Baylen Linnekin Says the Farm Bill Stinks

CattleLike
a phoenix made of pork, the Farm Bill has risen from the ashes. And
for opponents of farm subsidies and wasteful government spending,
that’s bad news. The most notable change in this year’s Farm Bill
is the elimination of direct farm subsidies, the
multi-billion-dollar handout to mostly wealthy farmers. That’s a
good thing. But in its place, Congress has substituted
taxpayer-subsidized crop insurance. And, writes Baylen Linnekin,
the bill taxpayers may foot for crop insurance subsidies—at least
$89 billion over ten years—may outweigh what taxpayers would have
contributed in direct subsidies.

View this article.

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Peter Schiff on The Daily Show, Talking Minimum Wage

Investment guru and free-market proponent Peter Schiff was
recently on The Daily Show for a segment about the minimum wage. It
didn’t go well. As he explains
in a column
:

My use of the words “mentally retarded” (when Samantha Bee
asked me who might be willing to work for $2 per hour – a figure
she suggested) has come to define the entire interview. Although I
had no intention of offending anyone, I just couldn’t remember the
politically correct term currently in use (it is “intellectually
disabled”). Assuming she knew it, Bee could have prompted me with
the correct term, but she chose not to. By including those
comments in the final package, “The Daily Show” proved that they
did not care who they offended, as long as they could make me look
bad in the process. The volume of hate mail I have received in the
show’s aftermath confirms their success on that front….

“The Daily Show” was never interested in an honest debate
about the minimum wage. Nor is it concerned with the
intellectually disabled, whom they have no qualms about offending
if they can get a laugh. In fact, it’s “The Daily Show” that
wants to tell the intellectually disabled they are worthless, as
they want to make it illegal for them to have jobs. I did not
notice any intellectually disabled people working at “The Daily
Show.” I’m sure many would jump at the chance, particularly if they
were offered minimum wage or higher. But since they choose to pay
their intellectually capable interns zero, why should they be
expected to pay the intellectually disabled more?


 More here
.

I’m sympathetic toward Schiff, especially since he’s proven to
be an incredible persuader in many other circumstances. Check out this
video
Reason TV did with him where he’s talking with Occupy
Wall Street protesters. It’s got almost half-a-million views and is
electrifying stuff.

Reason TV was at the same minimum-wage rally that appears in The
Daily Show bit. Here’s what we saw:

 

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US Dollar Poised for Additional Gains

The US dollar is poised to extend its gains against most of the major currencies in the week ahead.  The Japanese yen is the main exception.  A combination of equity market weakness, the smaller US interest premium and the large short position leave the yen bears vulnerable to further pressure.   

 

The yen is the only major currency to have appreciated against the dollar in January (3%).  The dollar’s five day moving average crossed below the 20-day average for the first time since late October on  January 13.   Since the multi-week low was set on January 27 near JPY101.75, the dollar has hovered around JPY102.   There is some support in the JPY101.50-60 area, but if that were to be convincingly violated, it could signal another 1% slide in relative quick order.   

 

There is little reason to expect participants to seriously try picking a bottom in the euro ahead of the ECB meeting Thursday. Selling into the occasional bounce is preferred to buying dips.  At least one major German bank has predicted that the ECB adopt a negative deposit rate and cut the refi rate 5-10 basis points (from 25 presently).   We are considerably less convinced, but recognize that the two pillars of ECB monetary policy (money supply and inflation) were softer than expected.  At the same time, we recognize that Draghi has surprised the market more than once on the accommodative side.  

 

Yet, ECB officials appear to recognize that the main problem is not the price of money.  Recent comments by officials suggest more interest in rekindling lending via securitization, but do not seem prepared to unveil a new initiative next week.  Moreover, a negative deposit rate could potentially be disruptive to the very institutions that the ECB wants to lend more.

 

The euro had been largely confined to a $1.3500-$1.3740 trading range this year, but may be breaking out.  It spent the second half of last week below the 100-day moving average (~$1.3600 and rising).  The 2-year interest rate differential is at 6-month highs, which should be dollar supportive.  The euro finished last week at new lows for the year.  The break of $1.35 could signal a move toward $1.33-$1.34 in the days ahead.  

 

Sterling is faring better than the euro, but it too appears to be carving out a top.  Remember it has rallied from near $1.48 six-months ago to almost $1.6670 on January 24.    It probably requires a break of the $1.6240-$1.6300 area to get the bulls to capitulate.  With suspicions that the UK will have to raise rates sooner than the BOE anticipates, other currencies may offer a more efficient way to express dollar bullish sentiment.

