Thai Prime Minister Dissolves Parliament In Response To Protests, Calls For New Elections

Moments ago news hit the tape that during a televised speech in Bangkok, Thai Prime Minister has proposed a decree to dissolve parliament and call new elections. This is likely in response to the plans of government protesters, who had planned to march on Government House this morning to pressure Yingluck to step down and hold fresh elections.

Additionally, as VOA reports, a caretaker parliament will be appointed with limited powers.

The immediate result is that the Thai Baht gains 0.1% to 32.115 against the USD, after being down as much as 0.5% earlier. However, this kneejerk reaction may not last. As VOA also reports…

Whether or not this development will be seen as bullish for the EURJPY formerly known as the S&P500, is of course a rhetorical question: if it is a flashing red headline, it is always bullish for stocks.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/maRyDPo-TSQ/story01.htm Tyler Durden

Guest Post: The Triumph Of "Ron Paul"-ism

Submitted by Jim Quinn of The Burning Platform blog,

The American people are coming to the realization that everything Ron Paul has stood for in the last 40 years is true. He has been proven right regarding the Federal Reserve, the Military Industrial Complex, and the Warfare/Welfare Surveillance State. The American people have grown weary of inflation, wars of choice and being spied upon. Ron Paul’s consistently right message is finally making headway. He is a true American patriot.

 

America's Place In The World…

 

We Are All Non-Interventionists Now!

We are witnessing the triumph of Ron Paulism in the United States. The corporate media will avoid reporting it. They try their best to ignore Ron Paul’s 30 plus year intellectual march through our institutions.

But the facts in Pew Research’s 50 year survey of US views of “America’s place in the world” do not lie: This year the highest percentage of Americans ever — 53 percent — agree with the statement that “the US should mind its own business internationally and let other countries get along the best they can on their own.” (See illustration below)

Intervention

 

This means that despite the Mephistophelian temptations of the neoconservatives, offering war, interventionism, “responsibility to protect,” and humanitarian bombs, Americans are behind Ron Paul and the peacemakers — more than ever.

There is no major political figure in the United States who has more clearly identified himself with the cause of non-interventionism both at home and abroad.

When the Georgia/Russia war broke out in 2008, arch-neocon Senator John McCain incomprehensibly said that “we are all Georgians now.” He meant that we should go to war with Russia to back up a Georgian provocation. His slogan is laughable now, particularly as the facts have come out about the war.

But we can say this with all the facts to back us up: “We are (mostly) non-interventionists now!” We are in the growing majority, but still we have to fight the powers-that-be to get our message heard. The censorship and propaganda against our message is strong. The war machine does not give up easily.

Please continue to support the Ron Paul Institute’s efforts to advance Ron Paul’s important work. Read our website, share the articles, follow us on Facebook and Twitter, and if you can please financially support our efforts. Ron Paul is winning. Let’s help him!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5dqGM4TlpZ0/story01.htm Tyler Durden

Guest Post: The Triumph Of “Ron Paul”-ism

Submitted by Jim Quinn of The Burning Platform blog,

The American people are coming to the realization that everything Ron Paul has stood for in the last 40 years is true. He has been proven right regarding the Federal Reserve, the Military Industrial Complex, and the Warfare/Welfare Surveillance State. The American people have grown weary of inflation, wars of choice and being spied upon. Ron Paul’s consistently right message is finally making headway. He is a true American patriot.

 

America's Place In The World…

 

We Are All Non-Interventionists Now!

We are witnessing the triumph of Ron Paulism in the United States. The corporate media will avoid reporting it. They try their best to ignore Ron Paul’s 30 plus year intellectual march through our institutions.

But the facts in Pew Research’s 50 year survey of US views of “America’s place in the world” do not lie: This year the highest percentage of Americans ever — 53 percent — agree with the statement that “the US should mind its own business internationally and let other countries get along the best they can on their own.” (See illustration below)

Intervention

 

This means that despite the Mephistophelian temptations of the neoconservatives, offering war, interventionism, “responsibility to protect,” and humanitarian bombs, Americans are behind Ron Paul and the peacemakers — more than ever.

There is no major political figure in the United States who has more clearly identified himself with the cause of non-interventionism both at home and abroad.

