Monday, November 14, 2016

Today's Links

Today's quote:  "At the time, we still had illusions. It seemed to us, that after the soviet union collapsed and Russia had voluntarily agreed to historic limitations , and that after the disappearance of the ideological component that used to separate the USSR from the rest of the world, the prison walls would fall down, and we'd be free. ...But the brothers were in no hurry to greet us. (Instead) They would have been glad to destroy the remains of the USSR's military power. ...

I worked for almost 20 in the KGB, in foreign intelligence, and even I thought  that once the ideological barrier had fallen, and the communist party no longer had a monopoly on power, everything would change fundamentally. But there's been no fundamental change because, as it turns out, there are geopolitical interests that have nothing to do with ideology." Vladimir Putin


"Russia has first hand knowledge of terrorism that's why we can understand the feelings of the American people addressing the people of the US today we would like to say 'we are with you....at the same time, Washington was referring to terrorists fighting in Chechnya as "freedom fighters"

"Our special services (FSB) documented that there were direct contacts between militants (terrorists) from the north Caucasus and representatives of US special forces in Azerbaijan. They helped even with transport. And when I spoke about this to the president of the US (GW Bush) he said, "I'll kick their asses".

But ten days later, my subordinates, the FSB heads, received a letter from their colleagues in Washington "We have had and will have relations with all the opposition forces in Russia. We think we have the right to do this and will continue to do this in the future," Putin documentary

efforts to restrain Russias development goes back centuries to the czars time



1--Was the 2016 election rigged?


In a November 11 article on his blog, Crispin Miller suggested that Moore misinterpreted the significance of 90,000 Michigan residents filling out complete ballots in the recent election without voting for a presidential candidate.

"How likely was it, really, that 90,000 Michiganders would have gone to all that trouble, going out to vote, but NOT for president, just to make the point (i.e., Mike’s point) that they weren’t happy with their choices?" Crispon Miller wrote. "And just how likely was it in a state where, as Mike noted, TRUMP had so much strong support among the state’s white voters? Did 90,000 NON-white workers, and ex-workers, in that state all cast those undervotes to mount that protest—or were their ballots changed without their knowing it?"
It's not the first time something like this has occurred. Crispin Miller noted that there were 27,000 of these "undervotes" in Florida in 2000, when Bush was declared the winner by fewer than 600 votes.

2--A badly designed US stimulus will only hurt the working class

Not even US presidents with political mandates can repeal the laws of economics


I have long been a strong advocate of debt-financed public investment in the context of low interest rates and a decaying US infrastructure, so I was glad to see Mr Trump emphasise it. Unfortunately, the plan presented by his advisers, Peter Navarro and Wilbur Ross, suggests an approach based on tax credits for equity investment and total private sector participation that will not cover the most important projects, not reach many of the most important investors, and involve substantial mis-targeting of public resources.

3--Bonds Bloodied as Trump Spending Plans Spur Dollar, Copper Gains


A record $1.2 trillion was wiped off global bonds last week
  • Gold touches 5-month low on speculation U.S. rates to rise
  • Ten-year U.S. Treasury yields increased five basis points to 2.205 percent as of 8:44 a.m. New York time, the highest since early January. They surged 37 basis points last week, the most in three years, amid speculation Trump’s plans to boost spending and cut taxes will widen the budget deficit and stoke inflation. The 30-year yield increased as much as 13 basis points to 3.06 percent....“Yields will continue to rise over the next year,” said Hiroki Shimazu, an economist and strategist at the Japanese unit of MCP Asset Management in Tokyo. “The fundamentals are very strong, particularly in the U.S. There are some signs of higher inflation pressures. Trump is pushing this phenomenon.”


    The euro fell versus the greenback for a sixth day, its longest run of declines in six months, dropping 0.8 percent to $1.0774, a level last seen in January


    Trump’s election as U.S. President is sending shock waves through global markets on speculation his pledge to boost infrastructure spending will boost growth and inflation and trigger faster hikes in U.S. interest-rate. About $1.2 trillion was wiped off the value of bonds worldwide last week as equities added about $1 trillion and base metals soared by the most in four years. Emerging markets are being hit by an exodus of capital amid concern Trump will also implement more protectionist trade policies.

    “Trump has introduced so much uncertainty -- around the fiscal outlook, the outlook for foreign demand for Treasuries given his protectionism and his views on China, uncertainty around the outlook for the Fed,” said John Davies, an interest-rate strategist at Standard Chartered Plc in London, which adjusted its forecast for 10-year Treasuries yields to 3 percent in the end of 2017 from below 2 percent previously. “There’s an uncertainty premium, rather than just expectations of much more Fed tightening,” being priced into Treasuries, he said. “We think there’s room for this to continue.”

    4--Emerging market bond, currency markets face ‘meltdown’ after Trump's win


    5--Why President Trump Will Fumigate the Fed


    Perhaps Trump’s most scathing attack on the institution came last October, when he insinuated that Fed actions are crippling the middle class without creating any type of benefit to the economy at large.
    “[Chairwoman Yellen] is keeping the economy going, barely,” he said. “You know who gets hurt the most [by her easy money policies]? The people that went through 40 years of their life and saved a hundred dollars every week [in the bank].” He then paused and shook his head for added effect before adding: “They worked all their lives to save and now what happens is they’re being forced into an inflated stock market and at some point they’ll get wiped out.”

    6--Trump victory whacks emerging markets


    The International Monetary Fund has reported that world debt now stands at a record $152 trillion and warned that high debt levels in emerging markets could make them vulnerable to a reversal of capital flows.

