Weekend Economists Light the Candles December 19-21, 2014

[Demeter]

As the year nears its end, we in the Northern Hemisphere are plunged into darkness and varying degrees of cold.

But do not despair! We have many Festivals of Light to choose from in the time of Solstice.

The one that springs to mind first is, of course, Hanukkah, also transliterated as Chanukah, Hanuka, etc.

Hanukkah (/ˈhɑːnəkə/ HAH-nə-kə; Hebrew: חֲנֻכָּה, Tiberian: Ḥănukkāh, usually spelled חנוכה, pronounced χanuˈka in Modern Hebrew, ˈχanukə or ˈχanikə in Yiddish; a transliteration also romanized as Chanukah or Chanukkah), also known as the Festival of Lights, Feast of Dedication, is an eight-day Jewish holiday commemorating the rededication of the Holy Temple (the Second Temple) in Jerusalem at the time of the Maccabean Revolt against the Seleucid Empire of the 2nd century BCE (before common era). Hanukkah is observed for eight nights and days, starting on the 25th day of Kislev according to the Hebrew calendar, which may occur at any time from late November to late December in the Gregorian calendar.

The festival is observed by the kindling of the lights of a unique candelabrum, the nine-branched menorah or hanukiah, one additional light on each night of the holiday, progressing to eight on the final night. The typical menorah consists of eight branches with an additional visually distinct branch. The extra light is called a shamash (Hebrew: שמש‎, "attendant&quot and is given a distinct location, usually above or below the rest. The purpose of the shamash is to have a light available for practical use, as using the Hanukkah lights themselves for purposes other than publicizing and meditating upon Hanukkah is forbidden.

Other Hanukkah festivities include playing dreidel and eating oil based foods such as doughnuts and latkes.

Hanukkah became more widely celebrated beginning from the 1970s, when Rabbi Menachem M. Schneerson called for public awareness of the festival and encouraged the lighting of public menorahs.

The story of Hanukkah is preserved in the books of the First and Second Maccabees, which describe in detail the re-dedication of the Temple in Jerusalem and the lighting of the menorah. These books are not part of the Tanakh (Hebrew Bible); they are considered Jewish apocryphal books. Multiple references to Hanukkah are also made in the Mishna (Bikkurim 1:6, Rosh HaShanah 1:3, Taanit 2:10, Megillah 3:4 and 3:6, Moed Katan 3 , and Bava Kama 6:6), though specific laws are not described. The miracle of the one-day supply of oil miraculously lasting eight days is first described in the Talmud, committed to writing about 600 years after the events described in the books of Maccabees...

The Jewish historian Titus Flavius Josephus narrates in his book, Jewish Antiquities XII, how the victorious Judas Maccabeus ordered lavish yearly eight-day festivities after rededicating the Temple in Jerusalem that had been profaned by Antiochus IV Epiphanes. Josephus does not say the festival was called Hanukkah but rather the "Festival of Lights":

"Now Judas celebrated the festival of the restoration of the sacrifices of the temple for eight days, and omitted no sort of pleasures thereon; but he feasted them upon very rich and splendid sacrifices; and he honored God, and delighted them by hymns and psalms. Nay, they were so very glad at the revival of their customs, when, after a long time of intermission, they unexpectedly had regained the freedom of their worship, that they made it a law for their posterity, that they should keep a festival, on account of the restoration of their temple worship, for eight days. And from that time to this we celebrate this festival, and call it Lights. I suppose the reason was, because this liberty beyond our hopes appeared to us; and that thence was the name given to that festival. Judas also rebuilt the walls round about the city, and reared towers of great height against the incursions of enemies, and set guards therein. He also fortified the city Bethsura, that it might serve as a citadel against any distresses that might come from our enemies."

https://en.wikipedia.org/wiki/Hanukkah

And what were the Maccabees?

When the Second Temple in Jerusalem was looted and services stopped, Judaism was outlawed. In 167 BC Antiochus ordered an altar to Zeus erected in the Temple. He banned brit milah (circumcision) and ordered pigs to be sacrificed at the altar of the temple (the sacrifice of pigs to the Greek gods was standard ritual practice in the Ancient Greek religion).[24]

Antiochus's actions provoked a large-scale revolt. Mattathias (Mattityahu), a Jewish priest, and his five sons Jochanan, Simeon, Eleazar, Jonathan, and Judah led a rebellion against Antiochus. Judah became known as Yehuda HaMakabi ("Judah the Hammer&quot . By 166 BC Mattathias had died, and Judah took his place as leader. By 165 BC the Jewish revolt against the Seleucid monarchy was successful. The Temple was liberated and rededicated. The festival of Hanukkah was instituted to celebrate this event. Judah ordered the Temple to be cleansed, a new altar to be built in place of the polluted one and new holy vessels to be made. According to the Talmud, unadulterated and undefiled pure olive oil with the seal of the kohen gadol (high priest) was needed for the menorah in the Temple, which was required to burn throughout the night every night. The story goes that one flask was found with only enough oil to burn for one day, yet it burned for eight days, the time needed to prepare a fresh supply of kosher oil for the menorah. An eight-day festival was declared by the Jewish sages to commemorate this miracle.

The version of the story in 1 Maccabees states that an eight-day celebration of songs and sacrifices was proclaimed upon re-dedication of the altar, and makes no specific mention of the miracle of the oil.

I claim no expertise or scholarship on this subject...feel free to contribute, correct or discuss.

[Demeter]

1. And we have a bank thrown on the bonfire!

Northern Star Bank, Mankato, Minnesota, was closed today by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with BankVista, Sartell, Minnesota, to assume all of the deposits of Northern Star Bank.

The two branches of Northern Star Bank will reopen as branches of BankVista during their normal business hours...

As of September 30, 2014, Northern Star Bank had approximately $18.8 million in total assets and $18.2 million in total deposits. In addition to assuming all of the deposits of Northern Star Bank, BankVista agreed to purchase essentially all of the failed bank's assets...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $5.9 million. Compared to other alternatives, BankVista's acquisition was the least costly resolution for the FDIC's DIF. Northern Star Bank is the 18th FDIC-insured institution to fail in the nation this year, and the first in Minnesota. The last FDIC-insured institution closed in the state was 1st Regents Bank, Andover, January 18, 2013.

[Demeter]

2. I happen to think that most marketing activities are a waste, too. A good product sells itself.

[Demeter]

3. Tales of the Russian Bear

http://www.zerohedge.com/news/2014-03-09/us-foreign-policy-one-cartoon

“It’s not clear to us that breaking commercial ties with the Russia partners, consumers gets anyone to where they want to be,”said Gary Litman, vice president for international strategic initiatives at the U.S. Chamber of Commerce.

http://themillenniumreport.com/2014/07/851/



http://warisacrime.org/node/42915

[Demeter]

4. Russia is now in the grips of a full-blown capital crisis. Here’s what might happen next

https://medium.com/@edconwaysky/the-bleakest-winter-188fd9b96e44

If you’ve never witnessed a currency crisis, here’s how they usually go, in six simple steps:

1. First, your currency gradually creeps downwards. This can happen over a matter of months, as your current account deficit — the country’s ledger with the rest of the world, deteriorates.

2. Then, suddenly, overnight, investors panic. Their withdrawals of money from your country, up until then a steady stream, become a flood.

3. You raise interest rates — one point, two points, and then more.

4. But rather than being reassured, investors scent panic. The capital outflows accelerate and your currency collapse continues.

5. Eventually there is nothing for it. You yank up interest rates to eye-watering levels, in the full knowledge that your country will be plunged into recession; that unemployment will skyrocket. You impose capital controls to try to prevent more money leaving the country. You dig into your international reserves.

6. Finally, when those reserves run out, you call on your neighbours or the International Monetary Fund for a bail-out.

That’s the pattern that’s repeated itself on countless occasions in economic history — whether in Britain in 1992, in Asia in the late 1990s or in much of the Western world in the 1930s.

But if you’d rather see a currency crisis in the flesh, look no further than Russia. The country is sitting at stage four in this depressing sequence. It is reliant on oil for around two thirds of its exports, so the recent fall in crude prices has been disastrous for an economy still reeling from the sanctions associated with its Crimea exploits. The currency is cratering.

https://d262ilb51hltx0.cloudfront.net/max/823/1*nYjV0ckZzJTF1WqvHwE91g.jpeg

WE SHALL SEE...I AM WILLING TO BET THOSE WHO DEMONIZE PUTIN AND RUSSIA ARE GOING TO BE THE ONES HURTING, WHEN THE BATTLE IS OVER AND THE PETRODOLLAR IS HISTORY.

[Demeter]

5. Oil, Ruble and Ideology YVES SMITH, NAKED CAPITALISM

http://www.nakedcapitalism.com/2014/12/oil-ruble-ideology.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Since the financial media is covering the continuing meltdown of the ruble intensely, we thought it would be helpful to add some information that seems to be missing from most reporting. This post by Jacques Sapir from the 14th (hat tip Michael Hudson) provides important detail on the importance of oil to the Russian economy (far less than typically depicted, although it is the biggest source of foreign exchange), the impact of the fall of the ruble and oil prices on the domestic budgets, and the odds of a Russian default. Note that Sapir is sanguine on the default front and does not see a rerun of 1998 in the offing, by virtue of of Russia having large foreign currency reserves. Note that Menzie Chinn of Econbrowser differs, and uses a chart from the Economist to make his point:

In addition, observers did not take into sufficient account the fact that much of Russian forex reserves are to varying degrees illiquid…



In other words, reserves useful for defending the currency against speculative attacks are more like $200 billion than $400 billion.

And it’s telling to see what a difference a few days makes. This article was penned before the failed Russian emergency rate hike to 17%.

MORE

[Demeter]

6. "We must now examine the reason for the drop in oil prices."

A Drop of a Political Nature?

Multiple indications show this drop as being of a political nature. Some OPEC leaders have alluded to a possible speculation too. It is known that huge quantities of “paper-Oil” were in some Banks books and that these banks were going “short” on this trade. But, still, there is quite clearly a political bias in this speculation.

An attempt by the United States to destabilize Russia is often conjectured. Such an attempt may have occurred, but reality is much more complex. One must know that the threshold of profitability for the new sources of fossil fuels lies at 70 USD a barrel for oil sands (mostly exploited in Canada) and at 65 USD the barrel for shale oil. With an oil price that could hit below 60 USD a barrel, the OPEC countries are actually attacking the North American oil industry. Besides, it is significant that the large Russian oil companies, Rosneft, Loukoil, remain fairly silent about the present evolution of prices. One may well ask if there is not a tacit understanding between Saudi Arabia and Russia to evict, or at least to set limits to, a new actor on the fossil fuel market.

But this attack could have other consequences. The shale oil and gas sector has developed on loans covering 80% to 90% of the investment costs. These could make out over 300 billions in liabilities for American banks. These debts inevitably turn into “dubious loans” (or “non performing loans”) from the moment that one descends significantly below the threshold of profitability. But banks have, as a matter of course, securitized this loans, by emitting CDS’s in which these loans act as collateral. If we are stuck too long with a price that is too low, one cannot exclude a new financial crisis in the American banking system. We notice moreover that the potential risk hovering over the shale oil industry has already been anticipated in part, for operating licences in the United States have gone down 50% during the third quarter of 2014. We can therefore conclude that if oil prices maintain themselves at a very low level until next June, we will probably witness a blood bath in the shale oil industry, with very grave consequences for the banks. I point out in passing that the estimate of 65 USD as a threshold of profitability is an estimate given in oil industry circles, based on the technical conditions of extraction. It does not include financial costs. We can therefore expect the American government to blow the whistle to put an end to the price drop no later than the end of this winter, if it doesn’t want to have a major crisis on its hands. But extracted volumes will go down, too. Production in the United States, after experiencing a peak at the beginning of 2015, should go down significantly during the second semester of 2015. This means that we can expect a new rise in prices during the second semester of 2015, probably in the direction of 70-75 USD the barrel.