 

The Dollar Index is nearing the upper end of its three-month trading range near 81.50.   A break of this cap could see the advance extend toward 82.00, with the 82.50 area being a more formidable barrier.

 

The dollar-bloc currencies continue to trade heavily and although these may be crowded trades, the wind is to the back of the bears.   Yet, the US dollar staged a key reversal against the Canadian dollar before the weekend.  First it rose above CAD1.12 for the first time since July 2009, before reversing to finish the day below the previous session lows.   It closed just above the trend line drawn off this month’s lows that comes in near CAD1.1120.  We are suspicious that this marks an important high.   We would look at a pullback toward CAD1.1050 as a new USD buying opportunity in anticipation of a trend move in the medium term that could carry the greenback toward CAD1.15-CAD1.17.   

 

Even if the RBA is more neutral on rates at next week’s meeting, as some suspect, it still wants a lower Australian dollar.  Official guidance suggests $0.8000-$0.8500 is desirable.   We see bounces back toward $0.8850 as an opportunity to build shorts.   

 

The weakness in the Mexican peso appears to be largely the result of contagion from the sell-off of risk assets, including equities and other emerging markets.   Technical signals are not particularly strong.  We are more inclined to sell into contagion-spurred dollar spikes, but prefer to wait until there is greater stability in the emerging market space.  A break below MXN13.20 could confirm a top is in place for the greenback.  

 

Observation from the speculative positioning in the CME currency futures:

 

1.  After the net speculative positioning in the euro went short in the period ending Jan 21, for the first in nearly two months, it swung back to the long side in the most recent reporting period.  We fear it may be premature as the euro may be (finally) breaking to the downside.  However, the reason the net speculative position shifted back to favor the longs had more to do with shorts being covered (10.5k contracts) than longs being added (7.6k contracts).  Except for the Mexican peso, the other currency futures all saw a reduction of gross short positions.  Given the subsequent price action, this could be a  sign of the capitulation of the bulls.  

 

2.  This past reporting period saw more large (more than 10k contracts) position adjustments than has been experienced in several quarters.  Like the euro, the yen and Canadian dollar saw large declines in the gross short positions (25.9k and 11.0 k respectively).  The decline in the gross short yen position was the largest since July 2012.   The decline in the gross short Canadian dollar position is the largest in six months. Reflecting the contagion from the risk-asset sell-off, the gross short Mexican peso positions jumped by 25.7k contracts. 

 

3. The gross short yen position has been reduced consistently since the last two weeks of December.  Now with 102.2k short contracts, it is near three-month lows.  The dollar is near 2-month lows against the yen.  

 

4.  The net long sterling position increased by about 13.5k contracts, due in roughly equal measure to longs joining and shorts covering.  At 22.2k contracts long, it is the upper end of where it has been since Bear Stearns failed.  It has been larger for only around a dozen weeks since then.  The gross long position (63.4k) is also at the upper end of where it has been since the onset of the financial crisis. 


    



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US Dollar Poised for Additional Gains

The US dollar is poised to extend its gains against most of the major currencies in the week ahead.  The Japanese yen is the main exception.  A combination of equity market weakness, the smaller US interest premium and the large short position leave the yen bears vulnerable to further pressure.   

 

The yen is the only major currency to have appreciated against the dollar in January (3%).  The dollar’s five day moving average crossed below the 20-day average for the first time since late October on  January 13.   Since the multi-week low was set on January 27 near JPY101.75, the dollar has hovered around JPY102.   There is some support in the JPY101.50-60 area, but if that were to be convincingly violated, it could signal another 1% slide in relative quick order.   

 

There is little reason to expect participants to seriously try picking a bottom in the euro ahead of the ECB meeting Thursday. Selling into the occasional bounce is preferred to buying dips.  At least one major German bank has predicted that the ECB adopt a negative deposit rate and cut the refi rate 5-10 basis points (from 25 presently).   We are considerably less convinced, but recognize that the two pillars of ECB monetary policy (money supply and inflation) were softer than expected.  At the same time, we recognize that Draghi has surprised the market more than once on the accommodative side.  

 

Yet, ECB officials appear to recognize that the main problem is not the price of money.  Recent comments by officials suggest more interest in rekindling lending via securitization, but do not seem prepared to unveil a new initiative next week.  Moreover, a negative deposit rate could potentially be disruptive to the very institutions that the ECB wants to lend more.

