Monday, November 7, 2016

Today's links

Today's quote: "Nations across the Western world have reached a point where citizen anger at dysfunctional and tone-deaf political institutions is palpable. The backlash by outsiders against political insiders had combined with an endemic yet largely overblown fear of migrants, Muslims and multinationals to destabilise global relationships. Trust in policy making is being eroded. The risks of conflict on a national and community scale have grown." WSWS


"The United States Supreme Court ruled that influence peddling by individuals or non-profit organizations are protected by the free-speech First Amendment to the Constitution of the United States. In 2010 the court's Citizens United v. Federal Election Commission extended that concept to for-profit associations, corporations and labor unions. 
Predictably, organizations and wealthy individuals have flooded the federal government and the 2016 election cycle with money." Pravda



1--Gingrich, Giuliani, Priebus Eyed for Top Jobs in Trump White House: Sources


Among the names being considered, according to conversations with three campaign advisers who requested anonymity to speak freely: Rudy Giuliani for attorney general, Newt Gingrich for secretary of state, retired Lt. Gen Michael Flynn for defense secretary or national security adviser, Trump finance chairman Steve Mnuchin for Treasury secretary, and Republican National Committee finance chair Lew Eisenberg for commerce secretary.

2--Stocks, Dollar Rally After FBI Finds No New Evidence to Charge Clinton


3--Trump rally protester: I was beaten for a 'Republicans against Trump' sign


4--Financial Sector Costs Us More than Any Other Sector In Economy


The financial sector receives more of the average paycheck than any other sector of the economy.  Its share of the economy totals $2 trillion dollars.
In 1985, the financial sector earned less than 16% of domestic corporate profits.  Today, it’s over 40%.
In the 1960s, finance and insurance accounted for only 4% of GDP, whereas in 2007 finance and insurance accounted for 8% of GDP.

The purpose of the financial services industry is basically to transfer money from savers to entrepreneurs. It primarily consists of using a computer to shift money from one bank account to another. This service requires virtually no physical labor and very few material resources.
Yet, this relatively simple service cost our country more than $2 trillion in 2007. That was more than the country spent on health care, construction, food, utilities or transportation

The feds have taken or committed to take over $12 trillion from the other sectors and given them to financial institution to maintain this imbalance. This works out to $42,105 for every man, woman and child in the U.S.

The financial sector is at a historic high as share of the overall economy.

Note another year in history when it peaked, 1929.  At that time, many of the country’s resources were shifted to this low-employee, unproductive sector.  It was followed by a decade of unemployment and economic stagnation.  This would suggest that it may be unwise for the government to fuel this bloating if they wish to avoid another lost decade.

This begs the question “Why is government taking money from the paychecks of working people and giving it to AIG and Goldman-Sachs?” They claim that their failure will result in the collapse of our entire economic system.  This would, of course, eventually lead to a dystopian Mad Max scenario. However, the presented choice between government bailout and complete financial collapse is a false dichotomy. In reality, if the government allowed these irresponsible actors to fail, they would enter a bankruptcy process and be sold off to more smaller, more responsible companies.

Correlation doesn’t necessarily imply causation. However, the reason the government is so set on using tax dollars to prop up these insolvent companies (as opposed to taking the bankruptcy route) might be related to campaign contributions. For instance, AIG executives gave more than $630,000 during the 2008 political cycle even as the company was falling apart. President Obama collected a total of $130,000 from AIG in 2008, while McCain accepted a total of $59,499. Last year AIG and its subsidiaries spent about $9.7 million on federal lobbying, or about $53,000 for every day Congress was in session in 2008. Additionally, Obama’s top presidential campaign contributor was Goldman-Sachs. McCain’s was Merril-Lynch.

For all the awful investments AIG made, this political investment has produced a 1730000% rate of return.


5--Hillary's Million Dollar Donors

Clintons has turned Influence peddling into a cottage industry

6--(After promising meaningful change) Obama loaded his administration with Wall Street cronies


“…we get stuck again and again with people whose ties to Wall Street run deep. Indeed, the ‘revolving door’ between Wall Street and Washington seems to have been spinning faster than ever during the first five years of Barack Obama’s administration, contrary to what candidate Obama led us to expect. Is it just a coincidence that the president’s most important economic advisers — Jack Lew, the Treasury secretary; Sylvia Mathews Burwell, his choice to head the Office of Management and Budget; Gene Sperling, the director of the National Economic Council; and Michael Froman, a senior White House economic adviser — are all acolytes of Robert Rubin, the former Treasury secretary and longtime Wall Street honcho at Goldman Sachs Group Inc. and Citigroup Inc.?”

