Friday, February 3, 2017

Today's links

Today's Quote: "I have told friends forever that kkkristians are the danger, not Muslims in USA. Bannon +Sessions+Pence want a 9/11 event or Iranian war asap. They want this so they can lock down domestic dissent of all kinds by force and/or propaganda. …
If you get rid of Trump, you still have Pence, so there is no change for the Bannon junta. These boys make Cheney look good." Yves Smith, naked capitalism

1--The Great American Perpetual Motion War Machine

2--UN Official Admits Global Warming Agenda Is Really About Destroying Capitalism

This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution.”

3--Markets Smell a Rat as Central Banks Dither

4--Trump Veers Off Course with Iran Threats

5--The Coming Clash with Iran

Where is the evidence Iran had a role in the Red Sea attack on the Saudi ship? And why would President Trump make this war his war?
As for the Iranian missile test, a 2015 U.N. resolution “called upon” Iran not to test nuclear-capable missiles. It did not forbid Iran from testing conventional missiles, which Tehran insists this was.
Is the United States making new demands on Iran not written into the nuclear treaty or international law — to provoke a confrontation?
Did Flynn coordinate with our allies about this warning of possible military action against Iran? Is NATO obligated to join any action we might take...

The problem with making a threat public — Iran is “on notice” — is that it makes it almost impossible for Iran, or Trump, to back away.
Tehran seems almost obliged to defy it, especially the demand that it cease testing conventional missiles for its own defense

6--Investors Split Bets on Fed and Trump -- Stocks are up on expectations of Trump stimulus, but investors’ bets on Fed tightening are less confident

Investors are making two different bets on the markets and on the Federal Reserve. They can be right on only one of them.
Fed policy makers on Wednesday left their target range on overnight rates unchanged, while making it clear that they are taking a wait-and-see approach on their next interest-rate increase. ....
Investors are more optimistic. The stock and bond markets show they believe that President Donald Trump will craft a tax-cut and spending package that will lift spending and (perhaps with an assist from taxes on imports) push prices higher. Since the election, the S&P 500 has risen 6.4%, while the Treasury market’s implied forecast for inflation over the next five years has gone from 1.57% to 1.94%....

It isn’t hard to come up with scenarios where investors are right that the Fed would raise rates less than expected. Say that Mr. Trump’s tax-cut and spending plans are smaller than expected, or that trade and immigration restrictions begin to threaten growth. Or maybe that just because the White House has a new occupant doesn’t mean that the economy has lost its ability to disappoint.
If any of those scenarios turn out right, then investors’ bet on the markets would be wrong, and stocks and bond yields would reverse their postelection gains

7--The Economy’s People Problem -- Productivity data are weak again, showing the challenges faced by President Trump to boost growth, especially if he cuts immigration

efficiency gains have weakened. The Labor Department on Wednesday reported that productivity, as measured by what the average worker produces in an hour, was up just 1% in the fourth quarter from a year earlier. That is about the pace of the past few years, and compares with average annual productivity gains of 2.1% during the 1990s.
Getting productivity going again won’t be easy. Companies’ capital spending has been weak for over a decade, meaning workers aren’t getting cutting-edge technology that could boost their productivity. Mr. Trump’s promised tax cuts and regulation rollbacks could at least temporarily lift capital spending, which could boost productivity and growth.

8--Dow Chemical Wants Farmers to Keep Using a Pesticide Linked to Autism and ADHD

9--Trumped up expectations vs ‘hard data’:

10--Idiot Trump Signs Executive Orders Rolling Back Dodd-Frank, Fiduciary Rule

Among the targets are rules that protect against predatory lenders, force brokers to lower fees for retirees and ban proprietary trading. Specifically, Trump took executive action ordering the review of Dodd-Frank rules enacted after 2008 financial crisis, and halting the "fiduciary rule" that would require advisers on retirement accounts to work in the best interests of their clients...

“We’re going to attack all aspects of Dodd-Frank,” Gary Cohn, former Goldman president director of the White House National Economic Council, said Friday in an interview with Bloomberg Television. “We are going to engage the House, we’re going to engage the Senate. They are equally interested in reforming some of the regulatory processes as well. We can do quite a bit without them, but the more help we get from Congress the better off we’re all going to be...

Meanwhile, Elizabeth Warren - rightfully according to some - lashed out at Trump for rushing to undo the key Wall Street regulations, and issued a statement in which she said "The Wall Street bankers and lobbyists whose greed and recklessness nearly destroyed this country may be toasting each other with champagne, but the American people have not forgotten the 2008 financial crisis."
"Donald Trump talked a big game about Wall Street during his campaign - but as President, we're finding out whose side he's really on. Today, after literally standing alongside big bank and hedge fund CEOs, he announced two new orders - one that will make it easier for investment advisors to cheat you out of your retirement savings, and another that will put two former Goldman Sachs executives in charge of gutting the rules that protect you from financial fraud and another economic meltdown. The Wall Street bankers and lobbyists whose greed and recklessness nearly destroyed this country may be toasting each other with champagne, but the American people have not forgotten the 2008 financial crisis - and they will not forget what happened today."

