Jul 102017
 
 July 10, 2017  Posted by at 9:15 am Finance Tagged with: , , , , , , , ,  4 Responses »
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Fred Lyon Anne Lyon getting into her Riley on Nob Hill, San Francisco 1950s

 

Propaganda-ville (Robert Parry)
Trump Cannot Improve Relations With Russia (PCR)
Comey’s Leaked Trump Memos Contained Classified Information (ZH)
Tales from the FOMC Underground (PT)
Stock Market Tsunami Siren Goes Off (WS)
America Is Struggling With Economic Rot (BBG)
May Appeals To Corbyn For Help In Coming Up With New Ideas (Ind.)
US-Russian Ceasefire Deal Holding In Southwest Syria (R.)
The Lynx Could Return To UK Within Months After 1,300-Year Absence (Ind.)

 

 

When slow news becomes no news. I must have seen 100 different versions of the non-story of one of Trump’s not-so-bright sons meeting with a Russian lady, a story that’s supposed to prove what nothing else has yet proven, not even Bob Mueller, Russian meddling. Yeah, Russia spies, and it hacks, and so does everyone else. But that’s clearly not news, and you can’t make it so be endlessly repeating it. That Comey leaked classified information is apparently much less newsworthy. Only, it is not. It just serves the machine to a lesser degree. Be careful, America, or you’ll have no news sources left soon. Not a great prospect.

Propaganda-ville (Robert Parry)

As much as the U.S. mainstream media wants people to believe that it is the Guardian of Truth, it is actually lost in a wilderness of propaganda and falsehoods, a dangerous land of delusion that is putting the future of humankind at risk as tension escalate with nuclear-armed Russia. This media problem has grown over recent decades as lucrative careerism has replaced responsible professionalism. Pack journalism has always been a threat to quality reporting but now it has evolved into a self-sustaining media lifestyle in which the old motto, “there’s safety in numbers,” is borne out by the fact that being horrendously wrong, such as on Iraq’s WMD, leads to almost no accountability because so many important colleagues were wrong as well.

Similarly, there has been no accountability after many mainstream journalists and commentators falsely stated as flat-fact that “all 17 U.S. intelligence agencies” concurred that Russia did “meddle” in last November’s U.S. election. For months, this claim has been the go-to put-down whenever anyone questions the groupthink of Russian venality perverting American democracy. Even the esteemed “Politifact” deemed the assertion “true.” But it was never true. It was at best a needled distortion of a claim by President Obama’s Director of National Intelligence James Clapper when he issued a statement last Oct. 7 alleging Russian meddling. Because Clapper was the chief of the U.S. Intelligence Community, his opinion morphed into a claim that it represented the consensus of all 17 intelligence agencies, a dishonest twist that Democratic presidential candidate Hillary Clinton began touting.

However, for people who understand how the U.S. Intelligence Community works, the claim of a 17-agencies consensus has a specific meaning, some form of a National Intelligence Estimate (or NIE) that seeks out judgments and dissents from the various agencies. But there was no NIE regarding alleged Russian meddling and there apparently wasn’t even a formal assessment from a subset of the agencies at the time of Clapper’s statement. President Obama did not order a publishable assessment until December – after the election – and it was not completed until Jan. 6, when a report from Clapper’s office presented the opinions of analysts from the Central Intelligence Agency, Federal Bureau of Investigation and the National Security Agency – three agencies (or four if you count the DNI’s office), not 17.

The report also contained no hard evidence of a Russian “hack” and amounted to a one-sided circumstantial case at best. However, by then, the U.S. mainstream media had embraced the “all-17-intelligence-agencies” refrain and anyone who disagreed, including President Trump, was treated as delusional. The argument went: “How can anyone question what all 17 intelligence agencies have confirmed as true?” It wasn’t until May 8 when then-former DNI Clapper belatedly set the record straight in sworn congressional testimony in which he explained that there were only three “contributing agencies” from which analysts were “hand-picked.”

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Paul Craig Roberts lays it on. A bit much if you ask me, but then so is everything else.

Trump Cannot Improve Relations With Russia (PCR)

On the same day that President Donald Trump said “it is time to move forward in working constructively with Russia,” and the day after he said “I had a tremendous meeting yesterday with President Putin,” the ignorant, stupid, Nikki Haley, who Trump appointed as US UN Ambassador, publicly contracted her president, forcefully stating: “we can’t trust Russia and we won’t ever trust Russia.” The ignorant stupid Haley is still in office, a perfect demonstration of Trump’s powerlessness. The ignorant stupid Haley has gone far beyond Obama’s crazed UN Ambassador, neocon Smantha Power in doing everything in her power to ruin the prospect of normal relations between the two major nuclear powers. Why does Nikki Haley work in favor of a confrontation between nuclear powers that would destroy all life on earth?

What is wrong with Nikki Haley? Is she demented? Has she lost her mind, assuming she ever had one? How can President Trump normalize relations with Russia when every one of his appointees wants to worsen the relations to the point of nuclear war? How is President Trump going to improve relations with Russia when President Trump stands powerless in face of his dressing down by his UN Ambassador? Clearly, Trump is powerless, a mere cipher. Joining Nikki Haley was Trump’s Secretary of State, Rex Tillerson. Tillerson, allegedly a friend of Russia, is also working overtime to worsen relations between the two nuclear powers by publicly contradicting the President of the United States, thereby making it clear that Trump is barely even a cipher.

Tillerson, a disgrace, said that Putin’s refusal to admit that Putin elected Trump by interferring in the US election “stands as an obstacle to our ability to improve the relationship between the US and Russia and it needs to be addressed in terms of how we assure the American people that interference into our eletions will not occur by Russia or anyone else.” Trump’s incompetence is illustrated by his appointments. There is no one in “his” government that supports him. Everyone of them works to undermine him. And he sits there and Twitters. So, what is President Putin’s belief that an understanding can now be worked out with Washington worth? Not a plugged nickel. Trump has zero authority over “his” government. He can be contradicted at will by his own appointees. The President of the United States is a joke.

You can find him on Twitter, but nowhere else, not in the Oval Office making foreign or military policy. The president Twitters and thinks that that is policy. The Trump administration was destroyed when the weak Donald Trump allowed the neoconservatives to remove his National Security Advisor, General Flynn. Trump has never recovered. “His” administration is staffed with violent Russophobes. Wars can be the only outcome. We know two things about the alleged Russian inteferrance in the Trump/Hillary presidential election. One is that John Brennan, Obama’s CIA director, and Comey, Obama’s FBI director, implied repeatedly that Trump was elected by Russian interference in the election, but neither the CIA nor the FBI have provided any evidence whatsoever that any such interference occurred. Indeed, months into the case, the special prosecutor, the former FBI director, can produce no evidence.