 

The euro had been largely confined to a $1.3500-$1.3740 trading range this year, but may be breaking out.  It spent the second half of last week below the 100-day moving average (~$1.3600 and rising).  The 2-year interest rate differential is at 6-month highs, which should be dollar supportive.  The euro finished last week at new lows for the year.  The break of $1.35 could signal a move toward $1.33-$1.34 in the days ahead.  

 

Sterling is faring better than the euro, but it too appears to be carving out a top.  Remember it has rallied from near $1.48 six-months ago to almost $1.6670 on January 24.    It probably requires a break of the $1.6240-$1.6300 area to get the bulls to capitulate.  With suspicions that the UK will have to raise rates sooner than the BOE anticipates, other currencies may offer a more efficient way to express dollar bullish sentiment.

 

The Dollar Index is nearing the upper end of its three-month trading range near 81.50.   A break of this cap could see the advance extend toward 82.00, with the 82.50 area being a more formidable barrier.

 

The dollar-bloc currencies continue to trade heavily and although these may be crowded trades, the wind is to the back of the bears.   Yet, the US dollar staged a key reversal against the Canadian dollar before the weekend.  First it rose above CAD1.12 for the first time since July 2009, before reversing to finish the day below the previous session lows.   It closed just above the trend line drawn off this month’s lows that comes in near CAD1.1120.  We are suspicious that this marks an important high.   We would look at a pullback toward CAD1.1050 as a new USD buying opportunity in anticipation of a trend move in the medium term that could carry the greenback toward CAD1.15-CAD1.17.   

 

Even if the RBA is more neutral on rates at next week’s meeting, as some suspect, it still wants a lower Australian dollar.  Official guidance suggests $0.8000-$0.8500 is desirable.   We see bounces back toward $0.8850 as an opportunity to build shorts.   

 

The weakness in the Mexican peso appears to be largely the result of contagion from the sell-off of risk assets, including equities and other emerging markets.   Technical signals are not particularly strong.  We are more inclined to sell into contagion-spurred dollar spikes, but prefer to wait until there is greater stability in the emerging market space.  A break below MXN13.20 could confirm a top is in place for the greenback.  

 

Observation from the speculative positioning in the CME currency futures:

 

1.  After the net speculative positioning in the euro went short in the period ending Jan 21, for the first in nearly two months, it swung back to the long side in the most recent reporting period.  We fear it may be premature as the euro may be (finally) breaking to the downside.  However, the reason the net speculative position shifted back to favor the longs had more to do with shorts being covered (10.5k contracts) than longs being added (7.6k contracts).  Except for the Mexican peso, the other currency futures all saw a reduction of gross short positions.  Given the subsequent price action, this could be a  sign of the capitulation of the bulls.  

 

2.  This past reporting period saw more large (more than 10k contracts) position adjustments than has been experienced in several quarters.  Like the euro, the yen and Canadian dollar saw large declines in the gross short positions (25.9k and 11.0 k respectively).  The decline in the gross short yen position was the largest since July 2012.   The decline in the gross short Canadian dollar position is the largest in six months. Reflecting the contagion from the risk-asset sell-off, the gross short Mexican peso positions jumped by 25.7k contracts. 

 

3. The gross short yen position has been reduced consistently since the last two weeks of December.  Now with 102.2k short contracts, it is near three-month lows.  The dollar is near 2-month lows against the yen.  

 

4.  The net long sterling position increased by about 13.5k contracts, due in roughly equal measure to longs joining and shorts covering.  At 22.2k contracts long, it is the upper end of where it has been since Bear Stearns failed.  It has been larger for only around a dozen weeks since then.  The gross long position (63.4k) is also at the upper end of where it has been since the onset of the financial crisis. 


    



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US Dollar Poised for Additional Gains

The US dollar is poised to extend its gains against most of the major currencies in the week ahead.  The Japanese yen is the main exception.  A combination of equity market weakness, the smaller US interest premium and the large short position leave the yen bears vulnerable to further pressure.   

 

The yen is the only major currency to have appreciated against the dollar in January (3%).  The dollar’s five day moving average crossed below the 20-day average for the first time since late October on  January 13.   Since the multi-week low was set on January 27 near JPY101.75, the dollar has hovered around JPY102.   There is some support in the JPY101.50-60 area, but if that were to be convincingly violated, it could signal another 1% slide in relative quick order.   