When the Georgia/Russia war broke out in 2008, arch-neocon Senator John McCain incomprehensibly said that “we are all Georgians now.” He meant that we should go to war with Russia to back up a Georgian provocation. His slogan is laughable now, particularly as the facts have come out about the war.

But we can say this with all the facts to back us up: “We are (mostly) non-interventionists now!” We are in the growing majority, but still we have to fight the powers-that-be to get our message heard. The censorship and propaganda against our message is strong. The war machine does not give up easily.

Please continue to support the Ron Paul Institute’s efforts to advance Ron Paul’s important work. Read our website, share the articles, follow us on Facebook and Twitter, and if you can please financially support our efforts. Ron Paul is winning. Let’s help him!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5dqGM4TlpZ0/story01.htm Tyler Durden

Interactive Atlas Of The Leading Causes Of Premature Death

While some may think trading these manipulated capital markets has become a leading cause of death over the past year, that is not the case. At least not yet. Instead, the leading causes of early death are shown on the chart below compiled by Wired. It maps “the global cost of early mortality – some 1.7 billion years of potential human life forefited annually – sorted by cause of death.”

Not surprisingly, Wired notes that heart disease and stroke cause more than a quarter of all deaths. But since they hit mainly older people, the cost in years of life lost is relatively small. Curiously, one of the biggest net contributors to premature loss of life is Malaria, which is one of the biggest killers of children across the developing world. Also surprising: while not large (yet) in absolute terms, natural disasters are by far the fastest-growing contributor to the death toll.

The good news: the big yellow block representing infectious diseases and birth problems, is showing a rapid decline. Which means that “we’re making progress; deaths from disorders that could be avoided with basic medications, clean water and neo-natal care, are on the decline.”

Some additional perspectives are provided from the below two interactive maps by the Institute for Health Metrics and Evaluation, analyzing Disability Adjusted Life-Years (DALY) impact from various noted causes. A quick primer:

The disability-adjusted life year (DALY) is a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death.

 

Originally developed by Harvard University for the World Bank in 1990, the World Health Organization subsequently adopted the method in 1996 as part of the Ad hoc Committee on Health Research “Investing in Health Research & Development” report. The DALY is becoming increasingly common in the field of public health and health impact assessment (HIA). It “extends the concept of potential years of life lost due to premature death…to include equivalent years of ‘healthy’ life lost by virtue of being in states of poor health or disability.” In so doing, mortality and morbidity are combined into a single, common metric.

An interactive treemap of all causes:

 

A different perspective, this time broken down by risk factors. The far and ahead leader: “dietary risks”, which makes sense for a nation which every day roll sever further into record obesity land.

 

The best news: clicking too fast on the SPY heatmap in order to benefit from Bernanke’s “Wealth Effect” is still not a leading cause of premature death.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/8AM3Ml8mlc4/story01.htm Tyler Durden

The 9 Words Every Democratic Congressman Dreads

Following yesterday’s polls, we suspect this cartoon sums up the view of many ‘faithful’ as they head into the new year. Of course, no matter what faces change next year, the Fed will always be there…

 

“…if you like your seat, you can keep your seat…”


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/13FxaUk0jks/story01.htm Tyler Durden

Macro Myopia and Preview of the Week's Highlights

The solid US jobs report that saw the world’s largest economy add a little more than 200k net new jobs and the unemployment rate fall three tenths of a percent to 7.0%, even with the participation rate ticking up got some chins wagging about that the Federal Reserve tapering at its next FOMC meeting on December 17-18.

 

Even the usually astute Financial Times jumped all over the story with its page three story “US jobs boost raises speculation on Fed taper”.  Not once in the article did the reporters note that US bond yields actually slipped after the jobs report or that the dollar fell.  The speculation that it refers to was not found in price, but in one economist it cited.

 

Those inclined to the Fed tapering in December seem myopic.  The employment was not the only economic report that was released before the weekend.  The US also reported that the Fed’s preferred measure of inflation, the deflator for core personal consumption expenditures, which slipped to 1.1%, the slowest pace in more than 2.5 years.  The FT thought this was worth a single paragraph it is report on the prospects of tapering.

 

The Financial Times did not see fit, though, to even recognize in passing,  the fiscal uncertainty that hangs over the market. Recall that the lack of fiscal clarity influenced the Fed’s decision not to taper in September. Although December 13 is a self-imposed deadline for an agreement, the heightened tensions, especially in the aftermath of the Senate Democrats parliamentary maneuver that allows the filibuster to over ridden on presidential appointments with a simple majority, and the usual brinkmanship tactics warns that a final deal may be elusive until closer to the next legislative deadline in mid-January.

