Thursday, March 31, 2016

Today's Links

"When money yields nothing, then it will return nothing. So, when bonds have a zero percent interest rate, or negative interest rate, then there's nothing to gain from owning them." Bill Gross

1--Look out below! The dollar is Trader

2--European Peripheral Corporate Bond Yields Tumble To Record Lows Ahead Of Draghi's Monetization

Once again, Draghi has worked his verbal magic unleashing a buying spree before the ECB has bought even one single bond, all because other buyers are now completely price indiscriminate and fully aware they have the ECB's backstop.

The WSJ's conclusion:

Since the ECB’s bond buying program is designed to spur lending by reducing the cost to corporations, record low yields are good news: for now, at least.

We disagree: what the chart above shows is yet another asset class that is now completely dislocated from its fundamentals, just like European sovereign bonds, which are trading not on their underlying merit but because the ECB has to buy them. The same is happening in the corporate financial space. And, once the corporate non-financial market ends up broken and there is no more supply, the ECB will be forced to expand its bond buying universe again, launching the monetization of junk bonds, convertibles and ultimately equities

3--Gig economy takeover: Nearly Entire Increase in Employment Since 2010 is in Gigs!

The Wall Street Journal uses the term “gig” meaning an “alternative work arrangement job”.....

The estimated increase in gig employment between 2010 and 2015 is 10,058,540....

The BLS shows employment rose 10,628,000 in the same period.

Thus, nearly the entire increase in employment (94.6%) since 2010 has been in the gig economy!

New research shows labor shift affects health care, education and other industries that have traditionally offered stable employment. However, the Wall Street Journal reports Contract Workforce Outpaces Growth in Silicon-Valley Style ‘Gig’ Jobs.

Uber drivers aren’t the only “gig” workers rattling the U.S. economy. Older workers, especially women, increasingly are filling in as contractors across a range of traditional industries, from highway inspectors to health aides.

As companies look to shed noncore tasks and government budgets come under strain, an expanding share of the workforce has come untethered from stable employment and its attendant benefits and job protections.

The explosive growth of Silicon Valley companies such as Uber Technologies Inc., where on-demand drivers summoned by an app set their own hours and are paid by the ride instead of an hourly wage, has shined a bright light on the so-called gig economy. But new research shows this shift away from steady employment has taken place largely in the shadows


The Labor Department breaks down the four main types of alternative work arrangements into independent contractors, on-call workers, temp workers and workers employed by contract firms, but it hasn’t updated its count of such workers since 2005...

Workers in these alternative arrangements often find themselves with erratic schedules, spotty earnings and few benefits such as health insurance, Social Security or a retirement plan....

From 1995 to 2005, the “gig” workforce grew from 9% of the jobs to 10% of the jobs. Since then, the “gig” workforce grew to 16% of all jobs.

Today, the survey estimates 17% of women and 15% of men hold “gig” jobs.

Permatemps and Giggers

Even though some giggers (can I say that?) work full time, the rising cost of benefits and salary differentials means there is little to no chance companies will hire them. The polite new term for this plight is “permatemp”....

We now have gigger, side-gigger, permatemp, Silicon-Valley style gigger, full-time gigger, on-demand gigger, and solopreneur in the language lexicon.

According to Entrepreneur, a “side-gigger” works less than 15 hours a week. If a full-time gigger works 35 hours a week, is a part-time gigger someone who works gigs between 15 and 35 hours a week?

Clearly we need new terms here....

is a “gig” an “on-demand job” as the Journal defined? Or is a “gig” an “alternative workforce arrangement job” as the Journal also defined the term?...

U6 is a measure of unemployment that includes those working part-time.  Those who work as little as one hour a week are counted as “employed”....

Gig Statistics

  1. Total employment in December 2010: 139,301,000

  2. Total employment December 2015: 149,929,000

  3. 2010 “gig” employment (10% of line 1): 13,930,100

  4. 2015 “gig” employment (16% of line 2): 23,988,640

The growth in “gig” employment since 2010 is approximately 10,058,540 using “Civilian Employment“, a household survey measure, in my calculations.

According to the BLS, the growth in employment from December 2010 to December 2015 was 10,628,000....

The study estimates 10% of employment in 2010 was 10% and was 16% of employment in 2015.

the increase in gig employment in the same period is 10,058,540 .

In essence, virtually the entire increase in employment since 2010 was in the “gig” economy! 

4--Larry Summers: Corporate profits are near record highs. Here’s why that’s a problem

In the past seven years, the stock market has risen to 250 percent of its spring 2009 levels...

the rate of profitability in the United States is at a near-record-high level, as is the share of corporate revenue going to capital. The stock market is valued very highly by historical standards, as measured by Tobin’s q ratio of the market value of the non-financial corporations to the value of their tangible capital. And the ratio of the market value of equities in the corporate sector to its GDP is also unusually high. ....

it could be that higher profits do not reflect increased productivity of capital but instead reflect an increase in monopoly power. If monopoly power increased, one would expect to see higher profits, lower investment as firms restricted output, and lower interest rates as the demand for capital was reduced. This is exactly what we have seen in recent years!

5--$ story (important)

Point is, technicals can carry markets counter to the fundamentals for long periods of time.

6--The political economy of endless austerity

the political economy of endless austerity is rooted in the very foundations of the capitalist economy itself.

The capitalist mode of production is not some “natural” economic order—mankind did not descend from the trees onto the plains of Africa and divide into wage workers, factory owners and bankers. It is a historically developed socioeconomic order based on the private ownership of the means of production and the drive for the accumulation of profit, the key measure of which is the rate of profit. That rate is determined by the relationship of the total mass of profits to the total capital outlaid to secure it....

If profit rates are trending down, then new investment will be cut back, and productivity—measured by the output per worker—will tend to decrease and the economy will stagnate or contract.

This has been the consistent trend in all the major economies since 2008, with the result that in Europe, for example, investment rates are as much as 25 percent below their pre-crisis trend. Consequently, productivity rates have been trending ever further downwards, with the result that investment is reduced still further. A vicious circle has set in. Lower profit rates lead to cuts in investment, lowering productivity increases and reducing the rate of profit still further.

As a result, corporations, instead of reinvesting the profits they accumulate, use their available cash for speculative activities in financial markets, drawing on the ultra-cheap money provided by central banks for mergers and acquisitions, share buybacks and investment in the property market. While such parasitism boosts the bottom line of the individual firm, it leads to further stagnation in the real economy as a whole.