Thanks to WikiLeaks, the American people no longer have to guess why President Obama promised meaningful change and then stuffed his administration with Wall Street cronies. Emails released by WikiLeaks show that in the months leading up to Obama’s 2008 election win, Michael Froman, an executive at Citigroup, was emailing Obama and his advisers with the recommended personnel that he and his cronies wanted to see in the new administration. (See our coverage here and here.) Almost without exception, Wall Street got its way.

The outrage of Michael Froman submitting his personnel rosters to the future President in the Fall of 2008, using his official Citigroup email address, is that at that very moment Citigroup was an insolvent bank in the process of unraveling and on life support from the taxpayer. When the dust finally settled, Citigroup would receive the largest taxpayer bailout in U.S. history: $45 billion in equity infusions; over $300 billion in asset guarantees; and more than $2.5 trillion in secret below market-rate loans from the Federal Reserve.

7--ISW Warning on Russian Reinforcement in Syria


8--US election stokes deep concerns in Australian ruling circles


Now not only the “pivot” but the whole framework of post-war alliances in Asia is being called into question. The most overt sign has been the opposition of both major presidential candidates—Hillary Clinton and Donald Trump—to the Trans-Pacific Partnership (TPP), which was aimed at ensuring, as Obama put it, that the US, not China, writes the economic rules in the twenty-first century...

As for Clinton, she was one the chief architects of the “pivot” as secretary of state and consistently adopted a more militarist stance than Obama in the Middle East as well as against Russia and China. In 2010, Clinton deliberately inflamed longstanding territorial disputes in the South China Sea by declaring that the US had a “national interest” in ensuring “freedom of navigation”—transforming the disputed waters into a dangerous flashpoint for war....

The American election is also viewed in the Australian political establishment as another warning of the political instability threatened by widespread popular alienation and hostility deepening social inequality and the agenda of austerity, not only in the US, but Australia and around the world.

An editorial in today’s Sydney Morning Herald draws the parallel between the rise of the Trump, the surprise referendum vote in Britain to exit the European Union, and the re-emergence of the right-wing, anti-immigrant populist Pauline Hanson in Australia. As it points out, Hanson and other small parties and “independents” who have exploited seething resentments have created a parliamentary logjam.

“Nations across the Western world have reached a point where citizen anger at dysfunctional and tone-deaf political institutions is palpable. The backlash by outsiders against political insiders had combined with an endemic yet largely overblown fear of migrants, Muslims and multinationals to destabilise global relationships. Trust in policy making is being eroded. The risks of conflict on a national and community scale have grown,” it stated


9--'Fool's' monetary policy helped create Donald Trump, says ex-Fed president Fisher


I was therefore not the least bit surprised by the rise of Donald Trump or movements similar to his elsewhere, just, as anybody who I advised before June 23 knew I was not surprised by Brexit," he said.

Global monetary policy has "skewered the middle-income groups, the 'middle class,' adding to the angst that has sprung from their sense of an overbearing, intrusive central government."
"Small wonder that we have ended up at a political crossroad, with a choice for the presidency between a candidate who advocates having government distribute still more to ease the pain and another arguing to provide relief by changing gears entirely, though we know not how, when or where," Fisher added.

Fisher cited the zero and negative interest rate policies, along with trillions worth of money-printing known as quantitative easing adopted by the Fed and its global counterparts as measures that have spurred wealth inequality and increased economic and market risks.

"These schemes, coupled with the mere force of limitation of a feckless political class that can't contrive fiscal and regulatory policy that creates jobs and fosters economic prosperity, has put us in the present unhappy presidential predicament we are confronted with," he said.


10--US-backed Kurdish militia announces assault on ISIS capital in Syria


The Syrian regime, as well as the Russian government, have publicly raised questions about the Mosul operation, accusing US and Iraqi forces of deliberately leaving open escape routes to the west. They allege that ISIS fighters and supporters are being allowed to make their way unimpeded to Raqqa, where they can join operations against the Syrian government.

