"Over the past forty years, the promotion of racial divisions has become a central component of pseudo-left politics, a reactionary attack on socialism rooted in the interests of privileged sections of the upper middle class. The racialist historical narrative serves contemporary political purposes—to divide the workers against each other, to block and divert the development of class consciousness. In an earlier essay published by Hannah-Jones, in July 2016, the Times columnist, in responding to incidents of police violence, wrote of “the vast gulf between the collective lived experiences of white Americans and that of black Americans,” which “can make true empathy seem impossible.”
Where does one see this “vast gulf” among the striking GM workers? Whether black or white, they have the same experience of declining wages, attacks on jobs, the destruction of health care. And this is true not just of auto workers in the United States, but of workers in all sectors and throughout the world...
The past year has seen strikes of teachers from West Virginia and Kentucky to Oklahoma and Arizona—states condemned as bastions of racism by the Democratic Party and the pseudo-left". WSWS, The strike at General Motors: Class struggle vs. the reactionary politics of racial division
"Russia has been accused, and, strange as it may seem, it is still being accused, despite the Mueller report [on the investigation into allegations of Russian meddling in the 2016 presidential campaign], of mythical interference in the US election. What happened in reality? Mr Trump looked into his opponents’ attitude to him and saw changes in American society, and he took advantage of this.
You and I are talking ahead of the G20 meeting. It is an economic forum, and it will undoubtedly have discussions on globalisation, global trade and international finance.
The middle class in the US has not benefited from globalisation . . . The Trump team sensed this very keenly and clearly and they used this in the election campaign. Has anyone ever given a thought to who actually benefited and what benefits were gained from globalisation, the development of which we have been observing and participating in over the past 25 years, since the 1990s?
China has made use of globalisation, in particular, to pull millions of Chinese out of poverty.
What happened in the US, and how did it happen? In the US, the leading US companies — the companies, their managers, shareholders and partners — made use of these benefits. The middle class hardly benefited from globalisation. The take-home pay in the US (we are likely to talk later about real incomes in Russia, which need special attention from the government). The middle class in the US has not benefited from globalisation; it was left out when this pie was divided up.
The Trump team sensed this very keenly and clearly, and they used this in the election campaign. It is where you should look for reasons behind Trump’s victory, rather than in any alleged foreign interference. This is what we should be talking about here, including when it comes to the global economy." (my bolds)
Securing oil and gas contracts across all of Iraq will allow Russia to establish an unassailable political sway across the entire Shia crescent of power in the Middle East, stretching from Syria through Lebanon (by dint of Iran), Jordan, Iraq (also helped by Iran), Iran itself, and Yemen (via Iran). From this base, it can effectively challenge the U.S.’s vital oil, gas, and political ally in the region – Saudi Arabia. China, in the meantime, is operating to its own agenda in South Pars Phase 11 and its West Karoun holdings.
Iraq, like Turkey, is still – nominally at least – not committing to either the Russia or the U.S., preferring to play each off against the other for whatever they can get, and the same applies in microcosm to the field of Mansuriya..
Gazprom Neft often acts as the point man for Gazprom in initial conversations, as it is a slick, well-run, Western-style company, whereas Gazprom is a bit more old-style Soviet,” said the Iraq source. “It [Gazprom Neft] also made it clear that it would be interested in other sites, such as Siba,” he added. “It should be remembered that Gazprom was in the prime position to develop the other key gas fields of North Pars, Kish, and Farzad A and B before the U.S. withdrew from the JCPOA [Joint Comprehensive Plan of Action] last year,” he concluded
A sliver of news from Iraq passed almost unnoticed by global media last week: Stroytransgaz has signed a preliminary contract with the oil ministry in Baghdad for oil and gas exploration in Anbar province. The fact that it was barely reported is entirely unsurprising as Stroytransgaz is an almost unknown Russian oil and gas company - except by the U.S. whose Office of Foreign Assets Control extensively sanctioned it in 2014 - and Anbar is almost a wasteland as far as Iraq’s oil and gas sector development goes. However, this tiny announcement is a manifestation of Russia’s key strategy – alongside China – to hijack much of the Middle East whilst U.S. attention is still diverted on Iran.
“Along the spine running from east to west are the historical ultra-nationalist and ultra-anti-West cities of Falluja, Ramadi, Hit and Haditha, and then we’re into Syria, and a short hop to the key strategic ports of Syria – Banias and Tartus that also happen to be extremely important to the Russians,” he added. “So, what you’re looking at there is the absolute clear sign that the Iran-Iraq-Syria oil and gas pipelines system is now going ahead, which it is, it was agreed last July just after the U.S. pulled out of the JCPOA [Joint Comprehensive Plan of Action],” he underlined.
