Monday, August 22, 2016

Today's Links

1--Seller’s Paradise: Companies Build Bonds for European Central Bank to Buy

(Proof-positive that QE bond-buying is a scam to enrich the 1 percent while providing zero stimulus to the economy)

The European Central Bank’s corporate-bond-buying program has stirred so much action in credit markets that some investment banks and companies are creating new debt especially for the central bank to buy.

In two instances, the ECB has bought bonds directly from European companies through so-called private placements, in which debt is sold to a tight circle of buyers without the formality of a wider auction.

It is a startling example of how banks and companies are quickly adapting to the extremes of monetary policy in what is an already unconventional age. In the past decade, wide-scale purchases of government bonds—a bid to lower the cost of borrowing in the economy and persuade investors to take more risk—have become commonplace. Central banks more recently have moved to negative interest rates, flipping on their head the ancient customs of money lending. Now, they are all but inviting private actors to concoct specific things for them to buy so they can continue pumping money into the financial system

The ECB doesn’t directly instruct companies to create specific bonds. But it makes plain that it is an eager purchaser, and it lays out the specifics of its wish list. And the ECB isn’t alone: The Bank of Japan 8301 -1.81 % said late last year it would buy exchange-traded funds comprising shares of companies that spend a growing amount on “physical and human capital,” essentially steering fund managers to make such ETFs available to buy

The furious central-bank buying has been a relief to companies and governments that can now borrow at rock-bottom interest rates. But it has also spurred criticism that the extreme policies are killing the returns available to other investors, such as pension funds, and loading up the economy and financial system with potentially overpriced debt....

The ECB was late to the central-bank party—it began quantitative easing only in 2015, years after the U.S., the U.K. and Japan—but it has embraced bond-buying with fervor. In March, it boosted its purchases to €80 billion ($90.6 billion) a month from €60 billion and surprised investors by saying it would soon add corporate bonds to its shopping list.

It had already bought so many government bonds that it was running out of things to purchase.
The ECB had bought more than €16 billion of corporate bonds as of Aug. 12, according to the latest available data from the central bank, after starting purchases in early June. The lion’s share has been already-issued bonds trading in secondary markets, but some has come in new debt sales, according to the ECB.
And Morgan Stanley MS -0.39 % has arranged two private placements that have been bought by the ECB, according to a Wall Street Journal analysis of data from Dealogic and national central banks....

Private placements are private debt sales not open to the broader market, typically relying on a handful of investors that want to buy a company’s bonds....

Still, the scant data are enough to make traders and strategists scramble to divine what the big fish is buying. Guessing right can pay off. Yields on corporate bonds have plunged in Europe. (Yields fall when prices rise.) The average yield on euro investment-grade corporate bonds is 0.65%, according to Barclays, BCS -0.31 % compared with 0.99% before the program started and 1.28% before the bank said in March that it would buy corporate bonds.
“We’re all looking at the data,” said the head of credit trading at a major European bank. “They’re only one new customer—but it’s a big one....

The ECB’s corporate-bond program may well grow further. The bank is widely expected to extend quantitative easing beyond March, when it is planned to end. Government bonds are growing increasingly scarce. The ECB can buy only bonds that yield more than its deposit rate, currently minus-0.4%. That rules out vast amounts of German government debt, and much else too

2--$ for infrastructure??  Fed’s Fischer Says Better Fiscal and Regulatory Policies Could Improve Productivity   --Vice chairman cites pattern of high employment growth and low productivity growth in recent years  

Federal Reserve Vice Chairman Stanley Fischer raised concerns Sunday about the U.S. economy’s longer-term prospects and said more public investment, along with regulatory changes, could help boost flagging productivity numbers. But he was more optimistic about the economy’s short-term outlook.
In a Sunday morning speech in Aspen, Colo., the Fed’s second highest-ranking official called for more spending on infrastructure and education and adjustments to regulations to encourage private investment.

“The key to boosting productivity growth, and the long-run potential of the economy, is more likely to be found in effective fiscal and regulatory policies,” he said.
Productivity improvements are necessary for better long-term economic growth and increases in wages and living standards. After rising rapidly during the internet boom of the late 1990s, productivity, defined as the output per hour worked, has slumped recently for reasons that aren’t well understood.

The U.S. recorded productivity decreases for the past three quarters, the longest such stretch since 1979.

