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via Zero Hedge http://ift.tt/1Qhkxqz williambanzai7

• China’s Yuan Makes Largest Gain Since 2005 on PBOC Cue (WSJ)
• Japan’s Nikkei soars over 7%, for its biggest gain since 2008 (BBG)
• Global shares rise as firmer Chinese yuan eases deflation fears (Reuters)
• Banks’ Surge Takes Europe’s Stock Rally Into 2nd Day; HSBC Rises (BBG)
• Oil extends rally on prospects OPEC could act to counter low prices (Reuters)
• Europe’s Higher-Yielding Bonds Benefit as Global Turmoil Eases (BBG)
• Republicans gear up for Supreme Court battle after Scalia’s death (Reuters)
• Indian-American judge who could replace Scalia worked on controversial cases for business (Reuters)
• ECB now officially everyone’s “toxic bank”: ECB in talks with Italy over buying bundles of bad loans (Reuters)
• Soaring Chinese Imports From Hong Kong Renew Fake Trade Concerns (BBG)
• Oil Speculators Shrug Off Huge Stockpiles to Bet on Price Climb (BBG)
• SoftBank Announces $4.4 Billion Share Buyback (WSJ)
• Record-setting cold chills U.S. Northeast on Valentine’s Day (Reuters)
• Chinese Banks May Need All the Help They Can Get (WSJ)
• Brazil’s 5,500 Bankruptcies in 2015 Signal Deeper Credit Crisis (BBG)
• Gold Gets Thumped as Risk-On Mood, Surging Shares Erode Demand (BBG)
• ECB’s ‘Whatever It Takes’ May Be Too Much for German Top Court (BBG)
• Athens may face a choice: Bail-out or bail-in? (Kathimerini)
• Trump and Drudge for the win, again: Matt Drudge’s army is bigger than the RNC’s (Salon)

 

Overnight Media Digest

WSJ

– The U.S. Supreme Court vacancy left by Justice Antonin Scalia created one of the last major power struggles between President Barack Obama and congressional Republicans. Obama said he would fulfill his constitutional responsibilities to nominate a successor in the coming weeks. (on.wsj.com/1LoZgtR)

– The U.S. and Russia stepped up their efforts to cement a cease-fire in Syria as Turkey rebuffed appeals from world leaders for an immediate halt to shelling of American-backed Kurdish forces. (on.wsj.com/1R2Ay6S)

– China shares fell Monday, catching up with losses in markets around the world, as mainland markets reopened following the lengthy Lunar New Year holiday. The Shanghai Composite Index and the Shenzhen market were closed last week when worries about global growth and the health of banks sparked selling across the globe. (on.wsj.com/1mBEh0t)

– Japan’s economy shrank again in the fourth quarter, the latest confirmation that Prime Minister Shinzo Abe’s growth program is sputtering. The contraction, the fourth in seven quarters and could lead to calls for further monetary and fiscal stimulus. (on.wsj.com/1QBBEnj)

 

FT

HSBC Holdings Plc decided on Sunday to keep its headquarters in Britain, rejecting the option of shifting its centre of gravity back to its main profit-generating centre, Hong Kong, after a 10-month review.

UK’s National Health Service (NHS) said it will invest more than one billion pounds a year by the end of the decade, in a drive to improve mental health services in the country.

Britain’s push to win backing from its European partners for its wish list of EU reforms will go “right to the wire” at a summit this week, Foreign Secretary Philip Hammond said on Sunday.

 

NYT

– Prosecutors claim that the Porsche holding company misled investors in 2008 on its plan to take over Volkswagen , sending VW stock soaring. The criminal trial in Germany has shed new light on how a billionaire family acquired ultimate power at Volkswagen in the years leading up to the carmaker’s emissions-cheating crisis. (http://nyti.ms/1KQku8M)

– Japan’s economy shrank in the final three months of 2015, the government said on Monday, undergoing a more severe contraction than experts had expected amid signs that global growth was stalling. (http://nyti.ms/1KjYymM)

– HSBC Holdings Plc said on Sunday that it would keep its headquarters in Britain after announcing plans last year to review whether to move its home. The bank, which is based in London but generates more than half of its earnings in Asia, announced a formal review in April, citing increasing regulatory requirements and a tax that had hit banks based in Britain particularly hard. (http://nyti.ms/1Sr965Y)

 

Britain

The Times

UK Companies have reported their fastest growth for two years, but supermarkets and the oil and gas industries weighed heavily on an otherwise encouraging performance, according to an analysis by the Share Centre. (http://thetim.es/1WlSyut)

Karl Kohler, the chief executive of Tata Steel in Europe, will join thousands of steel workers marching in Brussels today to demand urgent action to save the industry. (http://thetim.es/1WlSzyy)

