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Monthly Archives: May 2014

On the Matter of Transparency and True Journalism

“Despite the current administration’s track record on transparency (completely lousy from nearly every angle), there’s little being done by the majority of the press to work around the roadblocks being set up by the government. While the administration has offered a few half-measures aimed at reining in the NSA in the wake of the leaks, the ODNI (Office of the Director of National Intelligence) has gone the other way, forbidding employees from speaking to the media about even unclassified information.

The media claims to be more interested in exposing government wrongdoing than ever before, but it is less willing to get its hands dirty doing it, according to a study by the Indiana University of Journalism.

One of the most surprising developments over that period over the past ten years, is the steep decline in the percentage of journalists who say that using confidential documents without permission “may be justified.” That number has plummeted from about 78 percent in 2002 to just 58 percent in 2013. In 1992, it was over 80 percent.

That’s even more notable given that the survey took place from August to December of last year, not long after Edward Snowden became a household name for stealing classified documents that revealed the extent of NSA surveillance. The journalists who worked with him to share that information with the public won the Pulitzer Prize last month.

There are several theories as to the drop in the number of journalists willing to publish leaks or push reluctant individuals for information. Some of that is the political climate. The report notes that journalists identify themselves as Democrats at a rate of 4-to-1 over Republicans, so there may be some deferral to the “home team” administration. Backing this theory up is the fact that the highest numbers listed here were recorded during the two Bush presidencies.

Then there’s the general chill against whistleblowing, one that has never been colder than it is right now. It’s been well documented that the Obama administration has prosecuted more than twice as many whistleblowers than all other administrations combined. Post-Wikileaks and post-Manning, there aren’t too many journalism outlets willing to sacrifice freedom for a story.

Other, more questionable methods (hidden mics, confidential informants, buying documents), are on the decline as well. Again, the administration’s aggressive push to snuff out leaks is partly to blame, as well as the legal ramifications of questionable tactics deployed by UK tabloids, which have raised the ire of both that nation’s politicians as well as the targets of these “investigative” efforts. Better safe than jailed/fined/sued, it would appear.

But there’s another downside to this, one that plays right into the hands of the self-declared “most transparent administration,” as Kevin Gostola at Firedoglake points out.

The Associated Press found, when conducting its annual review of responses to Freedom of Information Act requests, that the “government more than ever censored materials it turned over or fully denied access to them, in 244,675 cases or 36 percent of all requests. On 196,034 other occasions, the government said it couldn’t find records, a person refused to pay for copies or the government determined the request to be unreasonable or improper.” The media organization concluded the “government’s efforts to be more open about its activities last year were their worst since President Barack Obama took office.”

First, you seal off the documents. Then, you start threatening the access. Faced with this, it appears many journalistic entities have decided to defer to authority and simply publish unquestioned statements from officials unwilling to back up their words with a name…..”

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EU Court: $GOOG Must Remove Certain Links on Request

“BRUSSELS—Individuals can ask Google Inc. GOOGL +2.24% to remove links to news articles, court judgments and other documents in search results for their name, the European Union’s highest court said Tuesday—a surprise decision that could significantly disrupt how Google and other search-engine operators work across Europe.

The case centered on the so-called right to be forgotten, which plaintiffs argued before the court gives individuals the opportunity to request old information about them be removed from search engines. The ruling means that individuals can request operators remove links that come up during searches. It doesn’t mean that the original article or website has to be removed or altered—it would only affect search results.

The ruling contradicts the position of the European Union’s advocate general, who offered an opinion last year saying operators were under no obligation to honor such requests. Google called the ruling disappointing but said it needed time to analyze the implications. Other search engine operators, like Yahoo Inc. YHOO +2.04% and Microsoft Corp., which operates the search platform Bing, would also be affected by the ruling. No one at Yahoo was immediately available to comment while Microsoft declined to comment.

The decision “makes grim reading for Google and will delight privacy advocates in the EU,” said Richard Cumbley, information-management and data-protection partner at U.K. law firm Linklaters.

The European Court of Justice said Tuesday that search companies are responsible for personal data that shows up on Web pages they link to in search results…..”

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How to Use Choppy Markets in Your Favor

“Back in the late 1990s, my wife was expecting our second daughter and we were really anxious to buy a home.

But the real estate market was soaring … prices were insane.

I can’t tell you how many times we lost out on a house we really liked because some other buyer was willing to pay 25% or more above the asking price – or was an “all-cash” buyer.