 

Nor do most observers take seriously the institutional interests of the Federal Reserve.  We have argued that the seven person Board of Governors is going to see significant changes in the months ahead.  The Fed’s forward guidance that is to replace QE as the main policy tool will be more credible if issued by the next Fed chairman not the soon-to-leave current chairman.  Yellen-led tapering will build her (and the new Fed’s) credibility and help correct perceptions that she is a super-dove.  The macro-economic impact of waiting a month or two before reducing asset purchases by $10 bln or $15 bln is minor at best.

 

More importantly, investors appear to be accepting the Fed’s argument in a way that it had not done so previously:  tapering is not tightening.  The US 2-year yield was above 50 bp in early September as many expected tapering.  It was more than halved and now is near 30 bp, despite ideas that tapering could be imminent.

 

The German 2-year yield fell to 5 bp in early November as many took seriously the possibility that the ECB could soon adopt a negative deposit rate.  As ECB officials played down the risk of deflation and the a negative deposit rate seemed remote, the German 2-year yield jumped and was near 25 bp before the weekend (settling near 22 bp).  This saw the 2-year interest rate spread, which the euro-dollar exchange rate is sensitive to, fall below 9 bp to stand near the lowest levels since last February.  

 

The 10-year interest rate differential between the US and Germany rose above 100 bp.  This is near the highest since before the crisis.  Yet, it offered the dollar little support.  The euro finished at its best level since the end of October and appears poised to re-challenge the $1.3830 2-year high set on October 25.

 

This analysis helps explain why the US dollar is not rallying on good economic news and why an uptick in retail sales, the economic highlight of the week, may not stop led the greenback much support.  Separately, the flow of funds report on Monday is likely to show a new record high household wealth; completely recouping the sharp drop triggered by the crisis.  Sharp gains in equity prices and more modest gain real estate have been experienced, but the holdings are highly concentrated.  

 

Europe reports industrial production figures.  A strong German report is possible, despite the weakness in orders data before the weekend.  Survey data suggests a re-acceleration of the German economy in Q4.  To be sure, it is not the poor growth prospects that incite the ECB to act, but the disinflationary forces, the increased volatility of short-term interest rates as excess liquidity evaporates, and small and medium sized businesses remain locked out from finance.  Separately,  the industrial dispute in a large refinery in Scotland warns of potential disappointment with the UK’s figures.    

 

Sweden reports November CPI figures and this is the last important report ahead of the Dec 17 Riksbank meeting.   Poor economic data has fanned speculation of a rate cut, though the market seems a bit divided, with some looking for the central bank to stand pat until early next year.  

The Swiss National Bank and the Reserve Bank of New Zealand meet this week.  Neither is likely to change policy.  The latter is expected to hike rates toward the end of Q1 14.  The former is likely to reaffirm its CHF1.20 floor for the euro and a 0-0.25% target for 3-month LIBOR. 

 

Japan is expected to report a current account surplus in October after a seasonally adjusted deficit in September early Monday in Tokyo.  It will also report revisions to Q3 GDP.  These revisions are likely to be to the downside and quarterly annualized growth is expected to slow to 1.6% from the initial estimate of 1.9%, and down from 3.8% in Q2.  More important will be the Oct machinery orders later in the week which will shed insight into capex in Q4.  

 

Australia reports Oct employment data in the middle of the week.  The consensus calls for a 10k increase after a 1.1k increase in September.  This understates the Sept weakness as nearly 28k full time positions were lost.   The Oct unemployment rate may tick up to 5.7% from 5.6%.  

 

China reports a host of data this week, including CPI early Monday, industrial production, new lending and retail sales.  Although there a number of factors behind the rise in Chinese bond yields, which as we noted, has become a more worrisome development for Chinese officials, can be largely accounted for by the rise in inflation.  The risk is for another rise to 3.3% from 3.2%, which would be the highest since April 2012.  

 

Over the weekend, China reported a much larger than expected trade surplus.  The $33.8 bln Nov surplus is the biggest since Jan 2009.  Exports jumped.  The 12.7% (year-over-year) increase was more than twice the rise reported in Oct.  Imports slumped.  The 5.3% increase is the smallest since June.  It compares with a 7.6% increase in Oct and consensus expectations for a 7% increase.  

