to very low levels.

Homes are officially being sold at the highest prices, ever

Existing-home sales also reach highest pace in 8 years

Thanks to rising demand and shrinking supply, the median existing-home price for all housing types reached an all-time high in June.
According to the latest data from the National Association of Realtors, the median existing-homes sales price rose to $236,400, which exceeds the previous peak median sales price set in July 2006 of $230,400. …

Despite record prices, existing-home sales also reached their highest pace in more than eight years.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.2% to a seasonally adjusted annual rate of 5.49 million in June from a downwardly revised 5.32 million in May.
Sales are now at their highest pace since February 2007 (5.79 million), have increased year-over-year for nine consecutive months and are 9.6% above a year ago (5.01 million)....

All-cash sales dropped to the lowest share since December 2009, reaching just 22% of transactions in June, down from 24% in May and 32% a year ago....

The problem is that Potential buyers can’t afford peak prices at higher interest rates. When interest rates go up, sales volumes will fall, and house prices may follow

6--Pentagon chief threatens Iran with war, despite nuclear agreement

7--Supreme Leader's Sermons at Eid ul-Fitr Prayers, July 18th, 2015
Sayed Ali Khamenei, the Supreme Leader of the Islamic Revolution    

The following is the full text of the sermons delivered on July 18, 2015 by Ayatollah Khamenei, the Supreme Leader of the Islamic Revolution, at the Eid ul-Fitr prayers in Tehran.

Another issue is a domestic one: the issue of the nuclear negotiations. I deem it necessary to raise a few points in this regard......The next point is that one will be allowed to take advantage of this document in any way and to undermine the fundamental principles of the Islamic Republic whether this document is ratified or not. ..... The Islamic Republic will never give in to the enemy's greed in the area of protecting its defense capabilities and security- particularly in this environment filled with the enemies' threats...
The next point is that whether this document is ratified or not, we will not abandon our regional friends: the oppressed people of Palestine, the oppressed people of Yemen, the people and government of Syria, the people and government of Iraq, the oppressed people of Bahrain and the sincere mujahids of the Resistance in Lebanon and Palestine. These people will always enjoy our support.

The next point is that our policy towards the arrogant government of America will not change in any way despite these negotiations and the document that has been prepared..... As we have said many times, we have no negotiations with America on different global and regional issues. We have no bilateral negotiations with America. Sometimes, we have negotiated with them in exceptional cases such as the nuclear issue and we have done so because of our interests. The nuclear issue was not the only case. There were other cases as well which I have referred to in my previous public speeches. The American policies in the region are 180 degrees the opposite of the policies of the Islamic Republic.....

There was one point in the statements that the American president made in recent days: he admitted to America's past mistakes. Of course, he said a hodgepodge of things. He admitted that the Americans made a mistake in Iran on the 28th of Mordad. He admitted that the Americans made a mistake in helping Saddam Hussein. He admitted to two, three mistakes, but he did not mention tens of others. He did not speak about the 25-year oppressive and treacherous rule of the second Pahlavi monarch. He did not speak about the many instances of torture, looting, massacre, disaster and calamity that were caused by America. He did not speak about the destruction of the Iranian peoples' dignity and America's efforts to trample upon their domestic and foreign interests. He did not speak about the Zionists' domination, the killing of Iranian passengers on a passenger plane and many other things. Nonetheless, he mentioned a number of mistakes. ......

.... today they have signed on paper that they have no problem with our nuclear industry. Apart from stressing the power of the Iranian people, what other meaning does this have?....This has been achieved because of the people's resistance and steadfastness and our dear scientists' courage and innovation.....God's mercy be upon our nuclear martyrs. God's mercy be upon their families. God's mercy be upon a people who stand by their truthful claims and rights.



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