Sunday, May 8, 2016

Today's links

1--For Stan Druckenmiller This Is "The Endgame" - His Full 'Apocalyptic' Presentation (Must read)

2--DB: Expect things to get worse

Konstam's worst case scenario, one which is quickly starting to smell like the credit analyst's "base-case" namely the "third avenue for recession" which Deutsche Bank believes is the worst of the three. "This is an endogenous slowdown in labor demand that results because corporations are not just tired of negative profit growth, but also because they are drawing a line in the sand from the perspective of defending margins. No one knows where that line is. But payroll reports like last week’s suggest it could be around here. We have had the worst profit recession since 1971 but profit share is still in the low 20 percent range, having peaked around 24 pct. The worst level has been in the mid to low teens."

And the punchline:

An endogenous recession - not due to a negative demand shock or Fed policy tightening - is the worst because not only does it speak to policy impotence, but it also highlights the inherent contradiction in capitalism that has worried economists for over a century. That contradiction is that profits, savings or "surplus" must be continually plowed back into the economy to support growth, yet doing so runs the risk of undermining the next profit cycle through over supply. If profits are not plowed back, corporations run the risk of deficit demand. In simple terms, a line in the sand for profit share means that corporations end up firing workers who just happen to be consumers as well...

3--“Market is on Edge”: US Commercial Real Estate Bubble Pops, San Francisco Braces for Brutal Dive

Colin Scanlon, Research Manager at commercial real estate services firm Savills Studley, put it this way:
“San Francisco’s economy and office market have been at the forefront of major metro areas in the last five years, registering some of the most impressive hiring and leasing trends in the country. Now they may be leading the way in terms of correction as sublet space soars and tenants pull back.”

Things will need to get worse before policy can become radically better. That may involve piling more debt from government onto existing debt, coupled with “helicopter money” elements to reduce some of the burden for existing debtors. It could involve a direct transfer away from profits and savers to workers and spenders via negative rates and wealth taxes that banks collect either way. There is light at the end of the tunnel. But we have yet got to the right tunnel and probably won't until the US falls into a recession. 

4--Why April's hiring slowdown may show caution on US economy

5--It’s Official — the First Democratic Convention Just Abolished Superdelegates

6--Playing the NATO card

In perhaps the greatest show of interference in the Japan-Russia relationship, German Chancellor Angela Merkel reportedly offered Tokyo NATO membership during a meeting with Abe last year, according to a Japanese newspaper. Merkel reportedly assured Abe that she could get France and the UK on board with this plan — as if this was something that she believed he would see as being to his country’s benefit. As a side note, if NATO is going to go around asking countries located in the Pacific Ocean to join the ‘North Atlantic’ treaty organization, it might want to consider changing its name to something more appropriate.

7--Kerry's Ultimatum to Assad: Why US Plan Means 'Capitulation to Al-Qaeda'

8--Ignorance or Malice: Why the Mainstream Media is Silent on Terror in Syria

Unfortunately, the website notes, "the Western press does not have anything to say about terrorism in Syria," nor about the fact that these acts are perpetrated by foreign combatants and Syrian insurgents who have received funding and other support from the US, European countries, Qatar, Saudi Arabia, Israel and Turkey

9--Trump names hedge fund boss as finance chairman

Billionaire Donald Trump, the presumptive Republican presidential nominee, announced Thursday that hedge fund boss Steven Mnuchin had agreed to become his national finance chairman for the general election campaign. Mnuchin will be tasked with raising as much as $1 billion for the Trump campaign and the Republican National Committee.

The decision marks a shift in Trump’s campaign operations, which have largely self-funded and have relied more on free media coverage than paid advertisements. As of the latest reports filed with the Federal Election Commission, the Trump campaign has spent about $48 million, of which $36 million came from a series of loans from the candidate, which could be repaid from future contributions. The remaining $12 million came from individual contributions.

The choice of Mnuchin is a demonstration of the cynical doubletalk that has become a trademark of the Trump campaign. While posturing as the defender of those devastated by the Wall Street crash and the dismal-to-nonexistent economic “recovery” under Obama, Trump has brought in as his finance chairman a Wall Street figure closely tied to the mass evictions and foreclosures that were characteristic of the subprime mortgage collapse.

“Steven is a professional at the highest level with an extensive and very successful financial background,” Trump said in a statement. “He brings unprecedented experience and expertise to a fundraising operation that will benefit the Republican Party and ultimately defeat Hillary Clinton.” Actually, Mnuchin’s “experience” includes making financial contributions to Hillary Clinton for both her US Senate and presidential campaigns.

Mnuchin was a partner for 17 years at Goldman Sachs, the biggest and most influential Wall Street investment bank, which has supplied top Washington officials for decades, including the Treasury secretaries in the administrations of Bill Clinton and George W. Bush

10--What accounts for Trump’s support among West Virginia miners

To the extent that Trump is able to win a hearing among workers, it is due to the treachery of the unions and their subordination of the working class to the Democratic Party, which seeks to mask its indifference to the economic plight of workers with racial and identity politics....

