national security

• National Security Advisor Tom Donilon resigning, to be replaced by Susan Rice - Obama announcement to follow
• Japan's Abe targets income gains in growth strategy (Reuters), Abe unveils ‘third arrow’ reforms (FT) - generates market laughter and stock crash
• Amazon set to sell $800m in ads (FT) - personal tracking cookie data is valuable
• 60 percent of Americans say the country is on the wrong track (BBG)  and yet have rarely been more optimistic
• Jefferson County, Creditors Reach Deal to End Bankruptcy (BBG)
• Turks clash with police despite deputy PM's apology (Reuters)
• Rural US shrinks as young flee for the cities (FT)
• Australia holds steady on rate but may ease later (MW)
• The Wonk With the Ear of Chinese President Xi Jinping (WSJ)
• Syrian army captures strategic border town of Qusair (Reuters)

Whether the Japanese government guessed that the 150% annualized surge in the nominal price of their stocks, or 30% devaluation was unsustainable is questionable, but it seems that 'Plan B' is being created. As The Diplomat notes, finding itself in an increasingly complex and hostile security environment, Japan has taken the first steps towards developing a pre-emptive first-strike capability. This is a controversial move in a region that remains wary of a potential return to Japanese militarism.

The US Attorney General's New Normal Watergate fiasco gets more surreal by the day. Eric Holder, currently being investigated for lying under oath, has been in hot water ever since the break of the AP scandal. But it has been his "handling" of the spillover that has raised eyebrows. The latest update is sure to raise them even more. Because it turns out that during Thursday's "off the record" meeting which the majority of the press boycotted for the simple reason that the reporting press probably can't go off the record when the topic is the US government's precedence over the first amendment or it will lose what little credibility it has left, Holder's message was simple: "trust me, I am the government, and I will stop spying on you." The farce just goes downhill from there.

The New York Times, The Associated Press, The Huffington Post, CNN and now, of course, Fox News: these are the media organizations, superficially from across the political spectrum, which have said they will boycott a meeting with the DOJ's embattled head, Eric Holder, on the topic of the DOJ's (not to mention the NSA's) Nixonian abuse of the first amendment and eavesdropping wherever and whenever it so chooses. The twist: the meeting is, paradoxically, supposed to be "off the record." One wonders: was this the DOJ's idea of being open and transparent - to hold a closed door meeting with the same media that it, allegedly, has been spying on, and thus put the media whose job is to report events - as in keeping the public informed - in a place where it can't do precisely that? It is as if the Marx Brothers are writing the tragicomic script for a sequence of events that inevitably ends with Holder's resignation and Obama's washing his hands of the whole affair.

• Japan’s Stocks Correction Raises Stakes for Abe’s Growth Plan (BBG)
• China Failure to Grow With $1 Trillion Is Warning to Li (BBG)
• Blankfein Leads Bank CEO Pay With $26 Million Deemed Overpaid (BBG)
• IMF says ‘no evidence yet’ of Abenomics hurting other economies (FT)
• Europe Seeks CFTC Delay in Imposing Swaps Rules on Banks (BBG)
• Fed's Rosengren: 'Modest' QE3 cut may make sense in a few months (Reuters)
• Who’s who of Obama lobbyists pushes Keystone pipeline (FT)
• China to Study Joining U.S.-Led Trade Accord After Japan Added (BBG)

• South China Sea tension mounts near Filipino shipwreck (Reuters)
• OECD cuts economic forecasts as eurozone drags on growth (FT)
• Switzerland frees banks to settle U.S. tax evasion cases (Reuters)
• U.S. Says Firm Laundered Billions (WSJ)... no, it's not HSBC, also: Free Corzine!
• Ardent conservative Bachmann to not seek re-election to Congress (Reuters)
• Russia faults U.S. over 'odious' Syria rights resolution (Reuters)

With the euphoric market once again serving as a much needed distraction from far bigger geopolitical issues, many have forgotten the plethora of scandals the Obama administration has recently found itself engulfed in. This may change shortly, following news that the head of the US Department of Justice, Eric Holder himself, is now being investigated for lying under oath. Will he too receive an extended absence of leave (with pay) after pleading the fifth, or will the circle of lies slowly but surely start to unwind? Of course, in the New Normal it is probably not only expected, but given, that the chief legal enforcer is just a little more equal when it comes to the same justice he is tasked to enforce.

One can read "The Lethal Presidency of Barack Obama" to get a true sense of Obama's "the best defense is a relentless drone everyone offense, ignore collateral damage and take out a few Americans in the process" policy. Or one can stare at rising stawks and enjoy their Obamaphones. Obe can't have both.

In a letter to Congress (below), AG Eric Holder admitted that the administration deliberately killed American Anwar al-Awlaki (the radical Muslim cleric) in a drone strike in September 2011 adding, as the NY Times reports, "the decision to target Anwar al-Awlaki was lawful, it was considered, and it was just." As RT notes, there was collateral damage, as it has been widely reported but rarely acknowledged in Washington that two other US citizens - Samir Khan, and al-Awlaki's teenage son, Abdulrahman al-Awlaki - were executed in that same Yemen strike. With Holder’s latest admission, however, a fourth American - Jude Mohammed - has also been officially named a casualty of America’s continuing drone war; bringing the total 'known' Americans killed under the US Drone War to 4 since 2009.

Last Thursday at a hearing held by the Senate Armed Services Committee, we found out what many of us already knew.  That the “war on terror” is never going to end.  Indeed, it was never supposed to end.  This never-ending “war” on a fantastical enemy provides the American oligarch class with too much money and too much power to ever make it worthwhile for the establishment to shut down. "Nobody really even knows with whom the US is at war, or where. Everyone just knows that it is vital that it continue in unlimited form indefinitely." 1984 really was an instruction manual for the people in power.

Use It or Lose It Time for the Constitution and Bill of Rights ...

Objective Analysis: Obama Versus Nixon

Today at 1pm the real circus starts. From the House Committee on the Judiciary: "On Wednesday, May 15 at 1:00 p.m., Attorney General Eric Holder will testify before the House Judiciary Committee for an oversight hearing on the U.S. Department of Justice.  The hearing will focus on the Justice Department obtaining two months of telephone records of reporters and editors for The Associated Press, the unwarranted targeting of conservative groups by the IRS, the recent bombings in Boston, wasteful spending at the Justice Department, and troubling allegations of the politicization of the Justice Department under Attorney General Holder’s leadership."

Why There Is So Much Pro-War Reporting

And so the final curtain falls on the myth of what was supposed to be, in its own words, the "most transparent administration" in history. As it turns out, the big Friday story of Bloomberg journalists snooping on clients was just amateur hour compared to what the AP was about to serve. In fact, the Watergate affair may soon appear like a walk in the park compared to the First Amendment shitstorm that is about to be unleashed following the just reported news that the US Department of Justice had "secretly obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative's top executive called a "massive and unprecedented intrusion" into how news organizations gather the news." First amendment? Freedom of speech and press? Surely not when it comes to the Nobel-peace prize winning President and those who dare to expose his secret ways. And what's worst, is that the AP breach has all the makings of a spiteful hack driven by personal vengeance against one of America's premier news outlets.