In Our Wake

“October was Iraq’s deadliest month since April, 2008. In those five and a half years, not only has there been no improvement in Iraq’s security situation, but things have gotten much worse. More than 1,000 people were killed in Iraq last month, the vast majority of them civilians. Another 1,600 were wounded, as car bombs, shootings, and other attacks continue to maim and murder.

As post-“liberation” Iraq spirals steadily downward, Prime Minister Nuri al-Maliki was in Washington last week to plead for more assistance from the United States to help restore order to a society demolished by the 2003 US invasion. Al-Qaeda has made significant recent gains, Maliki told President Obama at their meeting last Friday, and Iraq needs more US military aid to combat its growing influence.

Obama pledged to work together with Iraq to address al-Qaeda’s growing presence, but what was not said was that before the US attack there was no al-Qaeda in Iraq. The appearance of al-Qaeda in Iraq coincided with the US attack. They claimed we had to fight terror in Iraq, but the US invasion resulted in the creation of terrorist networks where before there were none. What a disaster.

Maliki also told President Obama last week that the war in next-door Syria was spilling over into Iraq, with the anti-Assad fighters setting off bombs and destabilizing the country. Already more than 5,000 people have been killed throughout Iraq this year, and cross-border attacks from Syrian rebels into Iraq are increasing those numbers. Again, what was not said was that the US government had supported these anti-Assad fighters both in secret and in the open for the past two years.

Earlier in the week a group of Senators – all of whom had supported the 2003 US invasion of Iraq – sent a strongly-worded letter to Obama complaining that Maliki was far too close to the Iranian government next door. …”

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“The extreme experiment of current US monetary policy has evolved (as we noted yesterday), from explicit end-dates, to unlimited end-dates, to threshold-based end-dates. Of course, this ‘threshold’ was no problem for the liquidty whores when unemployment rates were extremely high themselves, but as the world awoke to what we have been pointing out – that it’s all a mirage of collapsing participation rates – the FOMC (and sell-side strategists) realized that the endgame may be ‘too close’. Cue Goldman’s Jan Hatzius, who in today’s note, citing two influential Fed staff economists, shifts the base case and forecasts that the Fed will lower its threshold for rate hikes to 6.0% (and perhaps as low as 5.5%) as early as December (as a dovish forward-guidance balance to an expected Taper announcement).

Via Goldman Sachs,

• The most senior Fed staff economists for monetary policy analysis and domestic macroeconomics, William English and David Wilcox, havepublished separate studies that imply a strong case for a reduction in the 6.5% unemployment threshold for the first funds rate hike. We have proposed such a move for some time, but have been unsure whether it would in fact happen. And while the uncertainty around near-term Fed policy remains very considerable, our baseline view is now that the FOMC will reduce its 6.5% threshold to 6% at the March 2014 FOMC meeting, alongside the first tapering of QE. A move as early as the December 2013 meeting is possible, and if so, this might also increase the probability of an earlier tapering of QE.

It is hard to overstate the importance of two new Fed staff studies that will be presented at the IMF’s annual research conference on November 7-8. The lead author for the first study is William English, who is the director of the Monetary Affairs division and the Secretary and Economist of the FOMC. The lead author for the second study is David Wilcox, who is the director of the Research and Statistics division and the Economist of the FOMC. The fact that the two most senior Board staffers in the areas of monetary policy analysis and domestic macroeconomics have simultaneously published detailed research papers on central issues of the economic and monetary policy outlook is highly unusual and noteworthy in its own right. But the content and implications of these papers are even more striking.

It will take us some time to absorb the sizable amounts of new analysis in the two studies, and we are only able to comment on a few selected aspects at this point. But our initial assessment is that they considerably increase the probability that the FOMC will reduce its 6.5% unemployment threshold for the first hike in the federal funds rate, either coincident with the first tapering of its QE program or before.