Herein lies the reason for the relentless drive to austerity. Under conditions where the very operation of the profit system leads to cuts in investment, and the real economy stagnates or even contracts, capitalist governments insist that “there is no money” for social services. “The country must learn to live within its means” is their endless mantra....

The rate of profit, as we noted earlier, is determined by two factors: the increase in national income generated by investment and the division of that income between the owners of capital and the producers of that wealth, the working class.

Under conditions where investment is being slashed, and consequently the growth of productivity, and therefore national income, tends to decline, profit rates can be sustained and increased only by boosting the proportion of national income flowing to the corporations and finance houses—a result that is achieved through the imposition of ever-increasing impoverishment on the mass of the working population...

This endless austerity is not a “natural” development. It is the result of the relentless logic of the profit system that, by its very functioning, produces fabulous wealth at one pole and poverty and misery at the other.

7--The corporate profit bubble is about to burst

In the short-term, history suggests the current profits recession very likely will lead to an economic recession accompanied by a bear market. In fact, profit margin peaks regularly lead major stock market peaks and profit margins peaked this cycle about four years ago already. In addition, the recent fall in earnings and profit margins is already beginning to damage those earnings-based valuation measures. The S&P 500 now trades at its highest price-to-earnings ratio since the bull market began even as the index remains well off its recent price highs. And profit margins still could have a long way to fall before even reaching their average level since 1950.

Longer-term, if these new secular trends working against profit margins are to remain in place, earnings growth will be much harder to come by for corporate America than it has been over the past few decades. And there are plenty of signs it is already becoming very difficult for them. Corporate cash flow has essentially been flat for the past five years. At the same time, more and more companies recently have resorted to financial engineering via buybacks, non-GAAP reporting and even outright fraud. My guess is this is all in an attempt to make up for broadly slowing organic profit growth due the these secular tailwinds shifting to headwinds.

Should these shifts actually turn out to be longer-term secular trends, they pose a great risk to equities in both the short-term and the long-term. Falling profit margins and rising valuations (as earnings fall) make for a pretty bearish one-two punch for the stock market. I can’t imagine investors being very eager to pay higher valuations for companies growing more slowly. That equation usually works in reverse. And there’s no reason I can see to expect these challenges to corporate profit margins to let up any time soon.

8--Assad says Erdogan's army fighting in Syria


Wednesday, March 30, 2016

Today's Links

1---Chart Of The Day: 30 Million Independent Workers——Solopreneurs Vs. Side-Giggers


2--Europe's Bond Shortage Means Draghi Is About to Shock the Market

3--Stocks Breaking Down, Corporate Profits Imploding, and the US in Recession

This is hitting as new evidence suggests corporate profits are collapsing at a pace not seen since the 2008 meltdown.

4--Japanese economy continues to show signs of faltering

The Japanese government downgraded its assessment of the economy last Wednesday following a similar move by its central bank the previous week. Notwithstanding the initial hype which surrounded it, Prime Minister Abe’s economic agenda—so-called Abenomics—is now a dead letter so far as any economic revival is concerned. Growth has continued to contract while wages remain stagnant....

The movements in financial markets are a reflection of the confusion over the direction of the economy and the growing sentiment that the government has no viable program. Consumer spending reflects the same trend as households cut expenditure, fearing the introduction of negative interest rates means the economic outlook must be worse than they had thought....

The movements in financial markets are a reflection of the confusion over the direction of the economy and the growing sentiment that the government has no viable program. Consumer spending reflects the same trend as households cut expenditure, fearing the introduction of negative interest rates means the economic outlook must be worse than they had thought....

The highly unpopular increase in the consumption tax is another attack on workers. In 2014, it rose from 5 percent to 8 percent, sending the economy into recession. A planned increase to 10 percent is scheduled for April 2017. ...For workers, wages have remained stagnant with the median wage level remaining almost entirely unchanged in the past 20 years.

5--Impeachment looms in Brazil as PT’s largest coalition partner deserts government

To be placed on the chopping block are a number of programs that were initiated by the PT in an attempt to dampen class tensions in what is one of the most socially unequal countries on the planet. These include “Minha Casa, Minha Vida,” which provides subsidized housing, and “Bolsa Familia,” a poverty program involving direct income transfers to roughly a quarter of the population. The newspaper reported that the PMDB is considering putting a new cap on the second program that would limit it to only the poorest 10 percent of Brazilians living on less than one dollar a day.

A policy paper issued by the party last year calls for reversing the economic crisis by attracting foreign investment through improved “competitiveness.” This is to be achieved, it indicates, by slashing the living standards of the working class through measures such as raising the retirement age, ending constitutional mandates for health and education funding, and reducing real wages.

6--Private companies added 200K jobs in March, matching estimates: ADP

7--U.S. consumer spending, trade data signal sluggish growth

U.S. consumer spending barely rose in February and inflation retreated, suggesting the Federal Reserve could remain cautious about raising interest rates this year even as the labor market rapidly tightens.

Monday's report from the Commerce Department also showed consumer spending in January was not as strong as previously reported. That, together with other data showing a widening in the goods trade deficit in February, indicated economic growth remained sluggish in the first quarter.

"It speaks to the weakening in domestic economic momentum at the start of this year, further reinforcing the Fed's cautious monetary policy bias," said Millan Mulraine, deputy chief economist at TD Securities in New York.

Consumer spending edged up 0.1 percent as households cut back on goods purchases after a downwardly revised 0.1 percent gain in January. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have increased 0.5 percent in January.

8--Negative rates? Not so fast

Negative rates have been introduced by some central banks worldwide. In theory doing so should both devalue their currency, making their exports cheaper and imports more expensive, and at the same time encourage consumer spending. It should also boost lending by financial institutions, as the value of capital being held by both individuals and banks is ever decreasing.

Sadly this theory when put into practice has been found wanting. The Bank of Japan introduced a negative interest rate of minus 0.1% in January 2016 and the yen subsequently increased in value compared to its competitor currencies. Indeed in 2016 the yen is the best performing G10 currency against the US$.

Similarly the Swiss National Bank flagged a negative interest rate of minus 0.25% to be introduced in January 2015, but the inflow of funds into the Swiss franc continued and the rate was finally reduced on its introduction to minus 0.75%, with the aim of discouraging capital inflows. However despite these moves the Swiss National Bank continued to accumulate foreign exchange reserves into the second half of 2015.