3--No return to normal-- Fed Officials Brace for (Familiar) New Normal   -- Unconventional tools used after financial crisis may become increasingly common

(Central planning and intervention eliminate the last vestiges of a "free market")
For much of the post-financial-crisis era, U.S. Federal Reserve officials have held to a belief that they could get back to their old way of doing things. Growth would resume at a modest pace, annual inflation would climb to 2% and interest rates would gradually rise from near zero to a normal level near 4% or higher.
As they prepare to gather at their annual retreat in Jackson Hole, Wyo., officials are grimly coming to a view that it isn’t going to happen that way.

Growth in economic output appears stuck at a slow pace, with inflation vulnerable to undershooting the central bank’s target. The Fed, in turn, is starting to see that rates aren’t going to return to normal and the way it conducts monetary policy and deals with recessions is going to have to change...

“New realities pose significant challenges for the conduct of monetary policy,” San Francisco Fed President John Williams said in a research note released last week on the shifting monetary policy landscape.
In this world, unconventional tools used after the financial crisis—including purchases of long-term Treasurys to push down long-term interest rates and assurances of low short-term rates into the future—could be rolled out when another downturn hits. A portfolio of securities, now $4.2 trillion, could grow. Unpopular interest payments to banks for their deposits at the central bank could persist.
The new normal, in short, could look a lot like what the Fed has been doing for the past several years....

“We probably don’t have a lot of monetary policy tightenings to actually do over time,” William Dudley, president of the Federal Reserve Bank of New York, told Fox Business Network...

Because growth is slow and could remain so, and inflation correspondingly low, the Fed has revised down its estimates of how high the fed-funds rate will go in the long run. Most officials see it reaching 3% or less. Four years ago the consensus was 4% or more....

low rate in normal times puts the Fed in a bind when another recession hits. During the past four downturns dating back to the early 1980s, the Fed cut short-term rates by 5 percentage points or more in an effort to stimulate growth by boosting borrowing, spending and investing.
It now looks like it won’t have that room to maneuver next time. Officials will need to turn to other tools to support growth in a downturn. That includes bond purchases and assurances of low rates in the future....

A research paper by Fed senior economist David Reifschneider argues that bond purchases and low-rate promises ought to be enough for the Fed to manage even a “fairly severe recession” that drives the unemployment rate up to 10%. Doing so would require the Fed to expand its securities portfolio by $2 trillion, and possibly as much as $4 trillion, the analysis shows.
Still Mr. Reifschneider warns “one cannot rule out the possibility that there could be circumstances in the future in which the ability of the [Fed] to provide the desired degree of accommodation using these tools would be strained.”...

To manage its large securities portfolio and the abundance of reserves it has placed in the banking system, the Fed has rolled out new tools, including interest payments to banks on their deposits at the Fed. Lawmakers have complained to Fed officials that the payments look like an unfair subsidy to big banks.
In this brave new world of central banking, it is another feature of the current landscape that just might not go away

4--In Response to Indiscriminate Saudi Bombing, MSF Evacuates Northern Yemen

5--Attending Texas Charter Schools Hurt Students' Future Wages, Study Finds

6-- Russian President Vladimir Putin said that the goals of the campaign had been completed (in March)

Syria has been mired in civil war since 2011, with government forces fighting numerous opposition factions and radical Islamist groups, including Daesh.Russia conducted its anti-Daesh air campaign in Syria for six months, between September 2015 and March 2016 at the request of Damascus. Moscow started withdrawing aircraft and personnel from bases in Syria after Russian President Vladimir Putin said that the goals of the campaign had been completed

7--Suicide bombing kills 51 at wedding in Turkey

Fifty-one people died and 69 were injured Saturday when a horrific suicide bombing hit a Kurdish wedding in the Turkish city of Gaziantep, near the border with Syria. At least 17 of the wounded are severely injured and clinging to life....

Yesterday, a mass funeral was held for victims of the bombing in Gaziantep, though authorities said further DNA testing will be needed to identify all of the victims, many of whom were blown apart.
Several international heads of state issued condemnations of the bombing. Russian President Vladimir Putin called it “shockingly cruel and cynical,” and French President François Hollande denounced it as an “infamous terrorist attack.” German Chancellor Angela Merkel sent a letter to Turkish Prime Minister Binali Yıldırım regretting that “Again, innocent men, women, and children have fallen victim to cowardly and treacherous violence.”