The whole thing is a sham, but it is ongoing. There will be no end to it as it is designed to undermind President Trump with the people who elected him. The message is: “Trump is not for America. Trump is for Russia.”

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Is Muelller going to investigate Comey soon?

Comey’s Leaked Trump Memos Contained Classified Information (ZH)

Comey’s troubles started when he testified under oath last month that he considered the memos he prepared to be personal documents and that he shared at least one of them with a Columbia University lawyer friend. As Comey later disclosed, he asked that lawyer to leak information from one memo to the news media in hopes of increasing pressure to get a special prosecutor named in the Russia case after Comey was fired as FBI director. The Hill recounts that particular exchange with Senator Roy Blunt: “So you didn’t consider your memo or your sense of that conversation to be a government document?,” Sen. Roy Blunt (R-Mo.) asked Comey on June 8. “You considered it to be, somehow, your own personal document that you could share to the media as you wanted through a friend?”

“Correct,” Comey answered. “I understood this to be my recollection recorded of my conversation with the president. As a private citizen, I thought it important to get it out.” Comey insisted in his testimony he believed his personal memos were unclassified, though he hinted one or two documents he created might have been contained classified information. “I immediately prepared an unclassified memo of the conversation about Flynn and discussed the matter with FBI senior leadership,” he testified about the one memo he later leaked about former national security adviser Lt. Gen. Michael Flynn. Additionally, he added, “My view was that the content of those unclassified, memorialization of those conversations was my recollection recorded.”

That’s when the problems escalated, because according to The Hill – which for the first time disclosed that the total number of memos linked to Comey’s nine conversations with Trump – when the seven memos Comey wrote regarding his nine conversations with Trump about Russia earlier this year were shown to Congress in recent days, the FBI claimed all were, in fact, deemed to be government documents. Oops. As The Hill reveals, four, or more than half, of the seven memos had markings making clear they contained information classified at the “secret” or “confidential” level, according to officials directly familiar with the matter. This is a major problem for Comey because FBI policy forbids any agent from releasing classified information or any information from ongoing investigations or sensitive operations without prior written permission, and mandates that all records created during official duties are considered to be government property.

“Unauthorized disclosure, misuse, or negligent handling of information contained in the files, electronic or paper, of the FBI or which I may acquire as an employee of the FBI could impair national security, place human life in jeopardy, result in the denial of due process, prevent the FBI from effectively discharging its responsibilities, or violate federal law,” states the agreement all FBI agents sign. FBI policy further adds that “all information acquired by me in connection with my official duties with the FBI and all official material to which I have access remain the property of the United States of America” and that an agent “will not reveal, by any means, any information or material from or related to FBI files or any other information acquired by virtue of my official employment to any unauthorized recipient without prior official written authorization by the FBI.”

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“..Not since Herbert C. Hoover has there been a more perfect scapegoat for an economic depression of the Fed’s making.”

Tales from the FOMC Underground (PT)

“What should we do?” began Yellen. “A decade of easy monetary policies has turned financial markets into a Las Vegas casino while the economy’s lazed around like my smelly house cats. What the heck was Bernanke thinking?” “Hell, Janet,” remarked New York Fed President William Dudley. “He wasn’t thinking. He soiled his pantaloons and then he soiled them again.” “So now we must clean up his stinky pile while he promotes his revisionist courage to act shtick. The reality is we must orchestrate a take-down of financial markets, and we must do it by year’s end.” “Well, gawd damn Bill!” barked St. Louis Fed President James Bullard. “With the exception of Neel, the $700 billion dollar bailout boy, don’t you think we all know that?”

“Hey, now!” interjected Minneapolis Fed President Neel Kashkari. “Don’t blame me. I was just carrying out Hank Paulson’s will, right Bill? Saving our boys’ bacon back at Goldman so they could continue doing god’s work.” “Besides Fish, it was you all who lined up behind Bernanke and tickled the poodle with his crazy QE experiment while I was busy chopping wood at Donner Pass and getting my fanny spanked in the California Governor’s race by retread Jerry Moonbeam Brown, of all people.” “Fair enough,” continued Bullard. “The point is, taking down the stock market will cause an extreme upset to the economy’s applecart. The mobs will come after us with torches and pitchforks.” “You see, the real trick is to do the dirty deed then disappear behind a fog of confusion. That’s what Greenspan would do. How can we pull that off?”

After a moment of silent contemplation, and a licked finger held up to the cool political winds drafting across the country… “Eureka! We can pin it on President Donald J. Trump!” exclaimed Chicago Fed President Charles Evans. “Could our good fortune be any better? Not since Herbert C. Hoover has there been a more perfect scapegoat for an economic depression of the Fed’s making.” “Hear, hear!” approved Yellen. “Damn the economy,” they bellowed in harmony… minus Kashkari. “This one’s on Trump!” “Bill, one last thing,” closed Yellen. “After the meeting, remember to give the public that shake n’ bake you dreamed up about crashing unemployment. We have to give off an air of being data dependent.” “That misdirection should twist them up until NFL football starts. Shortly after that, our work will be done…” “…and by the New Year, Congress and Joe public will be begging us to rescue the economy from the Fed’s… I mean… Trump’s disastrous economic program.”

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Earnings vs S&P. Something will give.

Stock Market Tsunami Siren Goes Off (WS)

Everyone who’s watching the stock market has their own reasons for their endless optimism, their doom-and-gloom visions, their bouts of anxiety that come with trying to sit on the fence until the very last moment, or their blasé attitude that nothing can go wrong because the Fed has their back. But there are some factors that are like a tsunami siren that should send inhabitants scrambling to higher ground. Since July 2012 – so over the past five years – the trailing 12-month earnings per share of all the companies in the S&P 500 index rose just 12% in total. Or just over 2% per year on average. Or barely at the rate of inflation – nothing more. These are not earnings under the Generally Accepted Accounting Principles (GAAP) but “adjusted earnings” as reported by companies to make their earnings look better.

Not all companies report “adjusted earnings.” Some just stick to GAAP earnings and live with the consequences. But many others also report “adjusted earnings,” and that’s what Wall Street propagates. “Adjusted earnings” are earnings with the bad stuff adjusted out of them, at the will of management. They generally display earnings in the most favorable light – hence significantly higher earnings than under GAAP. This is the most optimistic earnings number. It’s the number that data provider FactSet uses for its analyses, and these adjusted earnings seen in the most favorable light grew only a little over 2% per year on average for the S&P 500 companies over the past five years, or 12% in total. Yet, over the same period, the S&P 500 Index itself soared 80%.