The European Central Bank (ECB) further increased its negative interest to minus 0.4%, on bank deposits held at the ECB in mid March 2016, as it attempted to manipulate downward the value of the Euro. The impact of this was undermined somewhat by allowing the European banks to borrow from their central bank at the same minus rate, depending on how much they lend to businesses and consumers. An initial dip in the value of the Euro when the minus 0.4% was announced was then followed by a sharp rise, as the implications of the whole package became clearer.

The aim of this is to lower the cost of borrowing for both consumers and corporations, as the banks borrow money from the ECB at no cost to them. This is intended to help stave of the threat of deflation in the eurozone by stimulating investment and consumption....

Recently published research from the Bank for International Settlement (BIS) found that in some cases savings accounts had been insulated from the impact of negative interest rates and that some mortgage rates in Switzerland had “perversely increased”. The conclusion from the BIS was then,“if negative interest rates do not feed into lower lending rates for households and firms, they largely lose their rationale”.

The Governor of the Bank of England has argued that if central bank policies are structured in ways that shield retail bank customers from minus interest rates, then they are unlikely to do much to stimulate domestic demand. Instead the main effect will be on exchange rates and this will result in the provoking of currency wars, as central banks attempt to out do each other in negative interest. Negative interest rates are intended to boost domestic demand by forcing banks to lend money out and encouraging consumers to both borrow and spend....

If the weapon of negative interest rates does not work as expected on currency values or domestic consumption and investment, what else is there left to deploy to prevent deflation and a further slow down in economic actively? Economics indeed truly is dismal science.

9--Financial Implosion and Stagnation”:

“It was the reality of economic stagnation beginning in the 1970s, as heterodox economists Riccardo Bellofiore and Joseph Halevi have recently emphasized, that led to the emergence of “the new financialized capitalist regime,” a kind of “paradoxical financial Keynesianism” whereby demand in the economy was stimulated primarily “thanks to asset-bubbles.” Moreover, it was the leading role of the United States in generating such bubbles—despite (and also because of) the weakening of capital accumulation proper—together with the dollar’s reserve currency status, that made U.S. monopoly-finance capital the “catalyst of world effective demand,” beginning in the 1980s. But such a financialized growth pattern was unable to produce rapid economic advance for any length of time, and was unsustainable, leading to bigger bubbles that periodically burst, bringing stagnation more and more to the surface.

A key element in explaining this whole dynamic is to be found in the falling ratio of wages and salaries as a percentage of national income in the United States. Stagnation in the 1970s led capital to launch an accelerated class war against workers to raise profits by pushing labor costs down. The result was decades of increasing inequality.” (Financial Implosion and Stagnation, John Bellamy Foster and Fred Magdoff, Monthly Review)

10--Graph: Compensation of Employees, Received: Wage and Salary Disbursements/Gross Domestic Product

Screen Shot 2015-01-14 at 7.45.48 PM

(The Great Economic Misdirection, Rob Urie, CounterPunch)

12--Average income growth in US recoveries: top 10% versus the bottom 90%. (Graph: Pavlina Tcherneva)

(Smart Charts: An Economic Recovery for the 1%, Bill Moyers)

13--Gig Economy Take II: Nearly Entire Increase in Employment Since 2010 is in Gigs!

14--Stephen Roach on negative rates (excellent)

15--Policies that saved the banks deny homeownership to Millennials

Tuesday, March 29, 2016

Today's Links

1--First-Quarter GDP Hopes Plunge

2--Credibility Watch - Janet Yellen Crushes Recent Hawkishness, Unleashes Fresh Bout Of Soothing Dovishness

3--Forget dovish Fed, this is what stocks need

U.S. equities will need strong earnings results to continue their remarkable comeback since hitting their 2016 lows last month, Prudential Financial's Quincy Krosby said Tuesday.

"Whether or not you think Janet Yellen is going to be accommodative, … the fact is we're moving closer to where we need growth. We need fundamentals, we need revenue growth to pick up," the firm's market strategist told CNBC's "Squawk Box."

4--Yellen pushes back at the hawks, stocks higher

5--Too much of a good thing

6--The outlook for the consumer has buckled, at least a bit following a surprisingly weak personal income and spending report for February. Income rose a soft 0.2 percent with wages & salaries slipping 0.1 percent. But the worst news comes from the spending part of the report, up only 0.1 percent and with January revised sharply lower, now also at 0.1 percent vs an initial jump of 0.5 percent.

7--Raising America’s Pay: Why It’s Our Central Economic Policy Challenge

8--Stocks Breaking Down, Corporate Profits Imploding, and the US in Recession

9--Australia’s Capex Collapse is Part of a Global Disease

10--Extra links


Monday, March 28, 2016

Today's Links

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” Warren Buffett

1---Buyback fuel for the bull market is losing steam

Stock buybacks, which have helped power the 7-year-old bull market, are showing their first signs of retreat in at least three years.

Share repurchases decreased 3.4 percent in the fourth quarter from the previous three-month period and are tracking at a 21-month low in March, according to respective data from S&P Dow Jones Indices and TrimTabs.

For all of 2015, share repurchases totaled $572.2 billion, an increase of 3.4 percent from 2014.

However, the pendulum could be turning, due in part to several factors...

Buybacks are becoming an increasingly inefficient way to boost share prices, with individual companies that devote a large share of buybacks underperforming their peers over the past year.Caterpillar, for instance, has been a company aggressively buying back shares but with little to show performance-wise. The company has spent more than $8 billion buying back shares over the past three years, a time during which its stock has declined more than 12 percent.

2--Companies that do buybacks do worse over time

Companies that haven't spent a single dollar on stock buybacks have performed better than those that have, according to an analysis of FactSet indexes since 2005.

At the most basic level, the companies spending the most on buybacks in the S&P 1500 appear to simply perform worse as a group...

Heavy buyback activity helps keep earnings per share steady, but it can also increase the price-to-earnings ratio (because manipulating the number of shares outstanding does not create additional earnings

3---Global collapse in capex

4--Who you gonna believe: The IRS or the BLS?

The Establishment data that gets all the headlines blared that 242,000 net new jobs were created in February. ..... Trim Tabs, a privately run independent company that monitors actual real time payroll withholding tax info issued a report two days ago which said the number of new jobs created in February was between 55,000 and 85,000, based on actual withholding tax data. If you are employed, payroll taxes are automatically extracted. This data cannot be manipulated by the government propagandists. It reveals the truth. No seasonal adjustments, tweaks or phantom jobs added. It’s pure tax data.