11--Wage growth stalls

U.S. employers added the most workers in four months while wage growth slowed more than projected, suggesting some slack remains in the labor market.
January’s 227,000 increase in payrolls followed a 157,000 rise in December, a Labor Department report showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 180,000 advance. The jobless rate rose to 4.8 percent, and average hourly earnings grew 2.5 percent from January 2016, the weakest since August

12--Trump Moves to Roll Back Obama-Era Financial Regulations

The actions are the latest sign that Mr. Trump, despite striking a populist tone during the campaign, is working to accommodate Wall Street and other corporations.
“The administration apparently plans to turn over financial regulation to Wall Street titan Goldman Sachs, and make it easier for them and other big banks like Wells Fargo to steal from their customers and destabilize the economy,” said Lisa Donner, executive director of Americans for Financial Reform, an advocacy group that supports Dodd-Frank. “That betrays the promises Trump made to stand up to Wall Street, and it will have dire consequences if he’s successful.”...

After a White House meeting with business executives, Mr. Trump signed a directive calling for his administration to identify potential changes to provisions of the Dodd-Frank Act, crafted by the Obama administration and passed by Congress in response to the 2008 meltdown. A second directive he signed will effectively halt an Obama-era Labor Department rule that requires brokers to act in a client’s best interest, rather than seek the highest profits for themselves, when providing retirement advice...

Mr. Trump’s action on the fiduciary rule will have a more immediate impact. His memorandum directs the Department of Labor to review whether the rule may “adversely affect” investors’ ability to access financial advice — and if it does, he authorized the agency to rescind or revise the rule....

The rule’s supporters, including Democratic lawmakers and consumer groups, describe it as a basic consumer protection that can prevent brokers from taking advantage of vulnerable clients. The industry argues, however, that the rule will expose it to a torrent of lawsuits and will lead firms to pass on the costs to consumers.
Taken together, the president’s actions constitute a broad effort to loosen regulations on banks and other major financial companies, put into motion by a president who campaigned as a champion of working Americans and a critic of Wall Street elites. On Friday, Mr. Trump said his actions were intended to help both Wall Street and workers as his administration eases constraints on banks and enables them to lend to companies, which could then hire more workers.....

The meeting underscored the degree to which the architects of Mr. Trump’s economic strategy are now some of the people he denounced in his campaign, which ended with a commercial that described “a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations.”
The advertisement included an image of the chief executive of Goldman Sachs, which has become a virtual feeder for top Trump administration officials. Steven Mnuchin, his nominee for Treasury secretary, is a former Goldman Sachs trader and a hedge fund manager. Gary Cohn, the chairman of his national economic council, was Goldman’s No. 2 executive, and Stephen K. Bannon, Mr. Trump’s chief strategist, is a former Goldman banker....

House Republicans are also moving legislation to “repeal and replace” Dodd-Frank, though they would need 60 votes to accomplish that. And they are considering potential ways to use the budget process to defund some aspects of the law, all of which comes on top of the president’s executive actions.

13--The Obamas prepare to cash in

14--Trump threatens UC Berkeley funding cut after protest against fascistic provocateur

The gratuitous violence carried out by the black-hooded ANTIFA group was a gift to the Trump administration, which seized on its actions to smear the students who demonstrated to express opposition to the anti-Muslim and anti-immigrant racism and general contempt for democratic rights pushed by Breitbart News and Yiannopoulos. The former head of Breitbart, a media platform for the fascistic “alt-right,” is Stephen Bannon, Trump’s chief White House adviser.
All three early morning network news programs led Thursday with the violence in Berkeley in reports designed to discredit the protesters and promote Yiannopoulos and his supporters as defenders of free speech and academic freedom. The viciously anti-Muslim Breitbart editor is touring mostly liberal US campuses in a well-organized provocation aimed precisely at inciting violent incidents that can be used as a pretext for the suppression of democratic and left-wing views....

His speech Tuesday night at California Polytechnic University was a diatribe against the right to abortion. Yiannopoulos presented the world as a battle between Christian “Western civilization” and Islam. In another speech last year he said, “Islam, not radical Islam, is the problem.” Muslim immigrants, he added, “bring their delicacies with them: pork chops, yoghurt and gang-rape.”
Writing at 2 am Eastern Standard Time on Thursday, Trump tweeted, “If UC Berkeley does not allow free speech and practices violence on innocent people with a different point of view—NO FEDERAL FUNDS?”...

Anarchist groups such as ANTIFA are politically reactionary. They represent demoralized sections of the middle class that are hostile to any struggle to politically educate and mobilize the working class and youth against the capitalist system. Their tactics, gratuitous violence and destruction of property, flow from and reflect their bankrupt politics.