The Achilles heel of the movement of miners, and of the American working class as a whole, was its subordination through the UMWA and the other unions to the Democratic Party and the capitalist system. Speaking for the entire union bureaucracy, UMWA President John L. Lewis in 1937 appealed to the employers and the capitalist state to recognize the CIO, declaring that “unionization, as opposed to communism” is “based upon the wage system and it recognizes fully and unreservedly the institution of private property and the right to investment profit.”

After the war, the American Federation of Labor (AFL) and CIO carried out a purge of the socialist and left-wing workers who had played the leading role in establishing the industrial unions. In 1955, the two federations merged to form the AFL-CIO on the basis of anticommunism and support for US imperialism...

The catastrophic implications of the alliance of the unions with the Democratic Party became fully apparent as American capitalism entered a period of protracted decline in the 1970s and into the 1980s. The ruling class responded with a brutal counteroffensive, initiated under Democratic President Jimmy Carter, who invoked the Taft-Hartley Act in an effort to crush the 111-day miners strike in 1977-78, and intensified under the Republican administration of Ronald Reagan....

The miners never lacked courage, militancy or self-sacrifice, but they fell victim to the subordination of the working class to the Democratic Party and economic nationalism. The betrayals inflicted on miners were part of a broader transformation of unions in the US and throughout the world in response to the emergence of transnational corporations capable of shifting production anywhere in the world in pursuit of cheaper labor and higher profits. In the face of globalization, these organizations abandoned any resistance to the attacks of the employers, adopted a corporatist policy of wage cuts and concessions to entice companies to produce within the US, and integrated themselves fully into the structure of corporate management and the capitalist state.

As with the entire working class, workers in West Virginia confront a political system that is thoroughly hostile to their interests. The Democratic Party has repudiated its previous association with social reforms. It is a party of Wall Street, aligned with corrupt layers of the upper-middle class on the basis of identity politics. Its leading candidate, Hillary Clinton, is justly despised, a fact that Trump has sought to exploit.

The hostile attitude of the Democratic Party to the working class, and the use of race-obsessed politics to smear white workers, in particular, was summed up Friday by New York Times columnist Paul Krugman, who wrote of Trump: “We’re looking at a movement of white men angry that they no longer dominate American society the way they used to.”

In other words, workers in economically devastated regions such as West Virginia are only getting what they deserve! This outlook permeates the milieu of middle-class “left” liberals and pseudo-lefts in the political orbit of the Democratic Party. The contemptuous and arrogant attitude of what is presented as the “left” in American politics toward the working class, and the right-wing policies of austerity and war it supports, create the conditions for a fascistic pitchman like Trump to gain a hearing, by default, among sections of workers.

11--Leader of Brazil impeachment drive sacked over corruption

12--North Korea: "We will only use nikes to defend ourselves from US aggression"

In a speech before his ruling Workers’ Party, North Korea’s leader, Kim Jong-un, said on Saturday that his country would live up to its international commitment to nuclear nonproliferation, while trying to end the danger of war on the Korean Peninsula by using its “strong nuclear deterrent” as leverage against the United States.
Mr. Kim presented what North Korea’s state media called an “ambitious blueprint” for his impoverished yet nuclear-armed country on Saturday, the second day of the Seventh Congress of his ruling Workers’ Party, the first such gathering in 36 years. Mr. Kim said that his country’s dealings with the outside world should be based on the fact that it has become a nuclear power — a status the United States has repeatedly vowed to not recognize.

“Our party and government will struggle to root out the danger of nuclear war being imposed on us by the United States, based on our strong nuclear deterrent and defend peace in the region and in the world,” Mr. Kim said. His speech was carried by the North’s official Korean Central News Agency on Sunday.
Mr. Kim said North Korea would act like “a responsible nuclear power” by not using a nuclear weapon unless its sovereignty is violated. “We will comply sincerely with our international commitment to nuclear nonproliferation and strive to achieve the denuclearization of the world,” he said.

The analysts also said North Korea wants the United States to accept it as a nuclear power and sign a peace treaty in exchange for a commitment not to grow its nuclear arsenal or export nuclear weapons knowledge.

North Korea has indicated in recent years that it can discuss its nuclear disarmament only in the context of global denuclearization. But Washington has insisted it can start dialogue with Pyongyang only when it agrees that it will abandon its nuclear weapons program.

13--Kim said North Korea would not use its nuclear weapons unless its sovereignty was violated, a familiar refrain from Pyongyang, which presents its nuclear and missile program as necessary for self-defense. Kim has lauded North Korea’s advances in nuclear technology, as South Korean officials continue to warn that a fifth test could be imminent.

14--Aleppo Doctor Attacks Western Media for Bias, Censorship and Lies

15--Obama’s Last Gasp Imperialism       

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