STOCK MARKET WATCH -- Monday, 22 June 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 22 June 2015[font color=black][/font]

SMW for 19 June 2015

AT THE CLOSING BELL ON 19 June 2015
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Dow Jones 18,015.95 -99.89 (-0.55%)
S&P 500 2,109.99 -11.25 (-0.53%)
Nasdaq 5,117.00 -15.95 (-0.31%)


[font color=green]10 Year 2.26% -0.02 (-0.88%)
30 Year 3.05% -0.01 (-0.33%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
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William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts







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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[Demeter]

1. 11. WHY MEDICARE ISN’T THE PROBLEM; IT’S THE SOLUTION Robert Reich

Again and again the upcoming election you’ll hear conservatives claim that Medicare - the health insurance program for America’s seniors - is running out of money and must be pared back. Baloney. Medicare isn’t the problem. In fact, Medicare is more efficient than private health insurance.The real problem is that the costs of health care are expected to rise steeply. Medicare could be the solution – the logical next step after the Affordable Care Act toward a single-payer system.

Please see the accompanying video – #11 in our series on ideas to make the economy work for the many rather than for the few. And please share.

Some background: Medicare faces financial problems in future years because of two underlying trends that will affect all health care in coming years, regardless of what happens to Medicare:

The first is that healthcare costs are rising overall - not as fast as they were rising before the Affordable Care Act went into effect, but still rising too quickly.

The second is that the giant post­war baby boom is heading toward retirement and older age. Which means more elderly people will need more health care, adding to the rising costs.

So how should we deal with these two costly trends? By making Medicare available to all Americans, not just the elderly. Remember, Medicare is more efficient than private health insurers ­­ whose administrative costs and advertising and marketing expenses are eating up billions of dollars each year. If more Americans were allowed to join Medicare, it could become more efficient by using its growing bargaining power to get lower drug prices, lower hospital bills, and healthier people.

Allowing all Americans to join Medicare is the best way to control future healthcare costs while also meeting the needs of the baby boomer and other Americans. Everyone should be able to sign up for Medicare on the healthcare exchanges set up under the Affordable Care Act.This would begin to move America away from its reliance on expensive private health insurance, and toward Medicare for all – a single­ payer system.

Medicare isn’t a problem. It’s part of the solution.

[Demeter]

2. Oil Markets Could Be In For A Shock From China Soon

http://oilprice.com/Energy/Crude-Oil/Oil-Markets-Could-Be-In-For-A-Shock-From-China-Soon.html


By Nick Cunningham, a Washington DC-based writer on energy and environmental issues. You can follow him on twitter at @nickcunningham1.


Oil analysts and commodity traders watch the price of crude swing down and up, and are trying to figure out when and to what extent the OPEC “price war” will force supply reductions from US shale. Any insight into this development can clarify the trajectory of oil prices. But, of course, oil market dynamics are complex and fluid. US shale supply is hugely important for oil prices, but one of the more under-reported factors influencing the price of oil is the pace of demand growth coming from China. Consumption of oil in China has climbed rapidly and consistently since it took off in 1990, accelerating into overdrive in the 2000s. The inexorable surge in demand caused oil markets to tighten in the lead up to the financial crisis, and then again in subsequent years as the global economy recovered.



The rise in US shale production managed to finally halt the climb in prices, adding enough supply to send prices downwards. Much of the analysis since last year’s bust has been focused on what is going on in Texas and North Dakota, as well as on key decisions made in Vienna every six months.

But the story in China has been overlooked. When it comes to demand, China is arguably the most important country to watch. And despite accounting for much of the world’s growth in demand in the 21st Century, China’s oil imports have been all over the map in recent months. In April, China imported 7.4 million barrels per day, a record high and enough to make it the world’s largest oil importer. But a month later, imports plummeted to just 5.5 million barrels per day. Much of that had to do with Chinese refineries going offline for maintenance, suggesting that the slowdown may have been just a slight detour from China’s seemingly ceaseless climb in import demand.

On the other hand, China’s exceptionally high levels of imports could be temporary. China is in the midst of filling up its strategic petroleum reserve, a project aimed at stockpiling 100 days’ supply in a reserve by 2020. China has seized the opportunity of low oil prices to fill up its strategic reserve as quickly as it can, buying up crude while it is cheap. This elevated level of imports has soaked up some of the glut, diverting several hundred thousand barrels per day of global supplies to China.

But what happens when China stops buying extra oil for its stockpile?

“We need to understand the dilemma of hidden demand in China, where you have two types of demand – normal demand and strategic stockpiling. The latter won’t last forever,” Jamie Webster of IHS Energy told Reuters in an interview. That could send prices down because once China stops vacuuming up a lot of the excess supply floating around for its strategic reserve, that additional oil will stay on the market. But the bigger question is over how much oil China is actually burning – as opposed to stockpiling – and the magnitude of its rate of growth. In 2014, China’s growth in demand slowed to just 3 percent compared to the year before, adding just 300,000 barrels per day. In previous years the growth rate was often twice as high. The deceleration in oil demand growth can be attributed to a slowing economy – China’s GDP is growing at its lowest rate in a quarter century.

Demand is indeed inching up in the US because of low oil prices, but maybe not enough to really move the needle on oil prices. Efficiency efforts in the US and Europe are keeping demand largely stagnant.

