Monday, March 27, 2017

Today's Links

“Nation state as a fundamental unit of man’s organized life has ceased to be the principal creative force: International banks and multinational corporations are acting and planning in terms that are far in advance of the political concepts of the nation-state.” — Zbigniew Brzezinski, “Between Two Ages: The Technetronic Era”, 1971

1--China’s Great Leap Forward

Historical amnesia infects these most deep diving frogs. Forgotten is how the post WW2 US invaded and destroyed Korea and Indo-China (Vietnam, Laos and Cambodia) killing over nine million inhabitants, both civilian and defenders. The US invaded, colonized and neo-colonized the Philippines at the turn of the 20th century, killing up to one million inhabitants. It continues to build and expands its network of military bases encircling China, It recently moved powerful, nuclear armed THADD missiles to the North Korean border, capable of attacking Chinese and even Russian cities. The US is the worlds’ largest arms exporter, surpassing the collective production and sale of the next five leading merchants of death.

In contrast, China has not unilaterally attacked, invaded or occupied anyone in hundreds of years. It does not place nuclear missiles on the US coast or borders. In fact, it does not have a single overseas military base. Its own military bases, in the South China Sea, are established to protect its vital maritime routes from pirates and the increasingly provocative US naval armada. China’s military budget, scheduled to increase by 7% in 2017, is still less than one-fourth of the US budget....

Unlike China, the US is wallowing at less than 2% annual growth. Wages stagnate for decades; real wages and living standards decline. The costs of education and health care skyrocket, while the quality of these vital services decline dramatically. Costs are growing, un-employment is growing and worker suicide and mortality is growing. It is absolutely vital that the West acknowledge China’s impressive advances in order to learn, borrow and foster a similar pattern of positive growth and equity. Co-operation between China and the US is essential for promoting peace and justice in Asia

2--Brookings Plan Materializes in E Syria--Kurdish leader expects Raqqa to join federal system in Syria Breaking apart Syria as per US strategic plan

The northern Syrian city of Raqqa is expected to join a decentralized system of government being set up by Syrian Kurdish groups and their allies once it is captured from ISIS, a leading Kurdish politician told Reuters on Monday.

The U.S.-backed and Kurdish-led Syrian Democratic Forces (SDF), are closing in on the ISIS de facto capital of Raqqa.

Saleh Muslim, the co-chair of the Syrian Kurdish PYD party, claimed it would be up to the people of Raqqa to decide their future once the city is purged of ISIS, but he thinks the city will join the “democratic federal” system, Reuters reported.

“We expect (this) because our project is for all of Syria … and Raqqa can be part of it,” Muslim said in a telephone interview. “Our only concern is that the people of Raqqa are the ones who take the decision on everything.”

The “democratic federal” system aims to build on three autonomous areas set up by the main Kurdish groups in the north and decentralise Syria. This illegal move undermines the efforts of the Syrian government to preserve the state

Muslim added that Raqqa needed to be in “friendly hands” otherwise it would form a “danger to all Syria, particularly northern Syria, the federal system of northern Syria, the areas of self administration”.

3--Fading Trump rally threatened by rare contraction of US credit

4--Is Trump Giving the Pentagon Free Rein to Wage War as It Likes?

5--Paper Wealth In US Stocks Reaches $32 Trillion (Fed)

6--(archive Feb 27) Trump says U.S. ‘never wins wars’ anymore

President Trump said Monday the U.S. has squandered trillions of dollars on military operations in the Middle East over the past two decades without winning any of the wars.
“We never win, and we don’t fight to win,” the new commander-in-chief told the nation’s governors at a White House meeting. “We’ve either got to win, or don’t fight it at all.”

In previewing his first budget proposal, the president said he’ll call for a big increase in military spending to send “a message to the world” about America’s strength and resolve. Mr. Trump said he wants to provide soldiers with the tools to deter war and, when called upon, “to start winning wars again.”
“When I was young, in high school and in college, everybody used to say we never lost a war. America never lost,” Mr. Trump said. “Now, we never win a war.”

He cited the example of the Middle East, where the U.S. has waged wars in Iraq and in Afghanistan since 2001.
“Here we are, almost 17 years of fighting in the Middle East,” Mr. Trump said. “I saw a chart, as of a month ago, $6 trillion we’ve spent in the Middle East. That’s just unacceptable.”

7--The massacre in Mosul

27 March 2017
The US-led “coalition” has admitted that its forces carried out the March 17 air strike in Mosul—ostensibly against Islamic State of Iraq and Syria (ISIS) fighters—that slaughtered as many as 200 civilians, including numerous children. The admission was only made in the face of evidence provided by survivors to Iraqi journalists, whose accounts were reported by sections of the Western press.
The massacre is being described as possibly the largest single death toll inflicted by a coalition air strike since the 2003 invasion of Iraq. The grim reality, however, is that very little is known about the impact of the assault on Mosul, which the Iraqi government began last October under pressure from the Obama administration. Coverage of the offensive has been heavily censored and marked by a propaganda-like character. Almost universally, the fighting has been portrayed as a “heroic” battle by Iraqi forces against the “barbaric” ISIS. Little attention has been given to the fate of hundreds of thousands of civilians trapped inside the besieged city....

The Iraqi Observatory for Human Rights reported last weekend it has eyewitness accounts of 3,846 civilian deaths since the assault into western Mosul began in February. It has reports of 10,000 residential homes being destroyed. Every day, thousands of terrified and starving civilians risk their lives to flee through the battle lines to escape the city. The number of refugees has soared to well over 200,000, with more than 10,000 new displaced persons arriving most days. Aid agencies are overwhelmed and warn they will not be able to care for the estimated 400,000 people still hiding out in the city’s ISIS-held areas.
Every effort is being made to conceal from the American and world population the savage consequences of US-led military operations in the Middle East...

Above all, the political and media establishment attempt to conceal the fact that the very emergence of ISIS is the direct outcome of the US invasion and occupation of Iraq, followed by the destruction of Libya and the proxy war the US and its allies sponsored in Syria.

8--Growing divisions, war threats loom over EU summit in Rome

The preamble to the 1957 Treaty of Rome signed by Germany, Italy, France, the Netherlands, Belgium, and Luxembourg reflects this long-abandoned strategy. Calling for “ever closer union among the peoples of Europe,” it pledges to ensure the “economic and social progress ... by common action to eliminate the barriers which divide Europe” and “the constant improvement of the living and working conditions” of European people.

Since the dissolution of the USSR in 1991 and the EU’s establishment in 1992 in the Maastricht Treaty, the EU has repudiated these conceptions. The NATO wars in the Balkans in the 1990s and above all the latest war drive against Russia, after the announcement of German re-militarization in 2014, went hand with accelerating austerity measures targeting basic social rights won by the working class in previous decades of struggle.

These took the sharpest form in Western Europe with EU austerity measures imposed after the 2008 Wall Street crash that devastated Greece and led to threats to expel Greece from the euro zone.
Deep political shocks are exposing the underlying bankruptcy of the EU and the unviability of attempts to unify Europe on a capitalist basis. With Brexit and the coming to power in Washington of the Trump administration, which has denounced the EU as a tool of German domination, the crisis of the EU has reached a new level of intensity. Even those sections of the European still defending the EU now aim to divide Europe in order to sideline, or even expel from the EU, those European countries that they see as an obstacle to their plans for war and austerity.

9--Somalia Flashback: Killing Nomads, Nimmo

Somalia is falling back into an all-out civil war fueled by the decades old unwillingness of the U.S. to condone an independent local unity government. The Islamic Court Union, a unity government created by the Somalis in 2006, was the last working instance of a real Somali state. It had no Jihadist agenda and held down local warlords. It was destroyed by the Bush administration.
The US does not want a political settlement in Somalia. It wants chaos. It needs al-Qaeda and Harakat al-Shabaab al-Mujahideen in order to justify its intervention and occupation of East Africa.