The Guardian

People facing mental health crises will be able to get community care 24 hours a day, seven days a week as part of the biggest transformation of NHS mental heath services in England for a generation, to be unveiled on Monday. (http://bit.ly/1WlSFWO)

Britain’s banks are vulnerable to a global financial shock despite efforts to shore up their finances, according to John Vickers, who led the inquiry into the safety of UK banks following the 2008 financial crisis. (http://bit.ly/1WlSL0t)

The Telegraph

Asia’s richest man, Li Ka-Shing, is among five suitors that are expected to make final bids for London City Airport this week to clinch a deal that could value the business at about 2 billion pounds ($2.9 billion). (http://bit.ly/1WlSOcH)

Sky News

Peter Bazalgette, the creator of Big Brother and one of Britain’s most influential creative industries figures, is on the verge of passing an audition to become the next chairman of ITV Plc. (http://bit.ly/1TjATFF)

HSBC Holdings Plc has decided to keep its headquarters in UK, following speculation that the bank was considering a move to Hong Kong. (http://bit.ly/1WlUjrp)

The Independent

The GMB union will bring an army of nearly 640,000 workers to help the battle to keep Britain in the European Union, The Independent reveals. (http://ind.pn/1WlTrDh)

The board of French energy company EDF SA is expected to postpone a decision once again on whether to commit to the 18.6 billion-pound ($27 billion) Hinkley Point C project, which is at the heart of Prime Minister David Cameron’s strategy to “keep the lights on” in Britain in the next decade. (http://ind.pn/1WlTv5P)

 

 

via Zero Hedge http://ift.tt/1Pzj5Td Tyler Durden

Bad news is once again good news… for stocks that is. 

After a month and a half of markets unable to decide if they should buy or sell on ugly data, over the weekend, People’s Bank of China Governor Zhou Xiaochuan expressed faith in the economy, and said there is no basis for further Yuan devaluation, something the PBOC has said consistently over the past year, despite two sharp devaluation episodes.

And while further devaluation is guaranteed, for now traders decided to take advantage of this verbal intervention and ignore the worst Japanese GDP data in over a year, when as reported last night, the country’s economy contracted at a -1.4% annualized rate, far worse than expected -0.8%…

 

… as well as to ignore the worst Chinese trade data, with both exports and imports coming below the lowest Wall Street estimate, since August…

 

 

… when just days after the trade report the PBOC proceeded with its first devaluation. The data was so bad it managed to push the Shanghai Composite nearly into
the green after opening down nearly 3% on a delayed catch up to the rest
of the world selloff.

The result of all this terrible economic data: hopes for more stimulus around the globe, with bank concerns (especially of Deutsche Bank) that more stimulus is not what the global financial system needs soundly ignored for now.

“The Chinese market didn’t react as bad as we feared and with the weak export data there is some big hope that he central banks will react quite fast,” John Plassard, senior equity-sales trader at Mirabaud Securities LLP in Geneva, told Bloomberg. “It’s a mix of hope of intervention from the Asian central bank, short squeeze and also a relief in some energy and banking sectors, the most shorted sectors.“

And there are your catalysts for today’s surge: hope of more central bank intervention and a global short squeeze.

So back to square one.

The immediate result was the biggest Yuan surge since 2005, climbing 1.2 percent from its Feb. 5 close to 6.4942 per dollar in Shanghai; the biggest jump in Japanese equities since October 2008 on the heels of the Nikkei’s 7.2%, or 1,070 point jump; the biggest spike in the MSCI Asia Pacific Index since 2009, a continuation of Friday’s rally in Europe with the Stoxx 600 up over 3% led by financials, and even WTI jumped nearly 2% to rise back over $30 this morning, despite being lower most of the session on renewed excess supply concerns now that Iranian tankers are en route to their destination.

While the US is closed for President’s day, US equity futures are open until noon Central Time, and at last check were up 1.6%, or 29 points to 1,888, piggybacking on the global euphoria.

A quick recap of market closures in the US for Presidents Day:

• CME/CBOT Closed all day, NYSE Closed
• CME Equity: closes at 12:00 Central; Reopens at 17:00 Central
• CME Interest Rates: closes at 12:00 Central; Reopens at 17:00 Central
• CME FX: closes at 12:00 Central; Reopens at 17:00 Central
• NYMEX: closes at 12:00 Central; Reopens at 17:00 Central

For the recap of global markets, we start in Asia where stocks traded mostly higher following last Friday’s gains in Wall St. where outperformance in financials and a resurgence in crude, which posted its largest one-day gain since 2009, lifted markets from last week’s early turmoil. Nikkei 225 (+7.2%) outperformed, led by financials and energy, while ASX 200 (+1.64%) was supported by commodity-based sectors, which also followed from last week’s 5.6% rally in gold prices. Mainland China bucked the trend with the Shanghai Comp (-0.63%) negative as it played catch up to last week’s losses, with poor export trade data adding to its sombre tone. JGBs traded lower tracking T-notes as the increase in risk sentiment spurred outflows from safe haven assets.