 

The PBOC said recently that there was no longer a need to accumulate reserves.  Some observers took this to mean that it would no longer do so and that this was negative for US Treasuries.  We are less sanguine.  . The combination of the trade surplus coupled with severe limits on the yuan and capital flows means that it will still be accumulating reserves.  

 

Finally there were two other notable developments over the weekend.  First, after much consternation, a World Trade Agreement was struck.  Critics will complain that the agreement is not ideal, as if any agreement is.  On balance, officials will embrace it in anticipation of boosting world trade and won’t refrain from making the good an enemy of the perfect.   

 

Second South Korea h
as announced an expansion of its air defense identification zone, which will now overall China’s newly declared zone.  The immediate market impact may be minimal, but the escalation of tensions as the year winds down is troublesome.  The animosity between Japan and South Korea seems to be preventing a coordinated response. This absence works in China’s interest. 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/f-ivtulMjTU/story01.htm Marc To Market

Macro Myopia and Preview of the Week’s Highlights

The solid US jobs report that saw the world’s largest economy add a little more than 200k net new jobs and the unemployment rate fall three tenths of a percent to 7.0%, even with the participation rate ticking up got some chins wagging about that the Federal Reserve tapering at its next FOMC meeting on December 17-18.

 

Even the usually astute Financial Times jumped all over the story with its page three story “US jobs boost raises speculation on Fed taper”.  Not once in the article did the reporters note that US bond yields actually slipped after the jobs report or that the dollar fell.  The speculation that it refers to was not found in price, but in one economist it cited.

 

Those inclined to the Fed tapering in December seem myopic.  The employment was not the only economic report that was released before the weekend.  The US also reported that the Fed’s preferred measure of inflation, the deflator for core personal consumption expenditures, which slipped to 1.1%, the slowest pace in more than 2.5 years.  The FT thought this was worth a single paragraph it is report on the prospects of tapering.

 

The Financial Times did not see fit, though, to even recognize in passing,  the fiscal uncertainty that hangs over the market. Recall that the lack of fiscal clarity influenced the Fed’s decision not to taper in September. Although December 13 is a self-imposed deadline for an agreement, the heightened tensions, especially in the aftermath of the Senate Democrats parliamentary maneuver that allows the filibuster to over ridden on presidential appointments with a simple majority, and the usual brinkmanship tactics warns that a final deal may be elusive until closer to the next legislative deadline in mid-January.

 

Nor do most observers take seriously the institutional interests of the Federal Reserve.  We have argued that the seven person Board of Governors is going to see significant changes in the months ahead.  The Fed’s forward guidance that is to replace QE as the main policy tool will be more credible if issued by the next Fed chairman not the soon-to-leave current chairman.  Yellen-led tapering will build her (and the new Fed’s) credibility and help correct perceptions that she is a super-dove.  The macro-economic impact of waiting a month or two before reducing asset purchases by $10 bln or $15 bln is minor at best.

 

More importantly, investors appear to be accepting the Fed’s argument in a way that it had not done so previously:  tapering is not tightening.  The US 2-year yield was above 50 bp in early September as many expected tapering.  It was more than halved and now is near 30 bp, despite ideas that tapering could be imminent.

 

The German 2-year yield fell to 5 bp in early November as many took seriously the possibility that the ECB could soon adopt a negative deposit rate.  As ECB officials played down the risk of deflation and the a negative deposit rate seemed remote, the German 2-year yield jumped and was near 25 bp before the weekend (settling near 22 bp).  This saw the 2-year interest rate spread, which the euro-dollar exchange rate is sensitive to, fall below 9 bp to stand near the lowest levels since last February.  

 

The 10-year interest rate differential between the US and Germany rose above 100 bp.  This is near the highest since before the crisis.  Yet, it offered the dollar little support.  The euro finished at its best level since the end of October and appears poised to re-challenge the $1.3830 2-year high set on October 25.

 

This analysis helps explain why the US dollar is not rallying on good economic news and why an uptick in retail sales, the economic highlight of the week, may not stop led the greenback much support.  Separately, the flow of funds report on Monday is likely to show a new record high household wealth; completely recouping the sharp drop triggered by the crisis.  Sharp gains in equity prices and more modest gain real estate have been experienced, but the holdings are highly concentrated.  