10--Senate votes to repeal FCC internet privacy regulations

By Bryan Dyne
27 March 2017
With virtually no public discussion, the US Senate voted Thursday to repeal a set of internet privacy regulations passed by the Federal Communications Commission (FCC) last October.
If passed by the House of Representatives and signed into law by President Donald Trump, the legislation will allow internet service providers such as AT&T, Comcast, Time Warner and Verizon to sell private communications information to the advertising industry and any other buyers, unimpeded by any sort of regulatory oversight.
The repeal was passed by the Senate using powers outlined in the Congressional Review Act (CRA), which gives Congress the authority to eliminate rules and guidelines passed by federal agencies before they go into effect. The use of the CRA will also prevent the FCC from passing “substantially similar” regulations in the future, essentially giving these companies free reign in regards to the data they collect from their users

11--Trump’s Wars

12--US Airstrikes Killed Nearly 300 Civilians in Mosul         

Pentagon Confirms Hitting Site, Says Iraq Asked Them To

13--Where the Anti-Russian Moral Panic is Leading Us

Yet they come very close to saying it. Here’s an approving article on the Oxford University web site that hardly masks Howard’s agenda:
“A form of mass propaganda more insidious than anything used in the 20th century is being used to manipulate global politics, according to the latest research. The culprit is social media and the lax regulation that allows voters to be bombarded with politically slanted misinformation – fake news.”
Insidious! Manipulative! “The culprit”! And what’s the solution? Regulation. The piece goes on to cite Howard:

“Ruling elites have often used propaganda to sustain their power, but this latest wave is different,’ says Professor Philip Howard, Director of Research at the Oxford Internet Institute and a Fellow of Balliol College. ‘Targeted messaging over social media is deeply personalized compared to the messaging that ‘all communists are evil’ that used to be distributed by mass films. It’s much more difficult to source who’s generating the content. Users think the messaging may be coming from their family and friends; it’s about particular issues the programmer knows you care about. And it appears to be pretty effective.’”

So it’s okay for “ruling elites” to use propaganda, “but this latest wave is different.” Well, yes, its goal is apparently to oppose the current ruling elites, which is what Howard objects to....

McCarthyism started out as a partisan campaign to tar the Democrats as the Kremlin’s party. But at least there was some evidence that the reds had indeed infiltrated the highest reaches of FDR’s administration. In the case of the neo-McCarthyites, their “evidence” consists of sheer assertions by anonymous spooks, cries of “it’s classified, we can’t give you the evidence,” and a case made by profit-making cyber-“security” companies like CrowdStrike that is fast coming unglued.


Saturday, March 25, 2017

Today's links

Forgotten promises?  
“We will pursue a new foreign policy that finally learns from the mistakes of the past…We will stop looking to topple regimes and overthrow governments…. Our goal is stability not chaos, because we want to rebuild our country [the United States]… We will partner with any nation that is willing to join us in the effort to defeat ISIS and radical Islamic terrorism …In our dealings with other countries, we will seek shared interests wherever possible and pursue a new era of peace, understanding, and good will.” Donald Trump campaign speech dec 1--Cincinnati

1--US military buildup continues, Nation  Mounting anti-Russia hysteria and military buildup, Hmmmm?

On March 9, The New York Times reported that the United States is sending 400 troops to Syria to bolster the small number of American troops that are already on the ground there. A week later, March 15, The Washington Post reported that the Pentagon has drawn up plans to send a 1,000 more troops within the coming weeks. Meanwhile, in anticipation of the coming (and perhaps final) stages of the operation against the Islamic State, the administration has decided to send “an additional 2,500 ground combat troops to a staging base in Kuwait from which they could be called upon to back up coalition forces battling the Islamic State in Iraq and Syria.”

2--Le Pen goes to Moscow

Intelligence sharing?

3--Thus Spake Sergei (Lavrov, that is)

"The formation of a polycentric international order"...

(must read)  The redistribution of the global balance of power continues. We are witnessing new centres of economic power and associated political influence come into being in the world. The Asia-Pacific Region has established itself as the driver of the world economy. Latin American and African nations, which have considerable human and resource potential, are taking a more active role. These developments bring into stark relief the cultural and civilisational diversity of the modern world. The need to democratise relations between states is becoming a more pressing issue

Russia remains the economic centre of gravity for the post-Soviet countries. This objective factor, not Moscow’s mythical urge to “revive the empire”, underlies the movement toward Eurasian integration. We and our partners in the Eurasian Economic Union are linked in today’s globalised world by centuries-long economic and cultural contacts and the intertwined destinies of our nations. We also advance the EAEU’s foreign contacts to implement President Vladimir Putin’s initiative to form a multilevel integration model in Eurasia. Interest in this initiative is growing steadily

4--Daesh, Creature of the West

"In the end, Shea frankly admitted to the source that Gen David Petraeus, conductor of the much-lauded 2007 surge, had trained these Sunnis now part of Daesh in Anbar province in Iraq.
"Saudi intelligence still maintains that these Iraqi Sunnis were not US-trained – as Shea confirmed – because the Shiites in power in Baghdad didn’t allow it. Not true. The fact is the Daesh core – most of them former commanders and soldiers in Saddam Hussein’s army — is indeed a US-trained militia."
Now I doubt very much more than previously that Dr. Frankenstein will destroy his creation, which explains the sudden surge to wall off Raqqa from all other regional forces and capture Taqba airbase

5--Putin speaks

Russia opposes attempts to destabilize and weaken international relations, as this could lead to a chaotic and ever less controllable slide towards greater tension in the world.

We support joint action to ensure a democratic and fair world order based on strict respect for the norms of international law, the United Nations Charter, recognition of the unquestionable value of cultural and civilizational diversity, national sovereignty, and the right of all countries to decide their futures freely, without external pressure.

The international situation does indeed require improvement. This calls for restraint, wisdom and responsibility. I would like to reiterate that Russia supports joint efforts to resolve the real problems facing the entire international community today. 

6--U.S. ​Stocks’ Weekly Drop Is Biggest in Months-- Political uncertainty, stretched valuations drive declines amid struggle on health-care bill

7--SEC Chairman Nominee Jay Clayton Calls for Scaling Back Regulations to Encourage IPOs -- President Donald Trump’s pick for top regulatory post says past work as a Wall Street lawyer is a strength

Another Trump fox arrives at the henhouse

8--What Comes After the Trump Trade for Markets? -- Markets can be driven by stories about fundamental factors or by pure supply and demand

Markets love a good story. The narrative this week has been about fear for the “Trump trade” of rising equities and higher Treasury yields, as the congressional battle over health care raised doubts about the prospects for the president’s promised tax cuts.
A more nuanced tale involves a fragile rally increasingly reliant on share buying by private investors, even as Donald Trump’s approval ratings fell and sophisticated investors grew more concerned about how much hope was priced in to stocks.

A deeper analysis goes to the next level, trying to detect when the story itself is changing. It is often obvious with hindsight: Last summer, U.S. stocks flipped from moving the opposite way to the dollar to moving in the same direction, as deflation fears faded. The S&P 500 switched from being driven up by a hunt for yield to instead gaining from a hunt for growth, and economically sensitive cyclical stocks took the lead. Mr. Trump’s election turbocharged the rally because a growth narrative took firm hold, shown by investors who started to like higher inflation-adjusted yields....

The story is changing again. U.S. stocks have become less and less sensitive to economic factors as the year has gone on, and the explanatory power of macroeconomic influences fell close to zero at the start of this week, according to Quant Insight. QI aims to model how the macroeconomic drivers of asset prices shift as market narratives change, using a variation on a statistical tool known as principal component analysis. It found previously tight links between U.S. stocks, inflation-linked bond yields and the dollar weakened recently....