And these adjusted earnings are now back where they’d been on March 2014, with no growth whatsoever. Total stagnation, even for adjusted earnings. And yet, over the same three-plus years, the S&P 500 index has soared 33%. This chart shows those adjusted earnings per share for all S&P 500 companies (black line) and the S&P 500 index (blue line). I marked July 2012 and March 2014:

Given that there has been zero earnings growth over the past three years, even under the most optimistic “adjusted earnings” scenario, and only about 2% per year on average over the past five years, the S&P 500 companies are not high-growth companies. On average, they’re stagnating companies with stagnating earnings. And the price-earnings ratio for stagnating companies should be low. In 2012 it was around 15.5. Now, as of July 7, it is nearly 26. In other words, earnings didn’t expand. The only thing that expanded was the multiple of those earnings to the share prices – the P/E ratio. Such periods of multiple expansion are common. They’re part of the stock market’s boom and bust cycle. And they’re invariably followed by periods of multiple contraction. How long can this period of multiple expansion go on? That’s what everyone wants to know. Projections include “forever.” But “forever” doesn’t exist in the stock market. The next segment of the cycle is a multiple contraction.

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The incessant call far a return to normal. There’s no such thing. The economy never recovered.

America Is Struggling With Economic Rot (BBG)

The Great Recession, and the financial crisis that preceded it, were such enormous and terrible events that they occupied most of our economic thinking for a decade. But now that the smoke has cleared and the economy has returned to a semblance of normality, we’re starting to think more about long-term trends. And evidence is mounting that the Great Recession may have drawn attention away from a slow rot that has been eating the U.S. economy since the turn of the century. Some of the top macroeconomists in the business have a new paper that reaches this conclusion. In “The Disappointing Recovery of Output after 2009,” John G. Fernald, Robert E. Hall, James H. Stock and Mark W. Watson break down the declines in growth and employment into a structural, long-term component and a short-term part related to the crash.

That’s an inherently hard thing to do, since there’s no universally accepted theory of how recessions work. But Fernald et al. use two accounting methods, and find basically the same thing – although the recession hurt the economy a lot, it happened to coincide with two trends that were slowly eroding the U.S.’s fundamentals. Those two trends are slowing productivity and reduced labor-force participation. Slow productivity growth is hardly news – Bloomberg View recently ran a whole series of articles about the phenomenon. This unhappy trend appears to have begun three years before the financial crisis:

As for labor-force participation, this has been falling since the turn of the century, though the last two years have seen a small uptick:

Both of these trends might have been exacerbated by the Great Recession. That economic disaster caused businesses to stop investing, which may have deprived them of the technology needed to increase productivity. Workers thrown out of employment by the recession might have seen their skills, connections and work ethic degrade, preventing them from going back to work even after the economy recovered.

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His advise: call a snap election.

May Appeals To Corbyn For Help In Coming Up With New Ideas (Ind.)

Theresa May is to insist she has the right vision for Britain and an “unshakeable sense of purpose” to build a fairer nation as she launches a fightback after her General Election gamble backfired. The Prime Minister will acknowledge that the loss of her Commons majority means she will have to adopt a different approach to government, signalling she is prepared to “debate and discuss” ideas with her opponents. But amid rumours of unrest within Tory ranks about her position, Ms May will insist her commitment is “undimmed” almost 12 months after entering Number 10 as Prime Minister. Her comments in a speech on Tuesday will be viewed as an attempt to relaunch her premiership after the humiliation of the election result and the need to strike a deal with the Democratic Unionist Party to prop up her administration in the Commons.

Ms May will return to her core message from when she succeeded David Cameron: a “commitment to greater fairness” and tackling “injustice and vested interests” in recognition that the EU referendum result was a “profound call for change across our country”. She will say: “Though the result of last month’s General Election was not what I wanted, those defining beliefs remain, my commitment to change in Britain is undimmed; my belief in the potential of the British people and what we can achieve together as a nation remains steadfast; and the determination I have to get to grips with the challenges posed by a changing world never more sure. “I am convinced that the path that I set out in that first speech outside Number 10 and upon which we have set ourselves as a Government remains the right one.

“It will lead to the stronger, fairer Britain that we need.” The fragile nature of Ms May’s position in the Commons will not stop her being “bold”, she will insist. “I think this country needs a Government that is prepared to take the bold action necessary to secure a better future for Britain and we are determined to be that Government. “In everything we do, we will act with an unshakeable sense of purpose to build the better, fairer Britain which we all want to see.”

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Hard to believe.

US-Russian Ceasefire Deal Holding In Southwest Syria (R.)

A U.S.-Russian brokered ceasefire for southwest Syria held through the day, a monitor and rebels said on Sunday, in the first peacemaking effort of the war by the U.S. government under President Donald Trump. The United States, Russia and Jordan reached the “de-escalation agreement,” which appeared to give Trump a diplomatic achievement at his first meeting with Russian President Vladimir Putin at the G20 summit in Germany this week. The Syrian Observatory for Human Rights, a Britain-based war monitor, said “calm prevailed” in the southwest since the truce began at noon (0900 GMT) on Sunday despite minor violations. Combatants briefly exchanged fire in Deraa province and in Quneitra around midnight, but this “did not threaten the ceasefire,” said Observatory Director Rami Abdulrahman.

Major Issam al Rayes, spokesman of the Southern Front coalition of Western-backed rebel groups, said “a cautious calm” continued into the evening. “The situation is relatively calm,” Suhaib al-Ruhail, a spokesman for the Alwiyat al-Furqan faction in Quneitra, said earlier. Another rebel official, in Deraa city, said there had been no significant fighting. It was quiet on the main Manshiya front near the border with Jordan, which he said had been the site of some of the heaviest army bombing in recent weeks. “Syrian ceasefire seems to be holding … Good!” Trump tweeted on Sunday. A Syrian official indicated that Damascus approved of the ceasefire deal, describing the government’s silence over it as a “sign of satisfaction.” “We welcome any step that would cease the fire and pave the way for peaceful solutions,” the government official told Reuters.

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Majestic animal. But 1,300 years is a big gap.

The Lynx Could Return To UK Within Months After 1,300-Year Absence (Ind.)

The Eurasian lynx could be stalking through British woodlands within months after plans were submitted to reintroduce the species, absent from Britain for about 1,300 years. Campaigners have applied for a licence to import six of the wildcats, which were hunted to extinction in the UK, and release them in Northumberland’s Kielder Forest. The Lynx Trust said the animals, which can grow to 1.3m in length, “belong” in Britain and there was a “moral obligation” to bring them back. The cats’ return would also generate millions of pounds for rural communities by attracting tourists, according to the group. But the proposal has met with opposition from sheep farmers, who claim their livestock would be put at risk.

The scheme would initially involve six lynx, four females and two males, being imported from Sweden and fitted with GPS tracking collars for a five-year trial. The trust applied to Natural England for permission to release the cats after it carried out an 11-month consultation. No date has been set for the proposed reintroduction but they cats could return to the UK by the end of 2017 if the plans are approved. The trust said in a statement: “In many other countries Eurasian lynx reintroduction has proven exceptionally low-conflict and wonderfully beneficial for the local communities that live alongside them, and we do sincerely hope that these cats, which thrived here for millions of years, do have the opportunity to prove they can still fit into both our ecology, and alongside local communities like those across the Kielder region.”