I never play that game – and never pay more than list.

Although real estate agents urged me to “look at the market” and “play the game” to get into a house, I refused. Overpaying, I knew, might work in the moment. But when the market got back to normal, I’d be left owning a house that was worth less than I paid for it.

You just can’t make money that way.

As it turns out, we ended up buying a great house for thousands under the asking price. Not only that, but the agents cut their commissions to make the deal and actually paid us cash to move in.

I’m telling you this tale for a reason.

My story underscores the importance of managing risk in a turbulent market.

And what’s true of real estate is just as true for stocks, including tech stocks. At their core, houses and tech stocks are both financial assets. Managed recklessly, they can drive you into the poor house.

But managed skillfully, they can make you rich.

During my 30 years as an investor, I’ve developed five tools for turbulent markets. Through the years, they’ve always turned the table to my advantage.

And today I want to share them with you.

With the Nasdaq Composite Index – and tech stocks in general – going through a turbulent stretch of their own, these five rules will help keep you from making mistakes.

My five rules will help you navigate the choppy markets we’re seeing right now. And, in the long run, they will help make you wealthy.

Choppy Market Tool No. 1: Make Lowball Offers

I understand why many investors are confused these days. After all, the markets are all over the place.

But don’t worry: These rules are a set of tools that, used correctly, will put your mind at ease in any kind of market. And, in the long run, they’ll help get you to the “Winner’s Circle” so you can profit.

By making crazy low offers in a torrid real estate market, I bought a home with built-in profits. It’s a time-honored investment principle: Make your money when you buy, not when you sell.

With stocks, it’s easy to make lowball orders. These are called “limit” orders, meaning you only buy when the stock hits your chosen personal target price.

Let’s say momentum investors have piled into XYZ Software Corp., causing it to double in a short amount of time. Now, it’s sold off a bit, and is locked in a directionless, “sideways” market.

You want to buy the stock for the long haul: It has great financials, strong management, excellent products, and a strategically sound position in a growing market.

Suppose XYZ had a recent high of $100 and then dropped to $75. A lowball limit order of, say, $60 (a 20% discount) will protect your risk of losses and greatly boost your long-term gains.

Remember to stay focused and disciplined. If your research has yielded a price that makes sense, stick to it. You can set it up so the lowball limit order automatically expires in 60 days, which is called “good till canceled.”

If the order doesn’t fill, don’t worry about it. You’ll have plenty more opportunities in the future.

Choppy Market Tool No. 2: Buy “Test Shares”

Buying test shares is a powerful way to turn the investing odds in your favor. And it works in any kind of market…..”

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Hollywood’s Beef with the TPP

” “Hollywood Boycott Threatens Trans-Pacific Partnerhsip”

That’s the headline of an article published by the Huffington Post on May 6 reporting on the opposition of many in the entertainment industry to the inclusion of Brunei in the Trans-Pacific Partnership (TPP).

A coterie of celebrities is irked by the fact that the would-be TPP participant has adopted “a brutal penal code based on Sharia law with punishments including flogging, dismemberment and death by stoning for crimes such as adultery and sodomy.”

While Hollywood might be bringing attention to the TPP because of Brunei’s laws, their colleagues in the television news aren’t being quite so vocal.

A survey of television news coverage of the TPP by the liberal group MediaMatters found that a:

transcript search of CBS Evening News with Scott Pelly, ABC’s World News with Diane Sawyer, and NBC Nightly News with Brian Williams from August 1, 2013 through January 31, 2014 found no mention of the Trans-Pacific Partnership. The TPP received one mention on PBS’ Newshour, when Doug Paal of the Carnegie Endowment for International Peace argued that approving the TPP would improve relations with Asian nations.

The 24-hour cable news channels have been almost as silent. The report indicates that “the three largest cable networks — CNN, MSNBC, Fox News — covered the ongoing negotiations 33 times during their evening programming. The overwhelming majority of these mentions (32) originated on MSNBC and aired during The Ed Show.”

It is a bit disingenuous for these progressives who claim to be so open-minded and accepting of all lifestyles, to deny to others the right to live their life the way their consciences dictate.

That isn’t to say that Sharia Law, particularly some of the aspects singled out by the protestors, isn’t reprehensible, it’s just that it seems so incongruous for the enmity to come from those who insist their all-inclusive attitude is evidence of their evolved sensibilities.