The first study, written by William English, David Lopez-Salido, and Robert Tetlow and entitled “The Federal Reserve’s Framework for Monetary Policy–Recent Changes and New Questions,” uses a smaller version of the staff’s large-scale econometric model FRB/US to analyze the optimal path for the federal funds rate. Using “small FRB/US,” a set of assumptions about Fed preferences, and a set of assumptions about the baseline performance of the economy, the authors find that the theoretically optimal policy involves a commitment to hold the federal funds rate near zero until 2017, followed by a series of hikes that push the rate well above neutral by the early 2020s. In this simulation, the unemployment rate falls below the structural rate for a time, and inflation rises modestly above the 2% target. (The optimal policy in the English et al. study is more aggressive than that shown in Vice Chair Yellen’s earlier set of optimal control simulations, which points to the first hike in early 2016; the reasons seem to include a lower assumption for the structural unemployment rate and a later baseline for the first hike in the funds rate.)

However, the authors note that such an optimal policy is possibly infeasible because it is complex and model-dependent….”

Full article

“Current Position of the Market

SPX: Very Long-term trend – The very-long-term cycles are in their down phases, and if they make their lows when expected (after this bull market is over), there will be another steep decline into late 2014. However, the severe correction of 2007-2009 may have curtailed the full downward pressure potential of the 40-yr and 120-yr cycles.

Intermediate trend – SPX initial top in place.

Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of longer market trends.

Market Overview

… For some indices, probably. For the SPX, DOW, and NDX, perhaps not! I mentioned some time ago that I expected a minor top to form which would be followed by the final short-term uptrend. That minor top came at 1775 on SPX — three points beyond the 1772 target I had in place since the 1646 low was confirmed – and the minor correction is under way. Although Friday saw an intra-channel bounce, there are some indications that it was only a rally in a downtrend and that the final minor low is still ahead. After that, we should experience the final up-phase of the bull market which will either re-test the tops, or make new highs in the indices listed above. The DOW has recovered and managed to eke out a fractional new high which was celebrated on CNBC last week. Indexes which tend to lead, such as RUT, experienced the most weakness in last week’s correction.

The mood on Wall Street is very bullish, most individuals believing that as long as the Fed continues its purchases at the same rate, the market will continue to rise. Now that tapering has most likely been put off until next year, the bull market is expected to continue. According to the SentimenTrader:“Active fund managers have added to their exposure to stocks and are now carrying among their heaviest loads in 7 years”.

Cycles, however, may be telling a different story and, if some of the more reliable cycle analysts are correct, the bull is on a very short leash. Also waving a red flag, sentiment indicators are reaching levels that are seen at important tops. If you are an investor, it’s time to become wary!

Chart Analysis

Even though the DOW is trying to catch up….”

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“This morning’s announcement of the 25% rise in the IPO price of Twitter raised a few eyebrows across Wall and Main Street. Most will argue that investors have all learned many lessons in the 18 months since Facebook IPO’d to a clarion call for retail money large and small from every form of media that exists… The following headlines from the pre-IPO suggest, unfortunately, that we learned absolutely nothing…”

Full report

“WASHINGTON (AP) — A report by a medical task force says Defense Department and CIA health professionals violated professional ethics standards by helping to develop interrogation and torture techniques and participating in force-feeding of terror suspects over the last decade.

While reports of torture following the attacks of Sept. 11, 2001 are not new, the report by the Institute on Medicine as a Profession said the U.S. should do a full investigation into how much military and intelligence physicians and psychologists participated in the interrogations, saying the record “remains fragmentary.”

The report, compiled by a 20-member task force, says that government agencies improperly used legal restrictions rather than ethical standards to determine the actions of health professionals. And it said heath workers must be held to higher ethical standards than interrogators, who can inflict stress to legal limits.

“A health professional has an obligation not to participate in acts that deliberately impose pain or suffering on a person,” said the report, which was also funded by the Open Society Foundations and is titled, Ethics Abandoned: Medical Professionalism and Detainee Abuse in the War on Terror. It added that replacing ethical standards with legal ones “eviscerates the ethical standards.”

Billionaire and longtime liberal political donor George Soros funds Open Society Foundations.

The report said that medical professionals were used to advise interrogators on how to exploit detainee vulnerabilities, even as they were required to be present in order to protect detainees from severe harm. And the report said that even today reporting requirements for health professionals who witness abuse are unclear.

CIA spokesman Dean Boyd said the report “contains serious inaccuracies and erroneous conclusions,” adding that the CIA has no detainees in custody and that the interrogation program was ended by President Barack Obama in 2009. He said the CIA’s medical staff upholds “the highest standards of their profession in the work they perform,”

The ongoing debate ….”