Read more …

Oct 042015
 
 October 4, 2015  Posted by at 9:52 am Finance Tagged with: , , , , , , , ,  1 Response »
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Russell Lee Photo booth at fiesta, Taos, New Mexico Jul 1940

Markets Are Back At Panic Levels, Says Credit Suisse (MarketWatch)
Post-QE “S&P Should Be Trading At Half Of Its Value”: Deutsche Bank (ZH)
Oil Slump Plays Havoc With The Junk-Bond Market (MarketWatch)
Oil Bulls Lose Faith in Recovery as Russia Adds to Global Glut (Bloomberg)
Economists Can’t Find the Silver Lining in US Jobs Report (Bloomberg)
US Hedge Funds Brace For Worst Year Since Financial Crisis (Reuters)
US System Designed To Prevent Financial Crisis ‘Likely To Fail’ (MarketWatch)
Fed’s Fischer Says Financial Stability Toolkit May Need To Grow (Reuters)
IMF’s Mass Debt Relief Call For Greece Set To Be Rejected By Europe (Telegraph)
New Greek Debt Framework Not So Flattering For Italy, Spain, Portugal (WSJ)
‘Bubbles Are All Over The Place’: Ron Paul (RT)
History Isn’t A Guide When Market Is Playing By A New Set Of Rules (Ind.)
The Failure Of Central Banking: The French Revolution Case Study (Lebowitz)
UK Car Emissions Test Body Receives 70% Of Cash From Motor Industry (Observer)
The Record US Military Budget. Spiralling Growth of America’s War Economy (Davies)
153,000 Refugees Arrived In Greece In September Alone (UNHCR)
280,000 Refugees Arrived In Germany In September (AFP)

They can’t let go: “..panic equals buying opportunities..”

Markets Are Back At Panic Levels, Says Credit Suisse (MarketWatch)

If it feels like you’re reliving the market jitters of the Great Recession and eurozone crisis, it’s probably because you are. During this week, global risk appetite dropped to “panic” levels for the first time since January 2012, according to Credit Suisse’s Global Risk Appetite Index. That was back when investors feared a breakup of the euro bloc, grappled with unsustainably high sovereign borrowing costs and freaking out about the spillover from Greece. Before that, the index reached panic state around the onset of the 2008 financial crisis, after the Sept. 11, 2001 attacks on the U.S., during the dotcom bubble and after Black Monday in 1987. Get the picture?

This time, Credit Suisse’s Global Risk Appetite Index slipped into panic territory just as global equity markets were wrapping up their worst quarter in four years. That came as investors feared a sharp slowdown in China’s economy and a collapse in commodity prices. “Global growth is not a strong supportive factor for risky assets right now,” said the analyst team led by the bank’s chief economist, James Sweeney. “Weak Chinese growth has had very negative effects on general emerging market performance and commodity prices. And a strong dollar has caused many exporters around the world to see declining trade revenues, even if actual activity has not fallen off a cliff,” they added. Indeed, the U.S. economy may not even have grown 1% in the third quarter, according to the Atlanta Fed’s GDPNow tracker.

But here’s for the good news: panic equals buying opportunities. The Credit Suisse analysts said panic usually is an overreaction to short-term events, providing a chance to buy risky assets at a cheaper price. There’s a caveat for the current panic state, however. Because of the murky global growth outlook, investors should only use this as a short-term opportunity, rather than going in for the long haul, the analysts said. “If panic persists, it could alter the global growth outlook for the worse. Ongoing panic and weak global growth would likely influence Fed behavior. But history suggests rebounds often occur when they are least expected,” they said. “That’s why we see the current panic as a tactical opportunity, even if it does not point to a lasting boom in risky assets.”

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Define ‘value’.

Post-QE “S&P Should Be Trading At Half Of Its Value”: Deutsche Bank (ZH)

[..] “Since 2013, stocks rallied while disinflationary pressures were reinforced by a strong USD, low commodity prices and a decline in global demand. If pre-2013 coordination between the two is taken as a reference, then based on current stock prices breakevens should trade about 1.5% wider. This means the Fed should be hiking because inflation is above target. Alternatively, given the current level of inflation, S&P should be trading at half of its value.”

Wait, the S&P should be trading at 900… or even less? Yes, according to the following Deutsche Bank chart:

Only one question remains: which breaks first – do inflation expectations surge higher, soaring by some 150 bps to justify equity valuations, or do equities crash?

“Is reconciliation likely – and, if so, in which direction? Are we returning to the pre-crisis world, or we are in a completely new regime?”

The answer will come from none other than the Fed and by now, even Janet Yellen knows that one word out of place, one signal to the market that the QE-inflation trade will converge with stocks crashing instead of inflation rising (which, unless the Fed launched QE4, NIRP of even helicopter money now appears inevitable), and some $10 trillion in market cap could evaporate overnight. Is it any wonder that Yellen is exhibiting “health issues” during her speeches: the realization that the fate of the biggest stock market bubble lies on your shoulders would make anyone “dehydrated.” In retrospect, Ben Bernanke knew exactly what he was doing when he got out of Dodge just as the endgame was set to begin.

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The last few sources of funding dry up.

Oil Slump Plays Havoc With The Junk-Bond Market (MarketWatch)

Low oil prices continued to wreak havoc in the U.S. high-yield bond market in September, and the outlook remains grim, reports from two major rating firms showed Friday. Moody’s said its Liquidity Stress Index, a measure of stress in the high-yield bond market, deteriorated in the month, weighed down once again by a wave of downgrades in the energy sector. The index rose to 5.8% in September from 5.1% in August, placing it at its highest level since October of 2010. The index measures the number of companies that carry Moody’s lowest liquidity rating of SGL-4. The index rises when more issuers are placed in that category, and it falls when liquidity improves.

The U.S. high-yield market is dominated by energy companies, many of them highly leveraged shale producers that had ramped up production while oil prices were soaring. Many are now struggling as the low oil price hammers profits just as debt service costs rise. Crude has lost roughly 59% of its value in the past year, falling from a high close to $107 a barrel in 2014 to about $44 on Friday. Reflecting the pressure on risky borrowers, the energy Liquidity Stress subindex shot up to 16.9% in September from 12.7% in August, its highest level since it reached 19.2% in July of 2009. “The LSI’s rise warns that more companies are becoming dependent on increasingly fickle capital markets to alleviate liquidity pressures, and this is putting upward pressure on defaults,” Moody’s said in a report.

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Pumping at full capacity is the only lifeline left.