This is Not a Replay of 1998

This poses no problem to Russia, whose reserves are such at present (450 billion dollars just for the Central Bank) that it can face an important drop in prices, albeit of a limited duration. One must note also that the repayment of loans by Russian companies for 2015 does not exceed 120 billion dollars. This remains far below the reserves of the Central Bank of Russia as well as of those of the finance ministry. Should it turn out to be necessary, these companies will find among the state actors the money which they need to repay their loans. But this would then imply an extension of the authority of the State over the economy. Yet, in no case should it lead to a “default,” as in 1998, neither of the State (which is very little in debt, and whose debts are essentially held by Russian actors, such as Sberbank) nor of the private sector, which is in fact in possession of vast assets in dollars and which is therefore solvent in the long term. The question of short term liquidity being manageable by way of an appeal to the public sector. The very idea of Russia getting struck into the same crisis pattern than in August 1998 sounds very, very strange. This is probably another case of ideology-driven statements, or ones made by people with no information at all on the actual situation of current Russia.

The image of a Russian default continues to haunt the minds, when the situation is actually quite different at present, as shown by the ample currency reserves. But one may ask if this default of 1998, in which American banks and European banks generally lost a lot of money, is not still being « reproached » to Russia. As a matter of fact, this default allowed Russia to save itself from the depressionist trap in which it had found itself since 1992. It was the founding act of the economic renewal, and of course also of the political renaissance, of the country. We remember the decision of the then Prime-Minister, Evguenny PRIMAKOV, to send Russian paratroopers to protect Serbian populations at the time of the intervention of NATO in Kosovo. One can see in this a first adumbration of the “return of Russia” which is at present embodied by Vladimir Putin, and which has still not been admitted by the ruling circles of the United States and their satellites in Europe....

[Demeter]

7. How Putin’s Fealty to the Washington Consensus Made His Currency Crisis Worse

http://www.nakedcapitalism.com/2014/12/how-putins-fealty-to-the-washington-consensus-made-his-currency-crisis-worse.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



Who needs sanctions when intellectual capture produces such swimming results? The US-led restructuring of the Russian economy after the USSR fell is a gift that keeps on giving.

Hoisted from comments:

Ben Johannson
December 16, 2014 at 8:00 am

My understanding is tha Russia allows conversion of domestic deposits into USD. That needs to stop immediately. Until it does these rate hikes are going to be seen as acts of desperation, increasing stampede out of the rouble.

Put banks into receivership, push losses off on foreigners and when the dust clears return them to normal operations with a new restriction: if they can’t get USD on the fx markets, don’t come to the central bank asking for them.

Anyone have an in with the Kremlin? I sent an email to the President’s office but my opinion isn’t worth a damn. I really don’t want to see Russians go through a repeat of 1998.

Jim Haygood
December 16, 2014 at 9:04 am

‘My understanding is that Russia allows conversion of domestic deposits into USD. That needs to stop immediately.’

From the central bank’s point of view, yes. Rate hikes rarely work to defend a collapsing currency, when the underlying cause is likely capital flight.

For ordinary citizens (not the oligarchs, who already have houses and bank accounts in London), capital controls are harsh medicine. Foreign study or travel becomes difficult or impossible. Supplies of newest-model computers, phones, and even spare parts for old equipment dry up.

Some US economists take a remarkably nonchalant attitude toward capital controls, never actually having had to live under them.
Ben Johannson
December 16, 2014 at 2:50 pm

No one is talking about capital controls, this is an issue of currency sovereignty. Russians need to be stopped from converting the roubles in their accounts to USD and the country as a whole should be de-dollarized. There is no good reason for Russia to allow financial control of domestic policy by foreign investors and governments.

It would help for someone to tell Putin this; so far his government has acted stupidly in its response.
bob
December 16, 2014 at 3:03 pm

“There is no good reason for Russia to allow financial control of domestic policy by foreign investors”

Foreign investors? A russian oligarchs best friend is his dollars, or pounds. Do you really think they’re gonna let a guy like putin be in charge of their capitol?

They know exactly what kind of guy he is, one in the same.

If he stopped “allowing” the conversion, which isn’t really accurate anyway, he’d piss all his buddies off.
Carolinian
December 16, 2014 at 3:28 pm

I offered up this link for a reply already but I guess the comment was too long.

http://cluborlov.blogspot.nl/2014/12/can-anybody-find-me-central-banker-to.html
Ben Johannson
December 16, 2014 at 5:48 pm

Orlov is correct: the Russian central bank is an enormous part of the problem in refusing to move toward greater financial independence for the country and Putin himself appears captivated by Washington Consensus thinking. Unless this changes it’s 1998 all over again.

1) stop convertibility

2) raise taxes to reduce quantity of roubles and engineer a revaluation.

3) denominate oil transactions in roubles.

Yves again. Via e-mail, Mark Ames points out that it would have been extremely destabilizing politically to ban convertibility, but that isn’t something you do overnight. It’s something that in an ideal world should have been curtailed over years.

And to give more context, here are the critical sections of the ClubOrlov post that Carolinian mentioned above:

….at the moment Putin is pushing on a string. You see, once you staff the central bank with economic liberals trained to follow the dictates of the IMF, and do nothing to shut the revolving door between the central bank and other big banks (after all, if the Wall Street boys can do it, why can’t the Russians?) then why wouldn’t they rob their own people every chance they get, then attempt to use their ill-gotten gains to subvert the political system—just like the Americans have done?

Some people are starting to loudly criticize Putin for his inaction; but what can he do? Ideologically, he is a statist, and has done a good job of shoring up Russian sovereignty, clawing back control of natural resources from foreign interests and curtailing foreign manipulation of Russian politics. But he is also an economic liberal who believes in market mechanisms and the free flow of capital. He can’t go after the bankers on the basis of ideology alone, because what ideological differences are there? And so, once again, he is being patient, letting the bankers burn the old “wooden” ruble all the way to the ground, and their own career prospects in the process. And then he will step in and solve the ensuing political problem, as a political problem rather than as a financial one.

This strategy carries a very substantial opportunity cost. After all, if the central bank acted on behalf of regular Russians and their employers, it could take some very impressive and effective steps. For instance, it could buy out western-held Russian debt and declare force majeur on its repayment until financial sanctions against Russia are lifted. It could drop its interest rate for specifically targeted domestic industries—those involved in import replacement. And, most obviously, it could very effectively curtail the activities of well-connected financial insiders aimed at destroying the value of the ruble. Putin said he knows who they are. I hope that they are wearing adult diapers. I wouldn’t be at all surprised if they get Khodorkovskied before too long.

So the currency crisis besetting Russia has a bigger internal component than most observers realize. Orlov points out, as we have, that Russia is a comparatively low cost producer, and the slide in the ruble makes it more so, so in theory it should be able to ride out this downdraft. Or as Ames put it, “Russia’s been broken a few times already. It’s not going anywhere.”

[Demeter]

8. Three Members of Congress Just Reignited the Cold War While No One Was Looking DENNIS KUCINICH

http://www.truthdig.com/report/item/three_congressmen_just_reignited_the_cold_war_while_no_one_was_looking_2014

Late Thursday night, the House of Representatives unanimously passed a far-reaching Russia sanctions bill, a hydra-headed incubator of poisonous conflict. The second provocative anti-Russian legislation in a week, it further polarizes our relations with Russia, helping to cement a Russia-China alliance against Western hegemony, and undermines long-term America’s financial and physical security by handing the national treasury over to war profiteers.

Here’s how the House’s touted “unanimity” was achieved: Under a parliamentary motion termed “unanimous consent,” legislative rules can be suspended and any bill can be called up. If any member of Congress objects, the motion is blocked and the bill dies.

At 10:23:54 p.m. on Thursday, a member rose to ask “unanimous consent” for four committees to be relieved of a Russia sanctions bill. At this point the motion, and the legislation, could have been blocked by a single member who would say “I object.” No one objected, because no one was watching for last-minute bills to be slipped through.

Most of the House and the media had emptied out of the chambers after passage of the $1.1 trillion government spending package.

The Congressional Record will show only three of 425 members were present on the floor to consider the sanctions bill. Two of the three feigned objection, creating the legislative equivalent of a ‘time out.’ They entered a few words of support, withdrew their “objections” and the clock resumed.

According to the clerk’s records, once the bill was considered under unanimous consent, it was passed, at 10:23:55 p.m., without objection, in one recorded, time-stamped second, unanimously.

Then the House adjourned.

MORE AT LINK

[Demeter]

9. The Fed NEEDS Inflation Otherwise the Bond Bubble Will Burst

http://www.zerohedge.com/news/2014-12-19/fed-needs-inflation-otherwise-bond-bubble-will-burst

As we keep emphasizing, the Fed’s real concern is the bond bubble… NOT stocks. We get more evidence of this from Janet Yellen’s press conference after the Fed’s Wednesday FOMC meeting. During the conference, Yellen repeatedly stated that lower oil prices were “positive” for the US economy. This is simply astounding because the Fed has repeatedly told us time and again that it was IN-flation NOT DE-flation that was great for the economy. And yet, on Wednesday, the head of the Fed admitted, in public, that deflation can in fact be positive.

How can deflation be both positive for the economy at the same time that the economy needs MORE inflation? The answer is easy… Yellen doesn’t care about the economy. She cares about the US’s massive debt load AKA the BOND BUBBLE.

Yellen knows deflation is actually very good for consumers. Who doesn’t want cheaper housing or cheaper goods and services? In fact, deflation is actually the general order of things for the world: human innovation and creativity naturally works to increase productivity, which makes goods and services cheaper. However, DEBT DEFLATION is a nightmare for the Fed because it would almost immediately bankrupt both the US and the Too Big To Fail Wall Street Banks. With the US sporting a Debt to GDP ratio of over 100%... and the Wall Street banks sitting on over $191 TRILLION worth of derivatives trades based on interest rates (bonds), the very last thing the Fed wants is even a WHIFF of debt deflation to hit the bond markets.

This is why the Fed is so obsessed with creating inflation: because it renders these gargantuan debt loads more serviceable. In simplest terms, the Fed must “inflate or die.” It will willingly sacrifice the economy, and Americans’ quality of life in order to stop the bond bubble from popping. This is also why the Fed happily talks about stocks all the time; it’s a great distraction from the real story: the fact that the bond bubble is the single largest bubble in history and that when it bursts entire countries will go bust.

This is why the Fed NEEDS interest rates to be as low as possible… any slight jump in rates means that the US will rapidly spiral towards bankruptcy. Indeed, every 1% increase in interest rates means between $150-$175 billion more in interest payments on US debt per year. If you’ve ever wondered how the Fed can claim inflation is a good thing… now you know. Inflation is bad for all of us… but it allows the US Government to spend money it doesn’t have without going bankrupt… YET. However, this won’t last. All bubbles end. And when the global bond bubble bursts (currently standing at $100 trillion and counting) the entire system will implode.