Top Asia News

• Yuan Rises Most Since 2005 as PBOC Voices Support, Raises Fixing
• HSBC Keeps London Headquarters in Victory for U.K. Over Asia
• China Bad-Loan Problem Not as Bad as Bass Makes Out, CICC Says
• Airbus, Boeing Count on China as Southeast Asia Slows Down
• Hong Kong Land Price Plunges Nearly 70% in Government Tender
• Indonesia’s Jokowi Gets Traction After Tumultuous First Year
• Toyota-Led Profit Gains at Risk as Carmakers Face Strong Yen
• Record Wheat Forecast Spurs Investor Bets Price Rout Will Deepen

Looking at Europe, what we find is – literally – nothing but green:

Benchmark stock indexes of Italy, Spain and Germany rallied more than 2 percent. Putting that in context, all of these bourses lost more than 16 percent this year through Friday, becoming some of the world’s worst performers among 93 equity indexes tracked by Bloomberg.

The Euro Stoxx trades higher by over 3% this morning, with the financial sector the best performing. Of note, although financials outperform, banking heavyweights Deutsche Bank (+2.4%) and Commerzbank (+2.6%) have pared much of their gains from early in the session to underperform the main indices. Separately, the energy and materials sectors are the laggards in Europe today, with risk on sentiment failing to boost commodities. Elsewhere, Bunds have also fallen today given the turnaround in sentiment although remaining off their worst levels.

Top European News

• VW’s Winterkorn Notified of U.S. Probe in 2014: Bild am Sonntag
• Orange-Bouygues Telecom Talks Nearly Collapsed, Echos Says
• HSBC Decides to Remain Headquartered in the U.K.
• Carrefour Says French Offices Raided Feb. 9 by Anti-Fraud Body
• ArcelorMittal Says European Steel Needs Defense Against China
• Reckitt 4Q LFL Sales Growth, 2015 Adj. Oper. Profit Beats Ests.

In FX, the yuan climbed 1.2 percent from its Feb. 5 close to 6.4942 per dollar in Shanghai. People’s Bank of China chief Zhou said China’s balance of payments is good and capital outflows are normal, with the exchange rate basically stable against a basket of other currencies, according to an interview published Saturday in Caixin magazine. The comments marked an escalation in verbal support for Chinese markets, with Zhou having left most of the commentary over the past few months to deputies.

The yen retreated 0.6 percent to 113.94 per dollar, trimming this month’s advance to 6 percent. Japan’s GDP shrank an annualized 1.4 percent in the three months ended Dec. 31, following a revised 1.3 percent gain in the third quarter, official data show.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.2 percent as more positive sentiment dimmed the appeal of haven currencies like the yen, euro and the Swiss franc. The index has lost 0.9 percent this year as the case for further U.S. rate hikes in 2016 dims.

The Malaysian ringgit, Russian ruble and South African rand gained at least 0.4 percent, with a gauge of developing-nation currencies adding 0.2 percent, following 0.4 percent drop last week.

In commodities, West Texas Intermediate crude reversed losses, climbing to $29.86, after earlier falling as much as 1.7 percent. Iran loaded its first cargo to Europe since international sanctions ended, while Chinese crude imports in January fell almost 20 percent from a record in the previous month.

Copper rallied with other metals after China’s central bank chief stepped up efforts to restore stability to the nation’s currency and economy. The metal gained 1.8 percent in London, while nickel surged 4.4 percent.

In Europe’s periphery, Portuguese bonds, which suffered the brunt of the selloff in riskier assets last week together with Greece, advanced for a second day. Portugal’s 10-year bond yield fell 22 basis points to 3.51 percent. Spain’s 10-year bond yield fell four basis points to 1.70 percent, leaving the spread to similar-maturity bunds at 143 basis points, after rising to 170 basis points on Feb. 11.

The cost of insuring corporate debt tumbled for a second day. The Markit iTraxx Europe Index of credit-default swaps on investment-grade companies dropped four basis points to 114 basis points. A measure of swaps on junk-rated businesses fell 21 basis points to 441 basis points. Indexes tied to swaps on financial companies’ senior and subordinated debt also dropped, largely erasing last week’s increases.