The developing world, led by China, represent the most important demand-side factor when it comes to affecting the trajectory of oil prices. But after years of solid growth, China is now raising a lot of questions for the oil markets.

[Demeter]

3. “If You Are Not Building a Nation, Then What the Fuck Are You Doing?” By Tony Wikrent

DISMANTLING ITS ECONOMY, ASSET STRIPPING AND THROWING ITS PEOPLE INTO SLAVERY....

http://www.nakedcapitalism.com/2015/06/if-you-are-not-building-a-nation-then-what-the-fuck-are-you-doing.html

YVES: ...Wikrent ... gave one of the most compelling short overviews of America’s period of dominance in the 20th century and the seeds of its decline. I have to underscore two points that I mention from time to time. One is the revisionist history regarding how America lost its industrial dominance. Having read the business press at the end of the 1970s, the fulcrum point, it had nothing to do with now widely demonized (and then much more powerful) labor. As Wikrent points out, Germans and Japanese had an advantage by virtue of having better infrastructure, most important, newer factories. He also alludes to the fact that the comparative poverty of Japan (it had been reduced to third world status) forced them to be frugal with materials, and over time, that disadvantage was a spur to all sorts of innovation, such as just-in-time manufacturing. But just as obvious in the 1970s was how sclerotic American management had become, particularly in the auto industry. And rather than respond to the competitive challenge, more and more companies began to run on brand fumes and rely on cost-cutting and financial engineering as leveraged buyout artists showed that that could enrich managements more quickly and easily that doing the hard work of competing the marketplace.

Wikrent also mentions in passing the role that government has played in sponsoring new technologies. It’s even bigger than he suggests, as we discussed in this post: Government, Not the Private Sector, Leads Innovation.

*******************

...Yves is on the right track when she observes we have “a deceleration of technology advances (the fact that money is being poured into ventures like Uber and Lyft, whose source of return is using network effects to extract rents from laborers…” The aggregate power of any society is ultimately determined by its collective capacity to extract and process raw materials and transport and distribute the products thereof. In other words, the productive powers of labor. This is something surprisingly few world leaders have grasped. Fortunately for USA, its economy was designed by Alexander Hamilton, who thoroughly understood the need to promote and expand the productive powers of labor (through the use of machinery, i.e. technology). Note that the second section of Hamilton’s Report on Manufactures is devoted to a discussion of “An extension of the use of Machinery.”

Were Mackinder correct, the Soviet Union would have conquered the west and the Soviet bloc would never have collapsed. The USSR had control of about half of Germany (though it was, admittedly, not the half that contained the mighty industrial potentials of the Ruhr Valley; NATO commanders always expected and planned for the main thrust of a Soviet military advance to be through the Fulda Gap and into the Ruhr). And after the 1979 Iranian Revolution, the West was in grave danger of losing the pivot south to the Indian Ocean. I suspect that Brzezinski’s Operation Cyclone was in response to “losing” Iran. Finally, Africa has never been completely locked down by the West. The Soviets and the Chinese gave the West serious competition. Nasser in Egypt drove the Dulles brothers, and the Bundy brothers, into fits of apoplexy.

Again, Yves is pointing to the actual dynamics that run the world. The conventional wisdom is the USA emerged as a superpower after World War 2 because the industrial bases in Europe and Japan had been destroyed. This is an extremely superficial reading of history. The most important post-war result of the war-time destruction was the building of a new industrial base in Europe and Japan, more modernized and more productive than the USA, where investment in new plant and equipment was already beginning to be dragged down in the 1960s by the emerging boom in mergers and acquisitions fueled in no small part by dirty money from organized crime. Anyone familiar with Taiichi Ohno and the Toyota Production System, knows that the amazing productivity gains of the Japanese economy were based precisely on the need to get as much productivity and squeeze out as much waste as possible from the surviving capital plant after the USA bombing campaigns and the Surrender.

USA power and superiority after World War Two is mostly based on the electronic and computer technologies which, it should be noted, came out of the war research laboratories. The idea for Silicon Valley itself – originally Stanford Industrial Park – came from Stanford University’s engineering dean Frederick Terman’s war experiences just a few years earlier directing a staff of over 800 scientists and engineers at Harvard University’s Radio Research Laboratory, creating the technology and designing and building electronic jammers to block enemy radar, tunable receivers to detect radar signals, and other countermeasures to anti-aircraft fire. The new electronic and computer technologies spawned entire new industries, and, most importantly, a new pool of wealth, countervailing the old pool of wealth of Wall Street and its inclination toward speculation, usury, and extracting rent. Electronics and computers, and all their economic were thus the key to USA’s post-war leadership. Note the size of the spill-over effects: for example, the rapid populating and build-up of California, which doubled in population from 10.6 million in 1950, to 20.0 million in 1970, while the USA population increased by only a third in the same period, from 151.3 million to 203.2 million. For other examples, think of the way electronic and computer technologies have impacted transformed many other industries: numerically controlled machine tools; process instrumentation; communications; medical devices, aircraft and aerospace. And let us be clear here: the development of electronic and computer technologies was NOT driven entirely by market forces. There was no small amount of direction and support provided by the national government.