[Demeter]

10. The Russian Ruble Is Hereby Halted Until Further Notice

http://www.zerohedge.com/news/2014-12-16/russian-ruble-hereby-halted-until-further-notice

Earlier, we reported that various currency brokers such as FXCM and FxPro, would - as a result of the soaring liquidity in the USDRUB pair - suspend trading in the Russian Ruble (while other merely hiked margins to ridiculous levels). It appears things have escalated again, and as FXCM just reported, instead of just politely advising clients not to open new USDRUB position tomorrow, it has advised anyone long, or short, the USDRUB that their positions will be forcibly shut in moments.



So for those curious why there appears to be a collapse in Ruble volatility in the past few hours which in turn has sent both stocks and crude soaring, the answer is simple: nobody is trading it!

And this is what happened following the post: as soon as all those short the RUB (long USDRUB) realized they have to take profits, the USDRUB tumbled some 500 pips (!) in the process sending stocks surging.

[Demeter]

13. Russian ruble weakens as traders see no major measures in Putin speech

http://www.reuters.com/article/2014/12/19/us-russia-crisis-rouble-idUSKBN0JW0HX20141219

The ruble weakened against the dollar and euro on Thursday with traders saying President Vladimir Putin had so far offered no concrete measures to pull Russia out of a crisis at his end-of-year news conference.

At 0954 GMT (04:54 a.m. EST), the ruble was around 3 percent weaker against the dollar at 62.04 RUBUTSTN=MCX after opening more than 1 percent higher. The rouble was also around 2 percent weaker versus the euro at 76.50 EURRUBTN=MCX on the Moscow Exchange.

Traders said they saw no major measures from Putin so far to address the crisis that has seen the ruble collapse around 45 percent against the dollar so far this year amid slumping oil prices and Western sanctions over Ukraine.

They said market moves were exacerbated by thin liquidity and that small volumes were capable of moving the market by several percent, including trades not related to Putin's speech.

[Demeter]

14. Russian Central Bank may limit currency exchange spreads for banks

http://itar-tass.com/en/economy/767965

Any administrative measures have their pros and contras, but if needed the Central Bank can act harsher to freeze the speculators' enthusiasm, Deputy Chairman Mikhail Sukhov says...The Russian Central Bank may introduce limits on the spread between purchase and sale rates of foreign currencies for the country’s banks to prevent speculations with retail clients seeking to exchange money, Deputy Chairman Mikhail Sukhov told reporters Thursday.

“We will look at the duration and scale of this phenomenon. Any administrative measures have their pros and contras, but if we need to act harsher to freeze the enthusiasm, we will act this way,” Sukhov said.

The limit on the difference between a bank’s currency purchase and sale rate was 15% until 2014 but since the measure was abolished, some banks set a spread of up to 10 rubles for currency exchange during periods of the fastest ruble weakening.

[Demeter]

11. CITIGROUP DEMOCRACY BY MARK FIORE

http://vimeo.com/114832485

[Demeter]

12. Japan is in deep sukiyaki, too. Arigato, Prime Minister Abe!

Japan auto lobby sounds alarm over weak domestic sales

http://www.japantoday.com/category/business/view/japan-auto-lobby-sounds-alarm-over-weak-domestic-sales

The head of Japan’s auto lobby on Thursday said a “sense of crisis” hung over the industry, with unexpectedly weak domestic sales revealing the failure of government stimulus policies and currency turmoil hitting key export markets.

Japan Automobile Manufacturers Association (JAMA) Chairman Fumihiko Ike said an April sales tax hike was only partly to blame for the domestic sales weakness, citing the government’s failure to boost consumption.

“We are seeing continued weakness in domestic new car sales that go beyond a backlash to the April sales tax hike,” he said, adding that new car sales were down by double digits after the tax hike.

Both Toyota Motor Corp and Honda Motor Co Ltd cut their domestic vehicle sales targets when they announced their second-quarter results in November and October respectively.

Ike, who also serves as Honda chairman, said Prime Minister Shinzo Abe’s stimulus policies - known as Abenomics and designed to end years of deflation - had failed to encourage spending on big-ticket items like cars...

Japan to spend as much as S$39b in stimulus

http://www.todayonline.com/business/japan-spend-much-s39b-stimulus

Japan will spend up to 3.5 trillion yen (S$39.3 billion) in a stimulus package to revive the country’s regions but will keep new bond issuance in check, sources said today (Dec 18), highlighting the tough balance Prime Minister Shinzo Abe must strike between lifting growth and fixing Tokyo’s tattered finances.

With his landslide win in Sunday’s election giving him a fresh mandate to end 15 years of deflation, Mr Abe has pledged to push through his “Abenomics” stimulus policies including the missing third arrow of structural and fiscal reforms. The premier instructed his ministers in November to lay out a stimulus package and plans to finalize it on Dec 27, as part of efforts to pull the economy out of a recession caused by the hit from a sales tax hike in April.

The package, to be around 3.4 to 3.5 trillion yen, will mainly consist of payouts to local governments and subsidies to households for fuel purchases, government and ruling party officials told Reuters. The Asahi newspaper also reported today that Japan will spend over 3 trillion yen to revive the country’s regions.

The focus on helping regional economies partly reflects Mr Abe’s intention to garner votes in local elections to be held nationwide in April. The aggressive monetary and fiscal stimulus deployed under Mr Abe since last year has bolstered stock prices and weakened the yen, allowing big manufacturers to reap windfall profits...

Gov't, business heads, labor unions agree on efforts for wage growth

http://mainichi.jp/english/english/newsselect/news/20141216p2g00m0dm065000c.html

Prime Minister Shinzo Abe's government on Tuesday crafted a joint statement with leaders of business organizations and labor unions, aiming to bolster the economy through wage growth. At the trilateral meeting, Abe also urged large manufacturers, which have benefited from the yen's slide, to trade with their subcontracting companies at higher prices than before to allow the effects of his "Abenomics" policy mix to ripple through smaller firms and local economies.

Sadayuki Sakakibara, chairman of leading business lobby the Japan Business Federation, or Keidanren, told reporters after the meeting, "We told them we will make utmost efforts to raise wages, including bonuses and allowances."

(NOTE: THIS IS POLITE JAPANESE-SPEAK FOR NO F-ING WAY, HOSE!--DEMETER)

But it is uncertain whether other business leaders will act as requested by Abe, given that the economy shrank for a second straight quarter through September in the wake of the April 1 consumption tax hike, darkening the near-term economic outlook.

Japan's largest labor union has decided to seek a 2 percent or greater basic pay raise in annual wage talks starting early next year, a higher goal than set for this year. Fears, however, are growing that weak private spending following the 3-percentage-point tax hike to 8 percent, as well as the yen's depreciation that has increased import costs, have weighed on earnings, particularly at small firms, and made pay hikes a difficult option...Last year, the government, business leaders and labor unions compiled a joint statement that prompted many companies to raise pay scales to conclude this year's spring wage negotiations. This year, the three shared the view that a virtuous cycle where a recovery in corporate profits would lead to wage growth and consumption expansion is necessary to defeat nearly two decades of deflation.

In the latest joint statement, the government also called on the corporate sector to improve working conditions for non-regular employees and take measures to help empower women in society.

THAT'S THE TIP-OFF; NOTHING WILL BE DONE, AND NOTHING WILL CHANGE

[Demeter]

15. I'll return Saturday with another festival for the dark season

Sweet dreams, everyone!

[MattSh]

16. Time to buy the tree...

So I'll drop in later for a spell.

Yeah, right now is still considered early in the tree buying season in this part of the world. The main holiday here is not December 25 (never has been because of the Orthodox calendar), it's January 1, an old Soviet tradition. And Christmas here is January 7. Remember that anti-religious stuff the Soviets had going on? But apparently, because it's a Soviet tradition, from the time of Stalin no less, some hot heads over here want to change that.

[Demeter]

25. Christmas would be Jan. 7 if the Julian calendar were still used

Orthodox Christmas, in other words.

I didn't know Christmas trees had gone East! How interesting...of course, the Nutcracker would have given that away, and probably was the vector, too.

[xchrom]

17. ...

[xchrom]

18. "Faunus The Roman Goat-God"

?list=PL73EE135FCDC75788

[xchrom]

19. what night is this

[xchrom]

20. Mutual Funds Haven't Performed This Crappily Since 1997

http://www.businessinsider.com/large-cap-equity-mutual-funds-havent-performed-this-crappily-since-1997-2014-12

Some mutual funds try to track their benchmarks. Others try to beat their benchmarks.

Unfortunately, most mutual funds have historically lagged their benchmarks.

According to Goldman Sachs' David Kostin, 2014 has been a particularly challenging year for large-cap equity mutual fund managers.

"Market swings and shifting volatility regimes have compounded the performance difficulty for fund managers this year," Kostin wrote on Friday. "Only 12% of large-cap core mutual funds have outperformed the S&P 500 YTD, the lowest share since 1997. Following the 7% S&P 500 sell-off in October, the index rallied sharply by 11% during the course of two months to new record highs, before the past week’s turbulence."

This only adds to the case for choosing passively managed index funds over actively managed funds.



Read more: http://www.businessinsider.com/large-cap-equity-mutual-funds-havent-performed-this-crappily-since-1997-2014-12#ixzz3MRE4geGJ

[xchrom]

21. The Value Of America's Housing Market Climbed To $27.5 Trillion This Year

http://www.businessinsider.com/us-home-prices-in-2014-2014-12

The value of all homes in the US increased by $1.7 trillion in 2014 to $27.5 trillion, according to Zillow.

That's an appreciation of 6.7% year over year. Home prices increased 8% in 2013.

"Looking at the total value of the U.S. housing stock proves just how huge and important the housing sector is to the overall economy," wrote Zillow Chief Economist Dr. Stan Humphries in a press release. "Virtually nowhere else will you see gains of more than a trillion dollars in one year represent only single-digit percentages of the total market.

Houston led the jump in year-over-year home prices with homes worth $353 billion, a 13% increase. It was followed by Atlanta ($373 billion, up 10.5%) and San Jose ($544 billion, up 10.2%).



Read more: http://www.businessinsider.com/us-home-prices-in-2014-2014-12#ixzz3MRG8rQyk

[xchrom]

22. FALLING OIL PRICES WORRY ALGERIA

http://hosted.ap.org/dynamic/stories/M/ML_ALGERIA_OIL_CHALLENGES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-20-05-30-20

ALGIERS, Algeria (AP) -- With oil prices at their lowest in five years and showing few signs of hitting bottom, Algeria is feeling the pinch.

Though its problems are dwarfed by the impact on Russia for example, Algeria may have to rein back many of the policies it has held dear over many years. Generous subsidies, for one, may have to be scaled back despite the potential risk of social unrest in the North African country.

Oil revenues make up 97 percent of the country's hard currency earnings and 60 percent of the government's budget. Like Russia, which has seen a full-scale run on its currency, there have been few efforts to diversify the economy away from oil and gas.

Central Bank governor Mohammed Laksaci has warned that the oil and gas dividend won't last forever though nearly $200 billion of foreign reserves can help cushion the blow in the short-term.

[xchrom]

23. KOCHERLAKOTA WARNS FED OF 'UNACCEPTABLE' RISK

http://hosted.ap.org/dynamic/stories/U/US_FED_DISSENTS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-19-19-10-38

WASHINGTON (AP) -- One of three Fed officials who dissented in the Fed's policy decision this week is warning that the central bank is taking an "unacceptable" risk by not paying more attention to the dangers posed by low inflation.

Narayana Kocherlakota, the president of the Fed's regional bank in Minneapolis, said Friday that the Fed's failure to respond to weak inflation "runs the risk of creating a harmful downward slide in inflation" similar to the problems facing Japan and Europe.