Notable for his silence on the bombing was US President Barack Obama, whose relations with Turkish President Recep Tayyip Erdoğan have collapsed since Erdoğan publicly attacked Washington for supporting last month’s failed military coup against him....

The atrocity in Gaziantep is the outcome of years of incitement of Islamist terror and ethnic bloodshed in the region by Washington and its imperialist allies in Europe as part of their proxy war for regime-change in Syria. Since 2011, the NATO powers and their Middle East allies have funneled billions of dollars and vast weapons shipments to Islamist and Kurdish nationalist militias fighting in Syria. Hundreds of thousands of Syrians have died and over 10 million have fled their homes, unleashing the greatest global refugee crisis since World War II....

US officials are increasingly desperate over these shifts, which threaten to split Turkey from the NATO alliance and create a broad realignment of major powers in Eurasia against the United States. They are responding by escalating their reckless threats of military action against Russian and Syrian government forces, at the risk of provoking a global war.
Last week, after Assad’s Air Force bombed Kurdish militia among whom were “embedded” US Special Forces operating extra-legally within Syria, Pentagon spokesmen warned that the US was prepared to attack anyone who threatened its troops, risking a direct clash with Russian, Iranian or Syrian forces.

On Saturday, the commander of US forces in Iraq and Syria, Lt. General Stephen Townsend, issued a more official threat to take military action against Syria and Russia. He told CNN, “We’ve informed the Russians where we’re at… [They] tell us they’ve informed the Syrians, and I’d just say that we will defend ourselves if we feel threatened.”
“If the Syrians try this again, they are at great risk of losing an aircraft,” an anonymous senior US military officials told CNN.
CNN commentators added that the situation “increases the probability of direct conflict” between US forces on the one hand, and Moscow and Damascus on the other.

8--Only one in five actually support Hillary

According to the most recent Pew poll, only 22 percent say they will vote for Clinton because they actually support her (as opposed to fearing Trump), and only 16 percent support Trump (rather than hating Clinton).

9--Polls Show Syrians Overwhelmingly Blame U.S. for ISIS

The British polling organization ORB International, an affiliate of WIN/Gallup International, repeatedly finds in Syria that, throughout the country, Syrians oppose ISIS by about 80%, and (in the latest such poll) also finds that 82% of Syrians blame the U.S. for ISIS.

The Washington Post  summarized on September 15th the latest poll. They did not headline it with the poll’s anti-U.S. finding, such as “82% of Syrians Blame U.S. for ISIS.” That would have been newsworthy. Instead, their report’s headline was “One in five Syrians say Islamic State is a good thing, poll says.” However, the accompanying graphic wasn’t focused on the few Syrians who support ISIS (and, at only one in five, that’s obviously not much — it’s hardly even news). It instead (for anyone who would read beyond that so-what headline) provided a summary of what Syrians actually do support. This is is what their graphic highlighted from the poll’s findings:

82% agree “IS [Islamic State] is US and foreign made group.”
79% agree “Foreign fighters made war worse.”
70% agree “Oppose division of country.”

10--Turkey gradually cutting loose from US-NATO axis

Turkey takes closer military cooperation with Russia into consideration. This was declared by Turkish Foreign Minister Mevlut Cavusoglu in an interview with the state-owned Russian news agency Sputnik. “It seems that the NATO members respond to issues of technology exchange and joint investment in an evasive manner. Turkey wants to develop its own arms industry and strengthen its military defense system. If Russia should develop an interest regarding this context, we are ready, to take the possibility of cooperation into consideration,” Cavusoglu said.

In an interview with the Anatolia news agency on August 10, the Turkish diplomat had said that Turkey and Russia would intend to create a joint military, intelligence and diplomatic mechanism, because the relations with NATO would not be satisfactory.
Cavusoglu literally: “At this point, Turkey wanted to cooperate with the NATO members. But the results received, were not sufficient for us. Therefore, we need to develop other options. But we do not consider this as a step against NATO. ”

The Turkish Foreign Minister especially criticized the view of the West regarding Russia and Turkey. “You consider Russia and Turkey being second-class countries and you are outraged to be criticized by those second-class countries. Due to the linearity and resilience of Putin and Erdogan they are now scared and worried (…) Look at what happened in Ukraine! They threaten the country and force it to choose between them and Russia. This is a pointless approach. The events in Ukraine are a mirror image of the main problems in the region, ” Cavusoglu said.

