Wednesday, July 13, 2016

Today's Links

1---Flight to safety? Investors keep record cash on US election fears: UBS executive

Republican candidate Donald Trump has promised to dismantle financial reform laws, force Canada and Mexico to renegotiate the North American Free Trade Agreement, and slap steep tariffs on Chinese and Mexican imports.

A UBS survey of 2,200 high net worth investors found that 84 percent of them think the election will have a significant impact on their financial health, McCann said, citing a report due to be released later in July. Individual investors have consistently held an average of 20 percent of their portfolio in cash over the past five years, according to UBS data...

Many of the wealthiest UBS clients are so scarred by losses from the financial crisis that they insist on having at least 25 percent of their holdings in cash, even when they feel confident about the economy, McCann said.
"We've seen cash holdings higher than what you would traditionally think ... since 2009 on," he said. "I don't think that's a temporary phenomenon."

2--Bernanke: Wrong then, wrong now

Bernanke believes the Great Depression was caused by the Federal Reserve not doing enough. He never bothers to point out that the Fed actually expanded its balance sheet by 300% at that time bringing its balance sheet to 25% of US GDP…which by the way is even larger relative to GDP than the Fed’s balance sheet is now.
This is the dark secret of the Great Depression: the Fed printed its brains out fighting deflation. It failed MISERABLY to generate GDP growth.

Instead it eventually created inflation… and a stock market bubble.
From the market bottom in 1932, to its peak in 1937, the Dow rose 387%.
Then, in 1937, as CPI exploded higher to 3.6%, the Fed hiked rates, and the bubble burst losing 50% of its value in a single year.

Again, during the Great Depression the Fed printed a TON of money, growing its balance sheet exponentially, resulting in a stock market bubble during a weak economic recovery, ultimately leading to inflation, which caused the Fed to raise rates… resulting in the bubble bursting.
Sound familiar?

3--Brexit, what Brexit? Shares near 2016 highs

This is a short term relief rally thanks to some certainty around the swift handover to a new PM," said Tobias Davis, Head of Corporate Treasury Sales at Western Union in London.
"The path ahead still looks incredibly challenging. Equities are only rallying thanks to negative yields across most of the curve in Swiss, German and Japanese markets. In reality, the economic landscape is deteriorating."

Sterling, whose 14 percent fall made it one of the main victims of last month's referendum, hit its highest in more than a week at $1.3340.
But for every blip higher for the pound at the moment there are more sellers ready to bet it will fall further in the months ahead and it quickly fell back to stand just 0.2 percent stronger on the day at $1.3280.

The yen JPY=, investors' go-to currency in times of market stress was also up half a percent against the euro and dollar after falling sharply on the back of Japan's move into another round of stimulative policy. ...

Japanese Prime Minister Shinzo Abe ordered a new round of fiscal stimulus spending, as expected, after an election victory on Sunday. His meeting with former U.S. Federal Reserve Chair Ben Bernanke, a proponent of "helicopter money" policies - printing money and directly handing it to the private sector to stimulate the economy - fueled speculation that some of the stimulus plan could be funded by Bank of Japan easing

4--Yen under pressure as global stock markets rally

The yen lost ground on Wednesday, extending losses against the dollar after recording its biggest two-day fall in almost two years, as risk appetite bounced back in the European session.
The safe-haven yen had tumbled 4 percent against the dollar since the start of the week, its worst performance since November 2014, after Japan's Prime Minister Shinzo Abe's ruling coalition won a clear victory in upper house elections, fuelling expectations of more fiscal stimulus. ...

Globally we are seeing an environment where investors are buying riskier assets and that is putting the yen under pressure" said Petr Krpata, currency strategist at ING. "There is a lot of expectations of some mega stimulus from Japan. If they disappoint, we could see the yen bounce back."

5--Gundlach goes bearish

6--Fed's Mester says helicopter money "the next step" in US monetary policy

7--Great American Oil Bust Rages on; Defaults, Bankruptcies Soar

8--Buy, Buy, Buy: BOJ helicopter triggers full blown reflation panic

Brushing aside a view among Japanese economists that BOJ policy has reached its limit, Mr. Bernanke’s assessment added to speculation that Tokyo will unleash new rounds of fiscal and monetary stimulus to reboot Abenomics, Mr. Abe’s growth plan. The yen weakened to ¥103.64 to the dollar from below ¥103 in Asian trading hours. Tokyo stock prices ended up 2.5% at 16095.65.
Mr. Bernanke visited Tokyo at a time of intense speculation that Mr. Abe may resort to so-called “helicopter money,” a radical form of monetary easing advocated by the former Fed chief.

9--Amazing Brexit: Identity and Class Politics

the intellectual left has gradually become a crutch for the establishment’s tottering status quo. It is ashamed of its past. It has lost its belief in the historical battles necessary to advance the progress of humanity. It has junked the class struggle. It has replaced it with a sterile identitarian ideology of rights, which has no power to alter the economic nature of the capitalist system....

The rapacity of contemporary capitalism is enabled by the weakness, dishonesty, and cowardice of the flaccid and collaborationist left...

racism should be understood as “a displaced form of class struggle” that can become prevalent when the class consciousness of subaltern groups is at its weakest...

From the beginning, a market-based, free-trade European Union was a Tory-supported project...