Whichever story eventually dominates, expect choppy markets until the next narrative emerges

9--Prominent U.S. Ambassador to the Soviet Union: “The Whole Brou-Ha-Ha Over Contacts with Russian Diplomats Has Taken On All The Earmarks of a Witch Hunt … That is the Attitude of a Police State”

Thursday, March 23, 2017

Today's links

"The fact that Hillary Clinton can even show her face in public without being booed is proof of the Democratic Party death spiral. " Margaret Kimberley

1--Adam Schiff: Grifter, Racketeer, Warmonger

The cynical, absurd campaign to tar the Trump administration as a Russian plot to take over America is based on noting but lies, innuendo, political opportunism, and naked greed. Trump famously pledged to “drain the swamp” that is Washington, D.C., and it was inevitable that Schiff, one of the nastiest of the swamp creatures, would arise from the muck screeching in protest.

Let him. He and his party are consigning themselves to the margins of American politics. Their loony conspiracy theories are so far removed from the concerns of ordinary Americans that the distance can only be measured in light years. Polls show that even the majority of Democrats don’t think Trump’s relations with the Russians involved illegality: independents and Republicans disbelieve Schiff’s tales of Russian plots by an overwhelming majority. No normal person cares about Russia: but the Democratic activist base is very far from normal. ...

At the dawn of the cold war, as McCarthyism was rising, the formerly “isolationist” (i.e. anti-interventionist and anti-NATO) Republican party became the party of warmongers: the alleged threat of a domestic “communist conspiracy” logically translated into an international crusade to “roll back” communism by military means. What we are witnessing today is a similar transformation of the Democrats. Which is, as Trump would put it, sad!

2--Hillary Returns

The Democrats want to remain the corporatist party that carries out errands for the ruling class and wages imperialist war. They want those things more than they want to win. They are now fomenting an anti-Russian circus of a congressional investigation instead of making meaningful change in policy and platform that would bring them to victory. This strategy seems surprising until one acknowledges that change is the last thing they want. They prefer to live off of Republican unpopularity and slide back into office while doing the same things which have consigned them to also-ran status at every level of government around the country.

The Democratic Party exists on an outdated perception that it stands for justice and a fair and inclusive system. It has done nothing of the sort for decades but still lives off of long dead imagery.

This party is in free fall yet it keeps a hold on progressives who cannot imagine a political world without them. It is clear that supporting the Democratic Party is a path to more defeat. Even if they were committed to reforming their way to victory they would do nothing but repeat their history of ignoring and even attacking the millions of people who vote for them.

3--US Airdrops Marines Behind ISIS Lines in Syria

Forces Positioned Near Town of Tabqa

US forces in Syria have begun airdropping troops behind ISIS lines near the town of al-Tabqa, and near the important Tabqa Dam. The exact details of the airdrop are still emerging but they are said to include some US Marines as well as a number of Kurdish forces.

The area around Tabqa is just the latest in a series of targets for the Kurdish YPG as they attempt to surround the ISIS capital of Raqqa. Tabqa is about 25 miles west of the capital, and Kurdish YPG forces mostly control the area north of the city, though they’ve also made some efforts to take the northeast

The airdrops, which began on Tuesday, were the first US airdrops of Kurdish forces so far in Syria, and the deployment of US Marines with them points to the continued escalation of direct US military involvement on the ground by the Trump Administration.

In recent weeks, the US has also deployed hundreds of other US Marines with howitzers into the area north of Raqqa, aiming to provide support for advances toward the city. While the Pentagon officially labeled the howitzer Marines “advisers,” there appears to be little doubt that they, along with the new airdropped troops, will be involved in combat in the course of this deployment

4--Could the President Spy on His Political Opponents?-- Under the government’s current interpretation of the law, unfortunately, the answer is yes.

5--Davos For Democrats: DNC Mega Donors Meet At Mandarin Oriental Hotel To Plot "The Resistance"

6--BOMBSHELL: CIA Whistleblower Leaked Proof Trump Under "Systematic Illegal" Surveillance Over Two Years Ago: FBI Sat On It

As a result, Montgomery went to attorney and FreedomWatch founder Larry Klayman - who then approached the FBI:
Under grants of immunity, which I obtained through Assistant U.S. Attorney Deborah Curtis, Montgomery produced the hard drives and later was interviewed under oath in a secure room at the FBI Field Office in the District of Columbia. There he laid out how persons like then-businessman Donald Trump were illegally spied upon by Clapper, Brennan, and the spy agencies of the Obama administration

Montgomery left the NSA and CIA with 47 hard drives and over 600 million pages of information, much of which is classified, and sought to come forward legally as a whistleblower to appropriate government entities, including congressional intelligence committees, to expose that the spy agencies were engaged for years in systematic illegal surveillance on prominent Americans, including the chief justice of the Supreme Court, other justices, 156 judges, prominent businessmen such as Donald Trump, and even yours truly. Working side by side with Obama's former Director of National Intelligence (DIA), James Clapper, and Obama's former Director of the CIA, John Brennan, Montgomery witnessed “up close and personal” this “Orwellian Big Brother” intrusion on privacy, likely for potential coercion, blackmail or other nefarious purposes. 

He even claimed that these spy agencies had manipulated voting in Florida during the 2008 presidential election, which illegal tampering resulted in helping Obama to win the White House

7--NOW Can We Admit the War On Terror Has Failed?

8--Theresa May tells Parliament terrorist attacker was UK national known to MI5

9--London Attacker Was British-Born and Known to MI5 for 'Violent Extremism'

10--Will Trump Sacrifice US-Turkish Relations for Raqqa Liberation?

The Pentagon risks alienating Turkey if it continues to team up with the Kurdish-dominated Syrian Democratic Forces during its Raqqa operation. For its part, Damascus warned foreign powers that any military operation in the country without the approval of the legitimate Syrian government will be seen as an invasion.

The Pentagon's Raqqa operation may result in the deterioration of relations between Ankara and Washington.
The crux of the matter is that the US still largely relies on the Kurdish People's Protection Units (YPG), viewed by Ankara as an affiliate of the Kurdistan Workers' Party, designated as a terrorist organization in Turkey....

Meanwhile, Prime Minister Binali Yildirim warned Washington that "if [the United States] insists on carrying on this operation with terror organizations, our relations will be harmed — that is clear."

However, speaking to Sputnik Turkey Tuesday, a representative of the Kurdish-dominated Syrian Democratic Forces (SDF) confirmed that the Pentagon is going to deploy an additional 1,000 US troops to Syria to assist the SDF during the upcoming advance on Daesh's stronghold in Raqqa.
He also disclosed that the US continues to deliver heavy armaments to the region.

"Every two days the US deploys a large amount of weapons, primarily heavy armaments, to the region. They have sent tanks, armored vehicles, missiles, sniper rifles, mortar launchers and other types of weaponry," the source, who spoke on condition of anonymity, told Sputnik.
"In addition, the United States has told us that a decision was made to send an additional 1,000 US troops to take part in the Raqqa operation," he said, specifying that US troops will serve as military advisers during the operation and will not take part in the combat, at least initially....

For its part, Damascus has recently signaled that it will consider any military operation in Syria without the approval of the Syrian government to be an invasion, be it Raqqa or any other city.
"Any military operation in Syria without the approval of the Syrian government is illegal, and I said if there's any troops on the Syrian soil, this is an invasion, whether to liberate Raqqa or any other place. This is first. Second, we all know that the [US-led] coalition has never been serious about fighting ISIS [Daesh] or the terrorists, so we have to think about the real intention of the whole plan, if there's a plan to liberate al-Raqqa," Syrian President Bashar al-Assad told Russian journalists.