Sections of the US media have substantiated the Syrian and Russian claims. On November 3, the Rupert Murdoch-owned Fox News, which is sympathetic to Trump, ran a prominent report that stated: “As bullets fly in Mosul, the rural roads leading west are choked with traffic—much of which is believed to be ISIS fighters fleeing to the terrorist army’s Syrian stronghold some 275 miles away in Raqqa.”

Fox asserted that “some experts” in the US “blame a premature pullout of US troops [from Iraq under Obama] for giving rise to the black-clad jihadist army now seen moving along the backroads that span its twin strongholds...


On Sunday, just two days before the US presidential election, the Syrian Democratic Forces (SDF), a US-armed faction comprised largely of ethnic Kurdish militia, called a press conference to announce that it had begun “a major battle” to retake Raqqa from the Islamic State of Iraq and Syria (ISIS). Raqqa, a city of some 200,000 in central Syria, is often referred to as ISIS’s “capital.”

The SDF, one of several US-backed Syrian “rebel” coalitions seeking to overthrow the Russian- and Iranian-backed Syrian regime of President Bashar al-Assad, said at the press conference that it will eventually deploy 30,000 fighters for the assault on Raqqa. With next to no mention in the America media, let alone in the election campaign, at least 300 US Special Forces personnel are already on the ground with the SDF, training and “advising” its fighters and targeting air strikes on ISIS by US, British, Australian and French aircraft.
The press conference was held in Ain Issa, a Kurdish-controlled town 50 kilometres to the north of Raqqa

11--USA Continues Drive to Plutocracy, Dismantling of State 


Congressional legislation to limit the influence of lobbyists in the US Congress and the federal government at large arguably did not being in earnest until the 20th Century. The landmark Foreign Agents Registration Act 1938, passed on the eve of World War II, "requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities requiring foreign company or government." ...

US executive branch agencies can also write their own lobbying rules or modify those contained in legislative acts. Members of the US Congress can also play an active role above and beyond legislative actions. On December 18, 2008, then Senators John Kerry from Massachusetts and Richard Lugar of Indiana sent a memorandum of understanding (MOU) to the Clinton Foundation, and the soon to be confirmed US Secretary of State Hillary Clinton, limiting the Clinton Foundation's interactions with foreign governments. 
In the MOU, the Clinton Foundation was instructed to spin off the Clinton Global Initiative placing strictures on Bill Clinton's ability to accept contributions from foreign governments. It appears that the Clinton's ignored the MOU with the recent revelations of Qatar's $1 million gift which went unreported
...
The United States Supreme Court ruled that influence peddling by individuals or non-profit organizations are protected by the free-speech First Amendment to the Constitution of the United States. In 2010 the court's Citizens United v. Federal Election Commission extended that concept to for-profit associations, corporations and labor unions. 
Predictably, organizations and wealthy individuals have flooded the federal government and the 2016 election cycle with money.

According to the public interest website Opensecrets.org--which tracks lobbying and revolving door activity--from 2008 to 2016 over $15 billion was spent by assorted organizations for US federal level influence peddling for all manner of issues ranging from defense and finance to sports and healthcare. The National Football League works hard at the local, state and federal levels for public funds to get their stadiums subsidized at the expense of taxpayers

12--Stocks extend gains, Dow rises 300 points as US election nears


13--Is China Repeating Japan’s Missteps?


Driving that ascent was an economic system that many considered superior to laissez-faire American capitalism. By fostering close, cooperative ties among the state, big corporations, and banks, Japan’s policymakers encouraged investment and guided a national industrial strategy. Bureaucrats in Tokyo interfered with markets to a degree unthinkable in the U.S. by protecting nascent industries and directing financing to favored sectors and companies. Backed by such support, Japanese companies burst onto the world stage and pushed their American competitors to the wall.


But even as Japan appeared destined for greatness, its economy was, in reality, starting to rot. Those clubby ties among finance, business, and government misallocated capital and led to wasteful investments. Growth was given a boost by cheap credit in the second half of the 1980s, but that also helped inflate debt levels and stock and property prices. When this “bubble economy” burst in the early 1990s, the financial industry was flattened. Japan has yet to fully recover.


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