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“First it was China hinting that where Silk Road failed in monetizing, pardon the pun, BitCoin, the world’s most populous nation could soon take the lead. Then, none other than private equity titan Fortress said it had great expectations for the digital currency. Now, it is eBay’s turn to announce that it is preparing to expand the range of digital currencies it accepts, adding that “its payment unit PayPal may one day incorporate BitCoin.” But not just yet. FT reports that according to eBay CEO John Donahoe, “digital currency is going to be a very powerful thing.”

The ecommerce group, which has more than 124m active users, is initially focusing on incorporating reward points from retailers’ loyalty schemes into its PayPal wallet.

 

“We are building the container so any retailer could put their loyalty points into the PayPal wallet,” Mr Donahoe said.

 

“There is a limit to how many cards you will carry, or remembering what points you have or don’t have,” he said. “But in a digital wallet, you can put 50 different loyalty cards.”

 

Mr Donahoe said Ebay was not expanding the PayPal wallet to include Bitcoins, “but we are watching it”.

 

“That same technology could accept other digital currencies,” he said.

While traditional retailers have so far balked at even the vaguest idea of considering allowing BitCoin as a viable payment method, all that would take to start a seismic shift in perception would be one angel idea “investor” to show that it can be done. ….”

Full article

“Investors are stampeding into initial public offerings at the fastest clip since the financial crisis, fueling a frenzy in the shares of newly listed companies that echoes the technology-stock craze of the late 1990s.

October was the busiest month for U.S.-listed IPOs since 2007, with 33 companies raising more than $12 billion. The coming week is slated to bring a dozen more initial offerings, including Thursday’s expected $1.6 billion stock sale by Twitter Inc., the biggest Internet IPO since Facebook Inc. FB -0.10% ‘s $16 billion sale in May 2012.

The 190 U.S.-listed IPOs this year have raised $49.2 billion, more than the $45 billion raised by the 132 deals during the same period in 2012.

Container Store Group Inc. TCS +101.11% rose 101% on its first day of trading Friday, making it the sixth company this year to double in its first day of U.S. trading. There were eight such doubles in the previous 12 years, according to data tracker Dealogic.

The rush to buy shares of newly public companies is the latest sign of investors’ thirst for assets with potential upside, at a time when relatively safe investments are generating scant income due to tepid economic growth and Federal Reserve policies that have kept a lid on U.S. interest rates.

Many of these companies aren’t profitable. But investors increasingly are willing to roll the dice, particularly on technology firms that they say have the potential to “disrupt” the industry.

“After all these years of the market going up, investors are getting reacquainted with equities,” said Alan Gayle, senior investment strategist at RidgeWorth Investments, which manages $49 billion in Atlanta. “In a slower-growth environment, the newer names are much more likely to be disruptive. Disruptive companies are more likely to grow their top line at a fast pace.”

To some, the hunger for shares of newly public companies is a sign that the IPO market has begun to find its footing after five years in the doldrums, and could return to being a driver of growth for companies looking for capital to expand and hire.

To others, however, the demand is an indication that a rally fueled primarily by abundant liquidity from the Fed, and not by earnings growth and economic expansion, is entering dangerous territory.

“When I hear intelligent investors asking me not which companies are good to invest in, but which IPOs can I get into, it scares the heck of me,” said Mark Lamkin, a wealth-management adviser based in Louisville, Ky.

So far this year, 61% of companies selling U.S.-listed IPOs have lost money in the 12 months preceding their debuts, according to Jay Ritter, professor of finance at the University of Florida. That is the highest percentage since 2000, the year the Nasdaq Composite Index roared to its all-time high of 5048.62. The index closed Friday at 3922.04.

Investors this year are putting a higher value on debut companies’ revenue than at any time since the crisis. The median IPO this year has been priced at five times the past 12 months’ sales, according to Mr. Ritter. That is the highest mark since 2007, when the median ratio was more than six times.

Companies holding their IPOs in the U.S. this year have posted an average 30% gain in share price, according to Dealogic. That compares with a 23.5% advance in the S&P 500 index…..”

Full article

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In true Halloween fashion we have both a trick and a treat.

This is a David and Goliath story that shows how just one man can take on the system and win. If only every citizen of the world had David’s fervor we would certainly be a lot better off as a “civilized”  species living on this planet.

Cheers on your weekend!

“Do you remember the $700 billion bailout of the financial system in 2008?