 

Europe reports industrial production figures.  A strong German report is possible, despite the weakness in orders data before the weekend.  Survey data suggests a re-acceleration of the German economy in Q4.  To be sure, it is not the poor growth prospects that incite the ECB to act, but the disinflationary forces, the increased volatility of short-term interest rates as excess liquidity evaporates, and small and medium sized businesses remain locked out from finance.  Separately,  the industrial dispute in a large refinery in Scotland warns of potential disappointment with the UK’s figures.    

 

Sweden reports November CPI figures and this is the last important report ahead of the Dec 17 Riksbank meeting.   Poor economic data has fanned speculation of a rate cut, though the market seems a bit divided, with some looking for the central bank to stand pat until early next year.  

The Swiss National Bank and the Reserve Bank of New Zealand meet this week.  Neither is likely to change policy.  The latter is expected to hike rates toward the end of Q1 14.  The former is likely to reaffirm its CHF1.20 floor for the euro and a 0-0.25% target for 3-month LIBOR. 

 

Japan is expected to report a current account surplus in October after a seasonally adjusted deficit in September early Monday in Tokyo.  It will also report revisions to Q3 GDP.  These revisions are likely to be to the downside and quarterly annualized growth is expected to slow to 1.6% from the initial estimate of 1.9%, and down from 3.8% in Q2.  More important will be the Oct machinery orders later in the week which will shed insight into capex in Q4.  

 

Australia reports Oct employment data in the middle of the week.  The consensus calls for a 10k increase after a 1.1k increase in September.  This understates the Sept weakness as nearly 28k full time positions were lost.   The Oct unemployment rate may tick up to 5.7% from 5.6%.  

 

China reports a host of data this week, including CPI early Monday, industrial production, new lending and retail sales.  Although there a number of factors behind the rise in Chinese bond yields, which as we noted, has become a more worrisome development for Chinese officials, can be largely accounted for by the rise in inflation.  The risk is for another rise to 3.3% from 3.2%, which would be the highest since April 2012.  

 

Over the weekend, China reported a much larger than expected trade surplus.  The $33.8 bln Nov surplus is the biggest since Jan 2009.  Exports jumped.  The 12.7% (year-over-year) increase was more than twice the rise reported in Oct.  Imports slumped.  The 5.3% increase is the smallest since June.  It compares with a 7.6% increase in Oct and consensus expectations for a 7% increase.  

 

The PBOC said recently that there was no longer a need to accumulate reserves.  Some observers took this to mean that it would no longer do so and that this was negative for US Treasuries.  We are less sanguine.  . The combination of the trade surplus coupled with severe limits on the yuan and capital flows means that it will still be accumulating reserves.  

 

Finally there were two other notable developments over the weekend.  First, after much consternation, a World Trade Agreement was struck.  Critics will complain that the agreement is not ideal, as if any agreement is.  On balance, officials will embrace it in anticipation of boosting world trade and won’t refrain from making the good an enemy of the perfect.   

 

Second South Korea has announced an expansion of its air defense identification zone, which will now overall China’s newly declared zone.  The immediate market impact may be minimal, but the escalation of tensions as the year winds down is troublesome.  The animosity between Japan and South Korea seems to be preventing a coordinated response. This absence works in China’s interest. 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/f-ivtulMjTU/story01.htm Marc To Market

Japan Press: "China-Japan War To Break Out In January"

Following China’s unveiling of its air defense identification zone (ADIZ) in the East China Sea, overlapping a large expanse of territory also claimed by Japan, the Japanese media has, as The Japan Times reports, had a dramatically visceral reaction on the various scenarios of a shooting war. From Sunday Mainichi’s “Sino-Japanese war to break out in January,” to Flash’s “Simulated breakout of war over the Senkakus,” the nationalism (that Kyle Bass so notably commented on) is rising. Which side, wonders Shukan Gendai ominously, will respond to a provocation by pulling the trigger? The game of chicken between two great superpowers is about to begin.

Via The Japan Times,

Five out of nine weekly magazines that went on sale last Monday and Tuesday contained scenarios that raised the possibility of a shooting war.

