Month: June 2014

Just weeks before Blackwater guards fatally shot 17 civilians at Baghdad’s Nisour Square in 2007, The NY Times reports that the State Department began investigating the security contractor’s operations in Iraq. However, as James Risen reports, a senior official of the notorious private security firm allegedly threatened to kill a government investigator leading the probe into the firm’s Iraqi operation. Stunningly (or not), the US embassy sided with him and forced the inspector to cut the visit short.

As The Times reports, based on documents which were turned over to plaintiffs in a lawsuit against Blackwater… According to the documents, the investigators found numerous violations, including changing of security details without the State Department’s approval, reducing the number of guard details and storing of automatic weapons and ammunition in Blackwater employees’ private rooms.

There were also discipline problems, with guards having parties with heavy drinking and female visitors, including one episode in which an armored Blackwater car was requisitioned by four drunken employees, who drove to a private party and crashed the $180,000 vehicle into a concrete barrier.

As the probe continued, apparently it irritated some people in power in Iraq…

The inquiry was abandoned after Blackwater’s top manager there issued a threat:

 

“that he could kill” the government’s chief investigator and “no one could or would do anything about it as we were in Iraq,” according to department reports.

 

American Embassy officials in Baghdad sided with Blackwater rather than the State Department investigators as a dispute over the probe escalated in August 2007, the previously undisclosed documents show. The officials told the investigators that they had disrupted the embassy’s relationship with the security contractor and ordered them to leave the country, according to the reports.

But, as if that was not enough, the leader investigator (who is actively being sought for imprisonment by the Government) explains…

After returning to Washington, the chief investigator wrote a scathing report to State Department officials documenting misconduct by Blackwater employees and warning that lax oversight of the company, which had a contract worth more than $1 billion to protect American diplomats, had created “an environment full of liability and negligence.”

 

“The management structures in place to manage and monitor our contracts in Iraq have become subservient to the contractors themselves,” the investigator, Jean C. Richter, wrote in an Aug. 31, 2007, memo to State Department officials.

 

“Blackwater contractors saw themselves as above the law,” he said, adding that the “hands off” management resulted in a situation in which “the contractors, instead of Department officials, are in command and in control.”

Above the law? Wonder where they got that idea?

*  *  *

But the plot thickens (as they say). As Liberty Blitzkrieg's Mike Krieger notes,

James Risen is an honorable man and an excellent investigative journalist. Tragically, he also now faces jail time for refusing to reveal his sources. For a little background on his story, here’s an excerpt from a recent New York Times article:

On Dec. 31, 2005, the C.I.A.’s acting general counsel, John A. Rizzo, received an urgent phone call from the White House about a chapter in James Risen’s coming book, “State of War,” detailing a botched C.I.A. operation in Iran.

 

The administration wanted Mr. Rizzo to contact Sumner Redstone — the chairman of Viacom, owner of the book’s publisher, Simon & Schuster — and ask him to keep the book off the market.

 

Mr. Rizzo never made the call. It was too late. Copies of “State of War” had already reached bookstores.

First of all, the fact that the U.S. government asks the C.I.A.’s general counsel to try to prevent a book from being published is extraordinarily disturbing in its own right. Moving along…

After more than six years of legal wrangling, the case — the most serious confrontation between the government and the press in recent history — will reach a head in the coming weeks. Mr. Risen has steadfastly refused to testify. But he is now out of challenges. Early this month, the Supreme Court declined to review his case, a decision that allows prosecutors to compel his testimony. If Mr. Risen resists, he could go to prison.

 

On the advice of his lawyer, Mr. Risen, 59, declined to comment for this article. But during a speech in February in Boston, he said he had two choices: “Give up everything I believe in — or go to jail.”

 

The Times considered publishing an article about the operation in 2003, when Mr. Risen first learned about it, but President George W. Bush’s national security adviser, Condoleezza Rice, prevailed upon the newspaper to withhold publication for the sake of national security.

I’ve highlighted Mr. Risen and his case previously. Most recently, last summer in my post titled: Battle Royale on Piers Morgan: Glenn Greenwald, James Risen and Jeffrey Toobin. The most memorable line from that segment was Mr. Risen’s cutting observation that:

“That’s the thing I don’t understand about the climate in Washington these days. People want to have debates on television and elsewhere, but then you want to throw the people that start the debates in jail.”

