Tuesday, September 20, 2016

Today's Links

Bill Van Auken: "rather than being an accident, the attack was carried out with the deliberate aim of scuttling the agreement, either by the military acting on its own, or following a change in policy reached by the Obama administration, under intense pressure from the US military and intelligence apparatus." WSWS

1--“We had a lot of Drama in the Markets this Week,” Thanks to the Bank of Japan

(Monetary intervention is now openly failing. Important---Extra easing is actually tightening rates. The attempt to push rates lower is raising rates)

Japan has invented QE and zero-interest-rate policies. It conducted umpteen iterations of them over the past two decades. Throughout, it has demonstrated and documented with ample evidence that QE and ZIRP do not stimulate demand in the economy, though they can have all sorts of other effects. Now once again, Japan is out on front.

This week, something interesting happened, even by the standards of the NIRP-absurdity currently in vogue. The 10-year yield of Japanese Government Bonds (JGBs) rose sharply. It had been negative ever since the BOJ announced its negative interest rate policy in February and had dropped as low as -0.30% by late July.

But on July 28, the BOJ, to show it’s easing further, expanded its QE program by announcing yet another stock market pump-up scheme: it would nearly double its annual purchases of equity ETFs from about ¥3.3 trillion to ¥6 trillion ($60 billion).

At that point, 10-year JGBs began to lose ground and yields began to rise to where they nearly kissed 0% last Monday and Wednesday. On Friday, the 10-year yield edged down to -0.03% (there’s still a decimal difference between where it had been at the end of July, -0.30%, and today, -0.03%). So something is up

2---Fed to keep its balance sheet huge forever The distortions in the financial markets will remain permanently

The intense focus on when — and if — the Fed might raise rates again has overshadowed the second step in the central bank’s exit strategy: shrinking its $4.5 trillion balance sheet. Under the published plan, the Fed would reduce its holdings of long-term Treasurys and mortgage-backed securities by not replacing them when they mature.
The process is not supposed to begin until well after rate hikes are underway, and the Fed has explicitly stated it does not intend to sell any of its assets. ....

At the Fed’s exclusive annual conference in Jackson Hole, Wyo., which draws some of the world’s most influential policymakers, several prominent economists argued that the Fed should maintain a large balance sheet indefinitely. The idea has the backing of Bernanke, who recently questioned Yellen’s continuing support for the exit strategy outlined two years ago.

3--Why the Bank of Japan may overshadow the Federal Reserve on Super Wednesday

The BOJ has a propensity to surprise, although most of the time, the surprises are negative," Lam said.
The market certainly took a negative view of the BOJ's late January surprise move to introduce a negative interest rate policy, when the central bank cut the rate it pays on certain deposits to negative 0.1 percent.

That counterintuitively sent the yen sharply higher, frustrating policymakers who had hoped a weaker currency would help the BOJ reach its long-delayed 2 percent inflation target by increasing the cost of imports and spurring more consumption.

4--Russia's UN Ambassador Argues Bombing of Syrian Army Killing 80 Was Intentional

5--US-Led Bombing of Syrian Army 'Looks More Like a Warning Than a Mistake'

"There are many questions regarding this operation since the US has satellites and radars," he said. "Americans say that it was a mistake; Russians call it a provocation. The truth could lie somewhere in the middle."...

"Perhaps there is a rivalry between the Pentagon, which was against the deal brokered by Russia and the US, and the State Department that could have possibly made concessions [to Moscow]. Quite possibly the US feels that Russia is calling the shots in Syria and this has to be stopped," he suggested, referring to possible reasons behind the attack

“There’s been a lot of unhelpful rhetoric over the last couple days,” said Marine Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff. “It hasn’t yet … derailed the process we're involved in with the Russians to seek a verifiable cessation of hostilities.”...

The Pentagon acknowledged that it halted an airstrike by coalition planes Saturday after Russia said the planes hit Syrian government forces, killing 62....

Under the ceasefire agreement, the United States and Russia would begin exploring military cooperation in Syria if violence is reduced and aid convoys are able to get to Aleppo and other besieged areas within a week after the cease-fire began. Monday marked the end of the first week for the truce.

7--Markets too dependent on central banks, BIS warns

8--New York Times peddles alibi for US bombing in Syria (today's "must read")

How does the Times know that Saturday’s bombing of the strategic Syrian army position, overlooking the Deir Ezzor Airport near the Syrian-Iraqi border, was “accidental,” “mistaken” and “errant?” It provides no evidence to support this conclusion, citing neither any investigation nor any new facts gleaned from its own reporting.