 

There is little reason to expect participants to seriously try picking a bottom in the euro ahead of the ECB meeting Thursday. Selling into the occasional bounce is preferred to buying dips.  At least one major German bank has predicted that the ECB adopt a negative deposit rate and cut the refi rate 5-10 basis points (from 25 presently).   We are considerably less convinced, but recognize that the two pillars of ECB monetary policy (money supply and inflation) were softer than expected.  At the same time, we recognize that Draghi has surprised the market more than once on the accommodative side.  

 

Yet, ECB officials appear to recognize that the main problem is not the price of money.  Recent comments by officials suggest more interest in rekindling lending via securitization, but do not seem prepared to unveil a new initiative next week.  Moreover, a negative deposit rate could potentially be disruptive to the very institutions that the ECB wants to lend more.

 

The euro had been largely confined to a $1.3500-$1.3740 trading range this year, but may be breaking out.  It spent the second half of last week below the 100-day moving average (~$1.3600 and rising).  The 2-year interest rate differential is at 6-month highs, which should be dollar supportive.  The euro finished last week at new lows for the year.  The break of $1.35 could signal a move toward $1.33-$1.34 in the days ahead.  

 

Sterling is faring better than the euro, but it too appears to be carving out a top.  Remember it has rallied from near $1.48 six-months ago to almost $1.6670 on January 24.    It probably requires a break of the $1.6240-$1.6300 area to get the bulls to capitulate.  With suspicions that the UK will have to raise rates sooner than the BOE anticipates, other currencies may offer a more efficient way to express dollar bullish sentiment.

 

The Dollar Index is nearing the upper end of its three-month trading range near 81.50.   A break of this cap could see the advance extend toward 82.00, with the 82.50 area being a more formidable barrier.

 

The dollar-bloc currencies continue to trade heavily and although these may be crowded trades, the wind is to the back of the bears.   Yet, the US dollar staged a key reversal against the Canadian dollar before the weekend.  First it rose above CAD1.12 for the first time since July 2009, before reversing to finish the day below the previous session lows.   It closed just above the trend line drawn off this month’s lows that comes in near CAD1.1120.  We are suspicious that this marks an important high.   We would look at a pullback toward CAD1.1050 as a new USD buying opportunity in anticipation of a trend move in the medium term that could carry the greenback toward CAD1.15-CAD1.17.   

 

Even if the RBA is more neutral on rates at next week’s meeting, as some suspect, it still wants a lower Australian dollar.  Official guidance suggests $0.8000-$0.8500 is desirable.   We see bounces back toward $0.8850 as an opportunity to build shorts.   

 

The weakness in the Mexican peso appears to be largely the result of contagion from the sell-off of risk assets, including equities and other emerging markets.   Technical signals are not particularly strong.  We are more inclined to sell into contagion-spurred dollar spikes, but prefer to wait until there is greater stability in the emerging market space.  A break below MXN13.20 could confirm a top is in place for the greenback.  

 

Observation from the speculative positioning in the CME currency futures:

 

1.  After the net speculative positioning in the euro went short in the period ending Jan 21, for the first in nearly two months, it swung back to the long side in the most recent reporting period.  We fear it may be premature as the euro may be (finally) breaking to the downside.  However, the reason the net speculative position shifted back to favor the longs had more to do with shorts being covered (10.5k contracts) than longs being added (7.6k contracts).  Except for the Mexican peso, the other currency futures all saw a reduction of gross short positions.  Given the subsequent price action, this could be a  sign of the capitulation of the bulls.  

 

2.  This past reporting period saw more large (more than 10k contracts) position adjustments than has been experienced in several quarters.  Like the euro, the yen and Canadian dollar saw large declines in the gross short positions (25.9k and 11.0 k respectively).  The decline in the gross short yen position was the largest since July 2012.   The decline in the gross short Canadian dollar position is the largest in six months. Reflecting the contagion from the risk-asset sell-off, the gross short Mexican peso positions jumped by 25.7k contracts. 

 

3. The gross short yen position has been reduced consistently since the last two weeks of December.  Now with 102.2k short contracts, it is near three-month lows.  The dollar is near 2-month lows against the yen.  

 

4.  The net long sterling position increased by about 13.5k contracts, due in roughly equal measure to longs joining and shorts covering.  At 22.2k contracts long, it is the upper end of where it has been since Bear Stearns failed.  It has been larger for only around a dozen weeks since then.  The gross long position (63.4k) is also at the upper end of where it has been since the onset of the financial crisis. 