*  *  *

Exceptional.

Meanwhile, Erik Prince, the founder of Blackwater, has moved on to other things. Like building a mercenary army for China to colonize Africa, something we reported on in the post: How Erik Prince, Founder of Blackwater, Will Help China Subjugate Africa.

Who knows what Mr. Carroll is up to. But for now just repeat tbe chant of freedom, justice and the American way:  USA! USA!

via Zero Hedge http://ift.tt/V5pIoG Tyler Durden

Submitted by Tim Price via Sovereign Man blog,

“We are currently on a journey to the outer reaches of the monetary universe,” write Ronni Stoeferle and Mark Valek in their latest, magisterial ‘In Gold we Trust’. Their outstanding work is doubly valuable because, as George Orwell once wrote,

“In a time of universal deceit, telling the truth is a revolutionary act.”

The reality bears restating: as the good folk of Incrementum rightly point out,

“..the monetary experiments currently underway will have numerous unintended consequences, the extent of which is difficult to gauge today. Gold, as the antagonist of unbacked paper currencies, remains an excellent hedge against rising price inflation and worst case scenarios.”

For several years we have advocated gold as a (necessarily only partial) solution to an unprecedented, global experiment with money that can only end badly for money.

The problem with money is that comparatively few people understand it, including, somewhat ironically, many who work in financial services.

Rather than debate the merits of gold (we think we have done these to death, and we acknowledge the patience of those clients who have stayed the course with us) we merely allude to the perennial difficulty of investing, namely the psychology of the investor.

In addition to being the godfather of value investing, Ben Graham was arguably one of the first behavioural economists. He wisely suggested that investors should

“Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it – even though others may hesitate or differ. You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”

Graham also observed,

“In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.”

Judgment has clearly been tested for anyone who has elected to hold gold during its recent savage sell-off.

The beauty of gold, much as with a classic Ben Graham value stock, is that as it gets cheaper, it gets even more attractive. This should be self-evident, in that an ounce of gold remains an ounce of gold irrespective of its price.

This puts gold (and value stocks) markedly at odds with momentum investing (which currently holds sway over most markets), where once a price uptrend in a given security breaks to the downside, it’s time to head for the hills.

There are only three ways of trying to handle a mountain of unsustainable debt. The options are:

1) Maintain economic growth at a sufficient rate to service the debt. We believe this is grossly unlikely.

 

2) Repudiate the debt. Since we also operate within a debt-based monetary system (in which money is lent into being by banks), default broadly equates to Armageddon.

 

3) Inflate the debt away.

At the risk of pointing out the obvious, which path do we consider the most likely? Which path does it suit grotesquely over-indebted governments and their client central banks to pursue?

But it does not suit central banks to be caught with their fingers in the inflationary cookie jar, so they now have to pretend that deflation is Public Enemy Number One.

Well, deflation is certainly a problem if you have to service unserviceable debts. So it should come as no surprise if this predicament is ultimately resolved through an uncontrollable and perhaps inevitable inflationary or stagflationary mess.

So we have the courage of our knowledge and experience. In fact, of other people’s experience, too.

As the title of Robert Schuettinger and Eamonn Butler’s book puts it, we have ‘Forty Centuries of Wage and Price Controls’ and their inevitable failure to draw upon. We know how this game ends, we just don’t know precisely when.

We have formed a conclusion based on facts and we know our judgment is sound. For the last two years, the crowd has disagreed with us on gold.

We think we are right because we think our data and reasoning are right. Not that we don’t see value in other things, too: bonds of unimpeachable quality offering a positive real return; uncorrelated assets; value and ‘deep value’ stocks. And we ask a final question: if not gold, then what?

