Saturday, March 26, 2016

Today's Links

1--Radical economic ideas grab attention amid low-inflation torpor
2--
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:
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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.

































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