 

 

First, let’s take Flash (Dec. 17), which ran a “Simulated breakout of war over the Senkakus,” with Mamoru Sato, a former Air Self-Defense Force general, providing editorial supervision. Flash’s scenario has the same tense tone as a Clancy novel, including dialog. On a day in August 2014, a radar operator instructs patrolling F-15J pilots to “scramble north” at an altitude of 65,000 feet to intercept a suspected intruder and proceeds from there.

 

Sunday Mainichi (Dec. 15) ran an article headlined “Sino-Japanese war to break out in January.” Political reporter Takao Toshikawa tells the magazine that the key to what happens next will depend on China’s economy.

 

“The economic situation in China is pretty rough right now, and from the start of next year it’s expected to worsen,” says Toshikawa. “The real-estate boom is headed for a total collapse and the economic disparities between the costal regions and the interior continue to widen. I see no signs that the party’s Central Committee is getting matters sorted out.”

 

An unnamed diplomatic source offered the prediction that the Chinese might very well set off an incident “accidentally on purpose”: “I worry about the possibility they might force down a civilian airliner and hold the passengers hostage,” he suggested.

 

In an article described as a “worst-case simulation,” author Osamu Eya expressed concerns in Shukan Asahi Geino (Dec. 12) that oil supertankers bound for Japan might be targeted.

 

“Japan depends on sea transport for oil and other material resources,” said Eya. “If China were to target them, nothing could be worse to contemplate.”

 

In an air battle over the Senkakus, the Geino article continues, superiority of radar communications would be a key factor in determining the outcome. Japanese forces have five fixed radar stations in Kyushu and four in Okinawa. China would certainly target these, which would mean surrounding communities would also be vulnerable.

 

One question that seems to be on almost everybody’s mind is, will the U.S. military become involved?

 

Shukan Gendai (Dec. 14) speculated that Chinese leader Xi Jinping might issue an order for a Japanese civilian airliner to be shot down. As a result of this, a U.S. Navy aircraft carrier would come to Japan’s aid and send up fighters to contend with the Chinese.

 

Unlike Japan, the U.S. military would immediately respond to a radar lock-on threat by shooting down the Chinese planes,” asserts military analyst Mitsuhiro Sera. “It would naturally regard an aircraft flying overhead as hostile. They would shoot at it even if that were to risk discrediting the Obama administration.”

 

“With the creation of Japan’s National Security Council on Dec. 4, Japan-U.S. solidarity meets a new era,” an unnamed diplomatic source told Shukan Gendai. “If a clash were to occur between the U.S. and China, it would be natural for the Self-Defense Forces to provide backup assistance. This was confirmed at the ‘two-plus-two’ meeting on Oct. 3.”

 

“China is bent on wresting the Senkakus away from Japan, and if Japan dispatches its Self-Defense Forces, China will respond with naval and air forces,” Saburo Takai predicts in Flash. “In the case of an incursion by irregular forces, that would make it more difficult for the U.S. to become involved. Japan’s Ministry of Foreign Affairs would protest through diplomatic channels, but China would attempt to present its takeover as a fait accompli.

 

“China fears a direct military confrontation with the U.S.,” Takai adds. “A few days ago, two U.S. B-52s transited the ADIZ claimed by China, but the flights were not for any vague purpose. I suppose the Chinese tracked the flights on their radar, but the B-52s have electronic detection functions that can identify radar frequencies, wavelength and source of the signals. These flights are able to lay bare China’s air defense systems. It really hits home to the Chinese that they can’t project their military power.”

 

Which side, wonders Shukan Gendai, will respond to a provocation by pulling the trigger? The game of chicken between two great superpowers is about to begin.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/NAmz3NEOvTs/story01.htm Tyler Durden

Japan Press: “China-Japan War To Break Out In January”

Following China’s unveiling of its air defense identification zone (ADIZ) in the East China Sea, overlapping a large expanse of territory also claimed by Japan, the Japanese media has, as The Japan Times reports, had a dramatically visceral reaction on the various scenarios of a shooting war. From Sunday Mainichi’s “Sino-Japanese war to break out in January,” to Flash’s “Simulated breakout of war over the Senkakus,” the nationalism (that Kyle Bass so notably commented on) is rising. Which side, wonders Shukan Gendai ominously, will respond to a provocation by pulling the trigger? The game of chicken between two great superpowers is about to begin.

