Friday, May 27, 2016

Today's links

Today's quote: "Young people in America are part of the first generation that is worse off than their parents and grandparents’ generations. It is a damning indictment of capitalism that it has nothing to offer but low wages, tenuous employment, austerity and ever expanding plans for war for which young people and workers will be deployed as cannon fodder for the rich." Niles Niemuth, SEP candidate for VP

1--The Reemergence of Class Struggle; Why you should be keeping an eye on France

Twenty-five years after the Stalinist dissolution of the USSR fueled a right-wing shift of all the so-called left parties, an extended period of political disorientation is coming to a close. A movement of the working class has emerged. The wholesale repudiation of the working class, Marxism and socialism that came to dominate in middle-class intellectual circles after the betrayal of the 1968 French general strike by the Stalinist French Communist Party is being refuted by the objective development of the political crisis of European capitalism and the resurgence of class struggle...

The repression bearing down on workers in France is a warning to the international working class. The basic answer of the ruling elite in France and internationally to the growth of social tensions and working class resistance is to move rapidly toward dictatorship.
The events in France demonstrate how the working class is left with no option but to take the revolutionary road, fighting to bring down pro-austerity governments in France and across Europe. As struggles spread, France and all of Europe are entering into a pre-revolutionary situation...

The European Union of the corporations and banks is a prison for the working class and breeding ground for national chauvinism, militarism and war. It must be overthrown. But a retreat behind national borders on the basis of French, German, British, Greek or any other chauvinism is no less reactionary and destructive of the interests of working people. The only progressive alternative to the European Union is the unification of Europe on a new, revolutionary and egalitarian basis through the coordinated struggle of workers across Europe for workers’ power and socialism.

2--Why is there “no money” for basic social needs?

All around the world, from Greece and France to the US and throughout Asia, governments are seeking to dismantle even the most crucial social programs—welfare entitlements, minimum wages, retirement pensions, and access to education and healthcare—because of the worsening breakdown of world capitalism that erupted with the 2008 financial crash....

But now, say the representatives of finance capital, there must be an even more brutal offensive against working-class people. “There is no money” to meet the most basic social needs....

But these resources flow only into the coffers of a tiny super-rich layer of society, siphoned off by way of billion-dollar profits, underpinned by ever-lower tax rates for corporations and high-income recipients, and outright fraud and tax evasion.
This insatiable drive for private profit blocks any resolution to the social crisis. Such is the anarchy and insanity of the capitalist market that there is now a global “over supply” of dairy products and an “over-capacity” of steel production.....

The Socialist Equality Party (SEP) is advancing the only alternative—the complete reorganisation of society along genuinely socialist lines in order to secure the fundamental social rights of all, which include well-paying jobs, free, high-quality public education and health care, affordable housing and decent retirement incomes.
None of these essential requirements of modern society can be secured without ending the domination of the financial aristocracy over economic life. Social need must replace corporate profit as the guiding principle. All the large corporations—the major banks, mining and energy conglomerates, retail chains, pharmaceutical corporations and communications giants—must be taken out of the grip of the billionaires and placed under public ownership and the democratic control of the working class, the vast majority of the population

3--Deepening national antagonisms dominate G7 summit

In a bid to win support for more economic stimulus measures, especially in Europe, Abe presented a series of graphs comparing the present economic conditions to those which prevailed in 2008, which led to the collapse of Lehman Brothers and the global financial crisis.
Abe’s charts focused on falling commodity prices and significantly lower growth in emerging markets in order to highlight the dangers of a new crisis in financial markets. His arguments were brushed aside in the Western press as “implausible,” with reports suggesting he had brought them forward to justify moving away from a commitment to lift Japan’s consumption tax from 8 to 10 percent next year. Abe has previously said that he would only make such a move in response to a major earthquake or a Lehman-type failure in the international banking system.

4--Young people in America: A lost generation stuck at home

A detailed analysis of Census data by Pew revealed that, in 2014, approximately 32.1 percent of young Americans were living with their parents, compared to 31.6 percent who were living with a spouse or partner. The last time the share of young adults living at home was higher was in 1940, at the end of the Great Depression, when 35 percent lived with their parents.

Among 18- to 24-year-olds without a college education, approximately 36 percent now live with their parents, well above the 27 percent who are living with a spouse or cohabitating.

Even for the growing share of young people who have attained a college education, it has become increasingly difficult to become economically independent. Graduates are burdened with student loan debt—an average of $30,000 for each student who had to borrow to pay for their schooling. Approximately 19 percent of college graduates are living at home in order to survive.

Collective student debt in the US is now well above $1.3 trillion, a burden compounded by the fact that the average wage for college graduates has been on the decline since 2001. Meanwhile, rapidly increasing rent and housing prices since the collapse of the housing market in 2008 have made it increasingly difficult for young people with lower wages to live either on their own or with a partner.

Young people in America are part of the first generation that is worse off than their parents and grandparents’ generations. It is a damning indictment of capitalism that it has nothing to offer but low wages, tenuous employment, austerity and ever expanding plans for war for which young people and workers will be deployed as cannon fodder for the rich

5--The NIRP Refugees Are Coming to America

And then they invest it elsewhere — wherever yields are not negative, particularly in US Treasuries. This no-questions-asked demand from investors overseas has done a job on Treasury yields. That’s why the 10-year yield in the US has plunged even though the Fed got serious about flip-flopping on rate increases and then actually raised its policy rate, with threats of more to come....