Are we deceiving ourselves – or are our central bankers in the process of deceiving everyone?

via Zero Hedge http://ift.tt/1mCLeXC Tyler Durden

Tonight's round of baffle 'em with bullshit is courtesy of a diverging AsiaPacific economic picture that is anything but supportive of the 'reality' being painted by China's official PMI (which printed at 51.0 as per expectations at 2014 highs) followed by HSBC China PMI which missed its flash estimate (with employment dropping to 8mo lows). South Korea PMI collapsed to 10-month lows; Aussie PMI faded further into contraction at 48.9; and then Japan's Tankan dramatically missed expectations, tumbling to 9-month lows (only to be followed by a 51.1 Japan print (3-month highs). Just to complete the "picture", Chinese home prices fell for the first time in over 2 years. The result, USDJPY rallies and Nikkei 225 soars 200 points… baffled?

 

So South Korea plunged… as did Aussie PMI

 

And Japan's Tankan tumbles to 9Mo lows (but PMI beat to 3Mo highs)

 

Which was promptly followed by this idiot…

• ASO: TANKAN DATA SHOWS JAPAN RECOVERING MODERATELY

Where?!!! Not even Goldman is buying it…

• Goldman: Tankan Business conditions worsens beyond market consensus

So now we know who is playing J-C Juncker in Japan! Lies moar lies

And China's PMI beat (official) and missed (HSBC) but housing tumbled…via WSJ

China's housing prices fell in June for the second straight month as property developers cut prices to stoke sales amid a glut of housing in many cities.

 

Many home buyers have stayed on the sidelines in anticipation of further price cuts, while cases of default among smaller developers are rising as companies struggle to repay debt in a souring property market.

 

Average new-home prices fell 0.5% in June from May, data provider China Real Estate Index System said Monday. Prices declined 0.3% in May from April, the first month-to-month decline since June 2012.

 

The result – sell JPY and BTFATH!!!

via Zero Hedge http://ift.tt/1pRCPTW Tyler Durden

Submitted by David Stockman of Contra Corner blog,

Janet Yellen is an officious school marm. She constantly lectures us on Keynesian verities as if they were the equivalent of Newton’s Law or the Pythagorean Theorem. In fact, they constitute self-serving dogma of modern vintage that is marshaled to justify what is at bottom an economic absurdity. Namely, that through the primitive act of banging the securities “buy” key over and over and thereby massively expanding its balance sheet, the Fed can cause real wealth—-embodying the sweat of labor, the consumption of capital and the fruits of enterprise—-to magically expand beyond what the free market would generate on its own steam.

In a fit of professorial arrogance, Bernanke even had the gall to call this the helicopter money process. His contention was that the rubes on main street would happily scoop up the falling bills and coins and soon “spend” the economy into a fit of expansion. In other words, according to Bernanke the essential ingredient in economic life is money demand, which is a gift of the state’s central banking branch, rather than production, savings, innovation and enterprise, which arise on the free market in consequences of millions of workers and businesses pursuing their own ends.

Indeed, under Keynesian dogma the latter can be taken for granted; the supply of labor, enterprise and output is automatic and endless until an ethereal quantity called potential GDP is fully realized. To achieve the latter requires that the state dispense exactly the right level of money demand so that the rubes on main street will not stubbornly remain poorer than they need be. This unhappy estate happens, of course, owing to their inexorable propensity to withhold the production and enterprise of which they are capable (i.e. keep plants idle and labor unemployed).

Stated differently, under Yellen’s primitive bathtub economics there is no possibility of inflation unless the central bank mistakenly over-dispenses money demand to the point where actual GDP and the job count overflows potential GDP and the full-employment of labor. Needless to say, we can trust the experts in the Eccles Building to stay on the safe side of this potential GDP divide—-an invisible boundary which can only be seen and calibrated by economics PhDs.

Once upon a time the world knew better. The pre-Keynesian rule was that when central banks hit the “buy” key they always and everywhere create monetary inflation. Ordinarily that resulted in the inflation of credit, which, in turn, caused prices to rise—whether of commodities, services, wages, real estate or financial assets like stocks and bonds.

Accordingly, the old-timers were always on the look-out for inflation and after the calamity of 1929 were especially attuned to inflation of financial assets and stock price manias. William McChesney Martin, the storied Fed Chairman of sound money beliefs and deeds, for example, famously took away the punchbowl in mid-1958 only a few months after the recession ended not because the CPI was yet rising too fast, but because Wall Street speculators on margin credit were getting too frisky.