The motivation for Iran is that Iran had it reconfirmed last May that it cannot trust the U.S., given the apparent capriciousness of its political figures. “Iran didn’t truly believe that any new [U.S.] president would revoke all of the work done by a previous one on the JCPOA, no matter what the personal animosity involved, until it happened but when it did it decided it wasn’t going to take any more chances, hence the new route, which will by-pass the Strait of Hormuz, and can run straight into southern Europe, or anywhere else for that matter,” the source told OilPrice.com.
A similar motivation pertains to Iraq allowing the pipeline to go through it. Not only is this distrust a product of the two invasions by the U.S. in 1991 and 2003, and subsequent occupation, which Iraq sees simply as opportunism designed to gain control of its oil and gas resources, but it is also a reflection of the uncertainty over how the U.S. intends to handle the Kurds in northern Iraq. “It’s well known that the U.S. promised the government of [the semi-autonomous region of] Kurdistan complete independence in exchange for its Peshmerga army acting as the West’s boots on the ground in the fight against Islamic State and the government in Baghdad is terrified of that, particularly given that over 90 per cent of those Kurds voted for Kurdistan independence from Iraq in September 2017,” said the Iran source. “Iraq knows a deal is coming between Iran and the U.S., and it’s okay with that as it needs ExxonMobil to build the critical CSSP [Common Seawater Supply Project], but [Moqtada] al-Sadr, who’s actually in control [in Iraq] won’t allow the U.S. much more past that,” he added. Indeed, al-Sadr gained effective power in Iraq through his message that Iraq should not be beholden to any single country in the future, as it has in the past....
Not only has it effectively made Iran a joint client state with China, carving up its oil and gas resources, but, given Iran’s enduring hold over Iraq, it has got a two-for-one deal on an epic scale. With Rosneft having effectively taken control of Kurdistan in the north through the deal done in November 2017, it has put itself in perfect position to similarly establish control over the south by building out its oil and gas infrastructure and transport structure (exactly how Rosneft started in Kurdistan): cue Stroytransgaz.
By all accounts, Stroytransgaz is not very good at all in oil and gas development terms but it is very good indeed in terms of building oil and gas infrastructure including, notably, pipelines. In its own company description...
Crucially in this context, it was Stroytransgaz that won US$$2.7 billion of contracts in 2006/7 to build two major pipelines and a gas processing plant in Syria. One of these was to have been the Iran-Iraq-Syria pipeline, moving Iranian, and later Iraqi, gas (and later oil) from South Pars (and nearby oil fields) to Syria. This was a cornerstone to the wider build-out of several planned refineries that had received the go-ahead prior to the breakout of the civil war in Syria. It included the 100,000 bpd facility at Abu Khashab backed by the China National Petroleum Corporation, and the South Central Gas Area - built by Stroytransgaz – that had started up by the end of 2009 and had boosted Syria’s natural gas production by about 40% by 2011. At that time, with proved reserves of 8.5 trillion cubic feet of natural gas and 2.5 billion barrels of oil, Syria was producing just over 316 billion cubic feet per day of dry natural gas and nearly 600,000 bpd of oil.
The precision with which all of these plans inexorably morph into a sustainable positive feedback loop is from an intellectual standpoint a thing of rare beauty. Specifically, income from all of these ‘occupied’ countries’ oil and gas resources – because Russia’s intention is to strike deals with Iraq and Syria that are at least as good as that which it struck with Iran – will be used to finance the build-out of its own political and military belt of influence running through them and into the Mediterranean and Europe. The belt works in the other direction as well feeding into the former Soviet Union state of Turkmenistan, plus Afghanistan and Pakistan. In preparation for this move into southern Iraq, Russia already had its other pieces in position: Rosneft in Kurdistan in the north, the deal with Iran in the East, and an absolute power in Syria.
In January 2017, Russia signed a deal with Syria that allowed Russia to expand and use the naval facility at Tartus for 49 years on a free-of-charge basis and enjoy sovereign jurisdiction over the base. The deal allows Russia to keep both warships and nuclear vessels in Tartus, plus essentially anything else it wants, as the deal stipulates that at the base all personnel and material is under Russian jurisdiction not Syrian.