“According to an analysis by Bank of America Merrill Lynch, for every $100 currently managed in global sovereign benchmarks, avoiding negative yields would result in roughly $20 being pushed into overweight US Treasuries assets,” wrote Christine Hughes of OtterWood Capital.

That’s a lot of money in markets where movements are measured in trillions of dollars. As long as NIRP rules in the Eurozone and Japan, US Treasury yields will become even more appealing every time they halfheartedly try to inch up just one tiny bit.

6--Wall Street Journal Tallies DoJ and SEC’s Pathetic Record in Tacking Wall Street Crime

7--New IMF Paper Challenges Neoliberal Orthodoxy

The publication of this IMF paper is a sign that the zeitgeist is, years after the crisis, finally shifting. It is becoming too hard to maintain the pretense that the policies that produced the global financial crisis, which are almost entirely still intact, are working. And the elites and their economic alchemists may also recognize that if they don’t change course pretty soon, they risk the loss of not just legitimacy but control. With Trump and Le Pen at the barricades, the IMF wake-up call may be too late

8--Clashes erupt at labour reform protests in France

9--Democratic Convention Hosted by Republican Donors, Anti-Obamacare Lobbyists

10--National Media Retracts Its Claim That There Was Violence at the Nevada State Democratic Convention

Branded "yourFirstMortgage," Wells Fargo's new product has a minimum down payment of 3 percent for a fixed-rate conventional mortgage of up to $417,000. Down payment help can come from gifts and community-assistance programs. Customers are not required to complete a homebuyer education course, but if they do, they may earn a 1/8 percent interest rate reduction. The minimum FICO score for these loans, which are underwritten according to Fannie Mae standards, is 620. Mortgage insurance can either be rolled in to the cost of the loan or purchased separately by the borrower. ...

"I don't know what offsetting factors you have for a 620 credit score with such a low down payment. Unless you require them to have a million dollars in the bank, I'm not sure what else you can do," said Cecala, who notes that a 620 credit score usually denotes someone who has an inability to manage credit. "I think it's problematic to make a loan to borrowers in a subprime credit range with a very low down payment like 3 percent down."

Wells Fargo will service the loans, but Fannie Mae will buy them, and that means the loans must be underwritten to Fannie Mae's standards, which are high. Jonathan Lawless, vice president of product development at Fannie Mae, admits that a borrower with a 620 score would be unlikely to qualify....

"It is true that it's a rare event that we see borrowers at that low a FICO score," he said. "There needs to be compensating factors — one is to have a lot of money in the bank or a very good debt to income ratio."
In other words, the borrower would have to have a very high income to negate the credit risk. Lawless does think the Wells Fargo loan will be far more popular than others on the market because of the financial incentive for homeowner education, the lack of restrictions on funding the down payment and the sheer simplicity of the product. Liking the loan is easy enough, but for first-time, low- to moderate-income borrowers, qualifying for the loan may be harder.
"Loans today are remarkably safe because the underwriting has improved so much. That will be the test with this," said Cecala

12--Japan Fails in Bid to Have G-7 Warn of Global Crisis Risk

Austerity, Stimulus

The G-7 statement compromised on the austerity-versus-stimulus debate by leaving each country’s road map open -- saying they will take "into account country-specific circumstances" as they move to use "all policy tools -- monetary, fiscal and structural -- individually and collectively to strengthen global demand and address supply constraints while continuing our efforts to put debt on a sustainable path."
The need for fiscal measures and structural reforms was underscored with the statement saying that "monetary policy alone cannot lead to strong, sustainable and balanced growth."

13--Helicopter Money Is Putting the Yen's Value at 'Great Risk': Noguchi

If these fiscal and monetary policies continue, the yen’s value is at great risk,” the 75-year-old professor at Tokyo’s Waseda University said in an interview on May 11. “If you base your thinking on the efficient-markets hypothesis, you can’t predict a level for the currency. But, if the nation’s economic strength weakens, it is possible the yen could drop to 300, or 500, or 1,000 to the dollar.”

Growth has stagnated for a decade despite fiscal and monetary stimulus efforts that left the government with a debt burden that is the highest in the world, at about 2.5 times the value of the nation’s economic output. Noguchi believes the Bank of Japan is already financing fiscal spending, providing so-called helicopter money. That echoes comments by billionaire bond investor Bill Gross, who said the likely endgame was for the BOJ to forgive sovereign debt....

The reason consumption isn’t growing is that real incomes haven’t risen, and this is due to the weak yen since the Abe government came to power,” he said. “In the long-term, it is of course better if the yen strengthens.”

14--Al-Nusra Front in Syria gets daily weapons supplies from Turkey - Russian military

15--Moderate forces in Syria – ‘figment of imagination’

16--A World-Wide French Connection

Workers should not give up any of these rights. Instead, they should be consolidated and extended to all countries, not rolled back. Rolling back labour protections is “a race to the bottom” whereby workers around the world are pitted against one another to erode all rights.

17--New Turkish-U.S. Quarrels About Syria
18--Is R+6 collapsing?


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