It seems these days that most investors do not. People are partying like it’s 1929… as if all the issues and challenges that plagued the banking sector just a few years ago have miraculously vanished.

This thinking is absurd, and even a casual glance at the balance sheets of so many banks in the West shows objectively that the entire system is still precariously leveraged, undercapitalized, and illiquid.

In the wake of the bailout, Congress created a special position to oversee how the funds were spent. Like anything else in government, they used an unnecessarily long name followed by a catchy acronym–

Special Inspector General for the Troubled Asset Relief Program, or SIGTARP.

(The first SIGTARP was a former federal prosecutor who had previously indicted 50 leaders of the Revolutionary Armed Forces of Colombia… just the right man to keep a watchful eye on bankers.)

SIGTARP just released its quarterly report to Congress… and it’s scatching, suggesting that “the toxic corporate culture that led up to the crisis and TARP has not sufficiently changed.”

There are some real zingers in the 518 page report, including:

• “[F]raudulent bankers. . . sought TARP bailout dollars to have taxpayers fill in the holes on their fraud-riddled books.”

• “Some bankers cultivated a culture of self dealing, criminally concealing that the bank was funding their luxury lifestyles, believing they were entitled to the finest money could buy. . .”

• “They were trusted to exercise good judgment and make sound decisions. However, they abused that trust. Many times they abused that trust for their own personal benefit.”

Moreover, the report calls into question the Treasury Department’s administration of the bailout.

For example, many banks have been delinquent in making TARP payments, or payments to one of TARP’s sub-programs.

Yet while many banks are delinquent by 1-2 quarters, according to the report, roughly 3% of the banks who received funds under the Community Development Capital Initiative are more than –two years– behind in their payments.

Yet the Treasury Department has done nothing to enforce terms on behalf of taxpayers.

Most alarmingly, though, the report throws a giant red flag on the Treasury Department’s deceit.

In 2011, the report states, 137 banks took in billions of dollars of funding from the Treasury under the Small Business Lending Fund (SBLF). They then used those funds to repay their TARP loans.

In other words, they repaid taxpayer money with more taxpayer money….”

Full article

[youtube://http://www.youtube.com/watch?v=Ouo7Q6Cf_yc#t=25 450 300]

“(CNN) — Israeli warplanes struck a military base near the Syrian port city of Latakia this week, an Obama administration official told CNN on Thursday.

An explosion at a missile storage site in the area was reported in the Middle Eastern press, but an attack has not been confirmed by the Israeli government.

The target, according to the Obama administration official, was missiles and related equipment the Israelis felt might be transferred to the Lebanon-based militant group Hezbollah. The official declined to be identified because of the sensitive nature of the information.

There was some confusion about the timing of the attack, with some reports saying it happened Wednesday, and others saying Thursday.

When asked for comment, an Israel Defense Forces spokeswoman told CNN: “We don’t refer to foreign reports.”

Israel has been accused several other times this year of launching airstrikes inside Syria, including once in January. In the January incident, a U.S. official said Israeli fighter jets bombed a Syrian convoy suspected of moving weapons to Hezbollah.

Syrian rebels warn against talks with regime

Israel’s military did not comment on any of the allegations at the time, but has long said it would target any transfer of weapons to Hezbollah or other groups designated as terrorists, as well as any effort to smuggle Syrian weapons into Lebanon that could threaten Israel.

Thursday’s reports of a blast come amid a Syrian civil war in which Hezbollah, a Shiite Muslim militant group….”

Full article

There are many ways to hose the taxpayer; let’s make sure this will not be one of them. Don’t get *^#*!$ in the @$$

“Statement by Francisco Enriquez, U.S. Public Interest Research Group Tax and Budget Associate, in response to recent news reports that JPMorgan will admit fault as part of its $100 million settlement with the Commodity Futures Trading Commission for the $6 billion “London Whale” trading fiasco.

“On Wednesday, reports emerged that JPMorgan Chase will agree to admit to wrongdoing and pay a $100 million penalty for improper market manipulation that led to a multibillion dollar trading loss. Yet unless the Commodity Futures Trading Commission (CFTC) explicitly forbids it, the bank could write off the settlement as a tax deduction, forcing taxpayers to shoulder some of the cost of JPMorgan’s admitted reckless behavior.