    



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The Bernank Celebrates

Submitted by James E. Miller of the Ludwig von Mises Institute of Canada

The Bernank Celebrates

 

BernankeSmilingWhen the last helicopter left the Vietnamese city of Saigon, Uncle Sam hung his head in defeat. The commies had won. The billions of dollars spent, lives lost, and damaged prestige were all lasting consequences. The war left a black mark on the U.S. government – though not one big enough to stop armchair generals from war-making in the Middle East decades later.

As one helicopter’s departure symbolized ignominy for a nation, another present-day lift off seemingly has fireworks going off in the background. Ben “helicopter” Bernanke just hosted his last meeting of the Federal Open Market Committee. He will soon bow out of his current position as Chairman of the Federal Reserve. His successor Janet Yellen is set to carry on his torch. The general consensus is she will embrace the very same policies of her predecessor.

For all his hard work, Bernanke is seeing praise from all corners of the media. In The Globe and Mail, business reporter Kevin Carmichael painted the outgoing central bank head a portrait of praise so colorful, Bernanke may as well have had a halo over his bald head. This isn’t the first time the central banker has gotten an abundance of praise. The Atlantic magazine famously declared Bernanke “The Hero” for saving the global economy. Likewise, Time gave him their Person of the Year award for 2009.

The media loves its heroes – especially when they work in the higher echelons of government. Compared to past laurels, Carmichael’s report is slightly less optimistic. Sure, he concedes, Bernanke is renowned for his relative grace under pressure. The question is: what’s the ultimate effect of his drastic actions in the wake of Wall Street’s near-meltdown? Will the economy keep rolling along as the unemployment rate drips lower? Or will the whole thing blow up in Yellen’s face?

Alan Greenspan left his spot at the Fed a veritable mensch. Just a couple years later, the housing bubble he engineered burst like water balloon. Now he spends his days irregularly commenting on the ongoing recovery, convinced that some people still care what he thinks.

Bernanke’s fate is still undecided, though some are ringing the song bell of victory. Richard Grossman, an economist at Wesleyan University, thinks that without Bernanke, “we’d be in a lot of trouble.” According to National Center of Middle Market director Anil Makhija, “[H]istory will always remember that he stood up at a very difficult time.” A majority of academic economists are in agreement: Bernanke used the printing press to keep the global economy afloat in the darkest days of 2008. When he first came to the Fed, the central bank’s balance sheet showed a total of almost $900 billion in assets – no paltry sum. When the Bernank leaves, he leaves behind a balance sheet of over $4 trillion.

For all his skepticism, Carmichael still seems to hold high views of the outgoing Fed chief. As he writes, “creation of money at that scale should have caused all kinds of problems by now: Runaway inflation, asset-price bubbles; name it. But it hasn’t.” The key here is: it hasn’t happened, yet.

The past few years haven’t just seen money creation the likes of which would make the planners in the Weimar Republic jealous. The Bernanke era also saw the mainstream economic profession chastise anyone who thought central bankers might just be clever by half. For Keynesians and statists, temperance is not allowed in the midst of a crisis. Government must act, and act it will.

Anyone who had the audacity to utter sacrilegious lines such as “maybe it isn’t a good idea to create trillions of dollars out of thin air “ was called a Cassandra or worse. Rampant hyperinflation failed to occur. The dollar did not go the way of Zimbabwe. The S&P 500 hit record highs following each bout of money injections. The amount of folks unemployed has dropped (though partially due to discouragement and a shrinking labor force).

With all this partial success and no slip ups, does Carmichael have a point in that Bernanke deserves an ample amount of praise?

Former MSNBC blowhard Keith Olbermann coined a term for this: premature jocularity. Bernanke is not breakdancing in the front lawn of the Federal Reserve building in Washington D.C., but he certainly isn’t displaying the humbleness of someone who’s unsure of their fate in the history books. New York Fed branch President Bill Dudley recently admitted his cohorts “don’t understand fully how large-scale asset purchase programs work to ease financial market conditions.” On the scale of admissions, that one is high-grade plus one. Dudley has operated the most important central bank branch in the country since 2009. The fact that they were, by all means, flying blind is not comforting.

To think that Bernanke’s extreme measures during the financial crisis will quietly slink away without consequence is an act of false comfort. The trillions added to the Fed’s balance sheet are not sitting quietly on the sideline. The dollars are working their way through the country’s largest corporations. Banks are pyramiding credit, creating money ex nihilo. The funds are likely finding their way to the stock market, often times reflective of investment in the capital goods sector. On numerous occasions, Bernanke has bragged about the robustness of Wall Street. Millions of folks might still be out of work but the banker class is living fat and happy. This is a central bank’s version of progress.

