Thursday, November 17, 2016

Today's Links

1--Bonds are doing a "head fake"


"When you look at what's driving inflation it's not wages, what's driving inflation is rentals, it's health care costs...And it's the base effect on the oil price."
And while this kind of inflation can push the topline level, it is actually deflationary given that it reduces disposable incomes and therefore reduces purchasing power.
"It's the kind of inflation which does make sense - it's to be expected, it needs to be reflected but it's not the kind of inflation driven by demand which is going to push up inflation (into) a brand new trend," he explained.
This type of cyclical inflation has been edging up since March, says Saint-Georges, and Donald Trump's presidency could accelerate the trends which were already underway.
"Is this D-Day, is this the beginning of a major bear market for bonds? Are we going to see 10-year rates at 4 percent at the end of next year?," he asked rhetorically.
"I would argue that it's very unlikely and the key reason is global indebtedness - that's where the big deflationary pressure is coming from," he posited

2--Yellen: Rate hike 'appropriate relatively soon,' cites dangers in waiting


"The appointment by President-elect Trump of a racist individual like Mr. Bannon to a position of authority is totally unacceptable," Sanders stated Wednesday. "In a democratic society we can disagree all we want over issues, but racism and bigotry cannot be part of any public policy."

Sanders is the latest Democratic lawmaker to oppose Bannon’s appointment over allegations the former publisher has for years espoused white supremacist views. On Tuesday, more than 169 members of the US House of Representatives signed a letter asking Trump to dismiss Bannon. Before serving on Trump's campaign, Bannon ran the right-wing news outlet Breitbart, worked in investment banking and served in the US Navy, including as a special assistant to the chief of naval operations...

"With the federal funds rate currently only somewhat below estimates of the neutral rate, the stance of monetary policy is likely moderately accommodative, which is appropriate to foster further progress toward the FOMC's objectives," she said


3--BOJ announces end of free market pricing to accomplish its destructive goal of 2% inflation. BOJ Fires Warning at Bond Market With Unlimited Buying Plan


The Bank of Japan fired a warning shot at the government bond market Thursday, announcing its first operation to buy an unlimited amount of securities to maintain its yield-curve target.
The so-called fixed-rate operation yielded no offers, a sign that the move was more of a demonstration exercise than an intended transaction in notes. Officials acted amid relative calm in the market, but in the wake of a global bond sell-off in the past week that had driven up yields across the globe -- and in the process put pressure on Japanese government bonds as well..

4--CNN further destroys its own credibility to wage war on populist Trump advisor


Anderson Cooper said to Jones, “Van, last night the spokesman for Senate Minority Leader Harry Reid released a statement that read in part, ‘It is easy to see why the KKK views Trump as their champion when Trump appoints one of the foremost peddlers of White Supremacist themes and rhetoric as his top aide.'”
Cooper was pointing to Trump’s appointment of Stephen Bannon — the executive chairman of Breitbart — as his chief White House strategist, something about which white nationalists across the country are thrilled...

There are plenty of reasons to be critical of Bannon as a top aide in the White House, namely his white supremacist and misogynistic values. Not only has Bannon engaged in overt racism, he has also been accused of domestic violence

5--Hillary Clinton Says ‘Radical Fringe’ Is Taking Over G.O.P. Under Donald Trump Hillary; still lying after election defeat. Vindictive Clinton reappears with incendiary message


Mrs. Clinton said that while a racially charged and “paranoid fringe” had always existed in politics, “it’s never had the nominee of a major party stoking it, encouraging it and giving it a national megaphone, until now.”


6--Syrian fighting intensifies amid growing signs of military escalation under Trump


In short, whatever Trump’s campaign rhetoric about rapprochement with Russia or halting the US intervention in Syria, all indications are that the incoming administration is preparing to embark on an even more reckless and aggressive campaign of global US military aggression...