By happy ‘coincidence’ both Banias and Tartus are also extremely close to the massive Russian Khmeimim Air Base and the S-400 Triumf missile system. Although the base only came in to operation in 2015 supposedly to help in the fight against Islamic State, Russia appears to have changed its tactical plans for it, having also signed a 49 year lease on it, with the option for another 25 year extension. A short flight away is Russia’s Latakia intelligence-gathering listening station.
This power, in turn, is neatly concentrated in the two major ports to which Iranian oil and gas (and Iraq’s and Syria’s oil and gas) will end up: Banias and Tartus.
For the first time in over a decade, the Federal Reserve Bank of New York took steps Tuesday to relieve pressures that were pushing short-term interest rates higher than the central bank wanted Monday.
Strains developed Monday in short-term financing markets that suggested the central bank could lose control of its federal-funds rate, a benchmark that influences borrowing costs throughout the financial system.
Bids in the fed-funds market on Tuesday morning reached as high as 5%, according to traders, well beyond the central bank's target range, which is 2% to 2.25%.
The Fed moved Tuesday morning to put $53 billion of funds back into the banking system through transactions known as repurchase agreements. After the moves, the New York Fed said the effective fed-funds rate, or the midpoint of transactions in that overnight market, stood at 2.25%, up from 2.14% on Friday.
The pressures that had sent the fed-funds rate higher were related to shortages of funds for banks, stemming from rising government deficits and the central bank's decision to shrink its securities holdings in recent years. Its reduced holdings have soaked up funds in the financial system, crimping liquidity.
The Fed is likely to continue to provide funding to ensure the smooth operation of the repo market for some time to come, although it isn't clear how long that might be, said Gennadiy Goldberg, a fixed-income strategist at TD Securities.
"I think they're going to be playing this one by ear," he said. "This is in every way, shape and form an emergency measure."
What happens in this narrow sector of the financial market can be important because funding spikes create the risk of sudden and disorderly efforts by market participants to reduce debts given the lack of cheap and predictable short-term financing.
"This sort of thing can lead to substantial pullbacks, and that can create very unpredictable dynamics in markets," said Mr. Crandall.
Scott Skyrm, a repo trader at Curvature Securities LLC, said he had seen cash trade in the fed-funds rate as high as 9.25% Tuesday.
"It's just crazy that rates could go so high so easily," he said.
On his trading screens, Mr. Skyrm said he could see traders with collateral securities that they were trying to exchange for cash. The rates they were offering would start to rise until an investor with cash available to trade would start to accept their bids, gradually driving repo rates down until investors had exhausted their cash, he said. Then rates would resume their climb.
While there are technical factors to explain why cash would be in high demand this week, including corporate tax payments, the settlement of recently issued Treasury securities and the approach of quarter-end, they didn't seem to explain the "crazy market volatility," Mr. Skyrm said.
"It seems like there's something underlying out there that we don't know about," Mr. Skyrm said.
5--Forever Secret --US Attorney General Barr invokes “state secrets” to cover up Saudi involvement in 9/11
Last week, it was revealed that the Trump administration has taken
extraordinary steps to continue the 18-year cover-up of Saudi government
involvement in the September 11, 2001 terror attacks.
17 September 2019
On Thursday, September 12, one day after the 18th anniversary of the attacks on New York and Washington that killed nearly 3,000 people, a federal court filing revealed that Attorney General William Barr has asserted the "state secrets" privilege to block the release of an FBI report detailing extensive relations between some of the 19 hijackers and Saudi government officials. Victims of the attacks and their families are pushing for access to the 2007 report as part of a lawsuit against the Saudi government launched in 2003 charging the despotic monarchy with coordinating the mass killings.
Barr declared there was a “reasonable danger” that releasing the report would “risk significant harm to national security.”
Government investigations have established that the two people who are named in the FBI summary, Fahad al-Thumairy, a former Saudi consulate official, and Omar al-Bayoumi, suspected by the FBI of being a Saudi intelligence officer, were working in coordination with the Saudi regime. The third person, whose name is redacted, is described in the FBI summary as having assigned the other two to assist the hijackers...
An FBI official said the agency was shielding the name to protect classified information related to “ongoing investigations” and to protect its “sources and methods.”...
Its intelligence agencies have long worked in the closest collaboration with the CIA and the FBI. The exposure of Saudi complicity in 9/11 immediately implicates sections of the US intelligence establishment in facilitating, it not actively aiding, the terror attacks, and sheds light on the multiple unanswered questions about how 19 men, 15 of whom were Saudi nationals, could carry out such a complex operation...