    Several factors are driving the emerging market downturn. There is concern that Trump’s protectionist “America first” policies will have a significant impact on global supply chains. These fears are also reflected in US stock markets. The stocks of tech-based companies, which depend on cheap-labour countries for their business models, did not join last week’s rise on Wall Street.

    Another major factor is the sharp rise in US bond yields which followed the Trump victory on the expectation that any infrastructure spending program, coupled with major tax cuts for corporations and the wealthy, will increase US government debt. The yield on 10 year-treasury bonds, considered to be a global benchmark, rose by 37 basis points (0.37 percentage points) last week to finish at 2.15 percent, the first time it has gone over 2 percent since the beginning of the year.

    7--Trump names fascist Bannon as top adviser, confirms plans to deport immigrants


    Trump’s appointments and his provocations against immigrants make clear that, despite the fact that he will have lost the popular vote by upwards of 2 million when all the ballots are counted, he intends to press forward with the most right-wing presidential agenda in American history...

    Trump’s plan to rapidly deport 2 million to 3 million immigrants could be realized only through the suspension of due process and the implementation of a massive police operation and creation of what would be, in all but name, a concentration camp system

    Bannon is a leading figure of the so-called “alt-right” movement, which includes in its ranks neo-Nazi and white supremacist organizations. In a July interview with Mother Jones, Bannon boasted that Breitbart News is “the platform of the alt-right,” which he called the American version of France’s neo-fascist National Front.

    8--From “political revolution” to collaboration: Sanders and Warren pledge to work with Trump


    On “Face the Nation,” Sanders said that to the extent Trump seeks “to create a better life for working people, we will work with him issue by issue.” Speaking directly to Trump, he said, “You talked about being the champion of the working families—all right, now produce. Your rhetoric was great, now do something.”

    Sanders’ entire position is absurd. There is no question as to what Trump represents and the type of government he will lead. He is committed to slashing corporate taxes, eliminating regulations, cutting social programs, intensifying the assault on the working class, vastly expanding the military and destroying what remains of democratic rights. To raise questions as to whether Trump will implement polices to “create a better life for working people” is to sow illusions while giving Trump time to prepare his reactionary government....

    These themes were echoed by the other leader of the “left” faction of the Democratic Party, Massachusetts Senator Elizabeth Warren. In a statement released on Wednesday, Warren proclaimed that Trump has “promised to rebuild our economy for working people, and I offer to put aside our differences and work with him on that task.”...

    The Democratic Party is a party of Wall Street no less than the Republicans. It is far more concerned with the consequences of stirring up opposition than it is with any tactical differences it has with the Republicans and Trump.
    One of the basic problems in the demonstrations is that many of those participating still express illusions in the role of the Democratic Party. In fact, the Democratic Party—from Obama and Clinton to Sanders and Warren—bears political responsibility for the election of Trump, and it is now making clear that it is willing to work with him in implementing a policy of war abroad and reaction at home.

    9--Trump signifies he will end US support for Syrian rebels despite their pleas to him for help



    The theory: Lowering taxes for businesses and wealthy individuals leaves more cash in their pockets, spurring more investment and hiring, and the faster growth generates enough new tax income to pay for the cuts. The top tax rate under Reagan was slashed to 28% from 70%, and business deductions became more generous. About 16 million jobs were created during his two terms, and the economy grew as much as 7.3% in 1984.

    Trump proposes chopping the top individual marginal rate to 33% from 40%  — as well as more modest cuts for those with low and moderate incomes — and the corporate rate to 15% from 35%. The many small-business owners taxed at the individual rate also would pay 15%.

    That’s going to be a job creator like we haven’t seen since Ronald Reagan,” Trump said in his first debate with Hillary Clinton. “It’s going to be a beautiful thing to watch

    Nonsense, says Jared Bernstein, former chief economist for Vice President Biden and a senior fellow at the Center on Budget and Policy Priorities. First, he says, it’s not clear that tax cuts are what juiced the economy in the 1980s, noting Reagan spearheaded massive increases in defense spending — from $325 billion in 1980 to as much $456 billion in 1987 — that rippled across the economy.
    The lower taxes and higher military spending nearly tripled the national debt to $2.8 trillion by the time Reagan left office, stoking inflation fears that contributed to the  recession under President George H.W. Bush in 1990-91.
    President Bill Clinton “significantly raised taxes and had bigger job gains than Reagan,” Bernstein says. About 22 million jobs were created in the eight years Clinton was in office, and the economy grew an average 3.8% a year, helped, in part, by a tech boom that turbocharged business productivity.  Despite tax cuts for the wealthy,  the economy slipped into a deep recession in George W. Bush’s term.

    Bernstein says sharp tax cuts made more sense in the Reagan era. The 70% top personal tax rate was far higher than the current 40%, so the massive reduction could have unleashed much more pent-up demand for investment than Trump’s plan would.
    Besides, while interest rates are near record lows and many companies are awash in cash, it’s not as if they don’t have easy access to funds for capital spending, Bernstein says. Yet, he says, many have chosen to buy back stock and fatten dividends.
    Mark Zandi, chief economist of Moody’s Analytics, says tax cuts do lead to stronger investment and job growth, but those benefits “are generally overstated.” He says they “do not pay for themselves” through additional tax revenue, citing the ballooning national debt during Reagan's term

    11--Who Benefits From Donald Trump's Tax Plan?


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