With US markets closed for Presidents’ Day today it’s a quiet start to the week with no data due in the US and just the Euro area trade balance reading due this morning in the European session

Bulletin Headline Summary from RanSquawk and Bloomberg

• Equities kick off the week on the front-foot with particular outperformance in financials, while risk-on sentiment is in full swing.
• Shanghai Comp. (-0.63%) played catch-up, consequently bucking the trend as the latest domestic trade data further highlighted the issues facing the nation’s export sector.
• Looking ahead participants will be keeping keen eye on comments from ECB President Draghi who is scheduled to speak at 1400GMT, while the US will be away from the market.
• Negative rates to cut major Japan bank profits by 8 pct this year
• Yuan Rises Most Since 2005 as PBOC Voices Support, Raises Fixing
• HSBC Keeps London Headquarters in Victory for U.K. Over Asia
• China Bad-Loan Problem Not as Bad as Bass Makes Out, CICC Says
• Airbus, Boeing Count on China as Southeast Asia Slows Down
• VW’s Winterkorn Notified of U.S. Probe in 2014: Bild am Sonntag
• Orange-Bouygues Telecom Talks Nearly Collapsed, Echos Says
• HSBC Decides to Remain Headquartered in the U.K.

As customery, DB’s Jim Reid concludes the overnight event wrap

This weekend, PBoC Governor Zhou Xiaochuan broke a very long silence and spoke to Caixin financial magazine to suggest that capital controls are not needed and that neither is further exchange rate depreciation. The lack of central bank communication throughout the two bouts of weakening the currency in the last 6 months have been deafening so this at least shows some willingness to communicate on something that has been threatening to destabilise markets with the fear of a big devaluation hanging over the market. Clearly the market might still force the issue and some credibility may have already been eroded but at least these words are a welcome response.

Following those comments, DB’s China Chief Economist Zhiwei Zhang highlighted that the most important statement was the acknowledgement from the Governor of a need for patience in balancing reform, growth and stability, as well the need to remain a responsible economic power. Zhiwei believes that the statement showed three important points. 1. The PBoC is still committed to FX policy reform from a dollar peg to a floating regime in the long term. 2. The global financial market volatility has likely closed the window for now. 3. The PBoC will likely stick to the dollar peg for now, and wait for the next window to float the currency. These conclusions have led Zhiwei to revise down the probability of a large RMB devaluation to 10% from 15%. Perhaps as a statement of intent from the PBoC, the CNY fix was set +0.3% stronger this morning and is currently trading over 1% firmer which, as it stands, is the biggest strengthening for the onshore currency since July 2005 (although it’s clearly playing some catch up with the weakness in the US Dollar last week).

There’s also been some important data out of China for us to digest over the last couple of days. The first was the retail sales numbers where according to the Ministry of Commerce, sales were said to have risen +11.2% yoy over the Spring Festival Period, boosted in particular by a strong increase in box-office sales. While those numbers were seen as positive, the January trade numbers, released this morning, are less so. In Dollar terms exports were down a sharp 11.2% yoy in January (vs. -1.8% expected) from -1.4% in December. That was the biggest plunge since March. Imports also tumbled a lot more than expected (-18.8% yoy vs. -3.6% expected) with the trade surplus a shade higher as a result at $63.3bn (from $60.1bn). In CNY terms exports were also sharply lower (-6.6% yoy vs. +3.6% expected) although also outdone by a huge decline in CNY imports.

Open for the first time in ten days, bourses are trading lower in China this morning although the moves are more than likely reflecting the catch-up from markets elsewhere last week. The Shanghai Comp (-0.77%), CSI 300 (-0.65%) and Shenzhen (-0.41%) are all lower just after the midday break, although in fairness have pared earlier steeper falls (of up to 3%). The most eye catching moves have come in Japan again where the Nikkei and Topix have rallied +7.16% and +8.32% respectively. This has come despite a softer than expected Q4 GDP report for the economy (-0.4% qoq vs. -0.2% expected), adding some weight perhaps to the argument for further easing from the BoJ. Elsewhere the Hang Seng (+2.94%), Kospi (+1.48%) and ASX (+1.64%) are up, while credit markets in Asia have ripped tighter with iTraxx Aus and Asia indices 8-9bps lower.

The moves this morning follow an epic week for markets with some savage volatility and a major rebound on Friday. Just to put things in perspective though, the following list of asset performance shows Friday’s rally first and then the overall performance in the week. Looking firstly at the sharp moves in equity markets: S&P 500 (+1.95%/-0.81%), Dow (+2.00%/-1.43%), Stoxx 600 (+2.91%/-4.41%), DAX (+2.45%/-3.43%), IBEX (+2.25%/-6.81%), Stoxx 600 Banks (+5.60%/-5.86%), S&P 500 Banks (+6.24%/-2.91%). Credit indices were subject to huge day-to-day swings also: iTraxx Senior Fins (-13.5bps/+6bps), iTraxx Sub Fins (-31bps/+18bps), Main (-7.5bps/+8bps), CDX IG (-2.6bps/+7bps). Meanwhile US HY energy spreads finished 26bps tighter on Friday but were +193bps wider on the week.