The truth behind the naked emperor is that it’s Islam’s prohibitions on homosexuality that underlies the TPP protest. Consider this evidence from the Huffington Post story:

Ellen DeGenneres, Jay Leno and other Hollywood celebrities have joined the Human Rights Campaign, the Feminist Majority Foundation and the city of Beverly Hills in blasting Brunei and calling for a boycott of properties owned by the government of Brunei, including the Beverly Hills Hotel. Virgin Airlines founder Richard Branson announced his companies will boycott all hotels owned by Brunei worldwide. These government-owned investments provide financial support to the medieval brutality in Brunei.

The radical “gay” lobby and the headline-grabbing glitterati that carries its water has little concern for the destruction of sovereignty, the surrender of legislative power to an extraconstitutional committee, and the subordination of the U.S. Constitution to international integration pacts masquerading as trade agreements. The TPP doesn’t appear on the radar of these groups when it infringes upon fundamental freedoms guaranteed by the Constitution, but it is “deplorable” when it infringes on the “rights” of homosexual to commit acts regarded as sinful to most of the world’s religions.

Here again, the source of the celebrities’ anger as reported by Huffington Post:

While human rights groups, religious freedom advocates, LGBT and women’s rights groups protest a regime that supports the public flogging of women who have abortions, the jailing of women who become pregnant outside of marriage, the stoning to death of gay men and lesbians and the outlawing of Bibles and Christian missionaries, the Obama administration seems to be seeking deeper ties with the Islamic Sultanate of Brunei.

The real problem with the TPP is much more malign, however.

Secret Surrender of Sovereignty….”

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8 Reasons Why Stocks Are Bubbling

“Edward Chancellor, a strategist at money-management firm GMO, believes U.S. stock prices are at bubble levels because “most of the conditions under which earlier bubbles have appeared are present in the U.S. markets today.” He lists eight such conditions, and warns that “this all bodes ill for long-term investors in U.S. stocks.”

The first three are “irrational exuberance, Ponzi finance and overblown growth stories,” he says in GMO’s quarterly letter to investors.

If you want an example of irrational exuberance, take a look at the initial public offering (IPO) market, Chancellor writes. “The IPO market in 2013 and into the first quarter of 2014 has become particularly speculative.” IPOs soared 20 percent on average in their first day of trading last year, he says.

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

When it comes to Ponzi finance, “manic markets are often marked by a decline in credit standards,” Chancellor writes. “We have recently witnessed the lowest yields for junk bonds in history. The quality of debt issuance has been deteriorating.”

On the subject of overblown growth stories, investors have snapped up many of the market’s hottest growth stocks for reasons as flimsy as those used to justify buying of Internet stocks in the late 1990s, Chancellor says. Those hot stocks include shares in the social networking, biotechnology and Internet sectors.

Chancellor’s other five reasons why stocks are in a bubble include:

• “This-time-is-different mentality.” Bubbles often arise as investors reason that history no longer is relevant in predicting the future, Chancellor says. “Most commentary assumes that U.S. profits have reached, in Irving Fisher’s immortal phrase, a ‘permanently high plateau.'” Good luck on that, Chancellor writes.

• “Moral hazard.” When market participants believe the government will bail them out of financial problems, bubbles expand, he says. “Whenever a cloud appears over Wall Street, market participants have come to expect more quantitative easing and guarantees of perpetually low interest rates.”

• “Easy money.” Low interest rates go along with bubbles….”

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El-Erian: Expect a Rocky Ride in Financial Markets

“By Mohamed A. El-Erian

U.S. financial markets have been in a familiar pattern, with stock indexes fluctuating to new highs while yields on 10-year Treasury bonds remain largely range-bound. Yet close observers should note some nuances that are likely to become more important in the weeks and months ahead.

As in previous weeks, two sets of corporate announcements supported stocks last week: earnings that tended to exceed (lowered) consensus expectations and new merger-and-acquisition deals. Central banks also helped meaningfully as both Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi reiterated their commitments to bolster economic growth while limiting the risk of damaging deflation. Draghi went even further, signaling that the ECB could boost its stimulus efforts next month.

Yet all was not smooth, contributing to quite a bit of intraweek volatility. Chinese and European data suggested that the global recovery is not as robust as many had hoped. Optimism about the impact of a perceived softening in Russian President Vladimir Putin’s position on Ukraine was dashed by disturbing on-the-ground realities. And investors showed little tolerance for any bad news from stocks with markedly high valuations.