“JPMorgan’s admission of wrongdoing will only benefit the public if investors can be made whole through ensuing civil litigation, and if taxpayers are protected from bearing the cost of tax windfalls to the bank.

“Federal law forbids companies from deducting public fines and penalties from their taxes, but payments made as part of a settlement can be treated differently. Companies that cut deals with an agency to resolve charges through a legal settlement typically manage to deduct the penalties as a tax write-off unless specifically forbidden from doing so. In essence, companies are allowed to receive a tax subsidy for their wrongdoing, forcing ordinary taxpayers to shoulder the budgetary burden.

“Despite an admission of wrongdoing….”

Full article

If you would like to voice your opinion click here

“Did you know that the number of Americans on welfare is higher than the number of Americans that have full-time jobs?  Did you know that 1.2 million public school students in the U.S. are currently homeless?  Anyone that uses the term “economic recovery” to describe what is happening in the United States today is being deeply insulting to the nearly 150 million Americans that are considered to be either “poor” or “low income” at this point.  Yes, things are great in New York City, Washington D.C. and San Francisco, but almost everywhere else economic conditions continue to steadily get worse.

The gap between the wealthy and the poor is at a level that America has never seen before, and this is beginning to create a “Robin Hood mentality” that could cause a tremendous amount of social chaos in the years ahead.  Anger at the “haves” in America continues to rise at a very alarming pace, and the “have nots” are becoming increasingly desperate.  At some point all of this anger is going to boil over, and you won’t want to be anywhere around major population centers when that happens.

Despite unprecedented borrowing by the federal government in recent years, and despite unprecedented money printing by the Federal Reserve, poverty in the United States keeps getting worse with each passing year. The following are 29 incredible facts which prove that poverty in America is absolutely exploding…

1. What can you say about a nation that has more people getting handouts from the federal government than working full-time?  According to the latest numbers from the U.S. Census Bureau, the number of people receiving means-tested welfare benefits is greater than the number of full-time workers in the United States.

2. New numbers have just been released, and they show that the number of public school students in this country that are homeless is at an all-time record high.  It is hard to believe, but right now 1.2 million students that attend public schools in America are homeless.  That number has risen by 72 percent since the start of the last recession.

3. When I was growing up, it seemed like almost everyone was from a middle class home.  But now that has all changed.  One recent study discovered that nearly half of all public students in the United States come from low income homes.

4. How can anyone deny that we are a socialist nation when half the people are getting money from the federal government each month?  According to the most recent numbers from the U.S. Census Bureau, 49.2 percent of all Americans are receiving benefits from at least one government program.

5. Signs of increasing poverty are even showing up in the wealthiest areas of the nation.  According to the New York Post, New York subways are being “overrun with homeless“.

6. According to the U.S. Census Bureau, approximately one out of every six Americans is now living in poverty.  The number of Americans living in poverty is now at a level not seen since the 1960s.

7. The gap between the rich and the poor in the United States is at an all-time record high.  The wealthy may not consider this to be much of a problem, but those at the other end of the spectrum are very aware of this…..”

Full article

“Despite the fact that Puerto Rican (PR) municipal bonds are triple-tax-exempt (no federal, state, or local income taxes apply on their interest), their interest rates have skyrocketed since the Detroit bankruptcy first disrupted the complacency among municipal bond investors in July. High quality municipal bonds are paying little more than 1 percent annually, but PR bonds, even though they remain investment grade (barely), have spiked to paying between 8 and 10 percent, with some predicting that even higher rates will be necessary in order to attract new investors.

Comparisons to Detroit are tempting, but a careful look at the headwinds facing Puerto Rico makes Detroit’s problems seem almost not worth mentioning. Detroit’s bankruptcy filing in July was for $18 billion. Puerto Rico’s debt is nearly four times larger.