Moves were as equally impressive in commodity markets and highlighted by Gold (-0.70%/+5.50%) which had its strongest week since 2011. In Oil markets, despite the massive rally on Friday (the biggest since February 2009) following those WSJ headlines concerning potential production cuts on Thursday evening, WTI (+12.32%/-4.69%) still failed to stem a decline over the full five-days. Not to be outdone, there were some wild swings in rates markets too. 10y Bunds (+7.5bps/-3.4bps) actually traded to as low as 13bps on an intraday basis last week, while 10y Treasuries (+8.9bps/-8.8bps) were as low as 1.529% and traded within a 34bps range over the five-days.

It was that huge rally for Oil along with a rebound for financials which combined for what was a markedly better day all round for risk assets on Friday. With regards to the latter, a lot was made of the much better than expected results from Commerzbank, while news of JP Morgan’s Jamie Dimon purchasing $26m of his own bank’s stock also contributed to the better sentiment. Some chatter around the ECB also potentially being in talks with the Italian government about purchasing bad loans also gained some headlines, however as we highlighted on Friday this has the potential to open moral hazard, political, legal and logistical questions.

Also in focus on Friday was the latest US retail sales data. January sales were up a better than expected +0.2% mom (vs. +0.1%) last month while there was also beats for the ex auto (+0.1% mom vs. 0.0% expected) and ex auto and gas (+0.4% mom vs. +0.3% expected) prints. Meanwhile a strong gain for the GDP sensitive retail control component (+0.6% mom vs. +0.3% expected) resulted in the Atlanta Fed revising up their estimate for Q1 GDP growth to 2.7% from 2.5% – there’s quite the divergence now starting to emerge between this and economist forecasts.

The rest of the data was something of a mixed bag. The January import price index reading declined less than expected last month (-1.1% mom vs. -1.5% expected). Business inventories printed in line for December at +0.1% mom. Finally the first estimate for the University of Michigan consumer sentiment print showed a 1.3pt decline from January to 90.7 (vs. 92.3 expected) with both current conditions and expectations indices edging lower. Notably the 1y inflation expectation index was unchanged at 2.5% but 5-10y inflation expectations edged three-tenths lower to 2.4%, which is the lowest on record. In Europe the main data of note had been in the Q4 GDP numbers. The flash estimate for the Euro area showed no surprises however at +0.3% qoq (in-line) which was also the same for Germany (+0.3% qoq). Meanwhile the soft regional prints that we had witnessed result in a much softer than expected Euro area IP report for December (-1.0% mom vs. +0.3% expected).

Away from the data, the NY Fed President Dudley became the latest Fed official to acknowledge that ‘inflation is probably going to take a little bit longer to get back to our 2% objective’. On the much talked about negative-rates topic, Dudley was of the view that it is ‘extraordinarily premature’ to talk about such a move for the US right now and that ‘there are a lot of things that we would do long before we would really think about moving to negative interest rates’.

A quick recap on earnings where the season is beginning to wind down in the US. 381 S&P 500 companies have now reported their latest quarterly numbers with earnings beats standing at a robust 76% which is a tad better than the 74%, 75% and 73% we had seen for the prior 3 quarters, albeit with expectations beaten down in advance. There has been a bit of improvement in the top line numbers in recent reports too, putting the overall trend back in line with prior quarters. 48% have beaten revenue estimates which compares to 44%, 49% and 48% in the previous three quarters.

via Zero Hedge http://ift.tt/214mv5l Tyler Durden

Submitted by Jeffrey St.Clair via Counterpunch.org,

Poor ISIS. Try as they might, the men in black still can’t out-terrorize their enemies or, more pointedly, even their patrons. For the past three years, decapitations have served as the money shots for ISIS’s theater of cruelty. Then on New Year’s Day the Saudis upstaged ISIS by audaciously chopping off the heads of 47 men, including a prominent Shia cleric.

This act of brazen butchery is made all the more horrific by virtue of the fact that the Saudi head-slicers recently landed a seat on the UN Human Rights Council, largely at the insistence of British Prime Minister David Cameron, who personally vouched for the petro-autocracy’s acute sensitivity to matters of civil liberties and the humane treatment of prisoners. Then again the drone-troika of Britain, France and the U.S. also enjoy seats on the council, so perhaps the Saudis have earned their slot after all.

With his peculiar fondness for porcine heads, Cameron is probably the Kingdom’s most un-kosher ally, but he is far from Saudi Arabia’s only political cheerleader. Showing a stunning lack of judgment, Comandante Bernie Sanders says his Syrian strategy relies on the Saudis taking the lead in the fight against ISIS. “They’ve got to get their hands dirty,” Sanders inveighed to Wolf Blitzer on CNN. “They’ve got to get their troops on the ground. They’ve got to win that war with our support. We cannot be leading the effort.”