Oil Bulls Lose Faith in Recovery as Russia Adds to Global Glut (Bloomberg)

Hedge funds trimmed bullish oil bets for the first time in six weeks, losing faith in a swift recovery as Russia boosted output to the highest since the Soviet Union collapsed. Speculators reduced their net-long position in West Texas Intermediate crude by 9.1% in the week ended Sept. 29, according to data from the Commodity Futures Trading Commission. Longs dropped from a 12-week high while shorts increased. U.S. crude output is down 514,000 barrels a day from a four-decade high reached in June, Energy Information Administration data show. The number of rigs targeting oil in the U.S. dropped to a five year low, Baker Hughes said Oct. 2. WTI traded in the tightest range since June last month as China’s slowing economy and the highest Russian output in two decades signaled the global glut will linger.

“The U.S. producers are the only ones doing their part to reduce the global glut,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. “Other countries, such as Russia, are pumping at full tilt. The cutbacks by shale producers here aren’t going to have much impact, especially given the slowing global economy.” WTI decreased 1.3% in the report week to $45.23 a barrel on the New York Mercantile Exchange. It settled at $45.54 Friday. U.S. crude stockpiles, already about 100 million barrels above the five-year average, may swell further. Stockpiles have climbed during October in eight of the last 10 years as refiners slow operations to perform seasonal maintenance.

Russian oil output rose to a post-Soviet record last month as producers took advantage of the weak ruble to push ahead with drilling. The nation’s production of crude and condensate climbed to 10.74 million barrels a day, 1% more than a year earlier and topping a record set in June, according to data from the Energy Ministry’s CDU-TEK unit.

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Give ’em a few days…

Economists Can’t Find the Silver Lining in US Jobs Report (Bloomberg)

When the U.S. jobs report is released each month, there’s typically enough nuance to offer something for everyone — the good and the bad. Today proved to be a feast for the bears. “When you look through all the details of the data, there just isn’t anything good to hang your hat on,” said Thomas Simons at Jefferies in New York. “It’s been years since we’ve seen such an unambiguously bad report. Silver linings were tough to come by in the September jobs data. Payrolls came in at a much-weaker-than-forecast 142,000, while August and July figures were revised down. Wage growth was nonexistent for the month, with average hourly earnings actually falling by a penny on average.

The softness in manufacturing endured, with factory payrolls falling by 9,000 when they were expected to show no change. With dollar appreciation and sluggish overseas growth providing headwinds, it was the biggest back-to-back decline since 2010. Even service industries, which make up the lion’s share of the economy and are more shielded from global weakness, seem to have shifted into a lower gear. Payroll growth there has slowed for four straight months, the longest such streak since 2001. “While it’s always important not to overreact to one single data release, we’ll make an exception in this case,” Paul Ashworth at Capital Economics in Toronto, wrote in a note to clients. “Aside from manufacturing, the slowdown in employment gains is most notable in business services and education and health, which are not the sectors most prone to cyclical swings.”

Even a small positive in today’s report — a sharp decline in the ranks of the underemployed — must be taken with a grain of salt, economists said. The ranks of people working part-time for economic reasons fell by the most since January 2014, which is generally a good sign. However, the number of full-time employees dropped as well. Meanwhile the labor force participation rate decreased to the lowest level since October 1977. At best, the data are murky. “It’s weak through and through,” Simons said. Because such thoroughly disappointing reports are so rare, “we probably won’t see it again next time around.”

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Numbered days?!

US Hedge Funds Brace For Worst Year Since Financial Crisis (Reuters)

U.S. hedge funds are bracing for their worst year since the 2008 financial crisis after a dramatic sell-off in healthcare and biotechnology stocks triggered double-digit losses for some prominent players last month. September’s sucker punch in the biotech sector, on top of a grim August when global markets tumbled due to fears about slowing growth in China, have pushed many hedge fund managers deep into the red. “These are some of the worst numbers we have seen since the crisis,” said Sam Abbas, whose Symmetric IO tracks hedge fund managers’ returns. The average hedge fund lost 19% in 2008 when the credit crunch hit. Since then, hedge funds have had only one down year, when they lost 5.25% in 2011, data from Hedge Fund Research show.

While the biotech sector held up relatively well during the initial market sell-off in August, it cratered in September. “It was the last remaining bastion of alpha and a sector where many hedge funds were hiding. Now it has succumbed,” said Peter Rup at Artemis Wealth Advisors, which invests in hedge funds. Rup said he was expecting some big negative surprises as more hedge funds send September returns to clients. Some of America’s most prominent hedge funds have seen their returns crumble. David Einhorn’s Greenlight Capital, now off 17%, is on track to post its first losses since 2008. And William Ackman’s Pershing Square Capital Management, which has a big bet on Valeant, told investors on Thursday that its Pershing Square Holdings portfolio is now off 12.6% for the year, a big reversal of fortune after 2014’s 40% gain. “Hedge funds are reeling from a relentless rout that has all but killed a year’s worth of alpha in a matter of two weeks,” Stanley Altshuller at research firm Novus wrote in a report.

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So.. more bailouts.

US System Designed To Prevent Financial Crisis ‘Likely To Fail’ (MarketWatch)

The current U.S.regulatory structure designed to prevent another financial crisis is “Balkanized,” a “mess” and likely to fail when needed, experts said. “The current U.S. institutional set-up is likely to fail in a crisis, and will be doing less to prevent a crisis than it should be,” said Adam Posen, president of the Peterson Institute for International Economics, at a two-day conference on financial stability sponsored by the Boston Federal Reserve. Posen said that U.S. regulators, including the Fed, don’t have the tools or the mandates from Congress that they need. Posen was especially critical of the umbrella group of regulators, the Financial Stability Oversight Council, that was set up by Dodd Frank to identify and deal with financial stability risks.

He said FSOC is chaired by the Secretary of Treasury, who is the most political member of the group. “To me, the FSOC is a mess,” Posen said. Mervyn King, the former head of the Bank of England, agreed that the U.S. institutional structure was a problem. He said U.S. regulators had a knack of working well together in a crisis, whatever the institutional structure. “It is before the crisis that the U.S. set-up is to be questioned,” King said. Well before the financial crisis, the U.S. and the Bank of England had a war game to discuss a possible cross-border bank failure, King said. The U.K. regulators had three key participants, while the U.S. had a “mass choir,” he said. Former Fed vice chairman Donald Kohn agreed: “broader and deeper structural deficiencies exist in the U.S. regulatory system for macroprudential regulation.”

Kohn said there is a widespread perception in Washington that the Fed is responsible for financial stability, but said in reality the Fed must work in a “Balkanized” regulatory system. He agreed that FSOC “cannot remedy the underlying flaws of financial regulation in the U.S.” During the conference, regulators and experts echoed concerns with the regulatory structure. Fed Vice Chairman Stanley Fischer said the Fed needed new tools targeted at the real estate sector to prevent another bubble. Boston Fed President Eric Rosengren suggested that Congress needed to give the U.S. central bank a third mandate to foster financial stability.