In recent months, the Fed has indicated it plans to incrementally scale back its economy-boosting efforts. This will be the final hurrah of Bernanke’s legacy – a calm unwinding of his life’s work. Even now, the delicateness of this plan is starting to show. Stocks are jittery about a Fed pullback. Traders know the free ride must come to an end sometime. The amount of money creation occurring can’t go on forever. Doing so risks a truly inflationary event, with the effervescing dollars threatening to spill over into the larger economy.

In economics the chicken must always come home to roost. Man can only live beyond his means for so long. Bernanke’s reputation hinges upon the market not tanking as his successors close up the spout of gushing currency. The endpoint is coming. When it happens, the house of cards will tumble down. And with it will come the livelihoods and hopes of many. With every boom there is a bust. It’s an immutable fact of government intervention into the economy.

As Bill Bonner writes, articles full of lavishing praise for Bernanke will begin appearing in coming weeks. Writing puff pieces on state bureaucrats is often a high-paying gig. But they all reveal a particular trend: celebrating the wise achievements of someone empowered to govern society. When businessmen are praised in print, their accomplishments are chalked up as minor victories reserved for the few. When the selfless man of charity is given his due, the praise is mild. When a lord of government sees the pages of a major periodical, it’s the kind of brown-nosing that would make a teacher’s pet uncomfortable.

For now, Bernanke will bask in exaltation. But his just deserts are coming. You can bet $4 trillion on it.


    

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

China, Japan, The Yasukuni Shrine, And The Confederate Flag

Submitted by Shannon Tiezzi via The Diplomat,

On Wednesday, the United Nations Security Council held an open debate on the theme of “war, its lesson, and the search for a permanent peace.” Under-Secretary General for Political Affairs Jeffrey Feltman, addressing the Security Council, laid out the core of the problem: “As we have seen repeatedly, fighting that ends without reconciliation – especially fighting inside States – is fighting that can, and often does, resume.” In the concept paper for the debate, Prince Zeid Ra’ad Zeid Al-Hussein of Jordan wrote that the UN could play a role in “forging a deeper reconciliation among ex-combatants … based on an agreed or shared narrative, a shared memory, of a troubled past.” A common interpretation of history, Zeid believes, helps smooth tensions between former enemies.

To those following the tensions between Japan and China (as well as South Korea), the implications are obvious.  As my colleague Ankit wrote, the UN debate became a stage for China, South Korea, and North Korea to criticize Japan’s handling of history. While the fighting between these nations ended almost 70 years ago, the process of reconciliation remains incomplete. The “deeper reconciliation” Zeid described, one based on “a shared memory of a troubled past,” has not yet emerged.

China and South Korea do have a “shared memory,” as shown by their comments during the UN debate. The problem, in their eyes, is that Japan “remembers” thing differently. When calling on Japan to “face up to history” or “admit mistakes,” as Foreign Ministry Spokesperson Hua Chunying did this week, what they really mean is that Japan should accept without reservation China and South Korea’s version of history.

Here’s the problem with that approach: it’s inevitable that each country will view its past from a more sympathetic (though not necessarily approving) perspective. Generally, each country acknowledges (more or less) that mistakes were made, but no one else understands better how those mistakes happened — the mitigating factors that humanize the decision-makers. For example, Chinese citizens, in general, have a much rosier idea of Mao Zedong’s rule than non-Chinese; they know he made mistakes but will often claim that Mao did the best he could with the historical circumstances he faced.

The current tensions in Northeast Asia have another analogue: the conflicted legacy of the U.S. Civil War. As in the Northeast Asia dispute, the major issue is how to appropriately remember the war — especially the Confederates, who fought on behalf of slave-owning states.

For example, is it appropriate for Richmond, Virginia, the former capital of the Confederacy, to have a statue of famed Confederate general Robert E. Lee in the heart of the city; for high schools in the South to be named after Lee and other Confederate generals, or even after the Jefferson Davis, the President of the Confederacy, who was arrested (but never tried) for treason? And the ultimate symbolic issue, the subject of a televised debate on Newshour a few years ago — is it acceptable for Southerners (who may or may not have had ancestors fighting in the war) to fly the Confederate flag?

To many, the answer is obviously no — the Confederacy stands for slavery and all the horrors that went along with it. It symbolizes not only the oppression of an entire race, but the treason of splitting the country and provoking civil war. To fly such a flag is to intentionally celebrate those who caused untold pain and suffering to hundreds of thousands of Africans and African Americans.