Apparently Sanders skipped the briefing on how ISIS’s apocalyptic ideology has been fueled by fire-breathing Wahhabi preachers financed by the Saudi royal family. The red senator also seems ignorant of the fact that ISIS functions as shock troops for the House of Saud in its proxy war against Iran, now raging in Yemen and Iraq, as well as Syria. You’d think that Bernie would be getting better advice from his friends in Israeli intelligence.

Sanders’ policy on Syria is naïve to the point of doltishness. But Hillary’s Syrian war plan—shared by most of her Republican rivals—borders on the pathological. Having not missed a minute of sleep haunted by the corpses of Libya, Mrs. Clinton is now stumping for the dismantling of Syria, using the carefully cultivated domestic anxiety over ISIS as the pretext. The cornerstone of Hillary’s rogue scheme is the imposition of a no fly zone over that embattled country.

Sounds like a relatively benign plan, right? But wait. ISIS doesn’t have an air force. They don’t even a have drone. Russia, of course, is flying daily sorties in Syrian air space, at the invitation of the Syrian government, such as it is, and some kind of confrontation would be inevitable. Still, Hillary doesn’t flinch. She has zealously vowed to shoot down any Russian plane that violated her unilateral ban.

Yet NATO’s latest recruit, Turkey, jumped the gun. Erdogan’s trigger-happy generals didn’t wait for any such fanciful legalisms and downed a Russian jet for momentarily breaching (perhaps) Turkish airspace. Then Turkamen fighters gleefully trained their machine-guns on the plane’s pilots as they slowly parachuted toward the desert. Vladimir Putin fulminated boisterously to his domestic audience, but prudently declined to retaliate against the Turks, perhaps intuiting that it would snap a tripwire for a full-frontal confrontation with NATO.

Everyone has been consulted about the future of Syria, except the Syrians themselves. Why? Because simply, Syrians don’t matter. They are quite beside the point. Thanks to fresh reporting by Seymour Hersh, we now know that the subtext for Obama administration’s Syrian strategy, dating back to Clinton’s tenure at the State Department, has been largely geared toward ensnaring Russian in the Levantine quagmire. This is chaos theory marketed as foreign policy.

The rubble of modern Syria has become a multi-national bombing range, a kill zone of neo-Cold War contention. Each new act of domestic terrorism, from Paris to San Bernardino, has been used to rationalize more airstrikes on Syria, even though the killers in both slaughters seemed mainly to be attempting to impress the terror network, which is like blaming Jodie Foster for inspiring John Hinkley’s wild fusillade at Reagan and his entourage.

Even Putin, that prickly hero to some precincts of the anti-imperialist Left, has upped the ante by threatening to launch a nuclear strike against ISIS in response to the bombing of a Russian passenger plane over the Sinai, even though there’s no direct evidence that the bomb was planted by the mad men of Daesh. Not to be outdone, Ted Cruz, the natural-born Canadian, has vowed to make the sands of Raqqa glow, despite the fact that few Americans could point to Raqqa on a map or explain why this city of a quarter-million people should be incinerated in retribution for the murderous rampage by the Bonnie and Clyde of San Berdoo.

The war on terror has exploded in the face of the West, with spreading mayhem across the Middle East and unraveling conditions on the home front. One chilling measure of the savage toll from 14 years of war is the rate of military suicides in the US, which now total more than 4000 since the first cruise missiles struck Afghanistan. There is a desperate motive to externalize the blame for this bleak situation, to target a scapegoat. The rancid resumes of ISIS and the despotic Assad regime make Syria a convenient landscape for more imperial bloodletting. There’s not even the faintest flicker of an anti-war movement left to impede their shameful enterprise.

In this comedy of terrors, the apex predators are the familiar ones circling overhead, waiting to blow Syria apart and plunder its bones.

via Zero Hedge http://ift.tt/1PLHd2J Tyler Durden

Despite the weakening of the Yuan, China exports collapses 6.6% YoY in January (massively missing the 3.6% increase expected). Imports continued their 15 month series of collapses with a 14.4% plunge (again drastically worse than the 1.8% increase expected). This pushed the trade balance to a record surplus CNY406bn.

In Yuan terms it's ugly… Both imports and exporets were worse than the lowest forecast of all professional economists…

 

But in USD terms it's a disaster…

 

Of course, between Japan's disastrous GDP and China's trade collapse, this is great news for those demanding moar as excuses for extreme monetary policy are just piling up in the ashes of previous failed policies.