11--Democratic Party floats proposal for a palace coup

Friedman reveals the completely reactionary character of the opposition of the Democratic Party to the Trump administration. Trump and his band of fascists, generals and billionaires have provoked the hatred of tens of millions in the US who oppose the administration’s attacks on democratic rights, its police state persecution of immigrants, and its appeals to chauvinism, racism and militarism. But the opposition of Friedman and the Democratic Party on whose behalf he speaks has nothing to do with these democratic sentiments.

Friedman gives voice to tendencies in and around the Democratic Party that are prepared, in pursuit of their McCarthyite-style demonization of Russia, to welcome a palace coup that would impose a military/intelligence/corporate junta on the American people. The wealthy and corrupt social layers for whom the millionaire columnist speaks are motivated by two primary concerns...

He cites US imperialist strategist Richard Haass, president of the Council on Foreign Relations, who warns that without an urgent course correction, the US could find itself “not with America first, but with America alone.”

12--Tillerson pledges long-term US military role in Iraq and Syria

US Secretary of State Rex Tillerson declared Washington’s intention to keep troops deployed more or less indefinitely in the territories now occupied by Islamic State in Iraq and Syria in remarks delivered at the beginning of a two-day meeting of the US-organized anti-ISIS coalition in Washington.

“The military power of the coalition will remain where this fraudulent caliphate has existed in order to set the conditions for a full recovery from the tyranny of ISIS,” he told an audience that included Iraqi Prime Minister Haider al-Abadi. He gave no indication of when, if ever, US troops could be withdrawn from a war zone extending across Iraq and Syria, where there has been fighting of greater or lesser intensity throughout the 14 years since the US first invaded Iraq.

Tillerson also called for the establishment of “interim zones of stability” in Syria to which refugees from the US-instigated civil war that has raged throughout that country for the past six years could be forcibly returned. Areas will be deemed “safe” if they have been initially cleared of ISIS, an absurdly low standard given the deadly conflicts which continue to rage between different factions in the Syrian civil war.

He also stressed that these areas would come under the control of local governments installed by Washington, presumably drawn from the Kurds and Sunni Islamist opposition forces sponsored by the Pentagon and CIA as part of the US war for regime change against the Assad government in Damascus.

Trump’s secretary of state also demanded a greater commitment both militarily and financially from the 68 countries represented at the meeting. A State Department release prior to the meeting said a key goal would be to “accelerate international efforts to defeat ISIS.”

Tillerson emphasized that US troops would effectively be engaged in a permanent occupation of neighboring Iraq. Even after ISIS is defeated in Mosul, where hundreds of civilians have been killed by the US-backed offensive on the Iraq’s second-largest city, the US military would remain there, Tillerson insisted.

“Local leaders and local governments will take on the process of restoring their communities in the wake of ISIS with our support,” he said. “The development of a rejuvenated civil society in these places will lead to a disenfranchisement of ISIS and the emergence of stability and peace where there was once chaos and suffering. But none of this will happen automatically. We all need to support this effort.”.....

In a remark that amounts to a blank check to the US to wage war wherever it sees fit, Tillerson ominously warned that ISIS could emerge anywhere after it is defeated in the current fighting. “As we stabilize areas encompassing ISIS’s physical caliphate in Iraq and Syria, we also must prevent their seeds of hatred from taking root elsewhere,” he said. “We must ensure ISIS cannot gain or maintain footholds in new regions of the world.”
Even as the secretary of state delivered his comments, a major operation has been launched in Syria by US special forces to provide support to the Kurdish-dominated Syrian Democratic Forces (SDF) in an assault behind ISIS lines. US troops and SDF militia were flown into a location close to a dam on the Euphrates River which they aim to take from ISIS so as to open up a new route into Raqqa, the Jihadi group’s de facto capital.
While reports sought to maintain the fiction that the US military personnel were there as “advisers,” they are to all intents and purposes engaged in a combat mission. Col. Joe Scrocca, spokesman for the US military intervention in Syria and Iraq, admitted as much when he noted that the mission behind enemy lines could take “weeks” to complete.....

Russia, which intervened in 2015 to prop up the Assad regime, is also strengthening its presence in the contested northwest of Syria, where its military personnel will carry out training of the Kurdish YPG militia, which is also receiving support from the US. This will further antagonize Turkey as Ankara is not prepared to tolerate the consolidation of a Kurdish-controlled autonomous region on its border. Ankara also views Iran with mounting hostility, accusing it of seeking to expand its influence in Syria

13--Political warfare flares over surveillance of Trump transition team

The House Intelligence Committee is scheduled to hold a second hearing on March 28 in which three former Obama administration officials will be the principal witnesses: former Director of National Intelligence James Clapper, who has said there is no evidence of collusion between the Trump campaign and the Russian government; former CIA Director John Brennan, who several Republicans have claimed is a major source of the intelligence leaks to the New York Times and Washington Post on the issue; and former Deputy Attorney General Sally Yates, who played a key role in the ouster of Trump national security adviser Michael Flynn, informing the White House of an intercepted conversation between Flynn and the Russian ambassador about US sanctions at a time when Flynn was denying he had discussed the matter with the envoy.

Nunes told the press that he expected the NSA, FBI and CIA to supply by Friday a full list of Trump transition officials whose communications were intercepted.

14--Poll: Trump’s Base Support Is Eroding

15--James Comey--The most ridiculous FBI Director of all time

There are times when I near the point of total despair. This week’s Congressional hearings into alleged Russian interference in the American presidential election are such a moment.
Answering questions about Russia, FBI Director James Comey said the following:
He [Putin] hated Secretary Clinton so much that the flip side of that coin was that he had a clear preference for the person running against the person he hated so much.
They engaged in a multifaceted campaign to undermine our democracy.
They were unusually loud in their intervention. It’s almost as if they didn’t care that we knew, that they wanted us to see what they were doing.
Their number one mission is to undermine the credibility of our entire democracy enterprise of this nation.
They’ll be back. They’ll be back, in 2020. They may be back in 2018.
Also, in response to the question ‘Would they like to see more Brexits?’, Comey said ‘Yes.’

These statements were described by the BBC as ‘things the FBI knows about Russia’. Note the use of the word ‘knows’. In a previous post, I pointed out the need to differentiate between fact and opinion. In his evidence to Congress, Comey didn’t say that these things were his opinion. He stated them as facts, as things he ‘knows’. Putin ‘hated’ Clinton; Russians’ mission ‘is’ to undermine American democracy; ‘Yes’, they do want more Brexits, etc.
But what evidence did Comey produce to support what he was saying? None. These were opinions, masquerading as facts, not actual facts. So the question which then arises is whether Comey’s opinions on Russia are ones we should trust.

16--US Confirms Airdrop Of Shock Troops West Of Tabqa In Syrian Province Of Raqqah

On Wednesday, the SDF, the US Special Forces and the US Marines airdropped behind ISIS defense lines west of the town of Tabqa and launched an operation to capture the town of Tabqa, the Tabqa military airbase and the Tabqa dam.
“The Coalition supported this offensive with air movement and logistical support, precision airstrikes, Apache helicopters in close air support, Marine artillery, and special operations advice and assistance to SDF leadership,” the US-led coalition said in a statement at its website.
Thus, the US leadership officially confirmed the participation of its troops on the ground in the area which is likely a key part of the new US strategy against ISIS adopted by the Trump administration.

17--Concerns over Trump crisis roil financial markets

As the Financial Times put it, the “deepening political tussle in Washington over an overhaul of the health care industry prompted fears over whether Donald Trump will be able to drive through the economic stimulus he has promised...

Whatever the short-term trend on the financial markets, Tuesday’s downturn reflected the underlying unsustainability of the massively inflated stock valuations—a defining feature of the so-called “recovery” from the Wall Street crash of 2008. The Obama administration systematically fed the record rise on the stock market with trillions of dollars in bank bailouts and trillions more in super-cheap credit and cash pumped into the financial system by the Federal Reserve, combined with austerity and wage-cutting imposed on the working class.