A partial listing of those headwinds include:

• Moody’s downgrade of PR debt on October 3 to just above junk, with its outlook changed from stable to negative;

• The recent settlement by UBS bank’s Puerto Rican branch with the Securities and Exchange Commission over hiding the country’s faltering financial condition and artificially supporting bond prices;

• The necessity by Puerto Rico treasury officials to borrow in the private market because the bond market is essentially closed to them;

• The U.S.-enforced minimum wage in Puerto Rico, which makes it too expensive for business owners to hire workers, impacting the island’s already high unemployment rate — a rate that is nearly twice that in the United States;

• National debt that is greater than any American state, except California (population of 38 million) and New York (population of 20 million) — Puerto Rico has a population of just 3.6 million;

• A ratio of debt to personal income (which in the United States averages 3.4 percent) is an eye-popping 89 percent;

• A labor force participation rate of just 41 percent, compared to 63 percent in the United States;

• The sharp increase in income taxes by President Alejandro Padilla in his attempt to balance the government’s budget by 2016;

• Overly generous welfare and disability income programs, which discourage employment and encourage dependency;

• Bloated government, where one in five workers are employed by the government;

• The country’s pension plan, which is only 7 percent funded;

• The government’s cash flow, which has been negative for the past 13 years, and

• Its 2012 Comprehensive Annual Financial Statement, due months ago, has yet to be filed.

As a territory of the United States (more accurately, the relationship between the United States and Puerto Rico is that of asuzerainty), Puerto Rico therefore suffers from the welfare state mentality of its northern neighbor. The country has subsisted on handouts, special incentives (such as a tax code that, until 2006, allowed U.S. corporations with offices in Puerto Rico to send their earnings to their parent without paying corporate income tax), and triple tax exemptions that allowed the government to continue to borrow at artificially attractive rates from American investors who assumed that their investments were safe. For those investors it was the best of all worlds: In a low interest-rate environment, they were able to generate excellent real rates of return without risk to their capital.

Until now.

Most of Puerto Rico’s borrowings have been absorbed by municipal bond funds run by big names such as Franklin, Fidelity, and Oppenheimer. According to MorningStar, the mutual fund tracking service, 180 mutual funds in the United States hold at least five percent of their portfolios in PR municipal bonds. Some of them, such as the Franklin Double Tax-Free Income fund, has a 60 percent exposure to Puerto Rico and has seen its value drop a harrowing 15.7 percent in just the last five months. In other words, investors in that fund have seen their capital shrink by three percent per month just since May, losing one-sixth of their initial investment.

One mutual fund manager, affiliated with UBS bank, has seen its two primary Puerto Rico funds — the UBS Puerto Rico Tax-Free Target Maturity Fund and the UBS Puerto Rico Tax-Free Target Maturity Fund II — lose an astounding 88.9 percent and 83.5 percent of their value, respectively.

The impact on borrowing costs ripple out far beyond that of a small island in the Caribbean. It is estimated that the entire municipal bond market in the United States exceeds $4 trillion. If the situation in Puerto Rico continues to unravel, interest rates are likely to rise significantly across the board, raising borrowing costs for every municipality from Dubuque to Portland….”

Full article

“The world’s first bitcoin ATM opened Tuesday in Vancouver, Canada, dispensing hard money in exchange for the anonymous crypto-currency through a palm-scan security system.

The automated teller is set up in downtown Vancouver at Waves Coffee House, making it the first of five ATMs bought by Canadian firm Bitcoiniacs from Nevada-based producer Robocoin.

“I think [bitcoins have] the potential to be revolutionary,” Mitchell Demeter, founder of Bitcoiniacs and co-owner of Robocoin, told RT.

The machines will exchange bitcoins for Canadian dollars via Canada’s VirtEx exchange. The transactions themselves will be anonymous, the vendor says, but clients will have to identify themselves via a palm scanner first.

Demeter said the anonymous nature of bitcoins should not scare those reticent to trust the currency’s validity.

A user is instructed on how to scan his palm using scanning identification to ensure that a single user cannot exchange more than $1,000 in a single day day on the world’s first bitcoin ATM at Waves Coffee House on October 29, 2013 in Vancouver, British Columbia (AFP Photo / David Ryder)

“It’s said to be anonymous, but it isn’t really,” he explained. “Every transaction you make is recorded on a public ledger. Your name isn’t attached to it, but if somebody wants to find out who is making that transaction, it can be done.”

This is done to enforce Canadian anti-money laundering laws……”

Full video & article

“Argentina’s agricultural industry was dramatically transformed by the introduction of genetically modified plants in 1996. A country once known for its grass-fed beef is now dominated by genetically engineered soy, corn and cotton. Farmers in the Latin American country use twice as much pesticide per acre as farmers in the US, and those agrotoxins are applied by many farmers not wearing any protective gear and then drift into homes and schools. Since the introduction of these practices in Argentina by agrichemical companies such as Monsanto, cancer rates have skyrocketed and the number of birth defects has quadrupled.