The U.S. has been coasting on the tidal wave of wealth from the computer and electronics revolution. That the economy is shifting, for the worse, is indicated by the fact that in 2011, Apple and Google spent more on legal fees</a (largely for patent fights) than on research and development. This bad trend portends even worse, because we are near the end of Moore’s Law. Intel is now producing chips built on its new 14-nanometer manufacturing process, supplanting its older 22-nanometer technology. Intel CFO Stacy Smith says the company has “an early look” at seven nanometers, but is not willing to discuss the next milestone, five nanometers, about twice the size of a strand of DNA. After that, humanity will have reached the physical limit of micro-circuitry. Robert Colwell, director of the microsystems group at the Defense Advanced Research Projects Agency, and a former Intel manager of Pentium-class processor design, says there are 30 possible alternatives to the CMOS technology that has been ruled by Moore’s Law. “My personal take is there are two or three promising ones and they are not very promising”.

So the wealth-producing dynamo that was computer and electronics is spinning down. Is there anything that can replace it? China has already set out to integrate Mackinder’s central land mass with its New Silk Road projects. But in USA and the West, elites fiddle while the planet literally burns. The obvious answer is the $100 trillion in new investment needed to stop climate change by building an new world economy that does not require fossil fuels.

MORE

[Demeter]

4. Experts Say Best Option Now Is Keeping Nation As Comfortable As Possible Till End ONION

http://www.theonion.com/article/experts-say-best-option-now-keeping-nation-comfort-50617

Saying there were no other options remaining and that continued intervention would only prolong the nation’s suffering, experts concluded Tuesday that the best course of action is to keep the United States as comfortable as possible until the end. According to those familiar with its condition, the country’s long, painful decline over the past several decades has made it clear that the most compassionate choice at this juncture is to do whatever is possible to ensure America is at ease during its last moments.

“We need to accept the fact that the U.S. doesn’t have long—simply helping it pass that time in comfort is the humane thing to do,” said economist Danielle Martin, speaking on behalf of a large group of experts ranging from sociologists and historians to lawmakers and environmentalists, all of whom confirmed they had “done everything [they] could.” “Attempting to stabilize the country in its current enfeebled state would not only be extremely expensive, but it would also cause unnecessary agony as it enters this final stage. With how hard the nation is struggling to perform even basic functions, letting it meet its end naturally is the merciful decision here.”...Added Martin: “At the end of the day, it’s nearly 240 years old—what can you reasonably expect?”

Others agreed with Martin, saying that, with America having gradually become a weak, almost unrecognizable shadow of its former self, the priority now should be ensuring that it is given whatever palliative support it needs and using the remaining time to put the nation’s affairs in order. Sources also emphasized that citizens who have not already begun to emotionally prepare themselves for the country’s demise should begin to do so.

“At a time like this, it’s completely understandable to wish for some kind of 11th-hour miracle, but expecting the U.S. to somehow magically return to the way it was in its prime isn’t healthy or realistic,” said Georgetown University researcher Andrew Fischer, who later stressed that just because the nation still has “the occasional good day,” this should not cause anyone to get their hopes up for a sudden recovery. “It’s important to manage expectations and realize that sometime very soon, we’re all going to have to say goodbye.”

“We just need to remember all the good times we had,” Fischer continued. “Like the moon landing—that was really nice, wasn’t it?”

Many of those with close ties to the United States said they were having difficulty coming to terms with the country’s imminent passing, but that letting it go peacefully was ultimately for the best.

“At one point, I would’ve done anything if it meant having America around for just a little longer, but I can’t watch it slowly waste away like this anymore,” said Tampa, FL resident Kathy Muniz, adding that it “breaks [her] heart” when she sees how hard the U.S. struggles to put on a brave face and pretend that everything is fine. “The kindest thing now is to just do what we can to keep the nation’s spirits up while nature takes its course.”

“Really, I think any country in America’s position would want the same,” Muniz added.

[tclambert]

5. You know, Republican policy does sound kind of like putting America on hospice care.

We're the richest nation on Earth, but no, we can't afford to do anything great, or even try for anything great. And anyway, government can never, ever do anything right, so why bother trying? Let's just make (rich) people comfortable while we stumble from one crisis to the next. And let's ignore any long term problems, like global warming, because most of our politicians aren't scientists, so how can they possibly know what the science is? Remove all regulations from business, give up on any concept of leadership or the "vision thing," and let's all just close our eyes and focus on happy thoughts of American exceptionalism while other countries pass us by.

Maybe if we're nice, the British will take us back.

[Fuddnik]

6. My first thought too.

Hospice care popped right into my little demented head.

[DemReadingDU]

18. The Onion is closer to the truth than anything else

Most people refuse to see the hospice analogy.

[Demeter]

7. The New World Order—A Faustian Bargain by Jeff Thomas

http://www.internationalman.com/articles/the-new-world-order-a-faustian-bargain

Faustian bargain: An agreement in which a person abandons his or her spiritual values or moral principles in order to obtain wealth or other benefits. A deal with the devil.

The argument over the existence of an Elite, who plan to control the entire world under a New World Order like some great yo-yo, has been around for a long time. Not surprisingly, events created by world leaders of all stripes in recent years give rise to an increasing belief in the likelihood of the existence of such an effort. There are two great dangers in attempting to describe this perceived secret endeavour, and they are at opposite ends of the spectrum:

a) being so naive as to assume that no collusion exists amongst various groups of leaders to further their respective ends, and
b) over-simplifying such alliances to suggest that there is an Elite Master Plan that all members implicitly agree upon and follow in every respect.