“The U.S. labor market is weaker than the conventional wisdom believes. We estimate based on real-time income tax withholdings that the U.S. economy added between 55,000 to 85,000 jobs in February, down from 175,000 to 205,000 jobs in January. Last month’s growth was the lowest since July 2013.

We cite a range rather than a single figure for our February estimate because the timing of bonus payments impacts withholdings at this time of year and makes our year-over-year analysis more challenging than usual. Part of the sharp deceleration in wage and salary growth in February was likely due to shifts in bonus payments, but the deceleration was too sharp to be explained by bonus-related factors alone.

Our estimate is not an attempt to predict the initial estimate that the Bureau of Labor Statistics (BLS) will report on Friday. The BLS data is subject to so many seasonal adjustments and so much statistical manipulation that we have no way to know what the BLS will report.”

5--The Economy's Role In The Rise Of Donald Trump And Bernie Sanders

Concerns about immigration or international trade, on the other hand, are driving anxieties of some who have experienced significant income compression. However, most countries around the world seem to be struggling with many of the same problems, suggesting U.S. income compression is tied to a global trend.

Realistically, a large portion of the U.S. income compression stems from economic globalization. For many years, overseas competition has restricted U.S. income growth while basic living costs have continued to rise. If globalization is an important part of the problem, political change that makes us less competitive could compress U.S. incomes even more

6--Robert Reich: We’re talking about the largest redistribution of wealth to the rich in American history    

7--Raising America’s Pay: Why It’s Our Central Economic Policy Challenge

8--Deja vu all over again

As the broader mortgage market remains in the doldrums, banks are again touting home-equity lines of credit, which allow homeowners to draw down the equity in their home as they need the cash, as well as cash-out refinances, which involve taking cash out of a home while refinancing and ending up with a larger mortgage balance.

The effort is gaining steam as banks try to offset faltering mortgage originations and a refinancing wave that is fizzling out. Lenders are betting that offers for home-equity lines of credit, or helocs, will resonate with many borrowers whose home values are higher than they were just a couple of years ago and who need cash for renovations or other expenses after holding on to their homes for longer than expected....

9--By throwing away money on buybacks, companies are giving up on the ability to grow in the future,” said Michael Lebowitz, an investment consultant and macrostrategist at 720 Global in Chevy Chase, Md....

At 3M, for example, research and development expenditures plus strategic acquisitions have totaled $22 billion over the last five years, Mr. Kanzer said. In the meantime, the company’s buyback program has cost $21 billion.

“When the buyback almost equals all the other expenditures, it makes sense to ask questions about whether there’s a more constructive way to invest that capital,” Mr. Kanzer said....

“You really have to ask why a company’s board decides to return a big chunk of capital instead of replacing managers with ones who can figure out how to develop the operations,” said Gary Lutin, who oversees the Shareholder Forum.

“If the board doesn’t think it’s worth investing in the company’s future,” Mr. Lutin added, “how can a shareholder justify continuing to hold the stock, or voting for directors who’ve given up?”

10--Why the market risk may be changing to the downside

11--Santelli-Biderman interview: "There's been a massive slowdown in new stock buybacks".

Saturday, March 26, 2016

Today's Links

1--Can Stocks Cope With a Profits Pinch?   ....Profits fell sharply in the fourth quarter, but it is the developing margin squeeze that investors should worry about

The squeeze is on for corporate profit margins, and it doesn’t look as if it is going to end soon. That doesn’t bode well for stocks.

The Commerce Department on Friday released fourth-quarter U.S. corporate profits figures. They didn’t look good.

Overall, after-tax profits were 15% below year-earlier levels. That was a lot worse than what investors have been hearing from companies. Over the same period, S&P 500 pro forma earnings per share, which excludes items such as restructuring charges and stock-based compensation, were down 3.6%, according to FactSet....

But after-tax profits as a share of gross domestic income, a proxy for economywide profit margins, came to 7.5% in the fourth quarter. This continued a decline that began in the second quarter of 2013, when the profit share peaked at 10%....

Meanwhile, workers are beginning to gain ground. Employee compensation came to 53.6% of gross domestic income in the fourth quarter, up from 52.8% a year earlier. That is still below the 50-year average of 55.8%, but there may be more to come....

So even if the punk global environment improves, the margin squeeze can still get worse. That doesn’t leave much hope for a profits revival.

2--U.S. Fourth-Quarter GDP Revised Up to 1.4% Growth but Corporate Profits Fall

The fourth quarter’s slowdown was less severe than previously estimated but corporate profits fell, showing the economy entered 2016 on uneven footing.

Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a 1.4% seasonally adjusted annual rate in the fourth quarter, the Commerce Department said Friday. That was an upward revision from last month’s estimate of 1% growth.

The output revision mainly reflects better consumer spending on services, and reinforces that the domestic economy is stable and growing. At the same time, declining profits and weak business investment show overseas uncertainty has stung manufacturers, energy firms and financial markets....

The balance sheets of U.S. companies weakened during the quarter. Corporate profits after tax, without inventory valuation and capital consumption adjustments, fell at an 8.1% pace last quarter from the third. That was the largest quarterly decline since the first quarter of 2011. Profits fell 3.3% in third quarter from the second. On a year-over-year basis, corporate profits declined 3.6% in the fourth quarter.

Still, for all of 2015, profits were up 3.3% from 2014

The after-tax adjusted profit reading, which more closely reflects profits on production during the quarter, fell 15% in the fourth quarter from a year earlier. That was the steepest year-over-year drop in a quarter since 2008, when the U.S. was mired in a recession. Adjusted figures showed the largest profit decline came in manufacturing, especially in production of petroleum and coal products.

Profit data isn’t adjusted for inflation.

“The strengthening dollar, the sharp decline in energy costs, and increasing wage pressures all played a role in falling profit margins and corporate income,” said Jim Baird, chief investment officer for Plante Moran Financial Advisors. “Against that backdrop, it’s no surprise that businesses trimmed capital expenditures.”

Friday’s report confirmed business investment slumped during the quarter. Nonresidential fixed investment fell at a 2.1% pace, worse than the prior reading of down 1.9%

3---Contract Workforce Outpaces Growth in Silicon-Valley Style ‘Gig’ Jobs ....New research shows labor shift affects health care, education and other industries that have traditionally offered stable employment

Since 2005, the number of workers in alternative arrangements has climbed by more than half, rising to nearly 16% of the workforce from 10% a decade ago, according to forthcoming research by Alan Krueger of Princeton University and Lawrence Katz of Harvard University. Meanwhile, the on-demand workforce or gig economy employs only about 600,000 people, or less than 0.5% of the workforce, the research finds.....