Via The Japan Times,

Five out of nine weekly magazines that went on sale last Monday and Tuesday contained scenarios that raised the possibility of a shooting war.

 

 

First, let’s take Flash (Dec. 17), which ran a “Simulated breakout of war over the Senkakus,” with Mamoru Sato, a former Air Self-Defense Force general, providing editorial supervision. Flash’s scenario has the same tense tone as a Clancy novel, including dialog. On a day in August 2014, a radar operator instructs patrolling F-15J pilots to “scramble north” at an altitude of 65,000 feet to intercept a suspected intruder and proceeds from there.

 

Sunday Mainichi (Dec. 15) ran an article headlined “Sino-Japanese war to break out in January.” Political reporter Takao Toshikawa tells the magazine that the key to what happens next will depend on China’s economy.

 

“The economic situation in China is pretty rough right now, and from the start of next year it’s expected to worsen,” says Toshikawa. “The real-estate boom is headed for a total collapse and the economic disparities between the costal regions and the interior continue to widen. I see no signs that the party’s Central Committee is getting matters sorted out.”

 

An unnamed diplomatic source offered the prediction that the Chinese might very well set off an incident “accidentally on purpose”: “I worry about the possibility they might force down a civilian airliner and hold the passengers hostage,” he suggested.

 

In an article described as a “worst-case simulation,” author Osamu Eya expressed concerns in Shukan Asahi Geino (Dec. 12) that oil supertankers bound for Japan might be targeted.

 

“Japan depends on sea transport for oil and other material resources,” said Eya. “If China were to target them, nothing could be worse to contemplate.”

 

In an air battle over the Senkakus, the Geino article continues, superiority of radar communications would be a key factor in determining the outcome. Japanese forces have five fixed radar stations in Kyushu and four in Okinawa. China would certainly target these, which would mean surrounding communities would also be vulnerable.

 

One question that seems to be on almost everybody’s mind is, will the U.S. military become involved?

 

Shukan Gendai (Dec. 14) speculated that Chinese leader Xi Jinping might issue an order for a Japanese civilian airliner to be shot down. As a result of this, a U.S. Navy aircraft carrier would come to Japan’s aid and send up fighters to contend with the Chinese.

 

Unlike Japan, the U.S. military would immediately respond to a radar lock-on threat by shooting down the Chinese planes,” asserts military analyst Mitsuhiro Sera. “It would naturally regard an aircraft flying overhead as hostile. They would shoot at it even if that were to risk discrediting the Obama administration.”

 

“With the creation of Japan’s National Security Council on Dec. 4, Japan-U.S. solidarity meets a new era,” an unnamed diplomatic source told Shukan Gendai. “If a clash were to occur between the U.S. and China, it would be natural for the Self-Defense Forces to provide backup assistance. This was confirmed at the ‘two-plus-two’ meeting on Oct. 3.”

 

“China is bent on wresting the Senkakus away from Japan, and if Japan dispatches its Self-Defense Forces, China will respond with naval and air forces,” Saburo Takai predicts in Flash. “In the case of an incursion by irregular forces, that would make it more difficult for the U.S. to become involved. Japan’s Ministry of Foreign Affairs would protest through diplomatic channels, but China would attempt to present its takeover as a fait accompli.

 

“China fears a direct military confrontation with the U.S.,” Takai adds. “A few days ago, two U.S. B-52s transited the ADIZ claimed by China, but the flights were not for any vague purpose. I suppose the Chinese tracked the flights on their radar, but the B-52s have electronic detection functions that can identify radar frequencies, wavelength and source of the signals. These flights are able to lay bare China’s air defense systems. It really hits home to the Chinese that they can’t project their military power.”

 

Which side, wonders Shukan Gendai, will respond to a provocation by pulling the trigger? The game of chicken between two great superpowers is about to begin.


    



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The 1% Also Don't Pay Their Bills: 10 Ultra Luxury Properties In Foreclosure

As we reported yesterday, something odd is happening in the US, which supposedly is deep in a “housing market and economic recovery” – foreclosures on ultraluxury homes, those worth $5 million and over, have soared by 61% in 2013 (even as overall foreclosures continue to decline due to the well-known and much discussed “foreclosure stuffing” process, which means millions of properties are held in bank shadow inventory just waiting for the moment to be unleashed and end the implicitly home price subsidy abused by banks for the past three years). Granted, the overall sample is relatively small, with fewer than 200 properties in the ultraluxury category compared to 1.2 million for all properties tracked, but as RealtyTrac notes, “each of these high-value properties represents a much bigger potential loss for the foreclosing lender compared to a median priced property.”