The air strike was an accident, a mistake and an error because the US government says it was. End of story. That is good enough for the three reporters with bylines on the article. They see no need to include any qualifiers, such as “US officials claimed that the bombing was accidental,” much less seek out any contrary opinions from those who firmly believe it was not.

Nor does the supposed newspaper of record raise the slightest doubt about how the US managed to confuse a military base, which the Syrian army has occupied for years, with an encampment of the Islamic State (ISIS); or, for that matter, why the Pentagon’s sophisticated military satellites and surveillance drones failed to provide accurate images of the intended target.

That ISIS forces were able to use the bombing as air support for their own assault upon, and overrunning of, the Syrian military base is also accepted as merely another “accident.”...

The Times article itself suggests a far more plausible explanation for Saturday’s bloody events. It notes that the ceasefire deal “faced many skeptics in Washington,” adding that “Chief among them was Defense Secretary Ashton B. Carter,” who “feared that the accord would reveal too much to the Russians about American targeting intelligence...”

The article, however, does not indicate the intensity and depth of the Pentagon’s hostility to the ceasefire. It was not just a matter of Carter’s “skepticism.” Top US uniformed commanders openly called into question whether they would abide by an agreement that had been adopted by the president of the United States.
Lt. General Jeffrey Harrigian, commander of the US Air Forces Central Command, told the media in respect to the agreement: “I’m not saying yes or no. It would be premature to say that we’re going to jump right into it.”

Army Gen. Joseph Votel, commander of the US Central Command, expressed similar views, declaring, “We have to see how this goes first of all ... see what direction it goes ... whether it actually pans out or not, I don’t know.”

Also unreported in the Times article is the fact that on Friday, on the eve of the US bombing, Obama convened a meeting of his security cabinet, including both Kerry and Carter, to discuss the crisis gripping his administration over the Syria ceasefire.
Given these facts, the Times’ parroting of the official US line that the air strike in Deir Ezzor was “accidental” has the unmistakable characteristics of an alibi and a coverup.

....rather than being an accident, the attack was carried out with the deliberate aim of scuttling the agreement, either by the military acting on its own, or following a change in policy reached by the Obama administration, under intense pressure from the US military and intelligence apparatus....

predominant layers within the military brass oppose any collaboration with the Russian military because they fear it could compromise US preparations for direct military confrontation with Russia itself, the world’s number two nuclear power.
Moreover, the bombing fits a definite agenda, clearly articulated by top figures in the ruling establishment. Just last month, former acting CIA director Michael Morell advocated bombing Syria to “scare Assad” and “make the Russians pay a price,” by which he meant killing them. Morell is a prominent supporter of Democrat Hillary Clinton’s presidential candidacy.

On a similar note, Human Rights Watch director Kenneth Roth, a proponent of the “human rights” pretexts used by US imperialism to justify its interventions in the Middle East, tweeted his approval of the US bombing raid: “As US kills 80 Syrian soldiers, is it sending Assad a signal for his deadly intransigence?”...

Washington correspondent David E. Sanger. In addition to his 30-year career writing for the Times, Sanger has found time to teach as an adjunct lecturer in public policy at Harvard’s Kennedy School of Government, an academy for top political and military officials. The faculty has also included figures now playing a key role in executing US policy in Syria, such as Ashton Carter and Washington’s ambassador to the UN, Samantha Power. Sanger is also a member of both the Council on Foreign Relations and the Aspen Strategy Group, think tanks that bring together senior government, military and intelligence officials, along with corporate executives, to discuss US imperialist strategy.

The second byline is that of national security correspondent Mark Mazzetti. In 2011, Mazzetti gained some notoriety by secretly “leaking” a piece on the Osama bin Laden assassination by New York Times columnist Maureen Dowd to the CIA, prior to its publication, along with a note reading, “this didn’t come from me… and please delete after you read. See, nothing to worry about!”
In other words, these are figures completely integrated into the state and trusted defenders of its interests. The conception, dating back to the 18th century bourgeois revolutions, that the press represents a “Fourth Estate,” functioning as a watchdog, with a critical and adversarial attitude toward the government and its officials, is a dead letter within these circles.

Among those presiding over this operation and its steady march to the right is the recently installed editor of the Times editorial page, James Bennet. His connections to the ruling establishment and the top echelons of the Democratic Party include a father who was a former head of USAID, a front for the CIA, and a brother who is the senior senator from Colorado.

Under the direction of such figures, the Times has become the premier conduit for US state disinformation and propaganda, and a key ideological instrument in the preparations for world war

9--U.S. Department of State spokesman Mark Toner said Lavrov and U.S. Secretary of State John Kerry will hold a bilateral meeting this week on the sidelines of the general debate of the United Nations General Assembly

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