Don’t expect this market tug of war to subside easily in coming weeks. Over the next few days, new data on U.S. retail sales, housing, inflation and industrial production will provide a fuller picture of the strength of the economic rebound from a weather-depressed first quarter, but they will not tip the balance decisively one way or another. That said, savvy investors will be keeping a close eye on two evolving trends that could well become more significant drivers of market behavior going forward.

First, the Fed is in the midst of a transition…”

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Bob Janjuah: S&P 1950, Followed by 1700

“Nomura’s Bob Janjuah has released an update on his market take.

Time has come to update my views. I have not written since late January as markets and economies have by and large moved as we expected back then. That late January note – which set out in detail my market views into April/May – is reproduced in its entirety below, and below each main bullet point I set out (in bold font) my latest views:

Bob’s World: Is it bear ‘clock now?

(original release date 27 January 2014)

It’s funny how – after not writing for over two months – I put a note out last week (highlighting some key levels) and within hours of publishing we have gone on to test and break some of these key levels. So in the spirit of the ongoing narrative:

1 – I remain firmly and resolutely structurally BEARISH the post-2008/09 QE-driven rally in risk assets. So no change there. As the year unfolds in both EM and DM we will, I think, see that most major and relevant data (economic) and earnings trends will be weak or deflationary. QE has so far failed to create the broad-based real economy inflation in incomes, earnings and productivity needed to get growth going again and thus has largely failed to achieve its primary objective, which was to drive the muchneeded post-2008/09 debt deleveraging – heavy indebtedness, now also including the EM bloc, still dominates.

May 2014 Update: The global data and earnings flow since January has supported my views outlined above, and over the belly (middle two calendar quarters) of 2014 I continue to expect downward growth and earnings revisions, with global deflation being the key macro theme. In particular, the risk of STRONG headline inflation, specifically in food prices driven by the Ukraine situation and by El Nino, and at the same time weak and weakening core inflation driven by weak income growth and soft discretionary consumption, will present a major (net) deflationary growth challenge to policymakers and markets.

2 – QE has been a friend for the paper wealth of the top 1%, at the expense of the many, through boosting speculation and financial engineering. But QE stopped being a friend of commodities in 2010/11, it stopped being a positive for EM around late 2012/13, has I think stopped being a positive for housing assets from around mid-2013/early 2014, and in 2014/15 the “last man standing” in the QE fan club – equities – will also fall out of love with QE. Why? Because as 2014 unwinds the data will, I think, expose policymakers as falling far behind the curve, persisting with a policy tool, whose “success” is increasingly narrowly based and which is failing to deliver broad-based inflation, growth or any other meaningful positives to the real economy, whose incomes, earnings and cashflows must ultimately validate all financial market asset valuations. I think later in 2014 the themes of deflation and recession will dominate, and in the middle of this it will I think be difficult to watch Fed Chair Janet Yellen and other policymakers flip flop and attempt to extract themselves from their policies.

May 2014 Update: No change of view – see update above. The waning of US housing data and the lack of growth in leverage by the US real economy (the private sector) over the past three to four months IMHO strongly support the views outlined above. And, it is now a consensus opinion, among many investors that I talk to, that we are dependent on policymakers and their willingness to persist with a set of policies that have largely failed real economies, but which have led to what many now increasingly see as speculative financial asset ‘bubbles’ in which the global top 1% has been the winner, largely at the expense of the other 99%. Civil society is the big loser. And while the top 1% may live comfortably in ‘gated communities’ and alike, this misses the bigger picture – the recent EM civil unrest shows clearly what can happen when wealth disparity gets too large (and which needs to be addressed sooner rather than later). The claimed ‘wealth’  effect and the trickle-down theory of economics are increasingly disputed and real redistribution policies are inevitable.

3 – We think that weak Chinese data explain last week’s price action….”

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U.S. Futures Rally Full Retard on M&A Activity

“(Reuters) – U.S. stock index futures pointed to a higher open on Monday, putting the S&P 500 within striking distance of record levels, though geopolitical concerns in the Ukrainecould cap gains.

In Ukraine, pro-Russian rebels voted in favor of self-rule in eastern regions of the country in a referendum dismissed by Kiev and Western governments as illegal. Separately, the European Union is set to step up pressure on Russia by taking steps to extend sanctions to companies, as well as individuals.