The post-election surge to new record highs was entirely based on the anticipation of an unprecedented profit windfall from Trump’s policies of corporate deregulation, corporate tax cuts and corporate-friendly infrastructure spending, alongside an historic attack on social programs, from health care, to education, to housing.
The underlying economy, however, remains stagnant, and Trump’s policies of economic nationalism and trade war threaten to intensify the tendencies toward a new financial crash and full-scale depression...

Without the massive stimulus to corporate profits from Trump’s promised program of social reaction, there is no basis for sustaining the record bull market. Hopes of a boost to economic growth are dwindling. A running projection for first-quarter economic growth from the Atlanta Federal Reserve has fallen to 0.9 percent.
The stagnant pace of economic growth and world trade has been reflected in declining prices for basic commodities such as oil, copper and iron ore. Oil prices fell to almost four-month lows on Wednesday after data showed US crude inventories rising faster than expected, adding to already bulging global stockpiles.

The dollar has continued to fall, raising fears of a new eruption of inflation, despite the Fed’s decision last week to raise its benchmark interest rate another 0.25 percent. The markets interpreted the Fed’s move as “dovish” because the central bank indicated it had no plans to raise rates this year more than the two additional times it had previously signaled.

The starkest measure of growing nervousness in financial markets is the continuing rise in gold, the most basic of all investment safe havens. Gold rose 1 percent to $1,247 a troy ounce on Wednesday, its highest level in almost three weeks. It is up nearly 7 percent since the start of the year, and Bank of America is predicting it will jump $200 by the end of the year to surpass $1,400 per troy ounce.
At the same time, the short-term prospects for US corporate profits are weakening. As the Financial Times reported Monday: “The US corporate profit outlook has dimmed in recent weeks, with analysts paring back their forecasts in a fresh sign of the risks facing the Wall Street rally that has powered equities to peaks.”

The newspaper noted recent data showing earnings of companies in the S&P 500 index rising by 9 percent in the first quarter of this year, significantly lower than the 12.3 percent increase predicted at the start of the year. The smaller-than-expected rise in profits will intensify concerns over the extraordinarily high price-to-earnings ratio that already prevails on US financial markets. According to a measure developed by Yale economist Robert Shiller, the cyclically adjusted PE ratio hit its highest point in 15 years this month.

The Financial Times reported Tuesday that a recent Bank of America Merrill Lynch survey showed more investors saying stocks are overvalued than undervalued than at any point since 2001. The New York Times on Wednesday noted that US stock prices relative to earnings have been higher than today only in 1929 and 1999, on the eve of major stock market crises followed by economic slumps.

18--The Bubble in commercial real estate and its effect on financial stability

Rosengren finds that “the root cause of the financial crisis was a significant decline in collateral values of residential and commercial real estate” and “exposures across the banking system that are correlated and sizeable.”
Real estate becomes a trigger for a financial crisis because of its high leverage. For banks, these properties are collateral. When property values tank, the collateral is impaired. Defaults rise. Then broader problems spread into the economy. Property owners experience a reduction in income. Homeowners see their paper wealth evaporate and financial stress rises. At some point, banks begin to fail....

Rosengren finds that “the root cause of the financial crisis was a significant decline in collateral values of residential and commercial real estate” and “exposures across the banking system that are correlated and sizeable.”
Real estate becomes a trigger for a financial crisis because of its high leverage. For banks, these properties are collateral. When property values tank, the collateral is impaired. Defaults rise. Then broader problems spread into the economy. Property owners experience a reduction in income. Homeowners see their paper wealth evaporate and financial stress rises. At some point, banks begin to fail....

Reading between the lines, it appears the real-estate bubble is once again putting financial stability at risk, but the Fed, which caused this bubble via low rates and QE, is now nudging up interest rates too slowly and too late to an “equilibrium rate” that it knows is too low. And as this bubble runs its course toward a crisis, the Fed will once again pretend it isn’t happening.

19--Chinese infrastructure: The big picture

Infrastructure development remains a top priority for China’s government, which has long recognized that a modern economy runs on reliable roads and rails, electricity, and telecommunications. From the late 1990s to 2005, 100 million Chinese benefited from power and telecommunications upgrades. Between 2001 and 2004, investment in rural roads grew by a massive 51 percent annually. And in recent years, the government has used substantial infrastructure spending to hedge against flagging economic growth.
China’s leadership has charted equally ambitious plans for the future. Its goal is to bring the entire nation’s urban infrastructure up to the level of infrastructure in a middle-income country, while using increasingly efficient transport logistics to tie the country together. What follows is a by-the-numbers portrait of this dynamic sector.

20--Wikimaps  Syria

21--Why Trump’s Tax Cut May Be Later and Smaller Than Investors Think -- With Republicans’ health-care overhaul threatening to chew up the legislative calendar, their tax-reform plans risk getting pushed back

...includes a drop in the corporate tax rate to 20% from 35% that Goldman Sachs estimates would lift S&P earnings by 10%. Other shareholder-friendly aspects of the plan, such as lowering the penalty for repatriating overseas profits, also would get delayed.Indeed, while Treasury Secretary Steven Mnuchin last month told The Wall Street Journal that the administration was working with House and Senate Republicans to pass tax reform before Congress leaves for its August recess, it is looking as if the legislation might not land on President Donald Trump’s desk until early next year.

If so, any boost to earnings that a tax cut brings also won’t come until next year. Investors who are assuming a more aggressive timetable also are assuming companies will have stronger cash flows over the next 12 months than they are going to get.

The longer the health-care debate drags out, the harder it will be to craft a tax-cut package. There are time constraints, too, points out Kim Wallace, a policy analyst at Renaissance Macro Research. A year from now, when the midterm elections are looming, it will be hard for Congress to accomplish much of anything.
In the end, Republicans may have to settle for tax-reform lite. The contentious idea of taxing imports to help pay for tax reform might have to be dropped in an effort to speed passage. Republicans might have to settle for a shallower tax cut. If it is something closer to 30%, for example, Goldman estimates it would raise S&P earnings by just 4%

22-- Putin, Munich 2007--The seminal speech

Wednesday, March 22, 2017

Today's Links

Trump is .... dismantling every part of the federal government that exists for any purpose other than waging war.

1--Trump morphs in War President

U.S. Marines are, for the first time, deploying to Syria (with more to come). There’s talk of an “enduring” U.S. military presence in Iraq, while additional U.S. troops are being dispatched to neighboring Kuwait with an eye to the wars in both Iraq and Syria. Yemen has been battered by a veritable blitz of drone strikes and other air attacks. Afghanistan seems to be in line for an increase in American forces. The new president has just restored to the CIA the power to use drones to strike more or less anywhere on the “world battlefield,” recently a Pentagon prerogative, and is evidently easing restrictions on the Pentagon’s use of drones as well. U.S. military commanders are slated to get more leeway to make decisions locally and the very definition of what qualifies as a “battlefield” looks like it’s about to change (which will mean even less attention to “collateral damage” or civilian casualties). President Trump may soon designate various areas outside more or less official American war zones -- since the U.S. Congress no longer declares war, they can’t truly be official -- as “temporary areas of active hostility.” That will grant U.S. commanders greater leeway in launching attacks on terror groups in places like Somalia. In fact, this already seems to have happened in Yemen, according to the New York Times, opening the way for a disastrous Special Operations Forces raid there that caused the death of a Navy SEAL and possibly nine Yemeni children (the youngest three months old), while evidently accomplishing next to nothing....

“Fifteen years after launching a worldwide effort to defeat and destroy terrorist organizations, the United States finds itself locked in a pathologically recursive loop; we fight to prevent attacks and defend our values, only to incite further violence against ourselves and allies while destabilizing already chaotic regions..."
Major John Q. Bolton, a veteran of both the Iraq and Afghan Wars.