Assumption A

In any country, the citizenry are accustomed to such acts of collusion as all the petrol suppliers raising the price by the same amount, overnight. Few individuals would doubt that the two companies get together well in advance to agree on the price hike. The same sort of collusion can be expected between banks and governments, etc. However, most people in any given country seem to believe that the political parties that rule them do not collude in their own collective interest and against the best interests of their respective constituents. Similarly, they are unlikely to accept that fascism exists in their country—that members of their favoured party collude with industries. Further, most people seem to disbelieve that the leaders of their own country collude with the leaders of their country’s enemies in such a way that might create loss or danger to their own people. This is naive. Such collusions are the norm rather than the exception.

Assumption B

Those who tend to be more informed, readily acknowledge that collusion exists between all of the above, to one degree or another. If this group errs, it is often in the opposite assumption—that the collusion is all-encompassing. There can be no doubt that a New World Order is being sought by some—this has been made clear for at least a hundred years by many who regard themselves as an Elite. It is therefore an open secret. As stated by David Rockefeller in his memoirs:

Some even believe we are a part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure—one world, if you will. If that’s the charge, I stand guilty and I am proud of it.

But the error that is most common amongst those who oppose a New World Order is the extent to which they believe the collusion exists. Many believe the collusion is total. That is, a Master Plan exists amongst the world’s leaders (the heads of the central banks, the Bilderberg Group, the leaders of the most powerful nations—or the whole gang of them—take your pick) that all members agree upon in detail and in full. Still, when any New World Order opponent rails against the latest perceived move by the Elite, if asked the question, “Do you really think that these people are so unified that several hundred of them get together every week around a conference table to decide who to victimise this week?,” most will say that, no, they may act in concert, but not in so total a fashion.

Option C

So, is there a third perception as regards those in high positions who collude on a large scale? In my opinion there is. In my experience in dealing with political leaders (and political hopefuls) from several jurisdictions, I’ve found there to be a consistent sociopathology (by definition, the desire for dominance over others, undeserved self-confidence, lack of empathy, a sense of entitlement, lack of conscience, etc.). Whether they are British members of Parliament or US members of Congress, they tend to display the same sociopathic traits. Sociopaths are drawn to political leadership for obvious reasons. First, they’re prone to collusion, as they recognise that it may further their interests (agreements with a small group of individuals that would allow for dominance over another, larger group of individuals). And this, of course, fits well into Assumption B. Trouble is, the same sociopathology would drive the same individuals to seek to dominate each other. Yes, they would enter into agreements with one another, but even as they are making them, they would be planning to deviate from them.

Any agreement regarding increased power for all members, defining what seat each would have at the table, may be agreed, but immediately after, each would begin jockeying for a better seat. Further, whatever agenda is agreed upon, each would already have a secondary agenda for his own betterment even as the agreement is being forged. Any attempt at a New World Order, if it were to succeed in creating unified dominance, would never reach full fruition, as so many disparate individuals would be plotting for a bigger piece of the pie from the outset. As regards the desire to follow a Grand Plan, we are not describing the meek Kool-Aid drinkers of Jonestown, Guyana, whose willingness to follow a Master Plan was unquestioningly due to their extremely low self-esteem. We are describing those with the opposite mental makeup—those who are compulsive in their desire for dominance of others (first their minions, then their partners). Further, each would promote his own sphere of power. A banker would seek to have the group’s means of control be economically based; a general would seek to have the means of control be militarily based; etc.

Dissent Among the Ranks

The push-and-pull of sociopathic leaders is unending. Their very makeup dictates that each one individually will always be vying for more. In order to achieve that, they will form subversive subgroups that will agree on a separate direction from what has been agreed by the primary group, and along the way, each one, in his lack of conscience and loyalty, might betray both the primary group and the subgroup. In the end, there’s no question that there are those who consider themselves to be part of a New World Order, as so many have publicly stated so themselves, for generations. Also, there can be little doubt that each member expects to come out of the deal as a ruler, not as one of the ruled. Further, the effort is ongoing and growing, and will result in great damage for the average person who, in most cases, simply wishes to be left alone to run his own life. It has been postulated by many that those who see themselves as an Elite are nearing the completion of what they perceive as world dominance. However, should they succeed, they will betray their partners the very next day, as it’s their nature to do so. Their behaviour would likely be that of a group of cats with their tails tied together.

So, what might we take away from this discussion? First, that there most assuredly are extremely domineering forces (regardless of how closely associated they might be), which, in the near future, will do immense damage to the cause of freedom in the world, particularly in those countries where they are most dominant, or will become most dominant. Second, the situation does appear to be reaching a head. The two greatest uncertainties will be how much damage will be done before the dust has settled, and how protracted the period of destruction and struggle for dominance might be. Ultimately, for the reasons stated above, I don’t believe the New World Order concept can fully prevail, but it can and will do damage of unprecedented proportions in the attempt to implement it. Those involved will not be swayed from their individual or collective objectives (consider Adolf Hitler or Josef Stalin).

The best that can be done is to work at placing ourselves as far outside of their sphere of influence as possible.