Meanwhile, Philadelphia Fed President Charles Plosser, another dissenter at this week's meeting, is unhappy for a different reason. He feels the Fed is making a mistake by saying it will still be patient in deciding when to begin raising interest rates.

Plosser said it was an error to use the word "patient" and also to say that current policy had not changed from the October meeting when the Fed was saying that rates would remain near a record low for "a considerable period."

[MattSh]

24. I guess I'm improving...

I had my first ever post hidden by a DU jury. Which is probably a good thing. If you never get a post hidden, you're probably part of the problem, both here at DU and in the world at large, and not part of the solution.

Some people took offense to the Saker's site. Hey, if Forbes (original post in the thread in question) is your thing, have at it. Just don't be surprised when the sh*t hits the fan and you're left moaning "nobody told me that this might happen." You choose ignorance; now pay the price. And pay you will.

Mini-rant off.

[Demeter]

28. Well, that's one way of looking at it

There are too many posts hidden or locked because of a rigidity of mindset that will kill the party, the country, the world.

And there are too many posts that linger, because of the conspiracy, for lack of a better word, of those who would use this site as a propaganda machine and a means of excluding debate, dissent, dissenters themselves, and oftentimes actual factual material that doesn't conform to the ideology, thus killing "Hope" by forbidding "Change".

That is why Tansy and I have this little safety zone fenced off for all of us. The actual scheme came from Hugin, of course, back when he was more active. The rest is history.

There used to be an active movement to ban sites because one or two of their posts violated some kind of "political correctness" test. Thankfully, that has mostly gone away, although some people do try to keep the old traditions alive, as you have seen.

I think that mostly the politically aware have taken refuge in specialty niches like ours. LBN is a joke, Good Reads usually aren't read or aren't good. There's too much Facebook on DU, and not enough of anything else.

[MattSh]

34. Yep, it's an R or X rated world (most of the time)

and some want to stick with their G and PG-13 fantasies.

[xchrom]

26. GLOBAL OIL IMPACT: WHO'S HURTING, HAPPY, HOPEFUL

http://hosted.ap.org/dynamic/stories/G/GLOBAL_OIL_PLUNGE_KEY_PLAYERS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-19-13-12-15

NEW YORK (AP) -- Oil's plunge is spreading both pain and gain across the globe.

The price of a barrel has fallen by about half since June, punishing the economies of some major exporters. Russia's currency has nose-dived, for instance, and investors worry Venezuela could default on its debt.

For countries that consume a large amount of the world's oil, it's a different story. The world's four biggest economies - U.S., China, Japan and that of the European Union - all benefit from lower oil prices.

"Economically this is a good thing for the U.S., it's a good thing for Europe, it's a good thing for China and it's a good thing for most consumers," says Sarah Ladislaw, director of the energy and national security program at the Center for Strategic and International Studies.

[Demeter]

29. Recent analyses point out

that this oil war is going to take down a lot more than its targets...like the good ole USA, the Middle East and probably Venezuela...and most likely before Russia succumbs.

The USA economy may like cheap energy, but that cheap energy has got a mass of expensive debt linked to it, which is a ticking time bomb for the financial system. Hence the recent chicanery in Congress to bail out derivatives, again. The nation cannot afford it, but there it is.

[xchrom]

27. When Santa Claus Showed Up on U.S. Currency

http://www.bloomberg.com/news/2014-12-19/when-santa-claus-showed-up-on-u-s-currency.html



Money can be so boring. Or, at least, U.S. paper currency. Green, black, cream, some president’s head. With the holiday season upon us, there are holiday stamps, holiday checks, holiday-themed toilet paper. Would it be so horrible to have holiday-themed currency?

They didn’t think so before the U.S. Treasury stepped in to un-democratize the design of U.S. currency. Before it did that in 1861, there actually was holiday-themed currency featuring Santa Claus, and earlier versions of St. Nicholas.

“From 1793 to 1861, when the U.S. Treasury was given exclusive rights to produce legal tender, thousands of different styles of bank notes were created by U.S. banks,” and prominent on some of their holiday-themed currency, a blog post from the Federal Reserve Bank of New York tells us, was Santa Claus.

Santa was extremely popular back then, the post says, thanks to a.) Christmas becoming an official holiday in many Northern states, and b.) the printing in 1823 of the poem “A Visit from St. Nicholas” by Clement Clarke Moore (that was the original title; today, it's known as "The Night Before Christmas&quot . Here's another image of a Santa bank note from that era from, yes, Saint Nicholas Bank in New York:

[Demeter]

30. Charming!

I woke up this morning with the realization that conversations about money, plans about money, schemes to steal money dominate the national conversation, psyche and life force. And this is wrong.

Money isn't everything. It is a tool, and like a powerful drug, has been abused. People are addicted to thieving, piling up and/or spending money to the exclusion of any other drive or life purpose. It is a sickness, identified in Biblical times, but given acceptability by a pathless culture, a venal government and its insatiably greedy overlords.

[xchrom]

33. well said. nt

[Demeter]

31. Mathew D. Rose: Germany’s Dubious Successes

http://www.nakedcapitalism.com/2014/12/mathew-d-rose-germanys-dubious-successes.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

IT'S A LONG, WORTHY READ, INCLUDING THE COMMENTS

[Demeter]

32. Bring On the Dark: Why We Need the Winter Solstice

http://www.nytimes.com/2014/12/20/opinion/why-we-need-the-winter-solstice.html

WHEN the people of this small mountain town got their first dose of electrical lighting in late 1924, they were appalled. “Old people swore that reading or living by so fierce a light was impossible,” wrote the local historian Alf Evers. That much light invited comparisons. It was an advertisement for the new, the rich and the beautiful — a verdict against the old, the ordinary and the poor. As Christmas approached, a protest was staged on the village green to decry the evils of modern light. Woodstock has always been a small place with a big mouth where cultural issues are concerned. But in this case the protest didn’t amount to much. Here as elsewhere in early 20th-century America, the reluctance to embrace brighter nights was a brief and halfhearted affair.

Tomorrow is the winter solstice, the longest night of the year. But few of us will turn off the lights long enough to notice. There’s no getting away from the light. There are fluorescent lights and halogen lights, stadium lights, streetlights, stoplights, headlights and billboard lights. There are night lights to stand sentinel in hallways, and the lit screens of cellphones to feed our addiction to information, even in the middle of the night. No wonder we have trouble sleeping. The lights are always on. In the modern world, petroleum may drive our engines but our consciousness is driven by light. And what it drives us to is excess, in every imaginable form. Beginning in the late 19th century, the availability of cheap, effective lighting extended the range of waking human consciousness, effectively adding more hours onto the day — for work, for entertainment, for discovery, for consumption; for every activity except sleep, that nightly act of renunciation. Darkness was the only power that has ever put the human agenda on hold. In centuries past, the hours of darkness were a time when no productive work could be done. Which is to say, at night the human impulse to remake the world in our own image — so that it served us, so that we could almost believe the world and its resources existed for us alone — was suspended. The night was the natural corrective to that most persistent of all illusions: that human progress is the reason for the world.

Advances in science, industry, medicine and nearly every other area of human enterprise resulted from the influx of light. The only casualty was darkness, a thing of seemingly little value. But that was only because we had forgotten what darkness was for. In times past people took to their beds at nightfall, but not merely to sleep. They touched one another, told stories and, with so much night to work with, woke in the middle of it to a darkness so luxurious it teased visions from the mind and divine visitations that helped to guide their course through life. Now that deeper darkness has turned against us. The hour of the wolf we call it — that predatory insomnia that makes billions for big pharma. It was once the hour of God.

There is, of course, no need to fear the dark, much less prevail over it. Not that we could. Look up in the sky on a starry night, if you can still find one, and you will see that there is a lot of darkness in the universe. There is so much of it, in fact, that it simply has to be the foundation of all that is. The stars are an anomaly in the face of it, the planets an accident. Is it evil or indifferent? I don’t think so. Our lives begin in the womb and end in the tomb. It’s dark on either side. We’ve rolled back the night so far that soon we will come full circle and reach the dawn of the following day. And where will that leave us? In a world with no God and no wolf either — only unrelenting commerce and consumption, information and media ... and light. We need a rest from ourselves that only a night like the winter solstice can give us. And the earth, too, needs that rest. The only thing I can hope for is that, if we won’t come to our senses and search for the darkness, on nights like these, the darkness will come looking for us.

[MattSh]

35. AND... Here's the article I had banned, but I'll be nice and post it from another site...

Free Fall of the Ruble – A brilliant ploy of Russian economic Wizards? Who’s chess game?  :  Information Clearing House - ICH


...

The propaganda drums tell you Russia is helpless because the world has lost the last bit of confidence in President Putin – of course. Regime change is on the agenda. Mr. Putin must be blamed as the culprit, hoping to discredit him with his people. He is leading Russia into a deep recession; the worst since the collapse of the Soviet Union. The mainstream media show you interviews with average mainstreet Russians saying they have lost all their savings, their salaries and pensions are worth nothing anymore and they don’t know how to survive this coming calamity.

In reality, at least 80% of the Russian population stands solidly behind Vladimir Putin. He has brought them universal education, health care and fixed infrastructure that was decaying after the fall of the Soviet Union. President Putin is literally revered as a hero by the vast majority of Russians – including the country’s oligarchy.

In fact, nobody in the western economic system these days is dealing in rubles. In short-sighted connivance with Washington, the treasuries of the western vassals are releasing their ruble reserves – which Russia does not buy, thereby flooding the market. Russia not only has large dollar reserves, plus the ruble is backed by gold, a fact consistently omitted in the MSM. For now, Russia prefers to let the ruble plummet.

Under another ‘arrangement’ by bully Obama, Middle Eastern oil producing puppets like Saudi Arabia and the Gulf States are overproducing and flooding the market with petrol and gas, thereby driving the price down to the ostensible detriment of Russia and Venezuela, both countries where Washington vies for regime change. A double whammy thinks Washington, buying kudos with the stooges. The sheiks that control their energy output apparently have been promised enough goodies from Washington to bite the bullet and take their own losses.

Russia needs rubles. That’s her currency. That is the currency Russia needs for future trading – detached from the western monetary system.

When Russia deems that her currency has reached rock-bottom, she will buy back cheap rubles in the market with massive amounts of dollars. Russia may then flood the western market – with dollars, and by now we know what that does to a currency – and simultaneously buy back rubles from the West. A brilliant move to reestablish Russia’s currency in a new emerging monetary system – which Europe would be welcome to join, but willingly, no by Washington style arm-twisting.

Is this another precursor to war? A nuclear confrontation or Cold War II? – Precursor to a false flag attempting Moscow to fall into the trap? - Not necessarily. Russia is playing a clever chess game, diplomacy at its best. Instead of sabre rattling – Russia is coin rattling. It might lead to a western financial fiasco early in 2015 for the dollar and euro denominated economies. And the winner is…?

Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe.


Complete story at - http://www.informationclearinghouse.info/article40508.htm

My comment. I am under the impression that Russia does not have enough dollars to pull this off by themselves. I could be wrong, who knows? But I know the Chinese do have those kinds of dollars and have been itching to find a way out. Expect some co-ordinated effort? Maybe.

What I can tell you is that on Russian TV, yes the same Russian TV that's viewed in Moscow, there have been broadcast pleas to not convert your rubles or buy stuff you really don't need. It could be an appeal to patriotism, OR it could be a confirmation of what our author is speculating might actually happen. Stay tuned...