Workers in these alternative arrangements often find themselves with erratic schedules, spotty earnings and few benefits such as health insurance, Social Security or a retirement plan. Some arrangements, like subcontracting or independent contract work, raise questions about worker safety, employer liability and consumer protections...

The steep jump in workers in alternative employment complicates the rosy picture of the labor market highlighted by officials at the Federal Reserve and in the Obama administration. While the economy has added nearly 14 million jobs since 2010, more than recovering the number of jobs lost during the recession, the new data suggests a growing slice of the workforce has only tentative ties to a main employer....

opponents like Rebecca Smith of the National Employment Law Project, which advocates for low-wage workers, see the practice as a “pattern where companies that call the shots distance themselves from the people doing the work at the bottom.”

4--Leaked Memo Reveals Erdogan’s 'Radical Solution' to Mideast Crises

5--The Murder of Chávez. The CIA and DEA Cover Their Tracks?

6--I Personally Believe That Hugo Chávez Was Murdered By The United States, Bill Blum

7--Untold Story of Syrian Coup: Who is Really Behind the Plot to Topple Assad?

8--The Murder of Chávez. The CIA and DEA Cover Their Tracks

9--The Big Lie About Hillary’s War In Libya

Today's Links

1--Radical economic ideas grab attention amid low-inflation torpor
Rockefeller Family Fund Blasts ExxonMobil, Pledges Divestment From Fossil Fuels

3--“It’s Not the Zika Virus” — Doctors Expose Monsanto Linked Pesticide as Cause of Birth Defects

4--Global Wage Report

5--Earnings Growth Based On Debt And Buybacks? Totally Unsustainable

6--U.S. Economy Grew 1.4% in Fourth Quarter, Supported by Consumers

The U.S. economy grew in the fourth quarter at a faster pace than previously estimated, supported by stronger household spending that’s helping cushion the expansion from weakness overseas.

...The economy grew 2 percent in the third quarter. The report also showed that corporate profits dropped in 2015 by the most in seven years...

The earnings slump illustrates the limits of an economy struggling to gather steam at the start of this year...

Friday’s report also offered a first look at corporate profits for the period. Pre-tax earnings declined 7.8 percent, the most since the first quarter of 2011, after a 1.6 percent decrease in the previous three months. The estimate of nonfinancial corporate profits was reduced by a $20.8 billion settlement, considered a transfer to the government, between BP and the U.S. after the 2010 oil spill in the Gulf of Mexico.

Profits in the U.S. dropped 3.1 percent in 2015, the most since 2008. Earnings are being weighed down by weak productivity, rising labor costs and the plunge in energy prices.

“If profits remain depressed, the prospects for capex and hiring will come under greater pressure,” Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, wrote in a research note.

Corporate outlays for equipment declined at a 2.1 percent annualized pace, subtracting 0.12 percentage point, the Commerce Department said.

7-- Q4 GDP 3rd revision

The overall deceleration is clear, likely to have continued into Q1, and all subject to be revised lower over the next few years:

8--Sugarcoating profits to dupe investors?  Investing Red Flag: Pro Forma Results and Share-Price Performance  

The bad news that companies ignore in pro forma results shows up in their stock performance—eventually

Sugarcoating results is hardly new for U.S. companies. Lately, though, they have been ladling on the glaze extra thick.

For companies in the S&P 500 in the fourth quarter, pro forma earnings—that is, earnings excluding items such as restructuring charges or stock-based compensation—were 59% above earnings under generally accepted accounting principles. That marked the widest so-called GAAP gap since the crisis-struck first quarter of 2009.

9--Banks Say No to Funds From Flagship ECB Policy

Three months before the launch of a revamped lending program, the current platform is seeing poor takeup

As the European Central Bank prepares to deploy new rounds of cheap lending to eurozone banks, the tepid take-up from what’s currently on offer suggests the scheme will provide little relief to the sector.

The seventh round of the ECB’s Targeted Longer-Term Refinancing Operation program was launched Thursday, and saw the program’s lowest take-up since it was began in 2014...

On Thursday, banks were still being offered funds at a zero percent interest rate but they bid for only 7.3 billion euros ($8.21 billion) worth of funds. That’s the lowest take-up since the program’s inception in September 2014....On Thursday, only 19 banks out of more than 300 eligible lenders participated....Bank shares continue to fall, and are now about 2.5% below where they were on the day of the announcement...

“Miracles should not be expected,” said Elwin de Groot, economist at Rabobank. “Demand for credit is likely to remain subdued, despite record-low interest rates.”

10--G-Sax outsized role at the Fed;  The Decline of Dissent at the Fed

Dallas Fed President Robert Steven Kaplan, a former Harvard Business School professor and Goldman Sachs Group       executive, is part of a widening consensus taking root inside the nation’s central bank on interest rates....

Four of the 12 regional Fed bank presidents were affiliated with Goldman before joining the Fed, feeding public perceptions that the central bank is too close to big banks bailed out during the financial crisis.

“Goldman Sachs does not have a monopoly on understanding the economy and they shouldn’t have such an outsized influence on the decisions that shape it,” said Shawn Sebastian, a field director for the Center for Popular Democracy, a left-leaning activist group....

Globalization of labor markets, he added, is a long-running downward weight on inflation and wages. “I don’t think it’s an option to just think domestically. You have got to think globally,” he said

..The Dallas Fed produces an inflation measure called a “trimmed mean” inflation rate which excludes volatile categories to get at underlying inflation trends. It was up 1.9% in January from a year earlier, a pickup from recent gains of 1.7%.

“It could easily tick back down a little bit in February or March,” he said. “I am hoping for more evidence that inflation will firm.”

Inflation has run below the Fed’s 2% target for 45 straight months, a factor keeping the central bank from raising rates aggressively.

11--Coming to the Oil Patch: Bad Loans to Outnumber the Good

The number of energy loans labeled as “classified,” or in danger of default, is on course to extend above 50% this year at several major banks, including Wells Fargo WFC -1.73 % & Co. and Comerica Inc., CMA 0.54 %  according to bankers and others in the industry....

“This has the makings of a gigantic funding crisis” for energy companies, said William Snyder, head of Deloitte’s U.S. restructuring unit. If oil prices, which closed at $39.79 a barrel Wednesday, remain at around $40 a barrel this year, “that’s fairly catastrophic.” ...