The Washington Post published an editorial Wednesday charging that Trump “has all but given Mr. Putin the green light for atrocities.” The editorial’s line repeated similar criticisms made in a November 13 editorial in the New York Times entitled “The danger of going soft on Russia,” which accused the Republican president-elect of having “shown little concern that Russia poses a major strategic challenge” and accused him of having “so far been Mr. Putin’s apologist.”
Similarly, Arizona Republican Senator John McCain, the chairman of the Senate Armed Services Committee, issued a statement Tuesday denouncing any amelioration of relations with Moscow. “At the very least, the price of another ‘reset’ would be complicity in Putin and Assad’s butchery of the Syrian people,” McCain said
.
Meanwhile, the House of Representatives Tuesday passed by a voice vote a sweeping new sanctions bill against Syria and anyone doing business with the country. In addition, the bill demands that the US president present a report on the prospect of establishing “a no-fly zone or a safe zone over part or all of Syria,” an action that US military commanders have warned would lead to armed confrontation with Russia.
On the same day, the House voted 419 to one for a 10-year re-authorization of the Iran Sanctions Act, or ISA, a law first adopted in 1996 to punish those doing business with Iran’s energy industry, supposedly to block Teheran’s alleged program to develop nuclear weapons. The bid to reimpose this measure, even after the negotiation of an international agreement on Iran’s nuclear program, is in line with Trump’s own denunciations of this deal and indications during the presidential campaign that he would renege on it.

7--More hypocrisy-- Dems try face lift to gain momentum as opposition party


Workers and young people must not be fooled again! In the Democratic Party primaries, Sanders won the votes of millions of workers and young people because of his calls for a “political revolution” against the “billionaire class.” As the WSWS warned, Sanders did not speak for the interests of the working class, but for a section of the ruling class that was seeking to divert anger over falling living standards and rising economic inequality and ensure that it did not take an independent political and anti-capitalist form

By throwing his support to the Wall Street favorite Clinton, Sanders ensured that anti-establishment sentiment among large sections of working people would be captured by the right. Now, as opposition is developing against Trump, Sanders is again being called forward to corral opposition.
Significantly, Sanders has been promoted into the leadership of the Democratic caucus in the Senate. Warren, already in the leadership, has been elevated to become its co-chair. The Democratic Party is seeking to give itself a face-lift even as it moves further to the right.

8--Sanders: Trump Must Rescind Hiring of ‘Racist’ for White House Job

"The appointment by President-elect Trump of a racist individual like Mr. Bannon to a position of authority is totally unacceptable," Sanders stated Wednesday. "In a democratic society we can disagree all we want over issues, but racism and bigotry cannot be part of any public policy."

Sanders is the latest Democratic lawmaker to oppose Bannon’s appointment over allegations the former publisher has for years espoused white supremacist views. On Tuesday, more than 169 members of the US House of Representatives signed a letter asking Trump to dismiss Bannon

9-- 169 members of congress call on Trump to dump Bannon-


10--Who’ll Get Hit by Fallout from the $11-Trillion Commercial Property Bubble in the US?


It’s the banks they’re worried about.

Warnings about the loans, bonds, and commercial-mortgage-backed securities (CMBS) tied to the vast $11-trillion commercial property sector in the US have been hailing down for months. Moody’s Investor Services just warned about the rising delinquency rate of some $360 billion in CMBS it rates. Delinquencies of 60+ days jumped from 4.6% last year to 5.6% in September....

The Wall Street Journal:
In all, Morningstar Credit Ratings LLC predicts borrowers won’t be able to pay off roughly 40% of the commercial mortgage-backed securities loans coming due next year. Suburban office properties and shopping centers are being hit particularly hard, said Edward Dittmer, a Morningstar vice president.
“We’re seeing a lot of stress,” Mr. Dittmer said.

Consider the Skyline office complex in Fairfax, Va. Vornado Realty Trust financed the property in 2007 with a $678 million mortgage that was converted into bonds [CMBS].
Vornado was forced to restructure the loan in 2012 after the portfolio ran into trouble. Earlier this year, Vornado for a second time notified the loan servicer that “cash flow will be insufficient to service the debt,” according to a regulatory filing. A Vornado spokesman declined to comment

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