Editor’s Note: It’s not all doom and gloom; the world is your oyster, and there are very attractive jurisdictions that are cause for optimism. Some are ideal places to reside. Others are great places to park some savings or to invest in. Others are optimal for conducting business. Yet others are perfect for obtaining a second passport. You can find out our favorite jurisdictions in the IM Communiqué.

[Demeter]

8. Austerity Isn’t Irrational by John Milios

https://www.jacobinmag.com/2015/06/syriza-greece-austerity-neoliberalism-tsipras/

In Greece and elsewhere, austerity is nothing more than capitalists imposing their class interests. After the outbreak of the 2008 global economic crisis, extreme austerity policies prevailed in many parts of the developed capitalist world, especially in the European Union (EU) and the eurozone. Austerity has been criticized as an irrational policy, which further deepens the economic crisis by creating a vicious cycle of falling effective demand, recession, and over-indebtedness. However, these criticisms can hardly explain why this “irrational” or “wrong” policy persists, despite its “failures.”

In reality, economic crises express themselves not only in a lack of effective demand, but above all in a reduction of profitability of the capitalist class. Austerity constitutes a strategy for raising capital’s profit rate. Austerity is the cornerstone of neoliberal policies. On the surface, it works as a strategy of reducing entrepreneurial cost. Austerity reduces labor costs of the private sector, increases profit per (labor) unit cost, and thus boosts the profit rate. It is complemented by economizing in the use of “material capital” (alas, another demand curtailing strategy); and also by institutional changes that, on the one hand, enhance capital mobility and competition and, on the other, strengthen the power of managers in the enterprise and shareholders and bondholders in society. As regards fiscal consolidation, austerity gives priority to budget cuts over public revenue, reducing taxes on capital and high incomes, and downsizing the welfare state.

However, what is cost for the capitalist class is the living standard of the working majority of society. This applies also to the welfare state, whose services can be perceived as a form of social wage. It is clear, therefore, that austerity is primarily a class policy. It constantly promotes the interests of capital against those of the workers, professionals, pensioners, unemployed, and economically vulnerable groups. In the long run, it aims at creating a model of labor with fewer rights and less social protection, with low and flexible wages, and no substantial bargaining power for wage earners. Austerity does lead, of course, to recession. However, recession puts pressure on every individual entrepreneur, both capitalists or middle bourgeoisie, to reduce all forms of costs, to more intensively follow the path of relative surplus value, i.e. to try to consolidate her profit margins through wage cuts, intensification of the labor process, infringement of labor regulations and workers’ rights, massive redundancies, etc. From the perspective of big capital’s interests, recession thus gives birth to a process of creative destruction. There is a redistribution of income and power to the benefit of capital, and concentration of wealth in fewer hands as small and medium enterprises, especially in retail trade, are being cleared up by big enterprises and shopping malls.

This strategy has its own rationality that is not completely obvious at first glance. It perceives the crisis as an opportunity for a historic shift in the correlations of forces to the benefit of the capitalist power, subjecting European societies to the conditions of the unfettered functioning of financial markets, attempting to place all consequences of the systemic capitalist crisis on the shoulders of working people. This is the reason why, in a situation of such an intensification of social antagonisms like today, a government that wants to side with labor and the social majority cannot even imagine succumbing to pressures to continue implementing austerity policies.

Capital vs. Workers AND GREECE! MORE AT LINK

AUSTERITY IS THE VISIBLE MANIFESTATION OF ELITE GREED...AND SELF-DEFEATING, HOWEVER "RATIONAL" IT MAY SEEM TO THE ELITE. THEY ARE KILLLING THE GOOSE THAT LAID THEIR GOLDEN EGGS, AND THE GEESE WILL RETURN THE FAVOR AND KILL THE ELITE....

[Demeter]

9. The "Noble" Post-White House Career Path of Obama’s Core Team By Glenn Greenwald

https://firstlook.org/theintercept/2015/06/09/noble-career-path-obamas-core-team/

...So many Obama officials have “spun through the revolving door” that it’s almost impossible to count them all. In March, The Guardian described “a rash of senior White House staff jumping ship for well-paid lobbying jobs at some of America’s biggest and most controversial companies.”

...As The Guardian noted, “when he took office, Obama signed an order that the White House said ‘closes the revolving door that allows government officials to move to and from private sector jobs in ways that give that sector undue influence over government.'” Moreover, “in the campaign before the 2008 election, Obama said: ‘I am in this race to tell the corporate lobbyists that their days of setting the agenda in Washington are over.’”

People who leave high government positions have all sorts of career opportunities and options because of the political influence they wield, and their choices about how to use that influence speak volumes — about Washington and about themselves. As Julia Carrie Wong put it today in a series of tweets: “It’s hard to think of a political identity with *less* actual meaning than being a Democrat these days. As a proud Democrat, Gibbs will devote his time to fighting wage increases, harming the environment, and preying on poor communities. His brother in arms Plouffe will focus on the core Democratic values of deregulation and obviating the National Labor Relations Act.”

The Obama revolving door has worked in the other way, too: so many early appointees came from Goldman Sachs that it was hard to keep track of them all. And, of course, the greatest enrichment of American political officials is reserved for those who are president or otherwise achieve full political celebrity. But the remarkably homogeneous post-White House career path of Obama’s top tier of aides and advisers is notable in all sorts of ways...