Until 1988, the British trade union and labor movement opposed membership in the Common Market, or EEC. In 1988, however, Jacques Delors, member of the French Socialist Party, Finance Minister for the Socialist Party of Francois Mitterand, and in 1988, president of the European Commission, appealed to the Irish, British, and Danish trade unions to consider a compromise. In exchange for membership in the eventual EU, he offered the trade unions a Social Charter, promising to advance legislation, protecting workers’ rights. The Charter was a toothless, vacuous document, but it provided the fig leaf for the social democrats to stop opposing the free-marketeers and present the EU as a guardian of workers’ rights....

So there it is, folks—the answer to the question of why “socialists” such as Fran├žois Hollande today are waging war on workers’ rights: it’s tradition. Since the 1980s socialists, liberals, social democrats, and leftish groups have got on board the neoliberal ship of deluded and dishonest fools, who have reduced the working class to beggary, loss of dignity, and burning anger. Both Tories and Labourites have put the working class in a tightening vise, squeezed by both sides. The Leave vote in Britain marks the dawn of the fight back to come by a class the free marketeers, of the left and the right, have reduced to a pool of cheap and precarious labor in competition with economic migrants fleeing the even cheaper and more precarious labor markets of their own neoliberal hells, the newly liberated masses from Eastern Europe, freed from the supposed oppression of communism to the realities of actually existing capitalism.
Questions for the Western left: whose side are we on—the workers’ or the market free-loaders’? Identity or class-conscious politics?“

10--Bernie Sanders Abandons the Revolution, Kshama Sawant

Even if Sanders was not prepared to take such a step, there was nothing that compelled him to endorse Hillary Clinton, a candidate of Wal-Mart, Wall Street, and warmongering.

The (un)Democratic Party will never be an effective tool to defeat the right wing, either during or after the election. Experience has shown repeatedly that it is, in fact, a longtime enabler of it. In order to defeat the right, we will need to build powerful, united mass movements and a new political party for the 99% – that will work alongside our movements, rather than against them.

Hillary Clinton has the dubious distinction of being the second most unpopular major party nominee in the history of U.S. presidential polling, second only to Donald Trump. Fear of Trump is the main support propping up Clinton, while fear of Clinton is the main prop for Trump.

The strategy of lesser evilism has been an utter disaster for the 99%. Effectively unchallenged by the left, the Democratic Party helped the Republican Party to push the agenda steadily to the right over the past decades. As Green Party presidential candidate Jill Stein has aptly put it, “the politics of fear has delivered everything we were afraid of.”...

The experience of the rigged primary utterly exposed the undemocratic, conservative, and pro-corporate character of the party. While Sanders won roughly 46% of the Democratic primary vote, he only received the endorsement of eight Democratic members of the House and only one Democratic Senator

11--Stop the Syria Misadventures

12--Buybacks Pump Up Stock Rally

Shares outstanding in the S&P 500 have fallen this year from year-earlier levels, on track for the first yearly decline since 2011

Shares outstanding in the S&P 500 have fallen this year from year-earlier levels, on track for the first yearly decline since 2011, according to S&P Dow Jones Indices. Companies in the S&P 500 bought back $161.39 billion of shares during the first three months of the year, the second-biggest quarter for repurchases ever.

While uneven economic growth, tumbling interest rates and a volatile political climate will likely drive wide market swings in the second half of 2016, portfolio managers said, buybacks appear to be providing support for shares.

“Corporate demand for stocks has been very healthy, and there’s no reason to believe it’s going to end anytime soon,” said David Goss, managing director and head of proprietary strategies at money manager Boston Private Wealth LLC...

Large share repurchases have come under scrutiny during the tepid U.S. recovery from the financial crisis. Some analysts warn that firms executing large buybacks risk shortchanging the investment spending that fuels economic growth and rising living standards over time.
While buybacks can bolster demand for shares in the short term, according to these skeptics, long-term profitability is better served by investing in projects that promise higher returns over the long haul....

“What we’d like to see is earnings growth coming from higher revenues and economic activity running at a faster pace,” Mr. Melcher said. “Those are typically more solid underpinnings for stocks.”

13--The predictable and pathetic end of Sanders’ “political revolution”

14--Obama in Dallas: Platitudes and lies on police killings

In the final analysis, America’s police represent the “thin blue line” protecting the interests of an immensely wealthy financial oligarchy from masses of working people living either in or on the brink of poverty. As social polarization and inequality have reached unprecedented levels, the police have been turned into a militarized force, officially deemed part of Washington’s “total army.”...

The endless eruption of violence and mass killing in the US is bound up with the unceasing violence unleashed by US imperialism abroad, the victims of which in the Middle East and Afghanistan number in the millions. Obama, who inveighed in Dallas against “senseless violence,” regularly selects victims for his administration’s drone assassination program, which has claimed the lives of thousands of innocent men, women and children. The notion that mass murder is a legitimate means of resolving problems originates at the pinnacle of the American state...

The American people are long past any reasonable expectation of a US president delivering a speech offering an honest explanation of any aspect of the crisis of American capitalist society. That being said, the address delivered by President Barack Obama to a memorial service for the five Dallas policemen shot dead last Thursday during a protest against the police killings earlier in the week of black men in Louisiana and Minnesota plumbed new depths of dishonesty and demagogy.

1 comment:

  1. eToro is the #1 forex trading platform for newbie and established traders.