 

Between ugly Japanese GDP, and miserable Chinese trade data, it is surprising futures aren't up more

— zerohedge (@zerohedge) February 15, 2016

Of course what everyone is really waiting for is the Hong Kong trade data to see just how much capital "leaked"…

via Zero Hedge http://ift.tt/1U2cvYp Tyler Durden

In his inimitable manner, Abraham Gulowitz unleashes 18 new pages of "all the charts you can eat" to expose the ugly reality of what is going on everywhere.

Trust Busters…

Market participants had penciled in stronger economies for 2016 and even a series of rate hikes by the Fed. Feeble world growth signals, the fallout from crashing oil and a weaker China plus tumultuous markets have combined to seriously dent expectations and encourage a serious reassessment of economic and financial prospects. Global equity prices have slumped by double digits so far this year and risk aversion has spread rapidly through the credit markets.

 

Reliable indicators of previous recessions have started to flash danger signals. We highlight several of these stats in this issue, and though specific explanations can be found to excuse each of these data readings, the abundance of warning indications cannot be dismissed. Both corporations and central bankers have queued up to warn about increased downside risks to the business and financial outlook, while at the same time seeking to reassure that renewed downturns are still likely to be avoided. But the risks have already increased that financial market conditions may yet feed through to the real business economy.

 

The greatest disappointment has to be the meager results emanating out of the massive and unprecedented easing around the globe. There is now little confidence in even the drastic measures that have been undertaken by central banks.

 

The experiments with negative interest rates conducted by a number of central banks trying to ward off deflation – – Switzerland, the eurozone and Denmark among them – – and now Japan, have yet to provide definitive conclusions. It does demonstrate, however, that too many economies are still struggling to grab onto sustainable growth paths with positive pricing power.

Engines of Growth are Sputtering…

Intense and confusing stress signals emanating from around the globe but particularly from China, the commodity markets, high yield and key emerging markets have confounded investors and contributed to intermittent bouts of severe volatility. Despite extensive and massive easing, most of the global economy still faces woefully inadequate growth prospects and difficult policy options.

 

The U.S. stands alone in the shift in monetary policy and the improvement in job markets.

 

Very obvious financial vulnerabilities and serious geopolitical concerns are aggravating the uncertainty. And let’s not forget that many of the challenges are not fleeting, and many cannot be resolved easily or quickly…

Abe Gulkowitz's full "The PunchLine…" letter is below:

 

TPL Feb 11 16

via Zero Hedge http://ift.tt/1U2cvHR Tyler Durden

Submitted by Jesse via Jesse's Cafe Americain blog,

"The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises.

 

If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time."

– Simon Johnson, The Quiet Coup

 

“A true opium of the people is a belief in nothingness after death – the huge solace of thinking that for our betrayals, greed, cowardice, and even murders that we are not going to be judged.”

– Czes?aw Mi?osz

As economist Simon Johnson put it so aptly, there was a 'financial coup d'etat' in the States. It was the result of a longer term and well-funded effort as documented by PBS Frontline and others.

 

People forget all too quickly what has happened, even things that happened less than twenty years ago. Perhaps it is easily forgotten because there are so few counterexamples of honesty and decency these days in government and business to hold up in comparison. The UK and Canada are following in lockstep, as well as the central government for Europe in Brussels.

The Clintons, along with a large group of Republican Congressmen and compliant Democrats, put a 'for sale' sign not only on the Lincoln bedroom as you may recall, but on the rest of the White House and the Capitol, and indeed, the well being of the people of the United States.

They certainly did not do it alone, as it was a bipartisan effort to overturn the protections established in the darker days of the Great Depression. But the money was good, and it was there for the taking, and with it the enormous power to threaten or reward those around them.

And it became the thing to do in Washington and New York, to partner up with big money to take the public for a wild ride, as we have not seen since the beginning of the last century.  Once again capitalism was unfettered, and became the rawest, the worst kind of short sighted and self-dealing 'capitalism' that is more corrosive looting than productive asset allocating.  And so the New York – Washington metroplex enthusiastically engaged in a program of fabulous gains for themselves, and longer term pain for the country.

I do not have to read Robert Scheer's account to understand it;  I saw this happening with my own eyes, almost in slow motion, as one might watch the events leading up to a train wreck.  The actions of the participants were deliberate, and focused solely on amassing enormous fortunes for themselves and their friends, and damn the people and the consequences.

What the Clintons did was not to invent soft graft of political contributions and gratuities, sinecure positions after public office, and ridiculously generous payment for speeches and appearances.  No, what they did was take what had been reviled as the worst of politics in craven service to big corporate interests, which had been largely but not exclusively the hallmark of their political opponents who were well established as servants to the corporate interests, and make it not only acceptable for establishment liberals, but downright fashionable.

Why would the Clintons, that wonderfully privileged and intelligent couple, do such a coarse and craven thing?  One might think of about $130 million reasons offhand.  Is anything just that simple?  And what would you do if you were offered $130 million in easy money for you and your family to make a few key decisions, to look the other way at times, while having no fear of punishment, with all your many sins forgotten, excused, and ignored by a compliant press?