GLEN GIVES US AN ATTEMPT TO LIST THE WORST...SEE LINK

[Demeter]

10. Turkey becomes first domino for emerging market debtors as politics split country JUNE 8

http://www.telegraph.co.uk/finance/economics/11660864/Turkey-becomes-first-domino-for-emerging-market-debtors-as-politics-split-country.html

Turkey's currency plunges to all-time low after electorate vote for change in move that has exposed 'existential' threat to the country's debt-laden economy... Turkey’s currency has plunged to an all-time low as the country slides into political turmoil and its foreign debts turn toxic, becoming the first big casualty of the gathering storm in emerging markets (EM). The lira slumped 5pc to 2.81 against the US dollar after President Recep Tayyip Erdogan’s AKP party lost its decade-long majority in parliament, leaving the country bitterly polarised and without a clear government. The currency has now fallen 60pc since 2008.

Turkish companies were left heavily exposed as they grapple with record levels of hard currency debt left from an unchecked credit boom. Borsa Istanbul’s 100 index of Turkish equities fell 6pc.

“This is shaping up to be the proverbial perfect storm,” said Neil Shearing from Capital Economics. “In emerging markets (EM) you can get away with bad macro-fundamentals if the politics are good, but once the politics turn ugly you can’t muddle through any more. We think Turkey is the most vulnerable of the EM countries,” he said.

Data from the Bank for International Settlements show that Turkey’s foreign liabilities have reached a net $430bn. Turkish banks alone must roll over $95bn in external debt over the 12 months. They may have to refinance just as the US Federal Reserve starts to raise rates for the first time in eight years and transmits a tightening shock through the global financial system.

“This is going to be existential for the Turks and I am afraid the crunch is coming soon,” said one hedge fund specialist.

SO THIS IS WHY RUSSIA EXTENDS JUICY CONTRACTS TO GREECE AND TURKEY...BECAUSE THE WEST IGNORES AND BELITTLES AND STIFLES AND RIPS THEM OFF....

[Demeter]

11. RECAPITULATIONS: AIG; FROM OCTOBER 2014

Richard Alford, a former New York Fed economist, provides his assessment of the AIG bailout in light of some of the revelations in the AIG bailout trial. FOR THOSE WHO CAN'T GET ENOUGH

http://www.nakedcapitalism.com/2014/10/richard-alford-aig-redux-fed-usurped-congress.html

[Demeter]

12. Pro Big Corporate IRS: Agency Guts Whistleblower Program, Leaves Billions on the Table

http://www.nakedcapitalism.com/2014/10/pro-big-corporate-irs-agency-guts-whistleblower-program-leaves-billions-table.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

It’s widely known among tax professionals that the US does little in the way of tax enforcement, and the little that it does do is directed against individuals and small businesses. What is not so widely known is how deep the institutional bias is in the IRS in favor of letting big corporate tax cheats get away with it. Conventional wisdom is similar to the rationalization of weak enforcement at the SEC: that the agency is afraid that if they go after big companies, they’ll have the penalties and fines challenged in court, and they’ll often lose by virtue of being outgunned by better lawyer (yes, Virginia, even if you have a solid case, that doesn’t mean you’ll win at trial). And top tax litigators are among the most highly paid legal talent. I’m not up on current rates, but in the mid 1980s, Sumitomo Bank fought the IRS on a $100 million assessment and won. Their attorney was a solo practitioner who charged $1000 an hour.

It turns out that the picture is vastly worse than that. In 2006, recognizing that the IRS was losing over $450 billion a year in revenue to tax evasion, Congress mandated that the agency establish a whistleblower office and pay whistleblowers 15% to 30% of amounts recovered from their filings. Unfortunately, as a whistleblower from the IRS’ Office of the General Counsel in New York has revealed, the IRS at its highest levels is opposed to implementing the policy.

This whistleblower, Jane Kim, makes it clear that in this letter, she is acting as a de facto spokesperson for an attorney that represents IRS whistleblowers. The missive, which we’ve embedded at the end of the post, presents three cases where the tax revenue lost exceeded $13 billion. Two of them looked to be particularly egregious. In one, a company set up completely sham foreign companies, with no operations whatsoever in any of these tax jurisdictions. Yet it claimed all of its profits were due to these phony companies and were kept permanently offshore (regular readers may recall that US technology companies who use Ireland and other low-tax domiciles to attribute their profits to “offshore” operations actually keep those “offshore” monies in US banks. For instance, Apple runs what amounts to a hedge fund to manage its “offshore” funds in Nevada). The effect of this scheme was that the company paid corporate taxes nowhere. That scam with that one company alone lost the IRS a purported $3 billion a year in revenues.

Another mind-boggling case involved a criminal case that was peculiarly shut down. The target had foreign brokerage accounts for US individuals. The target clearly knew it had reporting, withholding, and remittance obligations for foreign accounts, since it had come forward to ‘fess up an amnesty program for past abuses. Yet it was still engaged in effectively hiding offshore income of US clients by not keeping the required records. The case had advanced far enough that the DoJ was ready to empanel a grand jury, and was waiting for the final go-ahead from the IRS. The IRS closed the investigation because it went along with the target’s claim that there were too many accounts to be audited (huh?) and therefore it should be permitted to sample them. The target manipulated the “random” sample to hide the misconduct. So why does this occur? The very top level of the IRS is opposed to the whistleblower program, and more broadly, is effectively in bed with large corporations. As the whistleblower’s letter points out:

The IRS Chief Counsel Donald Korb, under whose tenure the Office was created, openly expressed his views on this issue when stating, “The new whistleblower provisions Congress enacted a couple of years ago have the potential to be a real disaster for the tax system. I believe that it is unseemly in this country to encourage people to turn in their neighbors and employers to the IRS as contemplated by this particular program. The IRS didn’t ask for these rules; they were forced on it by the Congress.”