Former Democratic Senator Robert Graham, cochair of the Joint Congressional Inquiry into the 9/11 attacks, said that there was “a pervasive pattern of covering up the role of Saudi Arabia in 9/11 by all of the agencies of the federal government, which have access to information that might illuminate Saudi Arabia’s role in 9/11.
Everything that is taking place contradicts the reactionary narrative that has proclaimed the death of the working class and the end of the class struggle, supposedly replaced by conflicts centered on race, gender and sexual orientation. Not only does the working class exist, but the class struggle is, as Marx insisted, the driving force of world history....
Just one month ago, the New York Times published a special 100-page edition of its Sunday magazine on “The 1619 project,” which presented a race-obsessed falsification of American history. The conflict between “black people” and “white people” is at the center of American society, wrote the Times columnist Nikole Hannah-Jones, and “anti-black racism runs in the very DNA of this country.” This conception is being actively promoted through an aggressive campaign in the media and on campuses throughout the country.
As the WSWS wrote in its statement analyzing the 1619 project, entirely absent from the Times narrative is any reference to the history and development of the American working class. “There is no class struggle,” the WSWS wrote, “and, therefore, there is no real history of the African-American population and the events which shaped a population of freed slaves into a critical section of the working class.”
Entirely left out in the Times’ account is the way in which racial divisions were consciously and deliberately promoted by the ruling class to undermine class consciousness in the decades following the Civil War. Among the most prominent examples of this pernicious form of ideological warfare was the racism and anti-Semitism promoted by Ford and the other auto companies in the 1920s and 30s, which was overcome in the formation of the industrial unions, led at the time by socialist-minded workers..
The fight to unify the working class in the United States across all racial, ethnic and gender lines is a component part of the struggle to unite workers throughout the world on the basis of their common class interests. The racialist and identity politics that is the specialty of the Democratic Party is the counterpart to the anti-immigrant chauvinism promoted by the Trump administration—and facilitated by the Democrats—which is aimed at pitting workers in the United States against their class brothers and sisters in Latin America and Asia.
The strike at GM is a stage in a much broader tendency. The growth of the class struggle is an objective process that profoundly undermines all efforts to divide the working class along the lines of nation, race, ethnicity, language or gender. As the class struggle develops and takes on an openly anti-capitalist and socialist character, the nature and role of racialist identity politics, and the organizations that promote it, will be ever more clearly revealed.
A US military confrontation with Iran is in direct conflict with the interests of China, which is dependent upon the Persian Gulf region for a large portion of its immense energy requirements. The threatened cutoff of oil exports from Saudi Arabia posed the greatest threat to China, which counts the kingdom as its second largest source of oil after Russia. Moreover, Iran, also a key source of energy for China, is a crucial link in Beijing’s One Belt, One Road initiative, with China offering some $400 billion in long term investments in Iran’s energy, transport and manufacturing sectors.
A US stranglehold over the Persian Gulf would confront China with an intolerable threat of being placed on energy rations by its principal global rival, or cut off from supplies altogether.
US aggression against Iran likewise cuts across the interests of the European imperialist powers. Anxious to secure their own access to Iran’s lucrative markets and energy resources, they are conducting what amounts to a rebellion on their knees against Washington’s drive to war...
In Israel, as in the United States and every major capitalist country, there is a powerful incentive for the ruling class to direct the tensions created by insoluble economic and political crises, social inequality and growing class conflict outward in an eruption of military violence.
liquidity was missing. It had dried up to the point that the major Wall Street banks could not, or would not, handle the demand for loans called overnight repurchase agreements (repos) that were coming their way. (Repos are a short-term form of borrowing where corporations, banks, brokerage firms and hedge funds secure loans by providing safe forms of collateral such as Treasury notes.)The oversized demand for the repos and the lack of available funds drove the overnight repo rate to an unprecedented high of 10 percent at one point. Typically, the overnight repo rate trades in line with the Federal Funds rate, which is currently targeted at 2 to 2.25 percent by the Fed.
The Federal Reserve Bank of New York (always there to rescue Wall Street from its hubris; see “Related Articles” below) had to jump in and infuse $53 billion into the repo market. It has promised to make another $75 billion available this morning.
Here’s what should concern every engaged American: As of June 30 of this year, the four largest banks on Wall Street (which are allowed to own Federally insured commercial banks as well as stock, bond and derivative gambling casinos known as investment banks) held more than $5.45 trillion in deposits. The breakdown is as follows: JPMorgan Chase holds $1.6 trillion; Bank of America has $1.44 trillion; Wells Fargo has $1.35 trillion; and Citibank is home to just over $1 trillion.