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Central banks’ toolkits should be abolished, not expanded. They create only mayhem.

Fed’s Fischer Says Financial Stability Toolkit May Need To Grow (Reuters)

The U.S.’s set of tools to limit asset bubbles is neither large nor “battle tested,” Federal Reserve vice chair Stanley Fischer said on Friday in a call for regulators to step up research on how to improve financial stability. Fischer said that compared to other countries the complexity of the U.S. financial system and the diverse number of regulators may make it difficult to develop or deploy so-called “macroprudential” tools – policies that could be used to selectively cool overheated financial markets. As head of the Bank of Israel, Fischer put such tools to work, for example, by hiking loan to value ratios on home mortgages to slow a run-up in real estate values. He has said the U.S. should examine that and other policies before new financial risks emerge, though he acknowledged they may be tough to implement.

“I remain concerned that the U.S. macroprudential toolkit is not large and not yet battle tested,” Fischer said, and it may be difficult to expand because so many agencies have control over different parts of the financial system. In addition, he said, targeting policies at one sector, such as home mortgages, could simply push that sort of lending to less regulated companies. There is concern that the Dodd-Frank regulations put in place after the crisis are already doing that, helping expand the influence of “shadow” banks not covered by the same rules as commercial lenders. Some of those regulations have a macroprudential character, such as the stress testing of banks and the possible imposition of “countercyclical” capital buffers that could require the largest banks to hold more in reserve if markets overheat.

Ultimately Fischer said it may be left to monetary policy to bear responsibility for financial stability. “The limited macroprudential toolkit…leads me to conclude that there may be times when adjustments to monetary policy should be discussed as a means to curb risks to financial stability,” Fischer said. Even though the interest rate is a blunt tool, requiring a potential tradeoff of higher unemployment if it was hiked to control an asset bubble, “we need to consider the potential role of monetary policy in fostering financial stability,” he said. That could include using narrower policy tools, like bank reserve requirements, and not just the interest rate alone, he said.

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And then Greece can jump back into crisis mode. No relief till 2017/18.

IMF’s Mass Debt Relief Call For Greece Set To Be Rejected By Europe (Telegraph)

The IMF is still poised to pull out of Greece’s third international rescue in five years over the sensitive issue of debt relief. The fund is pushing for a restructuring of at least €100bn of Greece’s €320bn debt pile, according to a report in Germany’s Rheinische Post. Such bold measures to extend maturities and reduce interest payments are set to be rejected by its European partners, who are unwilling to impose massive lossess on their taxpayers. The head of Greece’s largest creditor – Klaus Regling of the European Stability Mechanism – told the Financial Times that such radical restructuring was “unnecessary”. Debt relief is also not due to be discussed when eurozone finance ministers gather to meet for talks on Monday, said EU officials.

This intransigence could now see the IMF withdraw its involvement when its programme ends in March 2016. In debt sustainability analysis carried out by body, it has suggested Greece may need a full moratorium on payments for 30 years to finally end its reliance on international rescues. The reports came after a former IMF watchdog urged the world’s “lender of last resort” to be more critical of its involvement in many bail-out countries for the sake of the institution’s credibility. “Few reports probe more fundamental questions – either about alternative policy strategies or the broader rationale for IMF engagement,” said a report from David Goldsbrough, a former deputy director of IMF’s Independent Evaluation Office (IEO). The IMF has come under fire for failing in its duty of care towards Greece by pushing self-defeating austerity measures on the battered economy.

The Washington-based fund has previously admitted it should have eased up on the spending cuts and tax hikes, pushed for an earlier debt restructuring and paid more “attention” to the political costs of its punishing policies during its five-year involvement in Greece. Accounts from 2010 show the IMF was railroaded into a Greek rescue programme on the insistence of European authorities, vetoing the objections of its own board members from the developing world. The IMF is prevented from lending to bankrupt nations by its own rules. But it deployed an “exceptional circumstances” justification to provide part of a €110bn loan package to Athens five years ago. Greece has since become the first ever developed nation to default on the IMF in its 70-year history.

Despite privately urging haircuts for private sector creditors in 2010, the IMF was ignored for fear of triggering a “Lehman” moment in Europe, by then European Central Bank chief Jean-Claude Trichet. Greece later underwent the biggest debt restructuring in history in 2012. The findings of the fund’s research division have largely discredited the notion that harsh austerity will bring debtor nations back to health. However, this stance has been at odds with its negotiators during Greece’s new bail-out talks where officials have continued to demand deep pension reforms and spending cuts for Greece. Diplomatic cables between Greece’s ambassador to Washington have since revealed the White House pressed the fund to make vocal calls for mass debt relief to keep Greece in the eurozone during fraught negotiations in the summer.

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All it takes is a straw.

New Greek Debt Framework Not So Flattering For Italy, Spain, Portugal (WSJ)

When eurozone governments decided to throw Greece another financial lifeline this summer, they also embraced a new way of assessing whether the country will ever be able to repay its debts. But that framework isn’t so flattering for three other highly indebted euro countries. Italy, Portugal and Spain all have gross financing needs—the money a country has to raise to cover its deficit and roll over maturing debt—above 15% of gross domestic product in the coming years. That’s the maximum level the IMF said is manageable for Greece in its preliminary debt-sustainability analysis released this summer. By contrast, Cyprus and Ireland, two other euro countries that were bailed out in recent years, remain below the 15% threshold.

The question of when a country’s debt can be considered sustainable has been central to bailout discussions between the eurozone and the IMF for years. And the answer has been changing regularly—especially in the case of Greece. In the spring of 2012, the International Monetary Fund signed off on a second multibillion bailout, only after a steep writedown on its government bonds promised to bring Greek debt below 120% of gross domestic product by 2020. That, the IMF said at the time, was necessary to make the country’s debt “sustainable in the medium term.” It didn’t take long for that prediction to become outdated. By November 2012 it became clear that the 120% by 2020 was now out of reach. To keep the IMF on board, eurozone governments promised to ensure Greece’s debt would be “substantially lower than 110%” of gross domestic product by 2022.

Fast forward to 2015 and months of back and forth between Greece’s left-wing anti-austerity government and the rest of the eurozone. By the end of June, the IMF was once again ringing the alarm bells over Greek debt. The bigger deficits, lower growth and fewer privatizations expected under the Syriza-led government “render the debt dynamics unsustainable,” the fund warned. In its analysis released in on July 2, three days before Greeks overwhelmingly voted “no” in a referendum on a new bailout deal, the IMF said that Greece’s debt was going to remain at 149.9% in 2020. Even if debt sustainability was going to be judged by gross financing needs rather than the debt-to-GDP ratio, it was still unlikely that Athens would ever be able to regain its financial independence without substantial debt relief, the IMF warned. It was in this report that the IMF first official mentioned 15% as the adequate threshold for determining Greece’s debt sustainability.