[magical thyme]

52. boy did you nail it

Russia's new oil trade deals are for payment in rubles, correct? They don't need to coordinate anything. Commensense tells you their new trading partners will dump dollars for rubles to pay for their oil purchases. I guess the ruble will hit bottom when any one of them -- Russia or its partners -- starts dumping dollars for rubles.

Talk about blowback for us...the whole reason we went after Hussein in the first place was because he tried to get off the oil/dollar "standard."

[MattSh]

36. Something I posted on my website earlier this week - Chronicles of the Collapse of Kiev

Chronicles of the Collapse of Kiev - Edition 2014-1

Kiev, Ukraine: Nov 27 - Dec 16

by NoBC4U (No Bread & Circuses for You)

Kiev of course has not collapsed yet, and it may somehow make it through it’s recent troubles relatively unscathed. But from what I’m seeing, this outcome seems less and less likely as time goes by. Still, it’s hard to wish this kind of trouble on most people. But sadly, a small, hard core group of idiots can force a whole nation to sink under the waves into the Ocean of Oblivion.

Ukraine is a country that doesn't have much of a reason to exist. Its whole Raison d’être is defined as anti-Russia. Beyond that, they’ve rarely had a country; never been much of anything; never aspired to be something. Their only aspiration is to not be Russia. They're the anti-Russia. Just like matter and anti-matter cannot coexist; Russia and anti-Russia cannot coexist.

News from Kiev and Ukraine

Skilled Professionals Are Leaving Ukraine.

Well, should we really be surprised? Exactly what do they have too look forward to by remaining in Ukraine? A sinking economy? Deteriorating infrastructure? Continuing dysfunctional government? A nice 2 meter deep hole with one’s name on it? A Jekyll and Hyde educational system that metastasizes every couple of years depending who is in charge? A government run by Nazis? You can have all of this and a whole lot more if you remain in Ukraine; but if this isn't exactly your cup of tea, you're a whole lot better off somewhere else. And the exodus has begun.

The Antonov aircraft plant ceases production.

Well, it's certainly not the first, nor will it be the last industrial operation to shut down. But it’s certainly one of the largest industrial operations in all of Kiev. And now it's no more, at least temporarily. Because it seems the Boeing Corporation may be interested in taking over this plant. But trying to take over of vibrant operation with a lot of orders is a lot more expensive than taking over a factory that is idle. But from the USA's point of view, this is what the whole Ukrainian revolution was for. Ruin the economy, force formally vibrant companies to shut down operations, and let foreign corporations buy the whole operation for kopeks. And by buying into a depressed economy such as Ukraine, you can possess a workforce that costs 50% less than a it would have cost two years ago.

Zaporizhia nuclear power plant has an accident.

Boy, that sounds so innocuous, doesn’t it? Just like Little Bobby had an accident. (Except it's a whole lot more serious).

Luckily, it's not something very serious; certainly nothing close to the scale of a Chernobyl. Yet the authorities here are playing with fire. They are trying to use nuclear fuel sourced from the USA in Soviet era nuclear reactors. There have been numerous warnings stating that this could cause a disaster, but when the choices are using compatible and well tested products from Russia, or using untested products from the USA, the chance to thumb your nose at Russia was just too big for some of the idiots in charge around here to pass up. But don’t blame the current government for this one. This decision goes back to 2005, when the “Orange Revolution” government was in charge. So then, as now, go for the highly modified and untested products from the USA, screw Russia, and hope for the best.

Kiev faces power outages.

According to Kiev energy, lack of sufficient coal to power power plants is leading to some short-term problems. Kiev energy assures us that outages will only affect industrial operations and will last for no longer than two hours at a time. Surprise Surprise! They were wrong. There already are reports of numerous residential outages, often for 3 to 4 hours at a time, and often 2-3 times a day. Now that may have something to do with the nuclear power plant incident mentioned above, yet that has been no update of the original announcement. And the outages are still continuing.

Kiev schools to shut down for an additional week for winter break.

Well, no surprise here. The one week fall break magically turned into two weeks, and now the two week winter break magically morphs into three weeks. And this will apparently save Kiev 1/3 of $1 million. By the middle of January, children will have already missed two weeks of regularly scheduled school time. But don't fret! Rest assured that they will just accelerate the curriculum to make up for lost time. Of course, your children don't learn all that much during the regular paced curriculum. But students are sure to be motivated to learn a lot more when the pace picks up. And all this will be done by teachers who have historically been poorly paid and is now being paid even more poorly under the auspices of the new government.

Ukraine gets its own "Ministry of Truth."

Yes, it's 1984. And Ukraine has a new ministry. Officially, it's known as the "Ministry Of Information Policy." But journalists here and elsewhere are already referring to it as the "Ministry of Truth." The term “Ministry of Truth” comes from George Orwell's novel 1984, where the Ministry of Truth had absolutely nothing to do with the truth. It was strictly the propaganda arm of the government. So it was in the novel; so it is in Ukraine today. Journalists are up in arms about this new ministry, but really, they have no reason to complain. This is just the formalization of what's been happening ever since the junta came to power. I guess propaganda is just fine up to that point where the government gets to give its approval or disapproval. It makes you look less independent.

Luxuries, like meat and medicines, are being priced out of the range of normal citizens.

Well, what can you say about this one? I guess one might consider meat as a luxury that you can cut back on. But medicines? While that certainly seems to be more of a necessity than a luxury, if you can't afford them, or if it just not available, what choice do you have? I wrote a while back that not only on medicines more readily available in Moscow, they can often be purchased for 50% less. With the continuing devaluation of the local currency, these medicines will only become more costly and more difficult to find.

Propaganda trucks on the prowl.

It's getting more than just a little bit annoying by now, but three, four, five times a day, propaganda trucks go driving by with big PA speakers on the roof, informing everybody of what they should be outraged about today. But who has time for outrage when survival is on the line. I did see the local propaganda truck parked at a nearby police station a couple of days ago, and the propaganda stopped. But the trucks are back with your daily dose of propagandist thought.

Kiev cheers the demise of "South Stream."

Well, clueless is as clueless does I guess. Someone here in Kiev seems to believe that the demise of South Stream is good for Ukraine. And somehow this is a recognition by Putin that Ukraine is a reliable partner when it comes to gas deliveries. Poor, poor Ukraine. They just don't get it do they? One way or another, Russia will make Ukraine irrelevant when it comes to gas deliveries to Europe.

For only 200 hryvnias (about $13), you can help the Ukraine create a siege of Moscow.

How delusional can you get? A local aspiring “entrepreneur,” or whatever he wants to call himself, recently had to give his up his hopes of a military invasion of Moscow because nowhere near 25 million Ukrainians decided to pitch in the money. There's been no word on exactly how many did donate, or what will be done with any funds that have been donated.

Ukraine still has high hopes for liquid natural gas.

One of the earlier schemes of the Kiev junta and the US State Department involved shipping liquid natural gas from the USA to a new port to be built in Odessa, Ukraine. But it seems no one consulted with the Turks about this. The only way to get such ships into the Black Sea is through the Bosporus, and Turkey does not permit these types of ships to pass. Oh well, I guess there's always room for another color revolution. In Turkey. But it seems Ukraine’s plans for this port are still going ahead, undeterred.

Ukrainians are starting to refuse to pay utility bills.

As if the end of November, utility debt in Ukraine already totals 11.8 billion hrynias. Translated to dollars, this is about $800 million! While some of this is likely due to some people not being able to afford to pay, some of it is definitely a boycott of the current costs, plus another 50% increase that is supposed to go into effect on January 1. And this indebtedness is only likely to grow more quickly in the upcoming months. But this is nothing new here. During the days of Kravchuk and Kuchma (Ukraine’s first two presidents), a good number of people did not pay their bills for three years or more. It looks like the good old days of post-Soviet collapse have returned.

I expect to have more about this shortly.

The EU. A day late, a ton of Euros short.

Some in the EU are now claiming "it's only a minor misunderstanding. South Stream is just a matter of not being compliant with legislative action." Looks like Russia was tired of being jerked around by the EU and found more willing partner to deal with.

Churches continue to go up in flames.

Astute readers are already well aware that numerous Orthodox churches in the East of Ukraine have been deliberately bombed by the Ukrainian Army. But there are other fascists at work too. A church near the Babi Yar memorial complex was deliberately firebombed on December 2nd. For those who are not familiar with the history of Babi Yar, it's only the site of the largest two-day Nazi massacre of World War II.

Not surprisingly, petty crime is on the rise.

A friend of my wife's father recently reported that he had a tire slashed on his recently purchased vehicles. The scam goes like this. The perpetrators look for either older men or women of any age driving in high priced vehicles. The driver stops, goes into a store, and then when you come out you find a tire slashed. Older men and women of any age will most likely need help to replace the tire. The perpetrator and a couple of buddies offer their help. While the owner and the perpetrators change the tire, another buddy grabs whatever he can from the car while your attention is distracted. So, why men? Here men often carry valuables in a small handbag and not in their pockets.

The American carpetbagger in the finance ministry gets to work.

Well, that didn't take long did it? Here is some of the shock and awe in store for the citizens of Ukraine. No more free education and health care for you. Compulsory education is reduced from 11 years to nine years. Most students and teachers will lose access to free transportation. Most students will lose access to stipends and for the few that continue to get that, they will not be adjusted for inflation. Teachers with additional titles and degrees will no longer get extra pay for that. And many experienced teachers will see their pay drop to the level of a new graduate. Retirement age will be increased by 10 years for women and by five years for men. Those who worked during Soviet times may see an additional pension decrease because they were "working for the occupier country" during Soviet times.

On the taxation side, you'll be asks to prove the source of your income for any purchase over approximately $800. And if the value of the hrynia continue to decrease, that $800 valuation will be even less. If you can't prove the origin of your income, it will automatically be assumed to be undeclared income and you will pay an additional 30% for that purchase. Saving diligently or having relatives outside the country sending you funds will not be sufficient reasons to avoid the tax.

This is of course is just scratching the surface of life in the new Ukraine.

A Personal Thought.

I’ve thought back a couple of times to those days when I was younger, and this song has popped into my head on a few occasions. It’s a song from 1981 called “Part of a New America” by the Groceries. I remember then having the feeling that things were going to change for America, and definitely not for the better. I sometimes find myself singing this song, but with new words…

“I’m part of the New U-krai-ni-a.” Definitely changing, and not for the better.

(Oh, NSFW - When the song first came out, there was no video. This is just something some random dude put together).

That's the news from the past two weeks. Further dispatches will hopefully be on a weekly or biweekly basis. Until then, hope for the best, but expect the worst. Signing off from Kiev for now.

http://bread-circuses-today.blogspot.com/2014/12/chronicles-of-collapse-of-kiev-edition.html

[MattSh]

37. How bad is Inequality In the U.S. Today? Read on...

Inequality In U.S. Today Is Worse than in Apartheid South Africa or 1774 Slaveholding Colonial America ... and TWICE As Bad As In Ancient Slaveholding Rome - Washington's Blog

Even Slaves Had It Better

Inequality in America today is twice as bad as in ancient Rome, worse than it was in Tsarist Russia, Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America.

Nicholas Kristof notes at the New York Times that inequality in the U.S. is worse than it was in apartheid South Africa:

The net worth of the average black household in the United States is $6,314, compared with $110,500 for the average white household, according to 2011 census data. The gap has worsened in the last decade, and the United States now has a greater wealth gap by race than South Africa did during apartheid. (Whites in America on average own almost 18 times as much as blacks; in South Africa in 1970, the ratio was about 15 times.)