2--Stocks fall on tax cut delay

"The markets were reminded yesterday the 'Trump trade' is not a one-way trade and there's room for disappointment as actions on tax cuts and infrastructure spending might not materializes as quickly as we want," said Anastasia Amoroso, global market strategist at J.P. Morgan Private Bank in Houston.

"The pronounced fall in yields across the world is not helping market sentiment at the moment either."
U.S. 10-year Treasury yields fell to three-week lows on Tuesday and the gap between U.S. and German 10-year government borrowing costs hit its narrowest since November.

The S&P 500 has run up about 10 percent since the election in November, spurred mainly by Trump's agenda of tax cuts and infrastructure spending, but valuations have emerged as a concern.
The benchmark index is trading at about 18 times forward earnings estimates against the long-term average of 15, according to Thomson Reuters data

3--Don’t buy into the hype: There will be no tax relief under Trump

4--A Breach in the Anti-Putin Groupthink

“For 25 years, Republicans and Democrats have acted in ways that look much the same to Moscow. Washington has pursued policies that have ignored Russian interests (and sometimes international law as well) in order to encircle Moscow with military alliances and trade blocs conducive to U.S. interests. It is no wonder that Russia pushes back. The wonder is that the U.S. policy elite doesn’t get this, even as foreign-affairs neophyte Trump apparently does.”...

English explains how the U.S. meddled in Russian domestic politics in the mid-1990s to falsify election results and ensure Yeltsin’s continuation in office despite his unpopularity for bringing on an economic Depression that average Russians remember bitterly to this day. That was a time when the vast majority of Russians equated democracy with “shitocracy.”

English describes how the Russian economic and political collapse in the 1990s was exploited by the Clinton administration. He tells why currently fashionable U.S. critics of Putin are dead wrong when they fail to acknowledge Putin’s achievements in restructuring the economy, tax collection, governance, improvements in public health and more which account for his spectacular popularity ratings today.

English details all the errors and stupidities of the Obama administration in its handling of Russia and Putin, faulting President Obama and Secretary of State (and later presidential candidate) Hillary Clinton for all of their provocative and insensitive words and deeds. What we see in U.S. policy, as described by English, is the application of double standards, a prosecutorial stance towards Russia, and outrageous lies about the country and its leadership foisted on the American public.

5--Credit Check

Credit has been decelerating since the collapse in oil capex, and most recently the deceleration has intensified:

This is the absolute level of loans outstanding, which seems to only go negative like this in recessions

6--Existing home sales weaken

7--UK shelters Russian terrorists

The British government is also still sheltering Akhmed Zakayev, the former head of the Chechen Republic of Ichkeria (ChRI), who is wanted on terrorist charges in Russia.

The ChRI is a terrorist organization that was linked to the kidnapping and beheading of four British telecommunications engineers in 1998.

Speaking to RIA News, Loisa Petschi, a widow of one of the victims, said: “The UK allows Chechen terrorists to enter the country and claim political asylum.

I do not understand – do they intend to continue their militant activities here, in the West?” Petschi told the reporters.

Embattled Russian oligarch Mikhail Khodorkovsky, who is currently facing charges by Russian investigators of two counts of murder, recently announced that he might seek refuge in Britain.

"Definitely I'm considering asking for asylum in the UK," Khodorkovsky told the BBC.

It is unlikely that he will face any hurdles by the authorities in having his claim satisfied, given the British government’s apparently flexible stance on alleged Russian criminals.

8--Left Behind-- BRICS Plus: 'the Bloc That Will Dominate the World'

The proposed enlargement of BRICS (BRICS Plus) with the inclusion of powerful emerging economies would help fill the void created by US trade protectionism, international analyst Adrian Zelaia told Sputnik

Having analyzed Beijing’s idea to bring Pakistan, Bangladesh, Iran, Nigeria, South Korea, Mexico, Turkey, Indonesia, the Philippines and Vietnam into the BRICS group, consisting of Brazil, Russia, India, China and South Africa, Zelaia, the president of Ekai Center consulting company, concluded that this could come as a response to Washington’s decision to pull out from the Trans-Pacific Partnership agreement.

“The dissolution of the TPP, established to maintain US domination in Asia, created a void BRICS can now move in to fill and play a bigger role among the emerging economies,” Zelaia said in an interview with Sputnik Mundo...

He added that BRICS, which until now served as “a symbolical counterbalance to the West,” could now become “a leader of the global economic order” and could eventually dominate the global economy.

“The BRICS countries use a development model that, apart from trade, also prioritizes strategic investments into future progress. Most of the new inclusions are part of the New Silk Road project of Eurasian investments in infrastructure and communications,” Adrian Zelaia noted.

“This infrastructure would kick-start a Chinese model of development where money lost by one country does not necessarily make the other country richer. Instead, it encourages everyone to come up with new ideas and generate projects that benefit all,” he added.

9--China’s Maritime Silk Road to Potentially Encompass Australia and New Zealand

10--Fighting flares in Damascus as US escalates air war in Syria

The brutal US-instigated war for regime change in Syria, which entered its seventh year last week, has already claimed the lives of upwards of half a million people and driven a further 11 million from their homes.

Airwars, a group monitoring US and coalition airstrikes in Syria and Iraq, recently noted that since Trump took office, civilian casualties in both countries had undergone an “unprecedented” increase. Local sources in the Iraqi city of Mosul, currently the target of a US-backed assault to retake control of it from ISIS, reported to Airwars that in the first week of March alone, between 250 and 370 non-combatants were killed by US-led airstrikes.

Over the past three years, Airwars calculates that airstrikes conducted by the US-led coalition have claimed the lives of some 2,590 civilians in Syria.

The latest atrocity reportedly occurred Tuesday in the de facto ISIS capital of Raqqa, when an alleged airstrike struck a school building housing hundreds of civilians. If confirmed, the strike will be the second over the past week to claim a large number of civilian lives, following the partial destruction of a mosque in Idlib province which the US claimed was being used by al-Qaida as a base. At least 42 people were killed in that attack, although reports spoke of many more still trapped in the rubble....

Israeli politicians have gone on the offensive, vowing to expand similar strikes in the future. Foreign Minister Avigdor Liberman told Israeli Public Radio on Sunday, “The next time the Syrians use their air defense systems against our airplanes, we will destroy all of them without thinking twice.”

Israel has also sought to justify its intervention with allegations that Iran is attempting to strengthen its influence over Damascus by establishing a permanent military presence in the country. Tel Aviv’s hardline stance towards Teheran enjoys the full backing of the Trump administration.

Prime Minister Benjamin Netanyahu, during a trip to China, dismissed any talk of tensions with Russia, but insisted that strikes would go on. “If there is a feasibility from an intelligence and military standpoint—we attack and so it will continue,” he said.

Assad, in response to the Israeli airstrike, called on Russia to prevent future attacks. “Russia can play a role so that Israel no longer attacks Syria,” Assad stated to Russian journalists. “I think Russia can play an important role in this regard.”....

The increase in US troops on the ground in this contested region, and the broader escalation of the conflict being pursued by the Trump administration throughout Syria and Iraq, is adding fuel to the fire of a conflict that could rapidly spiral out of control. Even an unintended clash between any combination of the myriad competing military forces operating in Syria would be sufficient to draw in regional and global powers, with catastrophic consequences for the long-suffering population of the Middle East.

11--Wealth of world’s billionaires soars amid stock market surge

12--The Trump vs Germany fiasco

The German ruling class has reacted to the escalating conflict with a mixture of concern and aggression. On Monday, the daily Handelsblatt published a commentary headlined “Transatlantic confrontation” which declared, “Anyone who hoped that Angela Merkel’s visit to US President Donald Trump would lay the basis for a normalisation of transatlantic relations must learn to know better. The American president is sticking to his firm positions and is even intensifying the conflict with international partners. The tweet against the Chancellor is an affront, the incident at the G20 meeting an historic break with the past.”