DETAILS AT LINK

[Demeter]

13. Gaius Publius: The Only Solution to Climate Change — Outlaw Fossil Fuel Production

ACTUALLY, SUCH A POLICY WOULD ONLY STOP (PERHAPS) CLIMATE CHANGE DUE TO THE EXISTENCE OF THE HUMAN SPECIES--AND ONLY FOR ITS FOSSIL FUEL USAGE. TO BE ALIVE AT ALL IS TO CAUSE CLIMATE CHANGE, AND IS TRUE FOR ANY SPECIES, PLANT OR ANIMAL, NOT JUST HUMANS. THERE ARE MANY NON-LIVING SOURCES OF CLIMATE CHANGE, TOO, OVER WHICH MAN CAN EXERT NO CONTROL. THAT IS WHY WE DEVELOPED THE ABILITY TO ADAPT.

http://www.nakedcapitalism.com/2015/06/gaius-publius-the-only-solution-to-climate-change-outlaw-fossil-fuel-production.html

By Gaius Publius, a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, Americablog, and Naked Capitalism. Follow him on Twitter @Gaius_Publius, Tumblr and Facebook. This piece first appeared at Down With Tyranny.

I once had the opportunity to speak one-on-one with one of our leading progressive politicians, someone who is on the right side of everything I care about, including climate change. As we were discussing solutions to the climate problem, I mentioned the carbon industry and said, “You realize, fixing the climate crisis means we have to kill the carbon industry, right?”

She (or he) stopped, thought, then said (paraphrasing): “Huh. You know, I think you’re right.”

Why do I bring this up? Because this person, who’s right about everything I want her (or him) to be right about, hadn’t thought through the climate problem to the obvious solution. If you don’t want it burned, you can’t dig it up. That means, we have to kill the industry. There’s just no other choice.

The problem we seem to be facing is this: The industry gets that, and they’re fighting back. But most people who care about climate don’t. So we’re stuck, year after year, with more of this:



MORE AT LINK

[Demeter]

14. THE ESSENCE OF THE PROBLEM

[Demeter]

15. The Revival of Cities and the Urban Land Premium

http://www.nakedcapitalism.com/2015/06/the-revival-of-cities-and-the-urban-land-premium.html

By Henri De Groot, Professor in Regional Economic Dynamics at the Department of Spatial Economics, VU University Amsterdam; Gerard Marlet; Coen Teulings, Professor of Economics, University of Cambridge; and Wouter Vermeulen, Program manager Decentral Governments, CPB Netherlands Bureau of Economic Policy Analysis.

End of the ‘Death of Cities’

Forty years ago, a large squatting movement was taking hold of the city centre of Amsterdam. This was not so much an expression of left-wing radicalism, as much as the desolation of the city. After 25 years of population decline, many vacant buildings had no better use. At around the same time, New York’s Times Square hosted mainly sex shops. There simply was no alternative use for the available floor space. It was an era in which people talked about ‘the death of cities’. What use did it have for modern mankind to agglomerate in heavily congested cities, when telephone and fax made long-distance communication so easy as to render physical proximity seemingly irrelevant? These stories are just two examples of a major turn-around in the prospects of cities over the past four decades, so vividly reported in Edward Glaeser’s (2011) ‘Triumph of the City’. Amsterdam’s squatting movement squandered as the demand for housing and office space soared. Times Square has nowadays become the vibrant centre of NYC’s theatre district.

Explaining the Reversal of Fortune

What explains this unexpected reversal of fortunes? Why have cities emerged as hubs of economic activity in this era in which the internet seems to be the ‘cul-de-sac’ of physical distance? That is the question we ask in our new book ‘Cities and the Urban Land Premium’. Several authors point in the same direction, namely spill-overs and the agglomeration of human capital. Gennaioli et al. (2014) show how within countries, human capital clusters in a small number of regions. The premium in regional GDP per capita is 20% and more per year increase of the mean education level in a region. This return is far above any reasonable estimate of the private return to human capital. Desmet and Rossi-Hansberg (2008) focus on the role of general purpose technologies. In the 1920s and 1930s, that was electricity. Since 1990 it is information technology. In both periods, industries that could benefit most from these general purpose technologies moved to the city to facilitate the diffusion of new ideas. The growth of human capital has been key to the economic miracle of the 20th century, but the fruits of this capital could only be harvested when great minds and well educated people clustered together in cities. The rise of the city and the knowledge economy are therefore intimately related.

• Where knowledge spill-overs play a crucial role in the modern economy, locations where top talent clusters are scarce and hence land rents on these locations are high. Surprisingly, the social return to human capital gets paid out in the form of high land rents in cities.

In the Netherlands, both Amsterdam and Rotterdam lost 25% of their population between 1960 and 1980. Amsterdam managed to re-emerge as a focal point for the higher educated, while Rotterdam still struggles, similar to the difference in fates of Boston and Detroit in the US.