A number of excuses have been offered by the business press to explain why the New York Fed had to ride to the rescue yesterday but the very simple question is this: how can four banks with $5.45 trillion in deposits not be able to cough up $53 billion in overnight loans.
The excuses go like this: corporations had to pay their corporate taxes and drew down large amounts from the banks. But corporations paying their taxes is not some new problem that just fell out of the sky. These are very old banks that should certainly know how to anticipate a drawdown for corporate taxes. The next excuse is that liquidity at the banks was drained as a result of paying for Treasury securities purchased in last week’s Treasury auction. The major Wall Street banks are all “primary dealers,” which are contractually bound to make purchases in the regular Treasury auctions. But again, this has been going on for decades and sophisticated banks should be able to figure out how to make bids in the Treasury auctions while still leaving themselves with adequate liquidity for their customers.
One of the more reasonable theories is that the backup in interest rates that caused bond prices to tank last week drove an investor stampede out of bonds, forcing the Wall Street banks to buy back large amounts of unwanted bonds from customers, thus further draining their liquidity.
Then there is the problem that these same four banks, together with Goldman Sachs and Morgan Stanley, own 90 percent of the $272.5 trillion in derivatives at U.S. bank holding companies.
Given the fact that the last time the Fed was intervening in this fashion in the overnight lending market there was a major crisis on Wall Street with century-old iconic names vying for which one would go belly up first, one would have expected to see a serious percentage decline in the share prices of these banks during stock market trading hours yesterday. That didn’t happen. The worst of the bunch was Morgan Stanley, which closed down 1.21 percent.
Unfortunately for taxpayers, who will inevitably be on the hook again if things so south on Wall Street, everything is always fine on Wall Street – until it isn’t. And when Wall Street really begins to unravel, it does it at lightning speed.
Every afternoon banks settle their accounts with each other and then figure out how much cash they need for routine operations the next day. The banks that need cash borrow it in the repo market from other banks at rates that are usually just a little above the Fed’s policy rate. The whole thing is very dull and predictable.
Over the past couple of years, as the Fed has been raising interest rates, repo rates have gone up too. Right now they’re hovering a little over 2 percent. But something odd happened this week:
The surge in repo rates began Monday afternoon, well after the vast majority of trading in the market for overnight loans typically takes place, investors, traders and analysts said. The origin of the demand for cash was unclear, as traders seeking cash could have been acting on their own behalf or as intermediaries for other parties, one trader said.
Unexpected bids seeking cash entered the market at a time traders said was uncomfortably close to the 3 p.m. deadline for settling trades.
Scott Skyrm, a repo trader at Curvature Securities LLC, said he had seen cash trade in the repo rate as high as 9.25% Tuesday. “It’s just crazy that rates could go so high so easily,” he said.
The pressures relate to shortages of funds banks face resulting from an increase in federal borrowing and the central bank’s decision to shrink the size of its securities holdings in recent years….Reserves over the last five years have been declining….Then on Monday, corporate tax payments were due to the Treasury, and Treasury debt auctions settled, leading to large transfers of cash from the banking system. Meanwhile, postcrisis financial regulations have made short-term money markets less nimble.
If you’ve spent the last ten years fussing over all of the economic reports related to heavy industry and commodity costs and other dirty data points, you probably feel like you’ve been running in circles, caught up in a wild goose chase of oscillations and obfuscations that’s brought you no closer to understanding the twists and turns of the market than had you done absolutely nothing at all. Think of all the almost-recession readings in things like ISM and C&I spending and the like that we’ve whistled right past in the post-crisis period.
Had you, on the other hand, simply focused on the health and wealth of the consumer, you’d have gotten things mostly right.
The US consumer is the preeminent economic engine of the world right now, and following things like employment, wages, 401(k) balances, retail spending, small business confidence and home-buying / remodeling trends has been a great shortcut for investors and spectators alike.
Answer lies in short-term issues and structural market changes
Monetary policy was made up on-the-go during the crisis, and we are dealing with a changed paradigm where the Fed has to work to understand and come up with new solutions to deal with it.”
Monetary policy was made up on-the-go during the crisis, and we are dealing with a changed paradigm where the Fed has to work to understand and come up with new solutions to deal with it.”
Crunch in short-term borrowing market sends key policy rate above central bank’s target