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“..everything is a mistake and everything is going to be volatile…”

‘Bubbles Are All Over The Place’: Ron Paul (RT)

The US economy is set to grow 0.9% in the third quarter after a bigger-than-expected widening of the trade gap for goods in August, according to the Atlanta Federal Reserve’s GDPNow. This appeared to be a much slower rate from the regional Fed bank’s prior estimate of 1.8% last week, the Atlanta Fed noted. “It’s just the beginning of a downturn, nothing’s really happened yet,” Paul said. “Everything is misdirected because of the price of money. There are bubbles every place. You have a stock market bubble, you have still bubblemaking in housing when you see houses selling for $500 million, and you have a bubble in student loans.”

“The bubbles are all over the place. This is the problem. I don’t see an easy way out. I think the markets are going to go down a lot more when you realize how serious this is. Actually we are doing better than the rest of the world but we’re in for trouble too because the world has never had a situation like this where a whole world endorsed a paper currency and had pyramiding of debt around the world by the reserve currency which is the dollar. “It’s the biggest bubble ever, so it’s going to big the biggest crash ever, but it remains to be seen exactly when that’s going to hit. The source of the trouble is the Federal Reserve System, which simply cannot work in a real market economy, Dr Paul said.

“In a true free market economy you have to have people work, use what they need to live on and then save money, and that dictates interest rates and tells businessmen what they should do. Well, that isn’t the way it works any more. The so-called capital comes from the Fed and they create it out of thin air. So everything is a mistake and everything is going to be volatile. You can do this for a while when the country is very very wealthy, and a currency is very very strong.” “But eventually people mistrust the government. They don’t pay interest, they have a huge amount of principal to pay, and corporations are deeply in debt, they borrow a lot of money practically for free and they buy up their stocks. It’s a mess. It’s artificial. It has nothing to do with freedom, has nothing to do with free markets, and the sooner we realize this, the sooner we’ll get rid of central economic planning and especially look into the serious problems we get from the Federal Reserve System.”

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Only a few now the new rules.

History Isn’t A Guide When Market Is Playing By A New Set Of Rules (Ind.)

[..] an unstable global economy is nothing new. David Buik, a City of London veteran and a commentator for the stockbroker Panmure Gordon, has a theory – and it’s one echoed by many who have seen trading evolve over the years. “I think we forget that 40% of trades are programme trades,” Buik explains. “The number of what I call ‘numeric geeks’ that now work in the markets would never have considered being in the markets 50 years ago. “You’ve got a totally different person. He’s incredibly bright and he works out programmes that decide when it’s time to buy and sell. When you’ve got that kind of influence [on the market] you get that level of volatility.” Automated trading has changed the way the stock market works beyond all recognition.

Instead of holding a stock for years, months or days, as was the norm in years gone by, shares can now be owned for a matter of milliseconds. For example, a programme could be created to buy a stock when it reaches £10 and sell it at £10.0001. It might not sound like a big gain, but do it many thousands of times and it can make a tidy profit. High-frequency trading of this nature is also to blame for the “flash crashes” that have happened in recent years. So-called “stop-losses” can be put on trades, meaning that when a share price falls below a level determined by the investor, it is automatically sold, limiting their loss. For investors, it can mean the difference between a small loss and a catastrophic one – as plenty of those Glencore backers would attest to.

But inevitably, automatic stop-loss sales drag share prices down and trigger more selling, causing a dangerous domino effect as investors are automatically bailed out. The stock market is being played or manipulated by financial whiz kids – all completely legally, of course – but it is not what the market was intended for – investing in a company for the benefit of the backer and the recipient. The result is that the market has become increasingly detached from the real world and not a fair reflection of what most see as an improving outlook for the global economy. America, the world’s largest economy, is on the up and an interest rate rise is still expected this year. Yet the US stock market does not reflect that, with its benchmark Dow Jones average falling 8% in the third quarter.

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Great history.

The Failure Of Central Banking: The French Revolution Case Study (Lebowitz)

During the 1700’s France accumulated significant debts under the reigns of King Louis XV and King Louis XVI. The combination of wars, significant financial support of America in the Revolutionary War, and lavish government spending were key drivers of the deficit. Through the latter part of the century, numerous financial reforms were enacted to stem the problem, but none were successful. On a few occasions, politicians supporting fiscal austerity resigned or were fired because belt tightening was not popular and the King certainly didn’t want a revolution on his hands. For example, in 1776 newly anointed Finance Minister Jacques Necker believed France was much better off by taking large loans from other countries instead of increasing taxes as his recently fired predecessor argued.

Necker was ultimately replaced 7 years later when it was discovered France had heavy debt loads, unsustainable deficits, and no means to pay it back. By the late 1780’s, the gravity of France’s fiscal deficit was becoming severe. Widespread concerns helped the General Assembly introduce spending cuts and tax increases. They were somewhat effective but the deficit was very slow to decrease. The problem, however, was the citizens were tired of the economic stagnation that resulted from belt tightening. The medicine of austerity was working but the leaders didn’t have the patience to rule over a stagnant economy for much longer. The following quote from White sums up the situation well:

“Statesmanlike measures, careful watching and wise management would, doubtless, have ere long led to a return of confidence, a reappearance of money and a resumption of business; but these involved patience and self?denial, and, thus far in human history, these are the rarest products of political wisdom. Few nations have ever been able to exercise these virtues; and France was not then one of these few”.

By 1789, commoners, politicians and royalty alike continuously voiced their impatience with the weak economy. This led to the notion that printing money could revive the economy. The idea gained popularity and was widely discussed in public meetings, informal clubs and even the National Assembly. In early 1790, detailed discussions within the Assembly on money printing became more frequent. Within a few short months, chatter and rumor of printing money snowballed into a plan. The quickly evolving proposal was to confiscate church land, which represented more than a quarter of France’s acreage to “back” newly printed Assignats (the word assignat is derived from the Latin word assignatum – something appointed or assigned).

This was a stark departure from the silver and gold backed Livre, the currency of France at the time. Assembly debate was lively, with strong opinions on both sides of the issue. Those against it understood that printing fiat money failed miserably many times in the past. In fact, the John Law/Mississippi bubble crisis of 1720 was caused by an over issue of paper money. That crisis caused, in White’s words, “the most frightful catastrophe France had then experienced”. History was on the side of those opposed to the new plan.

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Cosy.