Additional thoughts from RealtyTrac:

This trend may indicate lenders are now financially stable enough to more comfortably weather the big-ticket losses that these properties potentially represent. In addition, an improving housing market means more prospective buyers, even for these ultra high-end homes. A bigger buyer pool translates into higher sales prices on these properties, allowing lenders to recoup more of their losses on these jumbo loans gone bad.

 

“A home selling for $5 million or above represents the ultra-luxury end of the market, and so far in 2013 we’ve had 34 properties close over that price with the average sale being $7.7 million,” said Emmett Laffey, CEO of Laffey Fine Home International, covering the five boroughs of New York.  “Any foreclosure properties in this type of ultra-luxury market usually get purchased very quickly since there is one thing all super rich buyers want – an outstanding deal on a real estate transaction, and in most cases foreclosures of this magnitude come with several million more dollars of built-in value.”

Regardless of the arbitrage opportunities available to “all cash” buyers, who would be happy to park some cash in real estate, the fact that ultraluxury foreclosures are soaring also means that even the “1%” is starting to succumb to reality and beginning to feel the pressure of a financial reality in which only the “too biggest” can never fail.

So what are the properties in question? The photo gallery below, courtesy of RealtyTrac, shows just where any given $5 million + property stopped making its mortgage payments.

MONTAGE, IRVINE, CA 92614

This home nestled on a bluff overlooking the ocean was listed for sale at $15.9 million but the foreclosure judgment amount at the foreclosure auction scheduled in November was $12.8 million.

PACIFIC COAST HWY, MALIBU, CA 90265

This foreclosure auction property is located right on the water on Pacific Coast Highway in Malibu. It features two detached units and was listed for $9.5 million, but the opening bid at the foreclosure auction in November was $8.8 million.

CUESTA LINDA, PACIFIC PALISADES, CA 90272

Built in 1990, this 5 bed, 6 bath estate was scheduled for foreclosure auction in November with an opening bid of $4.1 million, although the assessed value of the property is $5.5 million.

 

KIMRIDGE RD, BEVERLY HILLS, CA 90210

This beautifully remodeled 5 bed, 7 bath estate was scheduled for foreclosure auction in October with a foreclosure judgment amount of $7.5 million. The grounds feature panoramic views of the ocean, a putting green, and stunning pool area.

 

COLONY VIEW CIR, MALIBU, CA 90265

A beach lover’s dream! This pre-foreclosed, 5 bed, 5.5 bath single-family residence was custom built in 2001. A Notice of Default was filed in October with a default amount of $200,000, meaning the owner was behind that amount on mortgage payments.

 

BUSCH DR, MALIBU, CA 90265

This pre-foreclosed French Country hillside residence features 6 beds, 7 baths and sits on 8 acres.A Notice of Default was filed on this property in June, and at that time the homeowner was an estimated $125,000 behind on mortgage payments.

 

S OCEAN BLVD, DELRAY BEACH, FL 33483

Listed for sale at $13.5 million, this exquisite single-family residence in Florida is in the first stage of foreclosure. A dramatic and elegant floor plan makes this 6 bed, 9.5 bath home perfect for entertaining. The initial foreclosure notice was filed in July.

 

SANCTUARY DR, BOCA RATON, FL 33431

Beautiful single-family “sanctuary” in pre-foreclosure. It features 5 beds, 10 baths and has a fantastic pool and patio area with tranquil views. The pre-foreclosure notice was filed in September with an estimated total outstanding loan balance of $8.1 million.

 

SEA RIDGE DR, LA JOLLA, CA 92037

This 5 bed, 4.5 bath fully-furnished home was scheduled for foreclosure auction in November with an estimated total outstanding loan balance of $5.5 million. It features remarkable panoramic views and is located near many of La Jolla’s unique shops.

 

ARROWWOOD CIR, HOUSTON, TX 77063

This bank-owned property was repossessed by the bank via foreclosure back in April 2013 for an estimated $6.3 million. It features 8 bedrooms, 13 baths and is situated on over 23,000 sq/ft.


    



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