Argentina was an early adopter of GMO technology when it was billed as the silver bullet to solve world hunger with increased crop productivity, and improved human and environmental health resulting from decreased pesticide use. The most widely used GMO crops, such as Monsanto’s Roundup Ready line of corn and soybeans, allow farmers to apply the herbicide glyphosate during and after seed plantings in order to kill weeds without risk of the main crop dying off. Today, almost all the corn, soy, and cottonproduced in the country are GMO.

Both the United States and Argentina produce almost exclusively GM soybeans. In these countries, GM soybeans are approved without restrictions and are treated just like conventional soybeans. Producers and government officials in the US and Argentina do not see a reason to keep GM and conventionally bred cultivars separate — whether during harvest, shipment, storage or processing. Soybean imports from these countries generally contain a high amount of GM content.

No Official Concern

Doctors warn that the rise in cancer and birth defects in Argentina may be attributable to the growing use of these pesticides.

This summer the non-profit organization GRAIN highlighted the “neocolonialist fervor” with which transnational agribusinesses were transforming parts of Latin America, including Argentina, into “The United Republic of Soybeans,” pushing genetically modified crops and sparking “a social and environmental catastrophe settling like a plague over the entire region.”

GRAIN wrote:

Researchers in the U.S. have corroborated, GMO technology only decreases pesticide use for a short period of time. After the brief decline in Argentina, pesticide use soared from 9 million gallons in 1990 to 84 million gallons today as weed resistance developed to glyphosate. In response, agrichemical companies have encouraged the use of more hazardous and toxic chemicals to kill weeds. Argentinian farmers are now mixing in and applying herbicides such as 2,4-D, a chlorophenoxy herbicide that made up half of Agent Orange, the chemical mixture used to defoliate forests and croplands in the Vietnam War. 2,4-D has also been linked to kidney/liver damage, neurotoxicity, and birth defects. Earlier this year the U.S. Department of Agriculture (USDA) delayed the introduction of a new generation of GMO crops resistant to 2,4-D.

Widespread Health Problems 

Aixa Cano, a shy 5-year-old who lives in Chaco, Argentina’s poorest province, was born with hairy moles all over her body. Her mother believes the skin condition was caused by contaminated water. Her neighbour, 2-year-old Camila Veron, was born with multiple organ problems and is severely disabled. Doctors told their mothers that agrochemicals may be to blame.

“They told me that the water made this happen because they spray a lot of poison here,” said Camila’s mother, Silvia Achaval.

“People who say spraying poison has no effect, I don’t know what sense that has because here you have the proof,” she added, pointing at her daughter.

Fabian Tomasi, 47, never wore any protective gear in the years he spent pumping poisons into crop-dusting planes. Today, he is near death from polyneuropathy, a neurological disorder that has left him emaciated.

“I prepared millions of liters of poison without any kind of protection, no gloves, masks or special clothing. I didn’t know anything. I only learned later what it did to me, after contacting scientists,” he said.

Now, at 47, he’s a living skeleton, so weak he can hardly swallow or go to the bathroom on his own.

Schoolteacher Andrea Druetta lives in Santa Fe Province, the heart of Argentina’s soy country, where agrochemical spraying is banned within 500 meters (550 yards) of populated areas. But soy is planted just 30 meters (33 yards) from her back door. Her boys were showered in chemicals recently while swimming in the backyard pool.

After Sofia Gatica lost her newborn to kidney failure, she filed a complaint that led to Argentina’s first criminal convictions for illegal spraying….”

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” “It’s gotten pretty frothy,” is how one portfolio manager describes the behavior in internet-based companies currently as signs of pre-2000 exuberance can be seen in Silicon Valley and the nearby area. As WSJ reports, home prices in San Francisco and surrounding counties rose more than 15% in the past year. Office rents in San Francisco are 23% above their 2008 peak. As SnapChat, Pinterest, and Twitter are set to join such illustrious names as RocketFuel; asset managers are careful to remind suckers investors that it’s not at all like 1999 – companies going public are more mature, the leadership teams more seasoned, the business models more proven – but the “reach for growth” at all costs echoes Kyle Bass’ remarks that “financial memory is no longer than two years,” with even younger and more revenue-deprived companies come to market at massively elevated multiples.