UK Car Emissions Test Body Receives 70% Of Cash From Motor Industry (Observer)

The body examining the practices of the car industry following the Volkswagen emissions scandal has been accused of a major conflict of interest after it emerged that nearly three quarters of its funding comes from the companies it is investigating. According to its latest annual report, the Vehicle Certification Agency receives 69.91% of its income from car manufacturers, who pay it to certify that their vehicles are meeting emissions and safety standards. The transport secretary, Patrick McLoughlin, said last month that the VCA, which also receives government funding, would be responsible for re-running tests on a variety of makes of diesel cars and investigating their real-world emissions.

The announcement followed the revelation from the US EPA last month that Volkswagen had installed illegal software to cheat emission tests, allowing its diesel cars to produce up to 40 times more pollution than is permitted. However, the apparent conflict of interest raised by VCA’s funding has prompted lawyers to demand a truly independent investigation into the industry, and will raise fresh concerns over the government’s handling of the issue of air pollution. Last week the Observer revealed how the government has been seeking to block EU legislation that would force member states to carry out surprise checks on car emissions. It has also been accused of ignoring a supreme court ruling that the government needed to urgently draw up significant plans to tackle the air pollution problem, which has been in breach of EU limits for years and is linked to thousands of premature deaths each year.

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Last days of the empire.

The Record US Military Budget. Spiralling Growth of America’s War Economy (Davies)

To listen to the Republican candidates’ debate last week, one would think that President Obama had slashed the U.S. military budget and left our country defenseless. Nothing could be farther off the mark. There are real weaknesses in Obama’s foreign policy, but a lack of funding for weapons and war is not one of them. President Obama has in fact been responsible for the largest U.S. military budget since the Second World War, as is well documented in the U.S. Department of Defense’s annual “Green Book.”

The table below compares average annual Pentagon budgets under every president since Truman, using “constant dollar” figures from the FY2016 Green Book. I’ll use these same inflation-adjusted figures throughout this article, to make sure I’m always comparing “apples to apples”. These figures do not include additional military-related spending by the VA, CIA, Homeland Security, Energy, Justice or State Departments, nor interest payments on past military spending, which combine to raise the true cost of U.S. militarism to about $1.3 trillion per year, or one thirteenth of the U.S. economy.

The U.S. military receives more generous funding than the rest of the 10 largest militaries in the world combined (China, Saudi Arabia, Russia, U.K., France, Japan, India, Germany & South Korea). And yet, despite the chaos and violence of the past 15 years, the Republican candidates seem oblivious to the dangers of one country wielding such massive and disproportionate military power. On the Democratic side, even Senator Bernie Sanders has not said how much he would cut military spending. But Sanders regularly votes against the authorization bills for these record military budgets, condemning this wholesale diversion of resources from real human needs and insisting that war should be a “last resort”.

Sanders’ votes to attack Yugoslavia in 1999 and Afghanistan in 2001, while the UN Charter prohibits such unilateral uses of force, do raise troubling questions about exactly what he means by a “last resort.” As his aide Jeremy Brecher asked Sanders in his resignation letter over his Yugoslavia vote, “Is there a moral limit to the military violence that you are willing to participate in or support? Where does that limit lie? And when that limit has been reached, what action will you take?” Many Americans are eager to hear Sanders flesh out a coherent commitment to peace and disarmament to match his commitment to economic justice. When President Obama took office, Congressman Barney Frank immediately called for a 25% cut in military spending.

Instead, the new president obtained an $80 billion supplemental to the FY2009 budget to fund his escalation of the war in Afghanistan, and his first full military budget (FY2010) was $761 billion, within $3.4 billion of the $764.3 billion post-WWII record set by President Bush in FY2008. The Sustainable Defense Task Force, commissioned by Congressman Frank and bipartisan Members of Congress in 2010, called for $960 billion in cuts from the projected military budget over the next 10 years. Jill Stein of the Green Party and Rocky Anderson of the Justice Partycalled for a 50% cut in U.S. military spending in their 2012 presidential campaigns. That seems radical at first glance, but a 50% cut in the FY2012 budget would only have been a 13% cut from what President Clinton spent in FY1998.

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They will not stop coming.

153,000 Refugees Arrived In Greece In September Alone (UNHCR)

The UN refugee agency said on Friday that refugee and migrant arrivals in Greece are expected to hit the 400,000 mark soon, despite adverse weather conditions. Greece remains by far the largest single entry point for new sea arrivals in the Mediterranean, followed by Italy with 131,000 arrivals so far in 2015. With the new figures from Greece, the total number of refugees and migrants crossing the Mediterranean this year is nearly 530,000. In September, 168,000 people crossed the Mediterranean, the highest monthly figure ever recorded and almost five times the number in September 2014.

UNHCR spokesman Adrian Edwards told journalists in Geneva that the continuing high rate of arrivals underlines the need for a fast implementation of Europe’s relocation programme, jointly with the establishment of robust facilities to receive, assist, register and screen all people arriving by sea. “These are steps needed for stabilizing the crisis,” he said. As of this morning, a total of 396,500 people have entered Greece by sea since the beginning of the year, more than 153,000 of them in September alone. The nine-month 2015 total compares to 43,500 such arrivals in Greece in all of 2014. Ninety-seven% are from the world’s top 10 refugee-producing countries, led by Syria (70%), Afghanistan (18%) and Iraq (4%).

“There was a noticeable drop in sea arrivals this week, along with the change in the weather,” Edwards said, adding that on Sept. 25, for example, there were some 6,600 arrivals. The next day, it dropped to around 2,200. “From an average of around 5,000 arrivals per day recently, it has fallen to some 3,300 over the past six days with just 1,500 yesterday. Nevertheless, any improvement in the weather is likely to bring another surge in sea arrivals.”

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Refugees in Berlin face 50-day waits just to register. The system is broken.

280,000 Refugees Arrived In Germany In September (AFP)

A record 270,000 to 280,000 refugees arrived in Germany in September, more than the total for 2014, said the interior minister of the southern state of Bavaria Wednesday. “According to current figures… we have to assume that in September 2015 between 270,000 and 280,000 refugees came to Germany,” said Joachim Herrmann. Europe’s biggest economy recorded around 200,000 migrant arrivals for the whole of 2014. The sudden surge this year has left local authorities scrambling to register as well as provide lodgings, food and basic care for the new arrivals. Herrmann highlighted the pressure on the state government of Bavaria – the key gateway for migrants arriving through the western Balkans and Hungary.

“My fellow interior ministers confirm, without exception, that pretty soon we’ll hit our limits in terms of accommodation,” he said. “It’s crucial to immediately reduce the migrant pressure on Germany’s borders,” he said. As Germany expects up to one million refugees this year, Chancellor Angela Merkel’s generosity towards migrants has sparked discord within her coalition. Merkel’s allies, the conservative CSU party governing Bavaria, have been particularly vocal in criticising the policy and warning that resources are overstretched. Berlin is now stepping up action to deter economic migrants from trying to obtain asylum in the country, in a bid to free up resources to deal with applicants from war-torn countries like Syria.

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