Even representatives of the German ruling elite who have been vehemently pro-American in the past and supported US-led wars are no longer taking Germany’s partnership with the United States for granted. “Enough of making fun. There is no longer a generous patron, now someone is governing who recognises no allies, but only alleged debtors who take advantage of America. Yes, a new era is beginning in the White House,” wrote Klaus-Dieter Frankenberger in the Frankfurter Allgemeine Zeitung.

A comment in the Rheinische Post summed up the response of German imperialism to Trump’s aggressive assertion of US interests. Now it was necessary “to find even clearer statements against the new US protectionism and mobilise the majority of the remaining states against Trump.” Germany and the European Union have to “assert themselves and counterpose their own, different-sounding goals” to Trump, “instead of permitting themselves to be intimidated by Washington.” The prospects for this are good, wrote the newspaper, because at the G20 summit it became clear “that in trade policy, Germany not only has the rest of the EU, but almost the rest of the entire world, above all China, Brazil and Japan, on its side.”
Nobody should underestimate the historical and political significance of these developments. Twenty five years after the dissolution of the Soviet Union, the conflicts between the imperialist powers, which led twice in the 20th century to horrific world wars, are once again erupting in trade war and preparations for military conflict.

Tuesday, March 21, 2017

Today's Links

"It's not going to be called that (the Soviet Union). It's going to be called a customs union, it will be called the Eurasian Union and all of that, but let's make no mistake about it. We know what the goal is and we are trying to figure out effective ways to slow down or prevent it". Hillary Clinton Dec 2012

1--What rally? Mom-and-pop investors are getting left in the dust

The Trump rally is just the latest leg in a wild 8-year-old explosion higher, but mom-and-pop investors still aren't impressed.
By multiple measures, the retail-investing crowd has not been a significant player in the second-longest bull market on record.

Sentiment surveys show fewer than 1 in 3 believe stocks will be higher six months from now. Households were net sellers of stocks in 2016 and even exited stocks during the fourth quarter, when Donald Trump's upset presidential victory sent the market surging...

Goldman forecasts that corporations will be buying about $700 billion worth of shares this year. Net equity purchases from corporations and ETFs in 2016 totaled $584 billion and $188 billion, respectively.
That the retail crowd still isn't ready to dive into the market carries some silver lining. Usually, strong retail participation signals a bull market has expended nearly all its energy. The downside is that it also points to the disturbing historical trend of individual investors buying high and selling low

2--The CIA’s 60-Year History of Fake News: How the Deep State Corrupted Many American Writers

3--Democrats’ anti-Russia hysteria prepares the ground for war

The whole purpose of the congressional hearings—Monday’s was only the first in a series—has less to do with Trump than with the acceleration and intensification of the preparations for war with Russia. This was acknowledged in the opening remarks of the House Intelligence Committee chairman, Republican Representative Devin Nunes, who declared that whatever his disagreements with the Democrats, “one benefit” of the hearing was already clear. “It has focused wide attention on the pressing threats posed by the Russian autocrat” and set the stage “for stronger action against Russian belligerence.”...

The neo-McCarthyites of the Democratic Party have not presented a shred of credible evidence to support any of their allegations. Not a single charge can withstand critical scrutiny. But the rhetoric is utterly unrestrained, with declarations being made over and over that the alleged Russian hacking during the 2016 election was an “act of war.”

At one point during the hearing, FBI Director Comey repeated the claim made previously by US intelligence agencies that Putin had intervened in the US elections out of sheer hatred for the Democratic presidential candidate Hillary Clinton, whom he blamed for Washington’s support for anti-Putin demonstrations in Moscow in 2011, while Clinton was secretary of state. No evidence was presented to support this wild and stupid claim

4--Both Comey and National Security Agency Director Admiral Michael Rogers admit that Russia did not influence voting process in the US, shortly after Comey confirmed that there is still an active investigation.

5--Washington vultures circling Nunes for seeing no evidence of Trump-Kremlin collusion’

6--The Fed's global dollar problem       

7--Pentagon might propose sending ground troops to Syria

8--No evidence of collusion--Trump Russia

9--The Fed's mistake

there is little evidence that either wage growth or inflation is accelerating. The average hourly wage increased at just a 2.5 percent annual rate over the last quarter, slightly lower than its pace in late 2016. Broader measures of compensation, which factor in the drop in employers’ payments for health care insurance, show even weaker gains.

In addition, the inflation measures themselves show no evidence of acceleration. The core consumer price index, which excludes volatile food and energy prices, has been rising at the same 2.2 percent rate for more than a year. If rent is excluded, the rate of inflation would be just 1.3 percent.

Also, the core personal consumption deflator, the index targeted by the Fed, remains at 1.7 percent with no sign of acceleration. The Fed targets a 2.0 percent average rate for this index, meaning that it should want to see some rise above 2.0 percent to keep to its target.

These are all reasons for believing the Fed’s rate hike last week was a mistake. However it is important to keep in mind that a quarter point hike has relatively little impact. What matters far more is a sequence of rate hikes.

If the Fed makes further hikes in a context where there is little evidence of inflationary risks then it could needlessly be keeping millions of people from getting jobs. It will also be weakening the bargaining power of tens of millions of workers, to the benefit of corporations and higher paid workers.
That would be a very serious policy mistake if it happens, and one that we should not blame on robots.

10--Surprise: Good Economic News Isn’t Always Great News for Investors

Good news keeps coming for the U.S. economy. For contrarian investors, this isn’t exactly great news.
Consumers say they feel better about the economy than they have in the past 17 years. Optimism among small-business owners has surged since the election. Jobs are plentiful and wage growth is strengthening. New data coming this week, including reports on existing home sales, new home sales and durable goods orders, should contribute to the positive trend.

11--The Fed Is Stuck in the Past With Its Forecasts of the Future

for the long-term strong dollar bet, look to the Fed. The central bank is assuming the economy will experience a version of “secular stagnation”, popularized in recent years by former Treasury secretary Larry Summers. From this perspective, long-term growth will be weak, too much will be saved, and the “natural” interest rate will stay low. The dollar could still rise if the rest of the world is going to be even worse, but it’s hard to be truly bullish because the assumption of weak, long-run growth makes the Fed err on the side of lower rates.

At last week’s Fed meeting, policy makers held their long-run growth predictions for the economy at 1.6% to 2.2%, with a median forecast for long-run interest rates of 3%, equivalent to just 1% adjusted for inflation. Back in 2012, with the Lehman crash still fresh in the memory, the lowest Fed growth forecast was 2.2%, and the median expectation for long-run interest rates was above 4%.
“All these years they’ve had these bullish views and they’ve had to downgrade,” says Stephen Jen, co-founder of Eurizon SLJ Capital. “Now just as the world economy seems to be gaining traction they are moving the other way.”...

The term secular stagnation was coined by Alvin Hansen in 1938, on basically the same grounds as the idea is pushed today: weak productivity and population growth

12--Cost of Repo Safety Net Hits $74 Billion

The cost of backstopping repurchase agreements has risen from a $50 billion estimate circulated two years ago

13--Bond Rally Intensifies Inflation Debate -- Uncertainty over prospects for U.S. growth and asset prices in coming years

14--U.S. 10-Year Note Yield Hits Low for the Month--Investors unwind Trump trades, sending Treasury yield to 2.432%, as DJIA, dollar slide

Saturday, March 18, 2017

Today's Links

1--Nouriel Roubini warns: Markets are overestimating Trump policy positives

"[Markets] are overestimating the positives of the US-Trump policies. Infrastructure, stimulus, deregulation, tax cuts: I think Trump will achieve much less on those dimensions," he said. "And they're underestimating the risk that the U.S. protectionist policies are going to lead to trade wars, that the restrictions on immigration are going to slow down labor supply, and that micromanaging the corporate sector is going to be negative."