In the latest deal news, Hillshire Brands Co (HSH.N) agreed to buy Pinnacle Foods Inc (PF.N) for about $6.6 billion. Pinnacle jumped 20.5 percent to $36.70 in premarket trading while Hillshire was up 3 percent at $38.05.

The board of Allergan (AGN.N) rejected an unsolicited proposal from Valeant (VRX.TO), saying it significantly undervalued the company.

Separately, the head of research at Pfizer Inc (PFE.N) pressed the case for the company’s plan to buy AstraZeneca (AZN.L) for $106 billion, saying a deal wouldn’t disrupt drug research. U.S. shares of Astra (AZN.N) rose 1.1 percent to $78.11 before the bell while Dowcomponent Pfizer was up 0.6 percent at $29.20.

Virginia Rometty, chief executive of IBM Corp (IBM.N), told the New York Times the company was facing a “rocky time” but has a clear vision on how to pursue another generation of growth….”

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Documentary: The Collective Evolution 3

Cheers on your weekend!

[youtube://http://www.youtube.com/watch?v=fAE6zX5wlt4 450 300]



[youtube://http://www.youtube.com/watch?v=CLEtGRUrtJo 450 300]

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The Almighty Greenback Hits Six Month Lows, Analysts Left Scratching Their Heads

Most currency experts predicted that the dollar would rebound this year amid rising U.S. economic growth and interest rates.

But it hasn’t quite worked out that way. U.S. GDP growth shrank to a paltry 0.1 percent in the first quarter, and the 10-year Treasury yield has slid to 2.59 percent from 3.04 percent Dec. 31.

Meanwhile, the Dollar Index, which measures the greenback against six major currencies, has dipped 2.5 percent since Feb. 1, falling to a six-month low.

The Federal Reserve’s tapering of quantitative easing (QE) was supposed to lift both interest rates and the dollar….”

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Yellen: Fed Balance Sheet Could Be Swollen for Another 5-8 Years

“The U.S. Federal Reserve is in no rush to decide the appropriate size of its balance sheet, but if it ultimately shrinks it to a pre-crisis size, the process could take the better part of a decade, Fed Chair Janet Yellen said on Thursday.

Yellen, in testimony to a Senate panel, said no decision had yet been made on the central bank’s portfolio of assets, which has swollen to $4.5 trillion from about $800 billion in 2007.

Three rounds of asset purchases meant to stimulate the economy in the wake of the 2007-2009 financial crisis have boosted the balance sheet to this record level. Unsatisfied with the U.S. recovery, the Fed is still adding $45 billion in bonds each month, though the purchases should end later this year.

Yellen said the portfolio should start to shrink once the Fed decides to raise near-zero interest rates.

“We’ve not decided, and we’ll probably wait until we’re in the process of normalizing policy to decide, just what our long-run balance sheet will be,” she told lawmakers, adding it will be “substantially lower” than it is now.

While the central bank could sell the mortgage-based bonds it has accumulated, in the past it has telegraphed that it would more likely simply stop re-investing funds from expired assets and then, over years, let the assets run off the balance sheet naturally.

“If we do that and nothing more, it would probably take somewhere in the neighborhood of five to eight years to get it back to pre-crisis levels,” Yellen said of halting reinvestments.

It was the Fed’s most explicit time frame yet for the delicate task of shrinking its balance sheet to a more normal level. The massive portfolio has sparked worries that, once the Fed starts to raise rates, inflation will shoot up. The Fed could also absorb losses if it decides to sell assets in the years ahead, a potential political headache for Yellen.

The five-to-eight-year timeline generally aligns with estimates of both private economists and a paper published last year by top Fed economists. A paper by JPMorgan economists predicts shrinking the Fed’s portfolio would take seven years.


Yellen, in her second day of testimony before lawmakers, again stressed that low inflation drags on economic growth. But she rejected the idea, floated by some private economists, of trying to boost inflation above the Fed’s 2-percent target to ratchet down unemployment, saying it was critical to keep inflation expectations firmly anchored…..”