Undercover police and paid provocateurs would act no differently at a mass demonstration than ANTIFA did Wednesday evening in Berkeley. In fact, such organizations are, by dint of their politics and the social forces they attract, magnets for police infiltration. There can be little doubt that significant numbers of the hooded anarchists who rioted in Berkeley were police agents or informants.

15--Washington’s war threat against Iran

It is just two weeks since President Donald Trump was sworn into office after delivering an inaugural address proclaiming his policy of “America First” and vowing to defend the United States against “the ravages of other countries.”
Any illusions that this policy spelled a turn away from the unending wars waged by the US over the past quarter of a century in favor of isolationism have been rapidly dispelled. Trump and his advisors have staged one bellicose provocation after another in a sharp escalation of the longstanding militarist policy of American imperialism.
This has taken its starkest form in the ultimatum delivered Wednesday by Trump’s national security advisor, Gen. Michael Flynn. The former chief of military intelligence marched unannounced into a White House press briefing to declare that “... we are officially putting Iran on notice” over its ballistic missile test last Saturday and an unsubstantiated charge that it was somehow responsible for an attack on a Saudi Arabian warship by Houthi rebels in Yemen three days later...

Last week, Trump spoke at CIA headquarters, repeating his thuggish assertion that the US should have “taken Iraq’s oil” after the 2003 invasion, while casually adding, “maybe you’ll have another chance.” These remarks appear more and more to represent a direct threat of a far wider and bloodier war that could engulf the entire Middle East and beyond. The consequences of a war with Iran would be catastrophic not only in the region, but internationally and in the US itself.

16--The Fed’s Bond Portfolio Is Growing Up, and That Means Less Support for the Economy -- Janet Yellen says declining maturity of portfolio has same impact as two rate increases in 2017

The Federal Reserve is quietly tightening U.S. monetary policy—by means other than interest rates.
Decisions made by the Fed years ago mean that the maturity of its $4 trillion-plus bond portfolio declines every day, a process that Fed Chairwoman Janet Yellen said in January has the same impact on benchmark bond yields as two short-term rate increases over the course of 2017....

But the status quo alone means reduced stimulus, because as the portfolio gets closer to maturity, the Fed’s ownership of long-term debt decreases, pushing rates higher. The Fed is simultaneously thinking about actively trimming the size of its portfolio, a move that analysts say could put even more upward pressure on long-term rates....

Already, rising rates have pushed the average 30-year fixed mortgage rate up by more than 0.6 percentage point since November, threatening to cool demand in the housing market....

The unwind will not be pretty,’’ said Mark MacQueen, co-founder and portfolio manager at Sage Advisory Services Ltd. Quantitative easing, or buying bonds to stimulate growth, ”is like a party. When a party ends you never know if you can clean it all up easy."
While the Fed ended its bond buying in 2014, it has been reinvesting cash from maturing debt via Treasury debt auctions. The Fed’s holdings of Treasurys stood at $2.463 trillion for the week that ended Jan. 25, more than five times its level at the end of 2008, according to the latest data from the central bank. The Fed had agency mortgage-backed securities worth $1.744 trillion....

But the amount of maturing Treasury debt is expected to rise to $195 billion this year and $422.6 billion in 2018, compared with $3.5 billion in 2015, according to Mark Cabana, head of U.S. short-rates strategy at Bank of America Merrill Lynch.
Francesco Garzarelli, interest-rate strategist at Goldman Sachs Group Inc., said that once the Fed announces its intention to downsize the balance sheet, investors may look ahead to the issue of demand from other sources to fill the void from the Fed. The impact from this, he said, could lead to a rise of 0.5 to 0.75 percentage point on the 10-year Treasury yield. The yield on Thursday morning was 2.445%....

Would the Fed gamble that it can get away with reducing its balance sheet in 2017 and not cause a crisis? I don’t think so," said Jonathan Lewis, chief investment officer at Fiera Capital Inc.

17--Here’s How Goldman Sachs Became the Overlord of the Trump Administration

How did a candidate who repeatedly demonized Goldman Sachs as the poster child for a corrupt establishment that owned Washington end up with Goldman Sachs’ progeny filling every post that even tangentially has the odor of money or global finance? One answer is family ties; another may be something darker.

Trump’s non-stop nominations and appointments of Goldman Sachs alumni have left his supporters stunned. Trump nominated Steven Mnuchin, a 17-year veteran of Goldman Sachs to be his Treasury Secretary. Stephen Bannon, another former Goldman Sachs banker, was named by Trump as his Chief Strategist in the White House. The sitting President of Goldman Sachs, Gary Cohn, has been named by Trump as Director of the National Economic Council, which, according to its website, coordinates “policy-making for domestic and international economic issues.”  Last week, in a move that stunned even Wall Street, Trump nominated a Goldman Sachs outside lawyer, Jay Clayton of Sullivan & Cromwell, to serve as Wall Street’s top cop as Chairman of the Securities and Exchange Commission. Adding to the slap in the face to Trump’s working class supporters, Clayton’s wife currently works as a Vice President at Goldman Sachs.
But the Goldman Sachs’ ties don’t stop there. 


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