The disastrous Great Inflation of the 1970s proved the case. After Nixon unshackled Fed Chairman Arthur Burns at Camp David in August 1971, US bank credit grew by leaps and bonds; the US and then the global economy rapidly and dramatically overheated; and commodity prices at first and then the price of labor and consumer goods soon thereafter soared at rates never before experienced during peacetime. During the sound money decade ending in 1963, for instance, the CPI crept up at a 1.2% annual rate. By contrast, during the 10 years after Camp David, inflation averaged nearly 9%.

Unfortunately, Volcker’s hard-won victory over wage, commodity and CPI inflation was thrown to the winds by Greenspan and his successors.  Like Arthur Burns, they hit the “buy” key over and over, causing credit in the banking system and capital markets to expand massively.  When Greenspan took office in 1987, for example, public and private credit market debt outstanding in the US was about $10 trillion or 190% of GDP. Today it is nearly $60 trillion or 350% of GDP.

Those extra turns of leverage—in effect, a national LBO—caused a vast inflation of financial assets. But this self-evident deformation was explained away by the newly ascendant money printers at the Fed on the spurious grounds that the CPI remained “well behaved”.

Well, of course it did. In part, this was due to the fact that the CPI was seriously tampered with during the 1990s under Greenspan’s auspices in a move to shorten the measuring stick so that old people would be deprived of their full social security COLA.

But mainly there was no abnormal CPI inflation because the US money printing disease was adopted by the newly emerging mercantilist exporters of Asia—-a maneuver that brought a billion peasants out of the subsistence economy of the rice paddies and into the east Asian factories and world trade. Needless to say, this 20-year outpouring of cheap labor and factory goods kept the CPI in check–even as the credit swollen US economy borrowed $8 trillion in cumulative current account deficits from the rest of the world.

The monetary and credit inflation, therefore, was channeled into the domestic housing market and the stock market. Twice this century these bubbles have violently collapsed. Both times they Keynesian money printers have had no explanation for the collapse and the resulting trauma among main street “investors” and spill-overs on real economic activity.

Indeed, the prescription has been to double down with more monetary and credit inflation. In the immediate aftermath of the September 2008 financial meltdown it was widely acknowledged that the US economy was burdened with far too much debt. Yet today total credit market debt outstanding is more than $8 trillion greater than it was on the eve of the last crisis.

So the problem with monetary inflation—a process that has taken the Fed’s balance sheet from $200 billion when Greenspan took office to nearly $4.4 trillion today—is that its deformations, distortions and malinvestments are cumulative.   Worse still, owing to the “recency bias” of players in the Fed’s financial casino, increasingly outlandish pricing errors are taken for granted. They are viewed as part of the bubble landscape, rather than as a screaming indictment of the monetary inflations’ insidious results.

On the theory that perhaps at some point a picture can overcome the dense dogma of our benighted Keynesian money printers in the Eccles Building, the two illustrations below from the Dr. Housing Bubble Blog are offered.  Arcardia and San Marino, California are most definitely not unique national treasures where cracker-box houses should be valued at $1-$1.5 million.  No, they are just at the leading edge of the renewed speculative mania that has been touched off by the Fed’s latest and greatest monetary inflation.

Dr. Yellen, of course, claims there are no financial bubbles to worry about because the Keynesian bathtub of potential GDP has not yet been filled to the brim.  Perhaps she would like to put in a bid for one of these.

 

The first area we should examine is Arcadia. Arcadia has benefitted from heavy investor demand and continues to be a target for hot money.

 

325 Laurel Ave, Arcadia, CA 91006

2 beds, 1.5 baths, 1,522 square feet

For Sale:               $960,000

 

Our final stop takes us to investor magnate San Marino.

 

1400 Winston Ave, San Marino, CA 91108

3 beds, 2 baths, 1,862 square feet

For Sale:                               $1,580,000

 

http://ift.tt/JkCppE

via Zero Hedge http://ift.tt/V5c1pV Tyler Durden

Here are two very disturbing statistics:

• Every year, 300,000 Americans die from obesity (Source: NIH)
• Every year, 600,000 Chinese die from working too hard (Source: China Youth Daily, China Radio)

The rest, as the Chairmanwoman says, is “noise.”