Complete story at - http://www.washingtonsblog.com/2014/12/inequality-u-s-today-worse-apartheid-south-africa-1774-slaveholding-colonial-america-twice-bad-ancient-slaveholding-rome.html

[Demeter]

38. John Helmer: Ukraine Finance Minister Natalie Jaresko Accused in Colorado Court

http://www.nakedcapitalism.com/2014/12/john-helmer-ukraine-finance-minister-natalie-jaresko-accused-in-colorado-court.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. Helmer was first to provide in-depth reporting on the US citizen and State-Department supported Natalie Jaresko, who was mysteriously parachuted into the post of Ukraine Finance Minister a few weeks ago. Jaresko is in the midst of a nasty divorce from her former business partner. As Helmer wrote:

It hasn’t been rare for American spouses to go into the asset management business in the former Soviet Union, and make profits underwritten by the US Government with information supplied from their US Government positions or contacts. It is exceptional for them to fall out over the loot.

Helmer gives us the latest update on this protracted battle, and what it says about the Natalie Jaresko’s willingness to play fast and loose.

By John Helmer, the longest continuously serving foreign correspondent in Russia, and the only western journalist to direct his own bureau independent of single national or commercial ties. Helmer has also been a professor of political science, and an advisor to government heads in Greece, the United States, and Asia. He is the first and only member of a US presidential administration (Jimmy Carter) to establish himself in Russia. Originally published at Dances with Bears

A federal US court in Colorado has begun proceedings on charges that Natalie Jaresko, the US national who was appointed Finance Minister of Ukraine this month, lied to the US State Department and violated US passport laws, after she misled a Ukrainian court in September into issuing a judgement it lacked the legal authority and the evidence to make. Documents presented to the US court on November 21 also accuse the US Embassy in Kiev of being improperly influenced or misled into accepting the record of a Ukrainian court proceeding from which Ihor Figlus, Jaresko’s husband between 1989 and 2011, says he was excluded unlawfully. Figlus is a US citizen of Ukrainian extraction now living in a suburb of Denver. He is alleging in US District Court that Jaresko has tried to persuade the State Department to issue a US passport to the 10-year old daughter of their marriage with a ruling from a Kiev judge who believed the child was a Ukrainian citizen, not an American. Jaresko, according to Figlus, has manipulated the State Department with “rulings obtained in a foreign country whose judicial system is widely recognized by the Government of the United States as being deficient and corrupt.” According to a Ukrainian legal specialist cited in the US court file, Jaresko “deceived the (Ukrainian) court” by preventing Figlus from participating in the proceedings, and then getting the court to rule on the child and violating Ukrainian law “which it could not apply in this matter.” Figlus has asked the Colorado court to order the State Department not to issue the passport.

A European bank source currently working on Ukrainian financing issues says Jaresko’s private life can have no bearing on her performance as the new finance minister. “No one wants to know about her divorce, no matter how nasty. That’s what divorces are.” Other sources see the case as about the public credit and veracity of a new minister of state, not about family squabbles and child custody. “What counts now,” says a European investigator close to Ukrainian dealmaking, “is what sort of counterparty Jaresko makes in big-money deals. What does the record of what she has done to manipulate the Ukrainian judge and her contacts at the US Embassy in Kiev tell you about what she will do to the Ukraine’s creditors?” Other banking sources say that if Jaresko’s veracity and the legality of her actions are tested in the US court, then the proceedings will impact on her credibility in negotiations with European Union governments and multilateral lending organizations. “If the US judge says there is a smell, the bankers are likely to reach for their nose masks.”

Litigation between Jaresko and Figlus in the Ukrainian courts began in mid-2011, and continued through a higher court ruling in Kiev in May of 2013. At issue were differences over the division of assets and debts accumulated during their 21-year marriage; the value of the divorce estate was estimated by the courts to be worth about $6 million. The inventory recorded in the court documents included a house in Kiev; a land plot; antique furniture; Caucasian rugs; Ukrainian art; car; investments; and loans from Horizon Capital, an entity which the couple set up in Kiev in the mid-1990s with a US Government grant of $150 million.

Three of the court records are from the Shevchenko District Court of Kiev; the fourth is from the appeals court of Kiev. They are dated June 17, 2011; November 25, 2011; February 19, 2013; and May 22, 2013. From the beginning of the Ukrainian proceedings, the court recorded evidence that Jaresko, Figlus and their two children were US citizens; that they had moved between the US and Ukraine frequently, living and working in both countries. Jaresko’s employment by the US Government was not revealed in the records. Her residence in Kiev, along with the two children, is attested from 2011. Jaresko has also sued Figlus in the Chancery Court of Delaware, a US state, for control over investments in the Emerging Europe Growth Fund, managed by Horizon Capital. In the latest episode, a document of the Svyatoshinsky District Court of Kiev, dated September 11, 2014, reveals that Jaresko applied for a court order permitting one of the two children of the marriage to receive a passport for travel outside Ukraine. The court found that in the event that permission of both parents could not be obtained, the court had jurisdiction to order this for a “minor citizen of Ukraine”. The ruling by the presiding judge, A.Ya. Volchko, granted Jaresko permission to apply for the child’s passport. The evidence in Volchko’s ruling is that he knew Jaresko was a “foreigner”, but didn’t know the child was a US citizen, and that the passport Jaresko was seeking was from the US Embassy in Kiev. Figlus (right) has since told the Colorado court he was not notified in advance of the Kiev hearing in September, nor of the Volchko ruling, until October 9, when he received a letter from the Office of Children’s Issues at the State Department in Washington. This claimed that “a person applying for (the child’s) passport has presented sufficient evidence to establish sole authority under US law to apply for the child’s passport.”

The language of the State Department letter refers to the standard form of application for a US passport, DS-11. So as to stop well-known abuses and kidnapping, this form sets out special conditions when only one parent is applying for a child’s passport. Because Figlus was refusing to consent, Jaresko had the option of risking the US perjury law by making a statement Figlus might challenge later on as false.

Her alternative was to produce “primary evidence of sole authority to apply”. A Ukrainian court ruling on Ukrainian law applied to Ukrainian children was hardly “primary evidence”, and if Jaresko had committed perjury in Judge Volchko’s court, the record has been lost – at the time Volchko apparently didn’t notice. But note the word twist at State when the letter to Figlus drops “primary evidence” in favour of “sufficient evidence”. Which US official decided that, in Kiev or Washington, may expose more than Jaresko to investigation in the Colorado court – if the case continues.


Source: http://www.state.gov/documents/organization/212239.pdf

Another month elapsed, according to Figlus, before the State Department released to him a copy of the September 14 Kiev court ruling. A Ukrainian legal opinion was then obtained by Figlus, and relayed to the State Department. This expressed “incredulity that a US government institution would accept a Ukrainian court decision which was clearly based on laws governing citizens of Ukraine (and my daughter does not have Ukrainian citizenship) as an ‘order’ to issue a passport…and that the ruling was made in absentia because Jaresko misled the court about my [Figlus’] place of residence.”

Figlus’s application to the Colorado court is for an injunction preventing the State Department and the US Embassy in Kiev from issuing the passport. The federal court docket records the case was assigned last week to Judge Brooke Jackson. The State Department, which is represented by the US Attorney’s Office in Denver, has yet to file a reply. Figlus refuses to respond to questions. This week he posted a Facebook notice disclaiming a role in press coverage of his conflict with Jaresko. “I congratulate Natalie Jaresko on her appointment as Finance Minister of Ukraine,” he said, “and wish her all the best in performance of the difficult tasks ahead. For Ukraine’s sake I hope that she is successful.”

Jaresko was asked for her response to the court claims. Today at Horizon Capital in Kiev, a spokesman said Jaresko had resigned as chief executive on December 2, 2014. “Given your questions to Ms. Jaresko are of a personal nature and have no relation to Horizon Capital, we suggest you contact her or her attorneys.” At the Ministry of Finance in Kiev, there was no response from Jaresko.

[MattSh]

39. Go West, Young Han — Pepe Escobar

November 18, 2014: it’s a day that should live forever in history.

On that day, in the city of Yiwu in China’s Zhejiang province, 300 kilometers south of Shanghai, the first train carrying 82 containers of export goods weighing more than 1,000 tons left a massive warehouse complex heading for Madrid. It arrived on December 9th.

Welcome to the new trans-Eurasia choo-choo train. At over 13,000 kilometers, it will regularly traverse the longest freight train route in the world, 40% farther than the legendary Trans-Siberian Railway. Its cargo will cross China from East to West, then Kazakhstan, Russia, Belarus, Poland, Germany, France, and finally Spain.

You may not have the faintest idea where Yiwu is, but businessmen plying their trades across Eurasia, especially from the Arab world, are already hooked on the city “where amazing happens!” We're talking about the largest wholesale center for small-sized consumer goods - from clothes to toys - possibly anywhere on Earth.

The Yiwu-Madrid route across Eurasia represents the beginning of a set of game-changing developments. It will be an efficient logistics channel of incredible length. It will represent geopolitics with a human touch, knitting together small traders and huge markets across a vast landmass. It’s already a graphic example of Eurasian integration on the go. And most of all, it’s the first building block on China’s “New Silk Road,” conceivably the project of the new century and undoubtedly the greatest trade story in the world for the next decade.

Go west, young Han. One day, if everything happens according to plan (and according to the dreams of China’s leaders), all this will be yours - via high-speed rail, no less. The trip from China to Europe will be a two-day affair, not the 21 days of the present moment. In fact, as that freight train left Yiwu, the D8602 bullet train was leaving Urumqi in Xinjiang Province, heading for Hami in China’s far west. That’s the first high-speed railway built in Xinjiang, and more like it will be coming soon across China at what is likely to prove dizzying speed.

Today, 90% of the global container trade still travels by ocean, and that’s what Beijing plans to change. Its embryonic, still relatively slow New Silk Road represents its first breakthrough in what is bound to be an overland trans-continental container trade revolution.

Complete story at - http://rt.com/op-edge/215147-china-politics-asia-russia

[Demeter]

40. Saturday's Feature: ANOTHER NON-CHRISTIAN WINTER HOLIDAY---KWANZAA

Kwanzaa 2014 begins on Friday, December 26 and ends on Thursday, January 1, 2015



https://4.bp.blogspot.com/-d1kbXKGW0Zk/UOCf3fk_UXI/AAAAAAAAANU/Gxi5M6nczJA/s1600/kwanzaa+principles.jpg



Dr. Maulana Karenga, professor and chairman of Black Studies at California State University, Long Beach, created Kwanzaa in 1966. After the Watts riots in Los Angeles, Dr. Karenga searched for ways to bring African-Americans together as a community. He founded US, a cultural organization, and started to research African “first fruit” (harvest) celebrations. Karenga combined aspects of several different harvest celebrations, such as those of the Ashanti and those of the Zulu, to form the basis of Kwanzaa.

Kwanzaa History

The name Kwanzaa is derived from the phrase “matunda ya kwanza” which means “first fruits” in Swahili. Each family celebrates Kwanzaa in its own way, but celebrations often include songs and dances, African drums, storytelling, poetry reading, and a large traditional meal. On each of the seven nights, the family gathers and a child lights one of the candles on the Kinara (candleholder), then one of the seven principles is discussed. The principles, called the Nguzo Saba (seven principles in Swahili) are values of African culture which contribute to building and reinforcing community among African-Americans. Kwanzaa also has seven basic symbols which represent values and concepts reflective of African culture. An African feast, called a Karamu, is held on December 31.

The seven principles, or Nguzo Saba are a set of ideals created by Dr. Maulana Karenga. Each day of Kwanzaa emphasizes a different principle.

