Friday, October 28, 2016

Today's links

Today's quote:  "If the American people are really so unbelievably stupid that they think lewd remarks about women are more important than avoiding nuclear war, the American people are too stupid to exist. They will deserve the mushroom clouds that will wipe them and everyone else off the face of the earth." Paul Craig Roberts

"The Predatory State is an economic system where entire sectors have been built up to feast upon public systems built originally for public purposes and largely serving the middle class. The corporate republic simply administers the spoils system. On a day-to-day basis, the business of its leadership is to deliver favors to their clients. These range from coal companies to sweatshop operators to military contractors."  James Kenneth Galbraith, The Predatory State, (2008), Free Press Publishers, p. 146-7

1--Syria, Iraq are Turkey’s responsibility,’ exclaims Erdogan, demands Mosul, parts of Asia, Balkans and Middle East

2--Investors’ New Message to Global Governments: Spend More---Fiscal stimulus gains backers as central-bank policies fail to ignite growth; ‘we are moving into a new world’

U.S. Treasury Secretary Jacob Lew said in September that policy makers are “no longer debating growth versus austerity, but rather how to best employ fiscal policy to support our economies.” The IMF has also moved beyond the “expansionary austerity” it championed in 2010...

People have gone from believing stimulus is evil and you should balance your books to the realization that nothing is working,” said Mike Riddell, London-based fund manager at Allianz Global Investors....

On top of skepticism about its power to steer output and inflation, monetary policy is shouldering blame for its effect on banks. By pulling interest rates into negative territory and pushing down long-term yields, central banks have torpedoed the profitability of private lenders.
“It’s not really a win-win situation to keep doing this,” said James Athey, portfolio manager at Aberdeen Asset Management.
In the eurozone and Japan, bank shares have dropped roughly 20% and 29%, respectively, since the start of the year. Fiscal stimulus could change that.

there is growing evidence that central-bank policy is underwhelming: Households and businesses haven’t gone on a spending binge. What’s more, the policy has come at a cost to commercial banks, which have seen their profits compressed at a time when many are already weak.

So policy makers are toying with the old idea of having the government do the spending. Such a change, were it to come to fruition, isn’t likely to have the same salutary effect on stocks and bonds as central-bank stimulus, which relies on pushing up the value of financial assets.

“We are leaving this very certain, very comfortable investment environment,” said Guy Monson, chief investor for almost 20 years at London-based Sarasin & Partners LLP. “We are moving into a new world.”...

bonds have been the main beneficiaries of monetary stimulus. Since the start of the year, they are up 6.5% globally, figures by Bank of America Merrill Lynch show. They have even outperformed equities, traditionally riskier and higher-returning investments, which have gone up only 4.5%, according to MSCI....

Loose fiscal policy could mean higher bond yields, because central banks are expected to offset the inflationary effect of government spending by raising rates, or at least lowering them by less. Yields on bonds tend to follow interest rates.
Stronger global demand because of fiscal stimulus would help commodities, exporters and builders. Stocks more broadly might be mixed, because higher rates would weigh on them.
“If you had lots of fiscal expansion you could change the growth dynamics globally quite dramatically,” said Geoff Kendrick, economist at British bank Standard Chartered. “It would be a step back to somewhere normal.”

3--Surprise! US Intel Chief Confirms: Russia Not Behind Massive Online Attack

4--Turkey vows to press Syria offensive despite warning from pro-Assad forces

President Tayyip Erdogan said. "Let's make a joint fight against terrorist organizations. But Aleppo belongs to the people of Aleppo ... making calculations over Aleppo would not be right," he said in a speech in Ankara.

5--Hillary speaks:

“I’m going to continue to push for a no-fly zone and safe havens within Syria,” she vowed during last week’s debate with Donald Trump, “not only to help protect the Syrians and prevent the constant outflow of refugees, but to frankly gain some leverage on both the Syrian government and the Russians.”


Cooler heads may well prevail by the time she gets into office, not only because of the 70,000-plus military personnel who would be needed to institute such a “no-fly” policy, but because the advanced anti-aircraft systems that Russia has recently installed in Syria would raise the stakes immeasurably....

6--James K. Galbraith (2012), Inequality and Instability: A Study of the World Economy. p. 148; Cite in: "Muddling Towards the Next Crisis: James Kenneth Galbraith in conversation with The Straddler" at, Winter 2013 

  • Since the 1980s, the American business cycle has been based on financial and credit bubbles, and therefore on the enrichment, through the capital markets, of a very small number of people in a very few places. Truly we have become a 'trickle-down economy' — as we were not before. A rising tide may lift all boats, but recent business cycles have been more like waves, whereby certain sectors and areas ride the peaks before crashing to the shore. This is a sign, surely, not of the social evil of inequality per se but of the instability of bubble economies, closely associated with inequality of income, wealth, and power, for which we now pay a fearsome price.

  • 7--Brzezinski:   "In brief, for the United States, Eurasian geostrategy involves the purposeful management of geostrategically dynamic states and the careful handling of geopolitically catalytic states, in keeping with the twin interests of America in the short-term: preservation of its unique global power and in the long-run transformation of it into increasingly institutionalized global cooperation. To put it in a terminology that hearkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together."

    • Chapter 2, The Eurasian Chessboard, p. 40.
    The most immediate task is to make certain that no state or combination of states gains the capacity to expel the United States from Eurasia or even to diminish significantly its decisive arbitration role

    8--The Mosul Conundrum: Militants leave, but remain

    The idea of pushing out the militants with their families from the city is the right one, but the majority of them will not go anywhere. They are natives of Mosul or melt into the streets of the city. Having in their reserves capable IS fighters able to quickly mobilise, the Sunni leadership of Iraq is planning to begin their incorporation into its governing structure. The Islamic State (IS) is the result of Sunni discontent from its removal from economic levers of the administration, which happened as a result of the collapse of the Saddam Hussein regime and the usurpation of power in Iraq of Shiites and Kurds. All the while giving the process an appropriate religious-ideological form.

    The “movement” of 9000 fighters to Syria is doubtful

    9--Putin warns on Nukes, you tube

    10--US “pivot to Asia” in disarray

    11--Fed Inclined to Lift Rates If New President Adds Budget Bump

    12--Social inequality and the fight against capitalism

    13--Big Central Bank Assets Jump Fastest in 5 Years to $21 Trillion

    14--Plans to send heavier weapons to CIA-backed rebels in Syria stall amid White House skepticism

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