Global oil-and-gas sector debt totaled $3 trillion in 2014, three times what it was at the end of 2006, according to the most recent figures from the Bank for International Settlements, a central-banking group based in Switzerland. The oil-price plunge has worsened the financial picture for energy borrowers and lenders around the world because it directly affects the value of oil reserves and other assets backing some of the debt.....

12--Central banks are already doing the unthinkable - you just don't know it

13--Hillary's Death Squads?

14--Western Intel agencies clearly involved in Brussels terror attacks; Scandal mounts over failure by Belgian police to halt Brussels attacks

According to a report by Gilbert Dupont in Dernière Heure-Les Sports, widely taken up in other francophone newspapers, Belgian police were aware of Abdeslam’s location throughout. During four months when he was on the run, described by officials and the media internationally as Europe’s “most wanted man” due to his role in the November 13 attacks, elements in the police forces knew precisely where he was hiding in the Brussels area.

Dupont writes, “Our sources indicate a policeman in Malines had already given, in a December 7 report for the anti-terror section of the federal judicial police in Brussels, the address of 79, rue des Quatre Vents in Molenbeek where Salah Abdeslam was found last Friday. The confidential report (called a RIR, Rapport Informatief Rapport, in official jargon) was not transmitted. It was blocked and stayed stuck for three months at the Malines police...

Abdeslam’s short interrogation was not the only missed opportunity to prevent the March 22 attacks. The El Bakraoui brothers, the suicide bombers on that day, were known to US intelligence and were on US no-fly lists. Turkish officials had identified Ibrahim El Bakraoui as an Islamist fighter to their Belgian counterparts, and Russian and Israeli intelligence told the Belgian government that attacks on Zaventem airport and the Brussels subway were imminent.

Initial accounts are emerging on the string of extraordinary lapses through which the Turkish warnings were allegedly overlooked in Brussels..

Significantly, Turkish officials who spoke to the Guardian charged that European governments also used these networks to export European Islamists to the battlefields of Syria.

“We were suspicious that the reason they want these people to come is because they don’t want them in their own countries. I think they were so lazy and so unprepared and they kept postponing looking into this until it became chronic,” said a source described by the Guardian as a senior Turkish security official.

The close integration of these Islamist networks with security agencies of the NATO powers, including Belgium, underlies a whole spate of Islamist terror bombings. This ranges from last year’s terror shootings in Paris to the September 11, 2001 attacks, that flowed from the long collaboration between the CIA and the precursors of Al Qaeda to topple the Soviet-backed Afghan government in the Soviet-Afghan war of the 1980s.

15--Obama’s pivot to Latin America

Rogers told Kissinger to expect “a good deal of blood in Argentina before too long.” The incoming junta, he said, was “going to have to come down not only on the terrorists but on the dissidents of trade unions and their parties.” Kissinger’s reply was to order full US support for the dictatorship.

It was not only the State Department, the CIA and the military that backed the coup and the subsequent bloodbath, but also the US corporations operating in Argentina. Companies like Ford Motors fingered militant workers to be killed by the security forces and allowed the junta’s secret police to set up clandestine detention and torture centers inside their plants....

Obama could, to start with, speak of the crimes of his own administration. In 2009, his administration backed a coup that ousted the elected president of Honduras, Manuel Zelaya, and brought in a government that has presided over the systematic murder of its opponents. And what of the regimes in Egypt and Saudi Arabia, key pillars of US policy in the Middle East and prime purchasers of American military hardware? The Egyptian regime of General Sisi has carried out mass detentions, torture and murder on a scale rivaling that of the Latin American dictatorships of 40 years ago, while the House of Saud beheads its critics...

has presided over mass layoffs that are wiping out at least 50,000 jobs in the public sector and destroying another 75,000 in the private sector. He has scrapped currency controls, leading to a sudden 30 percent devaluation of the peso and a drastic cut in real wages for Argentine workers.

He has begun to implement sweeping cutbacks in education and health care, while scrapping electricity subsidies, leading to a 300 percent rate hike.

Meanwhile, he has slashed taxes affecting Argentina’s big landowners, a key constituency of the political right, and reached a multibillion-dollar deal with Wall Street “vulture” hedge funds, which will reap 10 to 15 times their original investment in defaulted Argentine debt they scooped up for pennies on the dollar.

Thursday, March 24, 2016

Today's links

Today's quote: "What drives Obama and the virtual army of CEOs and business lobbyists who accompanied him to Cuba is the ferocious struggle for markets and profits that underlies the worldwide eruption of American militarism." Bill Van Auken, WSWS

1--What killed the middle class?

Productivity has been slipping since around 2003

Inflation-adjusted household income has dropped back to levels first reached in the 1980s:

Income gains have all flowed to the top 10%, with most of the gains being concentrated in the top 5% and top 1%

If the middle class didn't receive any of the gains, who did? Corporate profits have soared to unprecedented levels:

Cause #2: all the gains in the economy have flowed to corporations and the top 10% of financiers, managers and technocrats

2--Yellen to workers: "We're just looking out for you"

"Proceeding cautiously in removing policy accommodation at this time will allow us to verify that the labor market is continuing to strengthen despite the risks from abroad," Yellen said.

"Such caution is appropriate given that short-term interest rates are still near zero, which means that monetary policy has greater scope to respond to upside than to downside changes in the outlook."

3--Hussman on the economy

As John Hussman points out, the market is poised to deliver nothing over the next decade, with a 40% to 55% “dip” in the foreseeable future. I wonder how many barely sentient, iGadget addicted, non-questioning, normalcy bias dependent zombies are prepared for a third Federal Reserve generated market collapse in the last 15 years?

From a long-term investment standpoint, the stock market remains obscenely overvalued, with the most historically-reliable measures we identify presently consistent with zero 10-12 year S&P 500 nominal total returns, and negative expected real returns on both horizons. From a cyclical standpoint, I continue to expect that the completion of the current market cycle will likely take the S&P 500 down by about 40-55% from present levels; an outcome that would not be an outlier or worst-case scenario, but instead a rather run-of-the-mill cycle completion from present valuations

4--Why you should have bought a home last year

5--CNBC analysis: Don't trust those GDP numbers

6--Isis, oil and Turkey

7--Kosovo: The war everyone loved

One Sanders aide, Jeremy Brecher, resigned in May 1999 arguing against the intervention as it unfolded, since the “goal of US policy is not to save the Kosovars from ongoing destruction.”