Still, here are some of the disturbing details from Bloomberg about a country that doesn’t believe in downtime:

China is facing an epidemic of overwork, to hear the state-controlled press and Chinese social media tell it. About 600,000 Chinese a year die from working too hard, according to the China Youth Daily. China Radio International in April reported a toll of 1,600 every day.

 

Microblogging website Weibo is filled with complaints about stressed-out lives and chatter about reports of others, young and old, worked to death: a 24-year-old junior employee at Ogilvy Public Relations Worldwide Inc., a 25-year-old auditor at PricewaterhouseCoopers LLP; one of the chief designers of China’s next-generation fighter planes at state-run AVIC Shenyang Aircraft Corp.

 

“What’s the point of working overtime so you can work to death?” asked one commentator on Weibo, lamenting that his boss told employees to spend more time on the job.

China is not the first country where people have worked themselves to death:

Japan is where the term karoshi, or death from overwork, gained notoriety in previous decades. It encompasses deaths from stroke, heart attack, cerebral hemorrhage or other sudden causes related to demands of the workplace. Because the causal relationship to work-related stress may not be evident, the death toll can be subjective and difficult to compile.

 

Japan’s parliament passed a law on June 20 calling for support centers, aid to businesses for prevention programs and more research on karoshi. The government in 2012 compensated 813 families able to show a link between overwork, illness and death, including 93 suicides. The actual toll may be higher. Japan’s police agency counted more than 2,000 work-related suicides in 2013, and lawyers in 2009 said 10,000 deaths a year may be from overwork.

But China, with its world-record population, is taking work deaths to a whole new level:

In China, such deaths are known as guolaosi. “We have noticed that excessive overtime in China has become an issue,” the director of the International Labour Organization’s China office, Tim De Meyer, wrote in an e-mailed response to questions. “It is worrying as a physical and mental-health hazard.”

 

Work-life balance gets short shrift in a society that combines a modern pursuit of riches with an ancient belief in putting the community above the individual, said Yang Heqing, Dean of the School of Labor Economics at the Capital University of Economics and Business in Beijing. In parts of China’s capital he’s surveyed, 60 percent of workers complain of clocking more than the legal limit of two hours a day of overtime, taking a toll on workers’ family and health, he said. He’s skeptical of the 600,000 figure, which he said may include other causes, and is working to compile his own data.

So why are people dying in the name of their job? “In China there’s still the belief that you do things for the development of the good of the nation, for development of the economy, to forget your own self,” said Capital University’s Yang. “But don’t forget, overwork also causes harm to the nation and to the family.”

Well, that. And there’s this:

Now, cubicle jockeys like regulator Li toil overtime in a society where issues of work-life balance are low on the agenda and self-sacrifice is the norm. Add to that long commutes and the detrimental consequences to health and family life start to add up, Capital University’s Yang said.

 

Family photos are rarely seen in Chinese offices, and workers are regularly expected to dine out entertaining clients. It’s common for children of urban professionals to be raised by grandparents in distant provinces.

 

Today’s worked-to-death workers are held up as China’s heroes for the modern age, cut from the same self-sacrificing cloth as earlier communist martyrs such as Lei Feng, a soldier in the People’s Liberation Army who has been lionized in propaganda campaigns since the 1960s for his selfless devotion to the Communist Party.

Whatever the reason, Americans are hardly at risk of mass deaths due to overwork-related exhaustion. Actually, we take that back. Since it is becoming increasingly impossible for young Americans to find jobs (no, it is not demographics’ fault that millions are leaving the labor force as more millions are entering it) as can be seen in the following chart showing the labor force participation rate of Americans aged 16-19…

… yet older American workers, those aged 55 and older, have seemingly never been in greater demand…

… it is only a matter of time before the average age of the US worker rises to 50, then 60, then 70, and then these geriatric debt serfs, with no other options, their savings income crushed by the sociopaths at the Federal Reserve, start dropping like flies. Then America will have finally caught up with China for once.

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We came, we saw, we left… the keys…

 

 

Source: Sunday Funnies

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