To many others, though, the answer is just as obviously yes — while slavery was a terrible mistake, the Confederate soldiers were simply fighting to defend their homeland and deserve to be honored for their sacrifice. Under this line of thinking, the Confederate flag can be divested of its ties to slavery and simply honored as a symbol of Southern culture and heritage. Flying the flag has nothing to do with slavery; it symbolizes Southern pride.

In a similar way, some Japanese would argue that Yasukuni can be divested of its ties to war criminals and Japanese imperialism. In both cases, the problem is not so much a denial  of history (although extremists in both Japan and the American South have fringe theories alleviating their countrymen of all blame) but a unique interpretation of history by the average person that allows him or her to reject the mistakes of the past without rejecting national or regional pride. It’s easy to  frown upon this as Orwellian “doublethink,” but it’s common to all nations, races, and peoples. Judging it in others is easy; rooting it out in ourselves is another matter.

For those who shake their heads at how a 70-year old conflict is still riling up Northeast Asia, look at the U.S. 150 years later, and how it still hasn’t sorted out the legacy of the nation’s bloodiest war. Reconciliation doesn’t happen naturally with the passage of time. The shared memories and understandings that lead to reconciliation have to be nurtured by all sides of the conflict, and that takes both time and dedicated effort.

“Leaders need to set the example, not just in ceasing war-time rhetoric and ending the intentional promotion of grievances, but also by deeds of genuine cooperation and honest examinations of their own roles in conflict,” Feltman said at the UN debate. This clearly lays the burden of reconciliation on both sides. Not only do past aggressors need to honestly examine their roles in the conflict, but past victims must end the practice of parading their grievances. It’s tough to say which is more difficult, owning up to historical wrongs or letting them go. But both are equally necessary for the sort of reconciliation Northeast Asia needs.

That absolutely doesn’t mean that African Americans should embrace the Confederate legacy, or that Chinese and Koreans should accept Japanese politicians visiting Yasukuni. It does mean, though, that accusations and finger-pointing about past wrongs are not going to lead to present reconciliation. Indulging in such tactics doesn’t provide moral high ground; it shows an unwillingness to actually make things better.

Instead, solving the problem will take an honest conversation, not about history per se but about historical interpretations, and acknowledging of their power to wound even decades later. Right now, it’s impossible to imagine that conversation happening on an official diplomatic level, but it can just as easily take place elsewhere — in academia, or even in the comments section of articles like this one.


    

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

What America's CEOs Really Think

With analysts preferring gloss over the massive bellwether stock earnings misses, focus on non-GAAP manufactured releases, and cling optimistically to hopes that weak performance, inclement weather, and volatile currency fluctuations will all go away soon and that the future looks rosy. However, as Bloomberg’s Richard Yamarone notes, the US economy continues to cling to an historical subpar growth and CEO comments hardly support any hope for a change.

 

P&G [PG] Earnings Call 1/24/13: “We continue to operate in a volatile environment with uncertainty in foreign exchange, some deceleration in market growth rates and a rapidly developing policy environment.”

Apple [AAPL] Earnings Call 1/27/13: “We expect four factors to negatively impact the year-over-year revenue comparison by over $2 billion. These are channel inventory increases in the year-ago quarter that we don’t expect to repeat, lower iPod sales, a stronger U.S. dollar against a number of currencies, particularly the yen and the Australian dollar and the higher per unit deferral for Mac and iOS devices.”

Starbucks [SBUX] Earnings Call 1/23/13: “Over the last month or so, I have heard many traditional brick-and-mortar retailers attribute the downturn in their core business during holiday to factors such as a shortened holiday shopping season, a weakened consumer, the U.S. Government shutdown, and poor weather. Respectfully, those explanations ignore a larger fundamental truth and that truth is that traditional brick-and-mortar retailing is at an inflection point. No longer are many retailers only required to compete with stores on the other side of the street. They are now required to compete with stores on the other side of the country.”

Southwest Airlines [LUV] Earnings Call 1/23/13: “Our outlook right now for the economy is very stable. Hopefully, the uncertainties that we had a year ago, hopefully they won’t return. And that would be, obviously, a real good thing. And then fuel prices have been remarkably stable for now three quarters in a row. And at least our outlook, as it stands today, is for yet another quarter of stability there.”

Ethan Allen Interiors [ETH] Earnings Call 1/23/13: “We had sunshine in sunshine states. We had good businesses in California and Florida. And in fact, what happened was that October, this government shutdown did have a major impact on us. We were down 10.5 percent in October. November was somewhat better. We are up 3.6 percent and then the bad weather affected us in December and we are down 2.6 percent.”