Roubini added that the policy mix for the U.S. also presents a challenge: Fiscal stimulus is going to force the Fed to tighten more, it's going to push up interest rates and the dollar, he said. "In a way it's going to weaken the economy over time."

Still, he acknowledged, confidence is reigning.

2--Letter from a Syrian reader: “There is a new sentiment of solidarity in the ranks of the poor people”

3--Why Hillary lost

  1. The Democrat Establishment

  2. Clinton’s “Deplorables” Gaffe
  3. Clinton Repels the Left
  4. “It’s The Economy, Stupid!”
  5. Voter Registration and Turnout Failure
  6. The Undecideds Break for Trump .....

Obama’s economic record includes job creation exclusively in part-time, precarious jobs (see the comment on warehouse jobs from Pennsylvania). Obama’s tenure has been marked by rising mortality rates, an AIDS-level epidemic of excess “deaths from despair” due in part to an opioid epidemic. These are all economic issues, and Obama’s record is terrible. Clinton attempted to wriggle out of the contradiction in two ways: First, she began by proferring incremental changes and endless bullet points, and then shifted to focusing on Trump’s flaws as a candidate and a man.[4] In either case, it was crystal clear she had no sense of how bad it was out there, or any real idea of what to do (unlike Sanders, who explicitly framed his program as an economic one). Trump’s slogan: “Make American Great Again.” Clinton’s riposte: “America is already great!” Really? The counties that voted for “hope and change” in 2008, and gave Obama a second chance in 2012, weren’t buying it, nor should they have. They decided to vote for “change” again in 2016. And why wouldn’t they?..


I hope the matrix of failure is a useful tool; I enjoyed fitting as much as possible of what I remember happening into it’s framework. To me, though, the election turned out to be pretty simple:

1) “It’s the economy, stupid!”, and

2) “Change vs. more of the same”

Clinton was the “more of the same” candidate in a change year when the economy was the issue. That’s why the Obama counties flipped. So she lost! Oh, and you can argue that zeitgeist issues like the Comey letter “lost Clinton the election.” But arguments like that depend on national polling. What you’ve got to do is show that your zeitgeist issue of choice would unflip the Obama counties that went for Trump. Seems unlikely.

3--Why Trump's budget may be 'devastating' to his supporters

It includes many programs that are important to rural, lower-income areas that went big for Trump last November, such as subsidies for regional airports, funds to clean up the Great Lakes and Chesapeake Bay, and support for regional economic development.

4--The Big Con-- Here's How Donald Trump's Budget Screws Over the People Who Elected Him

Goodbye safe drinking water. Hello high energy bills.

5--Why I Dissented--President Kashkari explains his vote at the March 2017 FOMC meeting.  (Excellent)

In short, the cost of labor isn’t showing signs of building inflationary pressures that are ready to take off and push inflation above the Fed’s target. And since the last FOMC meeting, overall, data on wage inflation are mixed....

It is true that headline inflation rates have climbed around the world since the last FOMC meeting. As noted earlier, that is due to higher oil prices, which can be transitory. More importantly, core inflation rates in advanced economies continue to come in below their inflation targets...

In summary, inflation is still below our target. While there are some signs of inflation slowly building toward our target, it isn’t happening rapidly, and inflation expectations appear well-anchored. Not much has changed since the last FOMC meeting...

The headline unemployment rate has fallen from a peak of 10 percent to 4.7 percent, roughly the level it was at before the financial crisis. But we know that measurement doesn’t include people who have given up looking for a job or are involuntarily stuck in a part-time job. So we also look at a broader measure of unemployment, what we call the U-6 measure, which includes those workers. The U-6 measure peaked at 17.1 percent in 2010 and has fallen to 9.2 percent today, which is still almost 1 percentage point above its precrisis level. The U-6 measure suggests that there may still be additional workers who might re-enter the labor force if the job market remains healthy....

Monetary policy has been at least this accommodative for several years, including the effects of the Federal Reserve’s expanded balance sheet, without triggering a rapid tightening of the labor market or a sudden increase in inflation. This suggests that monetary policy has been only moderately accommodative over this period. This level of accommodation seemed appropriate given where we are relative to our dual mandate. ....

The dollar has increased more than 20 percent over the past 2½ years. The strong dollar will likely continue to put some downward pressure on inflation. Overall, the global environment doesn’t seem to be sending a strong signal for a change in U.S. interest rates....

will shrink the balance sheet and when that roll-off will begin. I think it is imperative that we give the markets time to understand the details of the plan before it is implemented. And while it is likely the announcement of that plan will not trigger much of a market response, we don’t know that for certain. The announcement of our balance sheet plan could trigger somewhat tighter monetary conditions. In that case, that announcement could be viewed as a substitute for a federal funds rate increase, whose magnitude is uncertain...

One additional consideration that I think about is the possibility that low rates are scaring people and causing them to save more and invest less, while conventional wisdom is that low rates should lead to more investment and less saving. It is not a crazy argument because negative rates seem to be having unexpected results in some countries that have adopted them. If negative rates can scare people into saving more, perhaps very low rates can too? This would be an argument to raise rates just so people can feel more confident.


As was the case in the February FOMC meeting, we are still coming up somewhat short on our inflation mandate, and we may not have yet reached maximum employment. Inflation expectations remain well-anchored. Monetary policy is currently somewhat accommodative. There don’t appear to be urgent financial stability risks at the moment. There is great uncertainty about the fiscal outlook. The global environment seems to have a fairly typical level of risk. From a risk management perspective, we have stronger tools to deal with high inflation than low inflation. Looking at all this together led me to vote against a rate increase.

In summary, I dissented because the key data I look at to assess how close we are to meeting our dual mandate goals haven’t changed much at all since our prior meeting. We are still coming up short on our inflation target, and the job market continues to strengthen, suggesting that slack remains. Once the data do support a tightening of monetary policy, I would prefer the next policy move by the FOMC to be publishing a detailed plan that explains how and when we will begin to normalize our balance sheet. Once we put that plan in place, and we see the market reaction to it, we can return to using the federal funds rate to remove monetary accommodation when the data call for it. ...

Next let’s look at inflation expectations—or where consumers and investors think inflation is likely headed. Inflation expectations are important drivers of future inflation, so it is critical that they remain anchored at our 2 percent target. Here the data are mixed. Survey measures of long-term inflation expectations are flat or trending down. (Note the Michigan survey, the black line, is always elevated relative to our 2 percent target. What is important is the trend, rather than the absolute level.) The Michigan survey has been trending down over the past few years and is now near its lowest-ever reading...

But perhaps inflationary pressures are building that we aren’t yet seeing in the data. I look at wages and costs of labor as potentially an early warning sign of inflation around the corner.2 If employers have to pay more to retain or hire workers, eventually they will have to pass those costs on to their customers. Eventually, those costs must show up as inflation. But we aren’t seeing a lot of movement in these data. The red line is the employment cost index, a measure of compensation that includes benefits and that adjusts for employment shifts among occupations and industries. It has been more or less flat over the past six years, and there has been no new information since the last FOMC meeting

6--WSJ Op-Ed: Make Big Banks Put 20% Down—Just Like Home Buyers Do

7--The West’s sights are now clearly set on Iran

8--Archive--The world can no longer rely on debt: BIS

9--Stocks Soared on Trump’s $1-Trillion Infrastructure Boom. But that Just Evaporated. Now What?

Where does this leave the stock market? The “Trump trade” was conditioned on, among other things, massive deficit spending on infrastructure projects that would distribute $1 trillion of taxpayer money to the companies involved in it. Wall Street has endlessly hyped this bonanza and has used it to rationalize the recent rally of already irrational stock prices. Now it looks like Wall Street will have to go look for another mirage to hype, or someone is going to end up holding the bag.