The candle-lighting ceremony each evening provides the opportunity to gather and discuss the meaning of Kwanzaa. The first night, the black candle in the center is lit (and the principle of umoja/unity is discussed). One candle is lit each evening and the appropriate principle is discussed.
Seven Principles

The seven principles, or Nguzo Saba are a set of ideals created by Dr. Maulana Karenga. Each day of Kwanzaa emphasizes a different principle.

Unity:Umoja (oo–MO–jah)
To strive for and maintain unity in the family, community, nation, and race.

Self-determination: Kujichagulia (koo–gee–cha–goo–LEE–yah)
To define ourselves, name ourselves, create for ourselves, and speak for ourselves.

Collective Work and Responsibility: Ujima (oo–GEE–mah)
To build and maintain our community together and make our brother’s and sister’s problems our problems and to solve them together.

Cooperative Economics: Ujamaa (oo–JAH–mah)
To build and maintain our own stores, shops, and other businesses and to profit from them together.

Purpose: Nia (nee–YAH)
To make our collective vocation the building and developing of our community in order to restore our people to their traditional greatness.

Creativity: Kuumba (koo–OOM–bah)
To do always as much as we can, in the way we can, in order to leave our community more beautiful and beneficial than we inherited it.

Faith: Imani (ee–MAH–nee)
To believe with all our heart in our people, our parents, our teachers, our leaders, and the righteousness and victory of our struggle.

MORE AT http://www.history.com/topics/holidays/kwanzaa-history

THE OFFICIAL KWANZAA WEBSITE

http://www.officialkwanzaawebsite.org/index.shtml

[Demeter]

41. Financial Market Manipulation Is New Trend: Can It Continue Rigging the Market by PAUL CRAIG ROBERTS

http://www.counterpunch.org/2014/12/18/rigging-the-market/

A dangerous new trend is the successful manipulation of the financial markets by the Federal Reserve, other central banks, private banks, and the US Treasury. The Federal Reserve reduced real interest rates on US government debt obligations first to zero and then pushed real interest rates into negative territory. Today the government charges you for the privilege of purchasing its bonds. People pay to park their money in the Treasury debt obligations, because they do not trust the banks and they know that the government can print the money to pay off the bonds. Today Treasury bond investors pay a fee in order to guarantee that they will receive the nominal face value of their investment in government bonds...Think about this for a minute. Allegedly the US is experiencing economic recovery. Normally with rising economic activity interest rates rise as consumers and investors bid for credit. But not in this “recovery.” Normally an economic recovery produces rising consumer spending, rising profits, and more investment. But what we experience is flat and declining consumer spending as jobs are offshored and retail stores close. Profits result from labor cost savings from employee layoffs.

The stock market is high because corporations are the biggest purchases of stock. Buying back their own stock supports or raises the share price, enabling executives and boards to sell their shares or cash in their options at a profitable price. The cash that Quantitative Easing has given to the mega-banks leaves ample room for speculating in stocks, thus pushing up the price despite the absence of fundamentals that would support a rising stock market.

In other words, in America today there are no free financial markets. The markets are rigged by the Federal Reserve’s Quantitative Easing, by gold price manipulation, by the Treasury’s Plunge Protection Team and Exchange Stabilization Fund, and by the big private banks.Allegedly, QE is over, but it is not. The Fed intends to roll over the interest and principle from its bloated $4.5 trillion bond portfolio into purchases of more bonds, and the banks intend to fill in the gaps by using the $2.6 trillion in their cash on deposit with the Fed to purchase bonds. QE has morphed, not ended. The money the Fed paid the banks for bonds will now be used by the banks to support the bond price by purchasing bonds.

Normally when massive amounts of debt and money are created the currency collapses, but the dollar has been strengthening. The dollar gains strength from the rigging of the gold price in the futures market. The Federal Reserve’s agents, the bullion banks, print paper futures contracts representing many tonnes of gold and dump them them into the market during periods of light or nonexistent trading. This drives down the gold price despite rising demand for the physical metal. This manipulation is done in order to counteract the effect of the expansion of money and debt on the dollar’s exchange value. A declining dollar price of gold makes the dollar look strong...The dollar also gains the appearance of strength from debt monetization by the Bank of Japan and the European Central Bank. The Bank of Japan’s Quantitative Easing program is even larger than the Fed’s. Even Switzerland is rigging the price of the Swiss franc. Since all currencies are inflating, the dollar does not decline in exchange value. As Japan is Washington’s vassal, it is conceivable that some of the money being printed by the Bank of Japan will be used to purchase US Treasuries, thus taking the place along with purchases by the large US banks of the Fed’s QE.

The large private US and UK banks are also manipulating markets hand over fist. Remember the scandal over the banks fixing the LIBOR rate (the London Interbank Borrowing Rate) and the opening gold price on the London exchange? Now the banks have been caught rigging currency markets with algorithms developed to manipulate foreign exchange markets. When the banks get caught in felonies, they avoid prosecution by paying a fine. You try doing that.

The government even manipulates economic statistics in order to paint a rosy economic picture that sustains economic confidence. GDP growth is exaggerated by understating inflation. High unemployment is swept under the table by not counting discouraged workers as unemployed. We are told we are enjoying economic recovery and have an improving housing market. Yet the facts are that almost half of 25 year old Americans have been forced to return to live with their parents, and 30% of 30 year olds are back with their parents. Since 2006 the home ownership rate of 30 year old Americans has collapsed.

The repeal of the Glass-Steagall Act during the Clinton regime allowed the big banks to gamble with their depositors’ money. The Dodd-Frank Act tried to stop some of this by requiring the banks-turned-gambling-casinos to carry on their gambling in subsidiaries with no access to deposits in the depository institution. If the banks gamble with depositors money, the banks’ losses are covered by FDIC, and in the case of bank failure, bail-in provisions could give the banks access to depositors’ funds. With the banks still protected by being “too big to fail,” whether Dodd-Frank would succeed in protecting depositors when a subsidiary’s failure pulls down the entire bank is unclear...The sharp practices in which banks engage today are risky. Why gamble with their own money if they can gamble with depositors’ money. The banks led by Citigroup have lobbied hard to overturn the provision in Dodd-Frank that puts depositors’ money out of their reach as backup for certain types of troubled financial instruments, with apparently only Senator Elizabeth Warren and a few others opposing them. Senator Warren is outgunned as Citigroup controls the US Treasury and the Federal Reserve...The falling oil price has brought concern that oil derivatives are in jeopardy. Citigroup has a provision in the omnibus appropriations bill that shifts the liability for Citigroup’s credit default swaps to depositors and taxpayers. It was only six years ago that Citigroup was bailed out to the tune of a half trillion dollars. Already Citigroup is back for more while nothing whatsoever is done to bail the American people out of their hardships caused by Citigroup and the other financial gangsters.

What we are experiencing is not a repeat of the past. The ability or, rather, the audacity of the US government itself to manipulate the major financial markets is new. Can this new trend continue? The government is supposed to be the enforcer of laws against market manipulation but is itself manipulating the markets. Governments and economists take their hats off to free markets. Yet, the markets are rigged, not free. How long can stocks stay up in a lackluster or declining economy? How long can bonds pay negative real interest rates when debt and money are rising. How long can bullion prices be manipulated down when the world’s demand for gold exceeds the annual production? For as long as governments and banks can rig the markets. The manipulations are dangerous. Manipulations blow a bigger bubble economy, and manipulations are now being used by Washington as an act of war by driving down the exchange value of the Russian ruble. If every time the stock market tries to correct and adjust to the real economic situation, the plunge protection team or some government “stabilization” entity stops the correction by purchasing S&P futures, unrealistic values are perpetuated.

The price of gold is not determined in the physical market but in the futures market where contracts are settled in cash. If every time the demand for gold pushes up the price, the Federal Reserve or its bullion bank agents dump massive amounts of uncovered futures contracts in the futures market and drive down the price of gold, the result is to subsidize the gold purchases of Russia, China, and India. The artificially low gold price also artificially inflates the value of the US dollar.

The Federal Reserve’s manipulation of the bond market has driven bond prices so high that purchasers receive a zero or negative return on their investment. At the present time fear of the safety of bank deposits makes people willing to pay a fee in order to have the protection of the government’s ability to print money in order to redeem its bonds. A number of events could end the tolerance of zero or negative real interest rates. The Federal Reserve’s policy has the bond market positioned for collapse.

The US government, perhaps surprised at the ease at which all financial markets can be rigged, is now rigging, or permitting large hedge funds and perhaps George Soros, to drive down the exchange value of the Russian ruble by massive short-selling in the currency market. On December 15 the ruble was driven down 19%.

Just as there is no economic reason for the price of gold to decline in the futures market when the demand for physical gold is rising, there is no economic reason for the ruble to suddenly loose much of its exchange value. Unlike the US, which has a massive trade deficit, Russia has a trade surplus. Unlike the US economy, the Russian economy has not been offshored. Russia has just completed large energy and trade deals with China, Turkey, and India. If economic forces were determining outcomes, it would be the dollar that is losing exchange value, not the ruble. The illegal economic sanctions that Washington has decreed on Russia appear to be doing more harm to Europe and US energy companies than to Russia. The impact on Russia of the American attack on the ruble is unclear, as the suppression of the ruble’s value is artificial.

There is a difference between economic factors causing foreign investors to withdraw their capital from a country, thereby causing the currency to lose value, and manipulation of a currency’s value by heavy short-selling in the currency market. The latter can cause the former also to occur. But the outcome for Russia can be positive.

No country dependent on foreign capital is sovereign. A country dependent on foreign capital, especially from enemies seeking to subvert the economy, is subject to destabilizing currency and economic swings. Russia should self-finance. If Russia needs foreign capital, Russia should turn to its ally China. China has a stake in Russia’s strength as part of China’s protection from US aggression, whether economic or military.

The American attack on the ruble is also teaching sovereign governments that are not US vassals the extreme cost of allowing their currencies to trade in currency markets dominated by the US. China should think twice before it allows full convertibility of its currency. Of course, the Chinese have a lot of dollar assets with which to defend their currency from attack, and the sale of the assets and use of the dollar proceeds to support the yuan could knock down the dollar’s exchange value and US bond prices and cause US interest rates and inflation to rise. Still, considering the gangster nature of financial markets in which the US is the heavy player, a country that permits free trading of its currency sets itself up for trouble.

The greatest harm that is being done to the Russian economy is not due to sanctions and the US attack on the ruble. The greatest harm is being done by Russia’s neoliberal economists. Neoliberal economics is not merely incorrect. It is an ideology that fosters US economic imperialism. By following neoliberal prescriptions, Russian economists are helping Washington’s attack on the Russian economy. Apparently, Putin has been sold, along with his internal enemies the Atlanticist integrationists, on “free trade globalism.” Globalism destroys the sovereignty of every country except the world reserve currency country that controls the system. As Michael Hudson has shown, neoliberal economics is “junk economics.” But it is also a tool of American financial imperialism, and this makes neoliberal Russian economists tools of American imperialism.

The remaining sovereign countries are slowly learning that Western economic institutions are deceptive and that placing trust in them is a threat to national sovereignty. Washington intends to subvert Russia and to turn Russia into a vassal state like Germany, France, Japan, Canada, Australia, the UK and Ukraine. If Russia is to survive, Putin must protect Russia from Western economic institutions and Western trained economists.

It is too risky for the US to take on Russia militarily. Instead, Washington is using its unique symbiotic relationship with Western financial institutions to attack an incautious Russia that foolishly opened itself to Western financial predation.