Trouble is there was no “destruction.” Contrary to NATO claims of 100,000 or more Albanians purportedly massacred by the Serbs, postwar investigators found fewer than 5,000 deaths – 1,500 of which happened after NATO occupied the province and the Albanian pogroms began.

Western media, eager to preserve the narrative of noble NATO defeating the evil Serbs, dismissed the terror as “revenge killings.” NATO troops thus looked on as their Albanian protégés terrorized, torched, bombed and pillaged across the province for years, forcing some 250,000 Serbs, Jews, Roma, and other groups into exile

8--Belgian authorities had “precise intelligence warnings” of Brussels bombings

Under these conditions, it is increasingly clear that ISIS serves US and European imperialism not only as a proxy force fighting for regime-change in Syria, but also as an instrument to press for anti-democratic and unpopular policies at home.

The ISIS attacks in Paris last January and again in November, and in Brussels this week, were all carried out by the same terror network. This network is well known to French intelligence and to its US and European counterparts. All of these forces are linked to the original Al Qaeda network that emerged from the collaboration between the CIA and Saudi and Pakistani intelligence to mobilize Islamist fighters against the USSR and the Soviet-backed Afghan regime in the 1980s....

Chérif Kouachi’s meeting with Melouk on April 11, 2010 was photographed, using telephoto lenses, by investigators of the French Anti-Terrorism Sub-Division (SDAT).

Arrested with other Al Qaida members in Belgium in 1998 for attempted murder, possession of arms and explosives and falsifying government documents, Melouk was in prison until 2004, when he was extradited to serve a second term in France until 2009. When released, he stayed in France, quietly establishing closer ties to ISIS. He managed to flee to Syria the day after the Charlie Hebdo attacks.

Speaking to the Investigative Commission on Jihadist Networks of the French National Assembly last year, anti-terrorist investigating Judge Marc Trévidic declared, “The older ones are returning to activity. Farid Melouk, of whose presence in Syria I have now learned… I met him in 2000 when I was dealing with the first ‘Afghan’ network. He was at the head of a very big network that provided passage for jihadists… These older ones have a phenomenal number of contacts in Belgium and France.”

Such reports underscore that, over the course of decades, the jihadist networks have been investigated and mapped out in the greatest of detail by the European secret services, judiciary and police agencies.

9--US presidential candidates call for stepped-up war and police measures

10--US Hypocritical Lectures to Cuba

Economic, social and cultural rights comprise the rights to education, healthcare, social security, unemployment insurance, paid maternity leave, equal pay for equal work, reduction of infant mortality; prevention, treatment and control of diseases; and to form and join unions and strike.

These human rights are enshrined in two treaties – the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR). The United States has ratified the ICCPR.

But the U.S. refuses to ratify the ICESCR.

11--Obama opens old wounds in Argentina

“His arrival, forty years after the anniversary of the civic and military coup, is a provocation against those of us who have fought during decades against impunity. It is an insult to the memory of our 30,000 arrested and disappeared comrades to welcome to our country the president of the nation that promoted and supported the bloodiest military coup that Argentina ever experienced, as in other nations in this region. Many of us lost our sons, parents, family members and comrades, who were all victims of Plan Condor, operated by the United States, and out of which the activities of the armed forces and intelligence agencies of Argentina, Chile, Brazil, Uruguay, Bolivia, and Paraguay were coordinated, to assassinate thousands of militant workers and students that kept resisting the dictatorships. … Now, forty years after, the US announces that it will open the archives related to the Argentine dictatorship…but we all know that companies such as Ford that had clandestine detention centers in their plants will remain unpunished and no American official will ever be tried in court for participating in the Argentine genocide. … Now more than ever: We do not forget, we do not forgive, we do not reconcile.”....

March 24 is a day of remembrance in Argentina, marking the anniversary of the Videla coup that the US supported in 1976. Following the coup, it helped establish an alliance between the military regimes that ruled in Uruguay, Brazil, Chile and Argentina in the 1960s and 1970s and assisted in the blood bath that followed. Under its Plan Condor, the CIA and US military intelligence trained the torturers and executioners and helped hunt down and disappear the workers and youth that Obama now honors in the name of human rights and transparency.

As in Cuba, where he cast over a half century of US aggression as ancient history, Obama is attempting to portray Washington’s support for coups as some long-gone era. But as recently as 2009, his own administration helped orchestrate the overthrow of the elected president of Honduras, Manuel Zelaya

12--The rich are revolting: Brazil

13--Brazil: Where liberalism went wrong

Once elected, Dilma shifted economic policies further away from neoliberalism. The government intervened in several sectors seeking to promote investment and output, and put intense pressure on the financial system to reduce interest rates, which lowered credit costs and the government's debt service, releasing funds for consumption and investment. A virtuous circle of growth and distribution seemed possible. Unfortunately, the government miscalculated the lasting impact of the global crisis. The U.S. and European economies stagnated, China's growth faltered, and the so-called commodity supercycle vanished. Brazil's current account was ruined. Even worse, the U.S., UK, Japan and the Eurozone introduced quantitative easing policies that led to massive capital outflows toward the middle income countries. Brazil faced a tsunami of foreign exchange, that overvalued the currency and bred deindustrialization. Economic growth rates fell precipitously.

The government doubled its interventionist bets through public investment, subsidised loans and tax rebates, which ravaged the public accounts. Their frantic and seemingly random interventionism scared away the internal bourgeoisie: the local magnates were content to run government through the Workers’ Party, but would not be managed by a former political prisoner who overtly despised them. And she despised not only the capitalists: the President had little inclination to speak to social movements, left organizations, lobbies, allied parties, elected politicians, or her own ministers. The economy stalled and Dilma's political alliances shrank, in a fast-moving dance of destruction. The neoliberal opposition scented blood....

The Coup

Why is this a coup? Because despite aggressive scrutiny, no Presidential crime warranting an impeachment has emerged. Nevertheless, the political right has thrown the kitchen sink at Dilma Rousseff. They rejected the outcome of the 2014 elections and appealed against her alleged campaign finance violations, which would remove from power both Dilma and the Vice-President – now, chief conspirator – Michel Temer (strangely enough, his case has been parked). The right simultaneously started impeachment procedures in Congress. The media has attacked the government viciously for years, the neoliberal economists plead for a new administration to ‘restore market confidence’, and the right will resort to street violence if it becomes necessary. Finally, the judicial charade against the PT has broken all the rules of legality, yet it is cheered on by the media, the right and even by Supreme Court Justices

14--Offshore Yuan Drops as PBOC Cuts Fix, Pimco Warns of 7% Decline

15--Obama in Cuba

It was Cuba that was on receiving end of an unrelenting campaign by successive US administrations, the CIA and the Pentagon to overthrow the Cuban government and assassinate its leaders. It was Cuba that was the target of the abortive CIA-organized Bay of Pigs invasion of 1961, along with countless acts of state terrorism made in the USA, from the 1976 bombing of Cubana de Aviación Flight 455 that killed 78 people, to the bombing of hotels and restaurants in the 1990s. Obama speaks as if Washington’s use of armed violence in pursuit of regime change was something long relegated to the history books.