• The paradox is that the agglomeration of higher educated in particular cities leaves large parts of the country almost empty across all OECD countries, while land becomes scarce at particular hotspots.

Hence, land rents take an increasing share of GDP. This is because in the provision of housing services, the elasticity of substitution between land and construction is less than one (see Teulings et al. 2015 for the Netherlands, and Albouy and Ehrlich 2012 for the US). The increase in land rents in the city therefore more than offsets the decrease in the countryside. Agglomeration benefits driven by knowledge spill-overs are therefore one of the main explanations for the increasing share of housing in many developed countries’ capital stock as reported in Thomas Piketty’s (2014) ‘Capital in the 21st Century’, next to the downward trend in the real rates of return (see the debate on Secular Stagnation).

Externalities and Rents

Knowledge spill-overs imply that cities are a focal point of location-driven externalities. Land rents are the expression of these externalities. A location’s rent is high not because of the characteristics of the location itself, but because of what happens at locations in their direct proximity. This is a clear example of an externality, the value of your property depends on the actions taking by the owners of neighbouring property. These externalities provide a textbook argument for developing public policy at the level of the city and why a Henry George tax on the value of land is most efficient. In fact, the total land rent differential of a city can be shown to be an excellent instrument for the valuation of externalities generated by a city. They also allow a valuation of the contribution of public transport services. In the Netherlands, we show that these externalities account for approximately 3% of Dutch GDP.

As history has shown (see, for example, what happened to Detroit or the decline in the population of Amsterdam and Rotterdam referred to above), current successes provide no guarantees for the future. This is what Gibrat’s law tells us, growth is independent of current size. Future growth is therefore largely independent of past success. The chances for policymakers that try to row against the tide are small. A successful policy requires to ‘go with the flow’. Large investments in infrastructure in a declining city do not satisfy any real demand but lead to large financial burdens for the local population, making these cities even less attractive. However, policy can make a difference in growing cities. In order to remain on the short list of hot spots, policymakers in these cities have two margins to work on.

• First, the city has to be attractive for innovative entrepreneurs and enterprises to locate their business.
• Second, the city has to be an attractive choice for high-educated top talent as a place to live in.

Land rents provide an excellent instrument for analysing which of these factors matters most. When job availability matters most for the land rents, then the first margin is the most important determinant of urban success. When consumption amenities matter most, then offering an attractive living environment for higher educated is the key to success.

This is exactly the analysis that we do in Cities and the Urban Land Premium. Even in a small country such as the Netherlands, land rents for residential real estate differ dramatically, from 17€ per square meter in the north-eastern part of the country close to the German border, to 3,500€ per square meter in Amsterdam’s canal zone district. On average, the contributions of job availability and consumption amenities in explaining this variation are about equal. Both explain about 35% of the land rent differential. However, these shares are only averages. The distribution of consumption amenities is extremely skewed. When focussing on Amsterdam, by far the most successful city in the Netherlands, consumption amenities play a far more important role in explaining its success than does job availability. In particular, its monumental canal zone and its vibrant cultural life give the city a leading edge in attracting top talent, both from within as well as from outside the Netherlands. This conclusion is collaborated by the evidence on wages – regional wage differentials are rather small. Amsterdam’s consumption amenities are a good reason for people to accept high rents that have to be paid for living in this city. Entrepreneurs do not have to pay high wages to offset them.


BAH, HUMBUG! THE CITY WAS ORIGINALLY BUILT WHERE IT IS BECAUSE OF ITS LOCATION: TRAVEL ROUTES, RESOURCES, EASE OF CONSTRUCTION.

NOW THAT CAPITALISM HAS STRIPPED AWAY ITS ECONOMIC UNDERPINNINGS, THE ACTUAL LAND IS GOING FOR A SONG...SO IT'S TIME FOR "REDEVELOPMENT" WHICH IS A FORM OF CHURNING PROFITS BY URBAN RENEWAL.

[Demeter]

16. Mood brightens after latest Greek offer to creditors

http://www.reuters.com/article/2015/06/22/us-eurozone-greece-idUSKBN0P10JN20150622

A new Greek offer for a cash-for-reforms deal raised hopes of an agreement as euro zone leaders prepared for an emergency summit on Monday, with EU officials welcoming the proposals as a "good basis for progress" to avert a default by Athens.

European shares surged and the Greek stock market jumped nearly 7 percent on hopes that the government could finally end months of wrangling that have left the country on the verge of bankruptcy and possibly being pushed out of the euro bloc.

In a sign of the more positive mood music, EU Economic Commissioner Pierre Moscovici said he was "convinced" that euro zone leaders would find a resolution on the basis of the latest proposal by Greek Prime Minister Alexis Tsipras.

The contents of the new offer have not yet been officially divulged, but Greek officials say it acquiesces to some of the demands from Greece's EU and IMF lenders for tax hikes, curbing early retirement and other spending cuts to ensure Athens hits budget targets. In Brussels, European Union officials said Greece is offering to raise the retirement age gradually to 67 and make value-added tax reforms. A final deal was unlikely on Monday, but this could be a step toward an agreement in the coming days, they added.

MORE CHIRPY GOOD FEELINGS AT LINK

[Demeter]

17. It's Ron Paul vs. Federal Reserve (and the market). Who's right?

PROBABLY? NEITHER

http://www.cnbc.com/id/102771780