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The Next Episode

The story

[youtube://http://www.youtube.com/watch?v=3ZbDYAQx3cA 450 300] [youtube://http://www.youtube.com/watch?v=w3YhsGfqI2U 450 300] [youtube://http://www.youtube.com/watch?v=hOmE6-LU4Hk 450 300]



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Videos and Photos of the Odessan Massacre, and Why It Was Done

“For the first time in history, an organized massacre of civilians has been filmed by many people from many different angles and perspectives while it was happening, and is documented in extraordinary detail in “real time,” the perpetrators having no fear of any negative consequences from their endeavor, and even cheering and celebrating the tortures and deaths as they were being imposed upon the helpless victims. The perpetrators were unconcerned, because what they were doing was what the government (which the U.S. had imposed upon their country and which U.S. taxpayers had spent more than 5 billion dollars to bring about there) had wanted them to do, and had helped to organize them to carry out. These people were just having fun, like a party to them, nothing really serious at all. Sort of like Stanley Kubrick’s movie A Clockwork Orange, more than, say Auschwitz (such a bore!). But, if so, a hundredfold more. And none of these people (tragically including the victims) were actors!

Background: On May 2nd, the Ukrainian Government in Kiev, located in the west, ordered local governments in the country’s east to take over the buildings that were being occupied by Russian-speaking Ukrainians who didn’t recognize the legitimacy of that newly installed and U.S.-supported Ukrainian government. There was violence in many cities, one being Odessa, where Russian-speaking Ukrainians were taken into the Trade Unions Building (viewed as leftist by the conservative political parties) and were massacred by burning, gunshots, and other means….”

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Us and Them

[youtube://http://www.youtube.com/watch?v=hsh-NcZyuiI 450 300]


[youtube://http://www.youtube.com/watch?v=iSOzE1DUwK8 450 300]

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The IMF Gifts Ukraine With Bailout Monies Denominated in SDRs

“While much of the world was distracted by the supposed clash over Ukraine between Russian strongman Vladimir Putin and Western politicians, the International Monetary Fund announced a bailout of the new Ukrainian regime denominated in the IMF’s increasingly influential proto-global currency known as Special Drawing Rights, or SDRs. Analysts are warning that the developments could have profound implications for the global monetary system and the economy — and especially for the United States, which is stealthily being set up for economic calamity as the U.S. dollar continues on the road to losing its prized status as the world reserve currency.

The controversial planetary entity and its Western apparatchiks, along with various communist and socialist dictatorships and the United Nations, have long been agitating to ultimately dethrone the embattled U.S. dollar. Top-level American officials at the U.S. Treasury and the Federal Reserve have been helping them along. The dollar’s place as the global reserve currency would be filled by the IMF’s SDR, currently composed of a basket of currencies that includes dollars, British pounds, euros, and Japanese yen. The IMF, the UN, and multiple national governments have all openly advocated precisely such a plot in reports and statements made in recent years. The Obama administration, meanwhile, has exploited the Ukraine crisis to further empower the IMF while reducing U.S. influence.

In bailing out the new Ukrainian government, the IMF announcement of its decision — taken with approval from Russian authorities despite the alleged East-West brouhaha — referred to SDRs on multiple occasions. The press release noted that the IMF board had agreed to a two-year “Stand-By Arrangement” that “amounts to SDR 10.976 billion (about US$17.01 billion, 800 percent of quota).” The approval under the Fund’s “exceptional access policy,” the statement said, “enables the immediate disbursement of SDR 2.058 billion (about US$3.19 billion), with SDR 1.29 billion (about US$2 billion) being allocated to budget support.”

It is not the first time the IMF has relied on SDRs, which were originally created in 1969, for bailing out governments that agree to its demands. Iceland, for example, was also bailed out by the IMF amid the financial crisis with loans denominated in SDRs, which the Fund uses as its “unit of account.” However, the move in Ukraine has attracted the attention of prominent analysts including currency expert and best-selling author Jim Rickards, as well as Robert Wenzel, editor of the Economic Policy Journal. “The U.S. has never really stopped promoting SDRs as a global currency,” Wenzel noted. “Now Ukraine is being bailed out with this global government souped up money.”

In an e-mail to The New American, Wenzel noted that during the recent financial crisis, IMF allocations of SDRs occurred in 2009 and 2011 to various countries. “But what is noteworthy about those distributions is that China voiced its displeasure at the measures,” he said, citing comments made by the chairman of the People’s Bank of China, Zhou Xiaochuan. “It highlights the legitimate concern of the Chinese that the U.S., because of its major influence at the IMF, is trying to promote the SDR as an alternative to the dollar.”

