Wednesday, September 14, 2016

Today's links

Today's Quote:  "Long before our 2003 occupation of Iraq triggered the Sunni uprising that has now morphed into the Islamic State, the CIA had nurtured violent Jihadism as a Cold War weapon and freighted U.S./Syrian relationships with toxic baggage." Robert F Kennedy Jr, Politico

John Maynard Keynes:  "This is a nightmare, which will pass away with the morning. For the resources of nature and men’s devices are just as fertile and productive as they were. The rate of our progress towards solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a high standard of life—high, I mean, compared with, say, twenty years ago—and will soon learn to afford a standard higher still. We were not previously deceived. But to-day we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time—perhaps for a long time."

1--The Bank of Japan unleashes Chaos

2--Income gains in 2015 don’t reverse long-run trend toward greater inequality

Today’s news about income growth in 2015 is a welcome break from this trend, but does not yet overturn the general pattern that we have seen since 2007. The second benchmark I posit is income growth relative to that of earlier historical epochs. What this benchmark shows is that in the three decades following World War II, income growth was both much faster as well as more broadly shared than it has been since 1979.

3--What Turkey wants?  Syrian Buffer Zone – Turkey-Qatar Pipeline , Christina Lin

Erdogan’s demand for a US-Turkey buffer zone in Syria is likely to prevent Kurdish autonomy and not fight ISIS, and enable the building of the Turkey-Qatar natural gas pipeline proposed back in 2009.  With the proposed pipeline traveling through the Aleppo region—the same area for the buffer zone—the Turkey-Saudi-Qatar backed Army of Conquest would be able to establish a sunni salafist statelet in Syria and enable Ankara, Riyad and Doha to share in the future wealth of the pipeline...

Thus, even if the Saudi/Qatar/Turkey backed Army of Conquest can control just enough land in Syria for a salafist statelet to build the Qatar-Turkey pipeline, then these sunni states can finally realize their pipeline dream.

Writing in Armed Forces Journal4, Major Rob Taylor joined numerous other pundits in observing that the Syrian civil war is actually a pipeline war over control of energy supply, with Saudi Arabia, Qatar and Turkey needing to remove Assad “so they can control Syria and run their own pipeline through Turkey.” “Saudi Arabia and Qatar, as well as al Qaeda and other groups, are maneuvering to depose Assad and capitalize on their hoped-for Sunni conquest in Damascus. By doing this, they hope to gain a share of control over the ‘new’ Syrian government, and a share in the pipeline wealth.” Even if it includes Turkey surreptitiously supporting ISIS5 against Assad. ISIS also benefits from the aggressive Turkish onslaught against PKK—the most effective boots on the ground fighting ISIS.  United by their mutual hatred of the Kurds, Turkey also sat back and watched ISIS pound the YPG in Kobani last year. If Kurds had connected along Turkey's border and formed an autonomous region, plans for the Qatar-Turkey pipeline via Saudi Arabia would be completely destroyed.  It is not surprising that Turkish officials drew a line from Aleppo to Kobani as a buffer zone and the US agreed to their demands.

4--Negative Rates May Do More Harm Than Good, Expert Says

5--Markets Wag the Fed   --The market’s recent bout of tumult makes it that much harder for the Federal Reserve to raise rates this month

Calm returned to U.S. markets Monday, but Friday’s tumult has to leave the Federal Reserve less confident in the market’s ability to stomach a rate increase.

The dull summer in the markets probably made the Fed more likely to raise rates later in the year. Through last Thursday, the S&P 500 went 43 consecutive trading days without swinging more than 1%, and registered its lowest level of volatility since the 1960s.

It is ironic but not surprising that the Fed played a part in Friday’s  selloff: A hawkish speech by Boston Fed President Eric Rosengren suggested the odds of a rate increase at next week’s policy-setting meeting were higher than investors had thought. A dovish speech on Monday by influential Fed Governor Lael Brainard served to ease those fears.....

But the bigger cause of the selloff was likely a rise in European long-term bond yields on worries that European Central Bank may not buy as many assets next year as investors had expected.
That matters to U.S. markets and the Fed because the ECB’s buying of long-term bonds has been driving down yields and pushing global investors into long-term Treasurys, helping to keep their yields low. While that was the case, the Fed could be reasonably sure that it could raise its target on overnight rates without risking a sudden jump in long-term borrowing costs, which can weigh on the economy. Now it can’t be so certain....

Further, as Ms. Brainard again pointed out, the Fed considers the risk of raising rates too quickly to be far more dangerous than moving too slowly. Throw in an aversion to disrupting markets before an unusual U.S. presidential election, and a rate increase next week, while not out of the question, seems unlikely. Anyone waiting for a rate rise will probably have to wait at least until the Fed’s December meeting—and may have to wait even longer than that.

6---US plots to topple Assad after Assad rejects pipeline offer-- It's all about oil

Back in 2000, Qatar unveiled an ambitious plan to build a 1,500-kilometer multibillion-dollar gas pipeline from its shores, across Saudi Arabia, Jordan, Syria and Turkey.  The US liked the idea as a way of getting cheaper gas to Europe and weakening the EU's reliance on Russian gas. But in 2009 Syria's president, Bashar al-Assad, said no to the project, turning his attention a year later to signing a deal with Iran to build a pipeline that would transport its gas across Iraq, Syria and under the Mediterranean Sea to Europe instead.

...the decision was a slap in the face to Saudi Arabia and other Gulf states, and to the US and UK, which have supported Saudi Arabia since the 1940's, despite its horrific human rights violations and allegedly continuous backdoor funding of extremist groups like al Nusra, al Qaeda and IS
Putin calling strategic shots in Syria, Deutsche Welle

7--Santelli Exchange: Fed's balance sheet signals (video)

8--Despite increase in 2015, US household income still lags behind pre-recession levels

The census data also reveals that income inequality in America remained virtually unchanged from 2014, with the wealthy in the top fifth of the population taking in about half of all household income, while the bottom fifth earned only 3.4 percent.....

While Obama touted the household income gains as evidence that the economy is on the upswing, analysts question why seven years after the proclaimed “recovery” in 2009, household incomes have still not returned to pre-recession levels, while poverty and hunger remain extraordinarily high for the richest country in the world
Or, as Arloc Sherman of the Center of Budget and Policy Priorities told the New York Times, “The next question is why did it take such a long time for things to look good?”

9--Libya: From first to worst

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