As for some Americans having seen “Cuba as something to exploit,” what exactly does the small army of American businessmen accompanying Obama have in mind, charitable contributions?

Every child deserves the dignity that comes with education, health care and food on the table and a roof over their heads,” declared Obama, president of a country where roughly one in three children lives in poverty, where 48 million people struggle with hunger and which is rated last among the so-called developed countries in terms of early child education.

“I believe that citizens should be free to speak their mind without fear, to organize, and to criticize their government,” he continued. Tell that to Edward Snowden, Chelsea Manning or others who have sought to expose the war crimes and wholesale spying of the US government only to be persecuted, jailed or hounded into exile.

He added his belief that “the rule of law should not include arbitrary detention;” this just one day after again rebuffing Cuba’s demand for the return of its territory occupied by the Guantanamo Bay naval base, where the US government has imprisoned and tortured hundreds who have never been charged, much less tried, by a court of law.

Obama acknowledged that there are “still enormous problems in our society,” quickly adding that democracy was the way in which “we address the inequality that concentrates so much wealth at the top of our society.” The effectiveness of this “democracy” as an instrument of the ruling oligarchy is reflected in the fact that 95 percent of all income gains under Obama’s presidency have gone to the richest 1 percent.

16--Two faced Obama visits Cuba

No one would suspect that this great humanitarian is the same president responsible for the deaths of hundreds of thousands in US-orchestrated wars for regime-change in Libya and Syria—a man who has personally directed a drone assassination program that has murdered thousands of innocent civilians, who directs a covert spying operation against the people of the planet, and who pursues US interests by supporting bloodstained clients and allies ranging from the semi-feudal monarchy in Saudi Arabia to the death-squad regime in Honduras.


What drives Obama and the virtual army of CEOs and business lobbyists who accompanied him to Cuba is the ferocious struggle for markets and profits that underlies the worldwide eruption of American militarism....

the Cuban government appears to desire nothing so much as to emulate China in terms of its state forms, its economic setup and its relations with imperialism. It has already created a “special economic zone” for foreign capitalist investors at the new port facility of Mariel, offering itself as a labor contractor guaranteeing a cheap and state-disciplined workforce. The inevitable outcome will be the enrichment of a thin layer of bureaucrats and “entrepreneurs,” together with soaring social inequality and an explosive growth of class struggle.

17--Political prisoners in Cuba? It depends who you ask

under Obama, the United States has continued to fund pro-US groups in Cuba in violation of Cuban law. This history of aggression, which is ongoing, has been largely ignored by the US mainstream media, which has instead chosen to focus on the “political prisoners” in Cuba’s jails....

The Ladies in White are not unique, the US government has supported and funded many anti-government groups in Cuba in its efforts to replace socialism with capitalism in that country. Consequently, the Cuban government claims that many of the so-called political prisoners in its jails are Cubans who have received funding from a foreign government that is intent on achieving regime change. One such foreign program was conducted by the US Agency for International Development (USAID) which, under the guise of “democracy promotion,” distributed Internet and satellite communications equipment to Cuban opposition groups in direct violation of Cuban law. The project came to light when US aid worker Alan Gross, under contract to USAID, was arrested by the Cuban government in 2009. Such activities make it clear that it is the United States that has failed “to leave behind the ideological battles of the past.”

One can only imagine the outcry in the United States if a foreign government such as the Soviet Union or China were funding anti-capitalist organizations in the United States during the Cold War in an effort to bring down the US government and overthrow capitalism. ...

The United States currently holds 93 political prisoners in its internment camp in Guantanamo, most of whom have been held for more than 13 years without being charged with a crime or having their day in court. More than 50 of them have been cleared for release but there is nowhere for them to go because they are now, effectively, stateless. Perhaps Obama should have been more focused on living up to his campaign promise to remove these political prisoners from Cuba during his visit to Havana rather than lecturing the Cuban government about human rights....

A liberal democracy almost inevitably results in major political parties serving the interests of economic elites, which means corporations and their owners—the one percent. The result is gross inequality as the rich get richer and the poor struggle desperately with minimum wage jobs and under-funded social programs. In contrast, Cuba’s democracy is a socialist democracy in which citizen’s vote for individual candidates because political parties are not allowed to participate, thereby limiting the influence of private sector wealth to influence political policymaking. So the problem for Obama and corporate America is not a lack of democracy in Cuba, but the lack of a liberal democracy that serves corporate interests....

The 2002 US-supported coup of Venezuela’s President Hugo Chávez failed when millions of Venezuelans took to the streets demanding that their democratically-elected leader be returned to power. The Venezuelan military capitulated and returned Chávez to office three days after his ouster. In 2004, the US military—with Canadian and French support—ousted Haiti’s democratically-elected president Jean Bertrand Aristide because he dared to raise taxes on foreign corporations and double the minimum wage in the hemisphere’s poorest country. The new US-installed regime then proceeded to ban Aristide’s political party—by far the most popular in the country—from participating in future elections. And in 2009, under Obama’s presidency, the United States supported a military coup that ousted Honduras’ left-leaning president Manuel Zelaya and turned that country into the worst human rights disaster in the Americas. These examples are further evidence that it is the United States that cannot leave behind the ideological battles of the past whenever capitalist interests are threatened in Latin America...

The dominant human rights model under capitalism prioritizes individual rights—particularly the right to private property to establish corporations—to the degree that they cannot be significantly infringed upon in order to ensure that the collective—social and economic—rights of everyone in society are protected. This is why there is no right to food, housing or healthcare for citizens of the United States where, according to a 2009 Harvard University study, 45,000 people die annually due to a lack of access to the latter. But when a country such as Cuba defends the collective rights of all of its citizens with regard to access to food, housing, education and healthcare against the threats posed by those who seek to prioritize individual rights in a manner that violates the country’s socialist constitution, the Cuban government is portrayed as a major violator of human rights.