Via WSJ,

“It’s gotten pretty frothy,” says Daniel Cole, a senior portfolio manager at Manulife Asset Management who has invested in highflying IPOs, including for Rocket Fuel Inc. The Redwood City, Calif., online-advertising company sold shares to the public last month at $29 each. They traded at $61.72 a share Friday, giving Rocket Fuel a market valuation of $2 billion, without having recorded a profit.

… Technology and finance veterans say this time is different—and it is. Companies going public are more mature, the leadership teams more seasoned, the business models more proven. Social networks such as Twitter and Pinterest are drafting off the success of Facebook Inc., which sports a market value of $126.5 billion, or about 70 times next year’s expected earnings.

But the current surge is accelerating, aided by some little-appreciated factors. Big companies are scarcely growing, and interest rates remain near zero, boosting zeal for investment opportunities in companies with high-growth potential….”

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“New reports on leaked draft versions of the Trans-Pacific Partnership (TPP) agreement indicate threats to the rights of news organizations to publish information critical of large corporations. The multinational trade pact will require member states to surrender sovereign control over domestic copyright laws, as well.

In a story published by the Electronic Frontier Foundation(EFF), the agreement being hammered out by the 12 Pacific rim countries will:

give private corporations new tools to undermine national sovereignty and democratic processes. Specifically, TPP would give multinational companies the power to sue countries over laws that  might diminish the value of their company or cut into their expected future profits.

EFF reports that a seemingly benign provision of the TPP agreement called the “investor-state dispute settlement” (ISDS) will revoke the right of domestic courts to settle legal disputes between participating countries and corporations with investments in that country.

In a nutshell, if a corporation feels that its ability to turn a profit on an investment made in a member country is being stymied by the country’s regulatory scheme, then that corporation may bring the dispute to the TPP bureaucracy, completely bypassing the nation’s domestic judicial system.

The EFF story summed up this TPP provision’s assault on national sovereignty:

Apparently a country’s own courts can’t be trusted to administer this kind of lawsuit, so investor-state also requires the creation of a new court. It would be comprised of three private-sector attorneys who take turns being judge and/or corporate advocate.

Even if this kangaroo court ruled in favor of the defendant nation, court costs alone would scare countries from adopting (or enforcing) pro-user policies where they might potentially inhibit investor profits. The investor-state tribunal bills its time by the day and decides for itself how many days to work, so it can rack up as many days of work they want. Given this system, it’s then no surprise that current investor-state court costs average about 8 million dollars per case. So even if it wins, the country has to pay those court fees, the lawyer fees, plus compound interest. That’s money that would doubtless be better spent elsewhere.

The process is absurd as well. Once a decision has been issued, there is no way to appeal it. That’s right, if this court rules that the nation is at fault and has to pay huge fees that could even bankrupt a government, there’s no other way for the country to overturn that decision.

The ISDS section of the chapter on intellectual property in the leaked TPP draft agreement is nearly as “absurd,” however, as the agreement’s mandate forces member nations to enact regulations that require Internet Service Providers (ISPs) to privately enforce copyright protection laws.

These private companies — many of which are very small — would be forced to take upon themselves the responsibility of patrolling for and punishing any violation of the copyright laws by its subscribers.

Current U.S. law, specifically the Digital Millennium Copyright Act (DMCA), would be supplanted by TPP Article 16.3. This provision in the TPP draft document paves the way for a new copyright enforcement scheme that extends far beyond the limits currently imposed by DMCA. In fact, it contains mandates more expansive than even those proposed in the Anti-Counterfeiting Trade Agreement (ACTA).

ACTA is widely regarded as a threat to Internet freedom, as well as to the legislative power of the Congress. If ACTA is a threat than TPP is an all-out frontal assault.

Regardless of any flaws of the DMCA, it is U.S. law and should not be subject to de facto appeal by the work of a body of internationalists who are not accountable to citizens of the United States.

Apart from the issues of sovereignty, putting such pressure on service providers is a threat not only to the owners of these small business, but also to Internet freedom, as well.

It is the good work of these ISPs that has created the Internet we know today. Were it not for the typically low-cost access these companies provide, the pool of readily accessible viewpoints, opinions, and news resources would be significantly shallower…..”

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