“The payment to Ukraine in SDRs should be viewed as another move in this direction,” Wenzel added. “It signals fear on the part of U.S. government officials that the dollar is slowly losing its luster as a reserve currency. U.S. officials are trying to nudge the SDR as the alternative to the dollar because they will still maintain significant influence with regard to the SDR, as opposed to some other currency taking hold in parts of the world as a reserve currency (the [Chinese] renminbi?) or gold returning as an important reserve. China and Russia are both presently accumulating gold.”

Other analysts have also pointed to the latest IMF move as significant. Writing in Personal Liberty Digest, Alternative Market Project founder Brandon Smith suggested that the supposed bickering between East and West is largely theater for public consumption. Noting that like the U.S. government, Russian authorities are also dominated by global banks, Smith said that what is happening with the Ukraine bailout is part of the quiet but open move toward replacing the U.S. dollar with a global fiat currency such as the SDR.

“The SDR will not immediately be issued as a commonly traded currency itself,” he said. “Rather, the IMF will take over management of included currencies and denominate those currencies using SDR valuations. For example, $1 U.S. is worth only .64 SDR today. In the near future, I expect that the dollar will plummet in relation to the SDR’s value. We will still have our greenbacks when the IMF begins administrating our currency system, but the international and domestic worth of those greenbacks will fall to pennies. In turn, other currencies with stronger economic positions will rise in worth relative to the SDR.”

Indeed, since the financial crisis began, the SDR, described by the IMF as an “international reserve asset,” has taken on a far greater role in the global economic system….”

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Jeremy Siegel: DOW to Hit 18K So Long as Rates Stay Low

“Long-term interest rates should remain low amid positive fundamentals for bonds, says financial market guru Jeremy Siegel, a finance professor at University of Pennsylvania.

“Everyone expected the 10-year [Treasury yield] to be 3.5 percent by now on its way to 4 percent. It’s closer to 2.5 percent,” he tells CNBC. The 10-year yield stood at 2.63 percent Thursday morning and touched a two-month low of 2.57 percent Monday.

Siegel admitted that he was part of the chorus predicting higher yields. “Now I think we’re going to have low interest rates on that long-term [bond] for quite a while now no matter what [Federal Reserve Chair] Janet Yellen says,” he argues….”

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Shares of Companies Who Jettison Employees Outperform the Indices

“Companies seem to have found a sure-fire way to lift their stock prices: jettison their employees.

A total of 14 companies in the S&P 500 have erased jobs in each of their past five fiscal years.

And those companies’ shares have outperformed the index, USA Today reports.

The stocks increased 18.8 on average over the past year, besting the 15.5 percent rise for the S&P 500, according to the paper and S&P Capital IQ. Over the past five years, the job cutters lead the index 269 percent to 103 percent.

To be sure, not all the job losses stem from layoffs, USA Today notes. Some come from restructurings and divestitures.

In any case, leading the 14 companies in reducing headcount over the last five years is telecommunications equipment maker Motorola Solutions. Its workforce dropped 67 percent during the period, and its stock gained 50 percent….”

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The ECB Keeps Rates Unch, Mario Draghi Promises QE is Coming

“FRANKFURT—The European Central Bank held interest rates steady Thursday despite extremely low inflation rates, resisting calls to cut its key rate closer to zero to guard against the risk of falling prices.

The euro climbed in response, nearing a 2½-year high against the dollar. The common currency was up 0.3% on the day at $1.3960, a whisker away from its high for the year.

The ECB decided to keep its main rate at 0.25%, a record low, where it has been since November, as expected by the vast majority of economists polled by Dow Jones Newswires before the meeting.

Annual inflation was just 0.7% in April, up slightly from March but still far below the ECB’s target of just below 2% over the medium term.

Yet the bloc’s economy has yet to show ill effects from too-low inflation, which may weigh on spending and makes it harder for the private and public sectors to service debt. Retail sales advanced in each month of the first quarter and business surveys point to annualized growth rates of around 2% in the early months of the year. For now, households and businesses appear to be reaping the positive effects of low inflation, which also gives them extra disposable income.

“The data suggest no need for the ECB to act now,” said Berenberg Bank Chief Economist Holger Schmieding in a research note Wednesday.

ECB President Mario Draghi will explain the decision at a news conference in Brussels due to start at 2:30 p.m. local time. The ECB typically holds two meetings a year away from its Frankfurt headquarters.

ECB officials have repeatedly said they see no evidence of persistent drops in consumer prices, known as deflation, which Japan has grappled with for two decades.

Economists are looking at the ECB’s next meeting on June 5 as the time when officials will be more likely to consider further action…..”

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