Oh yes, you are an angel and would of course say no, even if the corruption was unrolled slowly, one step at a time.  But what do you think that the fellow next to you would do?   The ones who cut people off in traffic, makes the rules for themselves, wishing to have their own way, to have power and a place at the highest table?

Is this a system likely to be honest, just, and sustainable?  Is it designed for fairness and rewarding the best and most productive behaviour?

And like the utopian efficient market hypothesis, we are expected to believe that the powerful men of Big Money are just men of civic virtue who will give millions upon millions of dollars to politicians and expect nothing but fairness and objectivity in return, even if it is to their own disadvantage as required by justice.

No wonder so many politicians have become little more than marketing projects for Big Money, like brands of toothpaste and soft drinks.  Pick any flavor that you wish, but despite the appearances of difference, they are all owned by just four or five big corporate interests, as is the mainstream media.  Which by the way was enabled by the Clintons overturning the Fairness Doctrine.

A number of the old hands of politics see where this is heading, and have already taken the money and run, some to hide in their studies, to try and create a new legacy for themselves, and others to move to K Street as lobbyists and get filthier rich while it lasts.

But the problem still remains, Once thoroughly corrupted, a system finds it hard to correct itself, especially if the consequences for big rewards are more of an inconvenience than punishment, if there are any serious drawbacks at all. 

The American people seem to be attempting to rouse themselves, to use their right of suffrage to bring about the change, the necessary reform, that has eluded them for quite some time.  Let us hope that this effort will not be squashed in the manner of other protests, such as Occupy Wall Street, have been through almost ruthless and coordinated nationwide public relations campaigns and even violence from the government and the media.

The ‘Clinton Bubble’: How Clinton Democrats Fostered the 2008 Economic Crisis

By Robert Scheer

 

Since the collapse happened on the watch of President George W. Bush at the end of two full terms in office, many in the Democratic Party were only too eager to blame his administration. Yet while Bush did nothing to remedy the problem, and his response was to simply reward the culprits, the roots of this disaster go back much further, to the free-market propaganda of the Reagan years and, most damagingly, to the bipartisan deregulation of the banking industry undertaken with the full support of “liberal” President Clinton. Yes, Clinton. And if this debacle needs a name, it should most properly be called “the Clinton bubble,” as difficult as it may be to accept for those of us who voted for him.

 

Clinton, being a smart person and an astute politician, did not use old ideological arguments to do away with New Deal restrictions on the banking system, which had been in place ever since the Great Depression threatened the survival of capitalism. His were the words of technocrats, arguing that modern technology, globalization, and the increased sophistication of traders meant the old concerns and restrictions were outdated. By “modernizing” the economy, so the promise went, we would free powerful creative energies and create new wealth for a broad spectrum of Americans—not to mention boosting the Democratic Party enormously, both politically and financially.

 

And it worked: Traditional banks freed by the dissolution of New Deal regulations became much more aggressive in investing deposits, snapping up financial services companies in a binge of acquisitions. These giant conglomerates then bet long on a broad and limitless expansion of the economy, making credit easy and driving up the stock and real estate markets to unseen heights. Increasingly complicated yet wildly profitable securities—especially so-called over-the-counter derivatives (OTC), which, as their name suggests, are financial instruments derived from other assets or products—proved irresistible to global investors, even though few really understood what they were buying. Those transactions in suspect derivatives were negotiated in markets that had been freed from the obligations of government regulation and would grow in the year 2009 to more than $600 trillion…

 

Clinton betrayed the wisdom of Franklin Delano Roosevelt’s New Deal reforms that capitalism needed to be saved from its own excess in order to survive, that the free market would remain free only if it was properly regulated in the public interest. The great and terrible irony of capitalism is that if left unfettered, it inexorably engineers its own demise, through either revolution or economic collapse. The guardians of capitalism’s survival are thus not the self-proclaimed free-marketers, who, in defiance of the pragmatic Adam Smith himself, want to chop away at all government restraints on corporate actions, but rather liberals, at least those in the mode of FDR, who seek to harness its awesome power while keeping its workings palatable to a civilized and progressive society.

 

Government regulation of the market economy arose during the New Deal out of a desire to save capitalism rather than destroy it. Whether it was child labor in dark coal mines, the exploitation of racially segregated human beings to pick cotton, or the unfathomable devastation of the Great Depression, the brutal creativity of the pure profit motive has always posed a stark challenge to our belief that we are moral creatures. The modern bureaucratic governments of the developed world were built, unconsciously, as a bulwark, something big enough to occasionally stand up to the power of uncontrolled market forces…

Read the entire article with a link to the preceding excerpt from the book here.

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