McDonald’s [MCD] Earnings Call 1/23/13: “2013 was a difficult year and we’re keenly aware of our short-term challenges. Future economic predictions are mixed, but most assume some limited global improvement in 2014. However, we don’t expect significant changes in market dynamics, given modest growth projections for the IEO industry. Looking to January, global comparable sales are expected to be relatively flat.”

Caterpillar [CAT] Earnings Call 1/27/13: “In most regions, particularly in North America, economically we think a little better, a little better GDP around the world will help that as well. We’ve also seen actually our sales in China Construction improve as well. And it’s probably worth noting that for Construction, we still had a headwind in the fourth quarter on dealer inventory.”

Stanley Black & Decker [SWK] Earnings Call 1/24/13: “The currency trend versus the U.S. dollar for really the four major currencies that tend to have a significant impact on us. The first three have historically had a large impact on us since the merger; the European euro, the Canadian dollar, and the Brazilian real. The Argentinean peso has become more challenging over the last few years as that country continues to see governmental challenges and economic issues.”

…to see Bloomberg Orange book details  – type NI ORANGEBOOK in your terminal.


    



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

What America’s CEOs Really Think

With analysts preferring gloss over the massive bellwether stock earnings misses, focus on non-GAAP manufactured releases, and cling optimistically to hopes that weak performance, inclement weather, and volatile currency fluctuations will all go away soon and that the future looks rosy. However, as Bloomberg’s Richard Yamarone notes, the US economy continues to cling to an historical subpar growth and CEO comments hardly support any hope for a change.

 

P&G [PG] Earnings Call 1/24/13: “We continue to operate in a volatile environment with uncertainty in foreign exchange, some deceleration in market growth rates and a rapidly developing policy environment.”

Apple [AAPL] Earnings Call 1/27/13: “We expect four factors to negatively impact the year-over-year revenue comparison by over $2 billion. These are channel inventory increases in the year-ago quarter that we don’t expect to repeat, lower iPod sales, a stronger U.S. dollar against a number of currencies, particularly the yen and the Australian dollar and the higher per unit deferral for Mac and iOS devices.”

Starbucks [SBUX] Earnings Call 1/23/13: “Over the last month or so, I have heard many traditional brick-and-mortar retailers attribute the downturn in their core business during holiday to factors such as a shortened holiday shopping season, a weakened consumer, the U.S. Government shutdown, and poor weather. Respectfully, those explanations ignore a larger fundamental truth and that truth is that traditional brick-and-mortar retailing is at an inflection point. No longer are many retailers only required to compete with stores on the other side of the street. They are now required to compete with stores on the other side of the country.”

Southwest Airlines [LUV] Earnings Call 1/23/13: “Our outlook right now for the economy is very stable. Hopefully, the uncertainties that we had a year ago, hopefully they won’t return. And that would be, obviously, a real good thing. And then fuel prices have been remarkably stable for now three quarters in a row. And at least our outlook, as it stands today, is for yet another quarter of stability there.”

Ethan Allen Interiors [ETH] Earnings Call 1/23/13: “We had sunshine in sunshine states. We had good businesses in California and Florida. And in fact, what happened was that October, this government shutdown did have a major impact on us. We were down 10.5 percent in October. November was somewhat better. We are up 3.6 percent and then the bad weather affected us in December and we are down 2.6 percent.”

McDonald’s [MCD] Earnings Call 1/23/13: “2013 was a difficult year and we’re keenly aware of our short-term challenges. Future economic predictions are mixed, but most assume some limited global improvement in 2014. However, we don’t expect significant changes in market dynamics, given modest growth projections for the IEO industry. Looking to January, global comparable sales are expected to be relatively flat.”

Caterpillar [CAT] Earnings Call 1/27/13: “In most regions, particularly in North America, economically we think a little better, a little better GDP around the world will help that as well. We’ve also seen actually our sales in China Construction improve as well. And it’s probably worth noting that for Construction, we still had a headwind in the fourth quarter on dealer inventory.”

Stanley Black & Decker [SWK] Earnings Call 1/24/13: “The currency trend versus the U.S. dollar for really the four major currencies that tend to have a significant impact on us. The first three have historically had a large impact on us since the merger; the European euro, the Canadian dollar, and the Brazilian real. The Argentinean peso has become more challenging over the last few years as that country continues to see governmental challenges and economic issues.”

…to see Bloomberg Orange book details  – type NI ORANGEBOOK in your terminal.


    



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