Last week, the Turkish Ambassador in Moscow said that NATO would not be entitled to impose its foreign policy on Turkey. “In no way, we will tolerate NATO restricting our contacts with other countries. This means that NATO is not qualified to force their regulations upon us and to determine whom we´re authorized to talk with and whom we´re not authorized to talk with”, the newspaper quoted Cumhuriyet Yardim

12----Multipolar World Order: Economics Vs. Politics

One way to resist international finance is through a national economic system that is in many respects highly independent. This is how the world should view the alternative international systems of the likes of the BRICS Bank and the Asian Infrastructure Investment Bank (AIIB). In the near future, countries vulnerable to international speculative attacks will be able to embark on politically favorable projects through the AIIB or BRICS Bank. The multipolar future is not just for superpowers like China and Russia but also represents a huge opportunity to raise Third World countries up from unacceptable levels of poverty. The aim of Sino-Russian relations is nothing less than providing the necessary tools to other nations to resist international pressures from traditional financial channels (World Bank, IMF). Allowing these nations to pursue their own national strategic interests opens possibilities that only a multipolar world can offer.

The transition from a unipolar to a multipolar reality has already changed many aspects of international relations. Military options for superpowers against one another have become a less viable option thanks to economic ties and the nuclear balance. Some of the ultimate tools to influence events, namely manipulation and financial terrorism, have less and less effect on superpowers and tend to actually favor the creation of an alternative economic system.

The evolution of these events is easily predictable. With more integration of the world’s nations, the dollar's influence will gradually be reduced, but the decline of the United States’ unipolar moment will accelerate. The effects will be increasing international cooperation and a transformation that will guide our world toward a full multipolar age.

A revolution that will change everything like nothing in recent history is taking place, forever altering the delicate balance upon which international relations hitherto rested

13--Washington's provocation?: US uses SAA-YPG (Syrian army-Kurdish militia) skirmish to implement no-fly zone Plan B???

response to the Syrian air strikes, another first in the conflict occurred when the US coalition scrambled fighters to counter the SU-24s. The US coalition has since threatened to engage any further government air forces operating in the skies over Hasakah. The virtual ‘no-fly-zone’ is illegal because the US coalition has not received explicit international approval for its establishment.
The YPG leadership also released its second statement on the skirmishes in Hasakah. Besides reinforcing the notion that the Syrian government was supporting the survival of the Islamic State, the YPG offered their ‘casus belli.’

The YPG justified the initial assault on NDF forces because, in their words, the Syrian government was responsible for ‘abandoning’ residents when they lost ground to the Islamic State in the first Battle of Hasakah, in June of 2015. The YPG statement read, “We in the People’s Defense Units, as we liberated the region from Al-Nusra and Daesh, we will secure it from the terror of the Syrian regime as well.”....

The true intent of the initial Kurdish attack against Arab militias should be clear, however. With the establishment of the Rojava, or the so-called de facto autonomous region, Syrian Kurdistan, the pocket of Arab militias in Hasakah represents a force to counter this land grab.

14--Gundach goes short

15--Kurdish force on the verge of capturing Al-Hasakah

16--The impending battle of Jarablus

“Every day there are groups of fighters entering from inside Syria across a secret crossing to a Turkish base where they are gathering in preparation of the assault on Jarablus,” the source told the news agency.
Another source, in the hardline rebel group Ahrar al-Sham, expected the assault on Jarablus to begin within the next few days.

The Arabic crew of Russia Today, the Russian state-run English-language news channel, has reported that some 600 to 700 fighters are ready to launch an assault on Jarablus. The Lebanon-based Al Mayadeen channel has, meanwhile, reported that dozens of military vehicles already have crossed from Turkey into Syria.

According to Reuters, the forces are made up of Failaq al-Sham, Sultan Murad, Ahrar al-Sham and Jabha al-Shamiya units. The assault is expected to begin over the next few days, before the SDF can retake the ISIL-held town.

The U.S.-backed alliance of Kurdish and Arab fighters have also been making a push towards the border town after taking full control of Manbij by driving ISIL militants from the strategically important town, used by terrorists to smuggle weapons and goods. The SDF already controls the eastern bank of the Euphrates opposite Jarablus

17--Kurdish forces storm government districts in Hasakah

1 comment:

  1. eToro is the best forex broker for newbie and advanced traders.