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal. His latest book The Failure of Laissez-Faire Capitalism. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format.

[Demeter]

42. tomorrow is the Solstice--So We Will Talk Yule: the Wheel of the Sun, Past and Present

Yule (yew-elle)
Traditional date: December 21
Actual astrological date: December 21 in 2014
Winter Solstice, first day of Winter, shortest day and longest night of the year
Alban Arthuran, or "Yule", "Light of Arthur", Fire Festival
Archaic word "Yule" means Christmas?
Celebrates the end of darkness, the return of light to the earth
Gifts celebrated the sharing of the remaining harvest now that light would return
Ceremonies involve Mistletoe, burning of the Yule log (Icelandic tradition)
Wreath day is the first of four Sundays before Winter Solstice
Colours: Green, red, white, silver, gold
Evolved into a Christmas celebration

Notes:
The Druids felt the sun stood still for twelve days during this season and the Yule log was burnt to insure light for those days.

What we like to do:
It is difficult to remember the somber celebration of the end of winter amongst today's commercialized holiday glitz. This holiday more than any other serves to remind us of the cycle of life, all things in their season, just as this year, this winter, this life, is nearing its end, only to be renewed with a new season, a new year and new life. Candles are lit on each night with a prayer for the return of light and life.

http://www.packrat-pro.com/celts/celtholidays.htm

The origin of the word Yule, has several suggested origins from the Old English word, geõla, the Old Norse word jõl, a pagan festival celebrated at the winter solstice, or the Anglo-Saxon word for the festival of the Winter Solstice, 'Iul' meaning 'wheel'. In old almanacs Yule was represented by the symbol of a wheel, conveying the idea of the year turning like a wheel, The Great Wheel of the Zodiac, The Wheel of Life. The spokes of the wheel, were the old festivals of the year, the solstices and equinoxes.

The winter solstice, the rebirth of the Sun, is an important turning point, as it marks the shortest day, when the hours of daylight are at their least. It also the start of the increase in the hours of daylight, until the Summer Solstice, when darkness becomes ascendant once more.

Yule is deeply rooted in the cycle of the year, it is the seed time of year, the longest night and the shortest day, where the Goddess once again becomes the Great Mother and gives birth to the new Sun King. In a poetic sense it is on this the longest night of the winter, 'the dark night of our souls', that there springs the new spark of hope, the Sacred Fire, the Light of the World, the Coel Coeth.

Fire festivals, celebrating the rebirth of the Sun, held on the Winter's Solstice can be found throughout the ancient world. The Roman festival of Saturnalia was held on the winter solstice, boughs of evergreen trees and bushes would decorate the house, gifts where exchanged and normal business was suspended. The Persian Mithraists held December 25th as sacred to the birth of their Sun God, Mithras, and celebrated it as a victory of light over darkness. In Sweden, December 13th was sacred to the Goddess Lucina, Shining One, and was a celebration of the return of the light. On Yule itself, around the 21st, bonfires were lit to honour Odin and Thor.

The festival was already closely associated with the birth of older Pagan gods like Oedipus, Theseus, Hercules, Perseus, Jason, Dionysus, Apollo, Mithra, Horus and even Arthur with a cycle of birth, death and resurrection that is also very close to that of Jesus. It can hardly be a coincidence that the Christians, also used this time of year for the birth of Christ, mystically linking him with the Sun.

That Yule is another fire festival, should come as no surprise, however unlike the more public outdoor festival of the summer solstice, Yule lends itself to a more private and domestic celebration. Yet like its midsummer counterpart, is strongly associated with fertility and the continuation of life. Here the Goddess is in her dark aspect, as 'She Who Cuts The Thread' or 'Our Lady in Darkness', calling back the Sun God. Yet, at the same time, she is in the process of giving birth to Son-Lover who will re-fertilise her and the earth, bringing back light and warmth to the world.

http://www.thewhitegoddess.co.uk/the_wheel_of_the_year/yule_-_winter_solstice.asp

[Demeter]

43. As I am hosting a Solstice Party for the Condo Community

you won't be seeing much of me. We are going to eat cookies and play games, mostly, and the Yule log is an artificial, electrical fake, but realistic.

So, keep up the good work! Stay warm and dry and rejoice in friends and family.

God Jul, Alle!

[magical thyme]

53. Happy Yule!

&list=RDU8u5PRTb-Nk&index=19

[xchrom]

44. HOPES, FEARS, DOUBTS SURROUND CUBA'S OIL FUTURE

http://hosted.ap.org/dynamic/stories/U/US_CUBA_NEW_OIL_FRONTIER?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-20-09-01-48

MIAMI (AP) -- One of the most prolific oil and gas basins on the planet sits just off Cuba's northwest coast, and the thaw in relations with the United States is giving rise to hopes that Cuba can now get in on the action.

It's a prospect welcomed by Cubans desperate for economic growth yet deeply concerning for environmentalists and the tourism industry in the region.

But a Cuban oil boom is unlikely anytime soon even if restrictions on U.S. businesses are relaxed because of low oil prices and far better drilling opportunities elsewhere.

&quot Cuba) is not going to be the place where operators come rolling in," says Bob Fryklund, chief strategist for oil and gas exploration and production at the analysis firm IHS

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45. US REGULATORS CLOSE SMALL MINNESOTA BANK

http://hosted.ap.org/dynamic/stories/U/US_BANK_CLOSURES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-19-19-38-22

WASHINGTON (AP) -- Regulators have closed a small lender, the 18th bank failure in the U.S. this year after 24 closures in 2013.

The Federal Deposit Insurance Corp. said Friday that it has taken over Northern Star Bank, based in Mankato, Minnesota.

The bank operated two branches and had about $18.8 million in assets and $18.2 million in deposits as of Sept. 30.

BankVista, based in Sartell, Minnesota, agreed to assume all of Northern Star Bank's deposits and to purchase essentially all of the failed bank's assets.

Northern Star Bank's failure is expected to cost the federal deposit insurance fund $5.9 million.

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46. TEXAS RANCHERS SEEKING ALTERNATIVE INCOMES

http://hosted.ap.org/dynamic/stories/U/US_FOOD_AND_FARM_RESOURCEFUL_RANCHERS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-20-10-48-36

GAIL, Texas (AP) -- The Muleshoe Ranch's profits were chopped in half when the drought withered pastures, dried up stock tanks and forced the owner to move most of his cattle out of state.

Three years later, the sprawling 33,000-acre West Texas ranch is again populated with cattle, thanks to improved rainfall. But John R. Anderson is no longer taking chances with his bottom line. The fourth-generation rancher is exploring alternative incomes to ensure his business can survive another hit from Mother Nature, including leasing part of his land for quail, deer and antelope hunting.

"The drought opened our eyes to we need to be more diverse," said Anderson, who ranches near Gail, about 70 miles south of Lubbock. "Our mind isn't closed. If there's something we can do we're going to go for it, if it makes economic sense."

His counterparts in the nation's top beef-producing state are doing everything they can to make up for the smaller profits since the drought, which began in early 2011, forced a widespread culling of herds. Though limited supplies have prompted a record rise in beef prices, more ranchers are leasing part of their property for hunting or selling water to oil companies or desert plants and mistletoe to nurseries. Some are even taking side jobs to make ends meet.

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47. Non-OPEC Producers Called on to Cut Oil Output After Rout

http://www.bloomberg.com/news/2014-12-21/non-opec-producers-called-on-to-cut-oil-output-amid-oversupply.html


Oil producers outside of OPEC should cut their “irresponsible” output with excess supplies harming the market, the United Arab Emirates energy minister said.

The oil market is oversupplied by 2 million barrels a day, Mohammed Al Sada, Qatar’s energy minister, said in an interview on the sidelines of a conference in Abu Dhabi. The Organization of Petroleum Exporting Countries has produced about 30 million barrels a day since January 2013 while global output climbed more than 2 million barrels a day to 93.6 million barrels, according to data compiled by Bloomberg.

“We call on all other producers to stop the increase because the increase is harming the market,” U.A.E. Energy Minister Suhail Al Mazrouei said in a separate interview at the conference. “If the increase stops, and they follow OPEC’s lead, OPEC’s decision is to fix production, if production stabilizes in 2015 things will stabilize much faster.”

Brent oil prices tumbled 45 percent this year. OPEC decided last month to keep production unchanged at 30 million barrels, resisting calls from cash-strapped Venezuela that the group needs to stem the rout in prices.

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48. Ruble Advances as Cash Crunch From Higher Rates Supports Demand

http://www.bloomberg.com/news/2014-12-19/ruble-advances-as-cash-crunch-from-higher-rates-supports-demand.html

The cash crunch that Russian central bank Governor Elvira Nabiullina engineered to bolster the ruble is starting to work.

The currency has rallied about 35 percent versus the dollar since plunging to a record low on Dec. 16 in the worst day of Russia’s nine-month financial crisis. Nabiullina jacked up borrowing costs by the most in 16 years that day to 17 percent, sacrificing economic growth to prevent a freefall in the ruble.

The result: Russian banks already blocked from borrowing abroad by sanctions over Ukraine are getting squeezed at home. The rate they charge each other for overnight cash doubled this month to 27 percent yesterday, the most in at least eight years. This stabilization, at a ruble rate with half the buying power it had two years ago, will aggravate an economic contraction and may not last if the price of oil drops further.

“It’s clear that the ruble shortage is undoubtedly contributing to the strengthening, preventing it from falling,” Dmitry Dudkin, the head of fixed-income research at UralSib Financial Corp. in Moscow, said. “We see a liquidity crunch as a result of rising interest rates.”

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49. Wars’ Cost to U.S. Since the Sept. 11 Attacks: $1.6 Trillion

http://www.bloomberg.com/news/2014-12-19/wars-cost-to-the-u-s-since-the-sept-11-attacks-1-6-trillion.html

The wars in Iraq and Afghanistan and counterterrorism operations have cost the U.S. a combined $1.6 trillion since the Sept. 11 terrorist attacks, according to a new Congressional Research Service analysis.

Through fiscal 2014, which ended in September, Congress approved $815 billion for warfare in Iraq, $686 billion for Afghanistan and other operations against terrorism, $81 billion for other war-designated spending and $27 billion for Operation Noble Eagle air patrols over the U.S., according to the report posted on the agency’s internal website. The total includes $297 billion spent on weapon procurement and war repairs.

The assessment is the agency’s first full update of war costs since March 2011. About 92 percent of the funds went to the Pentagon, followed by the State Department and the Department of Veterans Affairs. It includes war operations, training and equipping Iraqi and Afghan forces, diplomatic operations and medical care for wounded Americans over the past 13 years, the agency said in the report dated Dec. 8. It also includes most reconstructions costs.

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50. Obama Says He’ll Make ‘Pretty Specific’ Tax-Revamp Proposals

http://www.bloomberg.com/news/2014-12-19/obama-says-he-ll-make-pretty-specific-proposals-for-tax-revamp.html


President Barack Obama said he wants to reach an agreement with the new Congress on revamping the U.S. tax code and said the administration would release a more detailed plan.

At his year-end news conference at the White House, Obama said he thought Republican leaders in Congress were serious about addressing taxes and other issues and that staff-level conversations would take place before his State of the Union speech Jan. 20.

Obama said he would “make sure that we put forward some pretty specific proposals, building on what we’ve already put forward.”

Republicans have been urging the administration to add more details to a 2012 framework for business tax changes and criticized Obama for not being engaged enough as they drafted a tax overhaul this year that never came to a vote.

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51. Let there be LIGHT! and HEAT!