http://www.zerohedge.com/fullrss2.xml/news/italy-miss-gdp-forecast-sees-sub-1-gdp-growth en China's Nauseating Volatility Continues, US Futures Flat Ahead Of Disastrous GDP Report http://www.zerohedge.com/news/2015-05-29/chinas-nauseating-volatility-continues-us-futures-flat-ahead-disastrous-gdp-report <p>The most prominent market event overnight was once again the action in China's penny-index, which after tumbling at the open and briefly entering a 10% correction from the highs hit just two days ago, promptly saw the BTFDers rush in, whether retail, institutional or central bankers, and after rebounding strongly from the -3% lows, the SHCOMP closed practically unchanged following a 2% jump to complete yet another 5% intraday swing on absolutely no news, but merely concerns what the PBOC is doing with liquidity, reverse repos, margin debt, etc. Needless to say, this is one of the world's largest stock markets, not the Pink Sheets.</p> <p>Just to put thing in perspective again:</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/05/china%20teaser_0.jpg" width="600" height="349" /></p> <p>Elsewhere, European equities opened firmly in the red after Greece stated yet again they are expecting a deal to be agreed on Sunday ahead of their IMF payment due on June 5th, thereby seeing markets using the excuse of month-end to take risk of the table ahead of this key risk event, with Greek banks among the worst performers. Over the last few minutes the selling ceased and Europe has rebounded on a bout of buying, which has pushed both the EUR lower and US equity futures into the green. </p> <p>And just to complete the confusion, it also sent the yield on the German 5Y bond negative once agagin for the first time since April, as NIRP is back once again. Whether this was a consequence of month-end demand or uncertainty surrounding Greece is unclear, but should the entire German curve go subzero again, expect the ECB to instill another panic selling episode as the more negative German yields go, the less purchasing capacity the ECB has in an already collateral constrained market.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/05/5%20year%20may%2029.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/05/5%20year%20may%2029_0.jpg" width="600" height="304" /></a></p> <p>In FX, month-end buying is a prominent factor in market movements during the last Europeans session of the month amid light news flow elsewhere. GBP has underperformed so far today with EUR and USD relatively flat on the day amid desks reporting monthend demand in EUR/GBP.</p> <p>Fed’s Kocherlakota reiterated his dovish stance yesterday by repeating his belief that the FOMC should delay a rate hike until 2016 and that the central bank risk the health of the labor market by hiking raising rates in 2015. Looking ahead, today’s US GDP (Q1 S) reading is expected to show a substantial revision (Exp. -0.9%, Prev. 0.2%) given the recent slew of worse than expected US data, while other highlights include US Chicago Purchasing Manager Index and University of Michigan Sentiment as well as Canadian GDP and comments from ECB’s Mersch.</p> <p>The energy complex resides in positive territory, with WTI bolstered by yesterday’s better than expected DoE inventories<br />(-2802k vs. Exp. -2000k, Prev. -2674k), while the metals complex is relatively flat in line with the greenback.</p> <p>On today's calendar we have the Chicago PMI and the UMich Consumer Confidence, but the biggest variable will be the first Q1 GDP revision which is expected to crash from 0.2% to -0.9%. <strong>This will be the third quarterly GDP contraction of the "recovery."</strong> As a reminder, Q2 GDP according to the Atlanta Fed is trending at 0.8% suggesting GDP in the first half of 2015 was negative. And that is including the $122 billion inventory boost carryover from Q1: should inventory clearance accelerate, Q2 GDP may easily drop negative as well.</p> <p>In summary: European shares stay negative, though above session lows, with all sectors declining; food, resources stocks are weakest; oil &amp; gas outperforms. Greece creditors say no deal near as frustration vented at G-7. Swedish 1Q GDP growth below ests. Ukraine creditors said to offer coupon cuts, 10-year extension. The French and German markets are the worst-performing larger bourses, the Italy the best. The euro is little changed against the dollar. German 10yr bond yields fall. Oil advances. U.S. Chicago purchasing manager, Michigan confidence, GDP, personal consumption, core PCE, ISM Milwaukee due later.</p> <p><strong>Market Wrap</strong></p> <ul> <li>S&amp;P 500 futures down 0.1% to 2119.8</li> <li>Stoxx 600 down 0.4% to 405</li> <li>US 10Yr yield down 1bps to 2.12%</li> <li>German 10Yr yield down 3bps to 0.5%</li> <li>MSCI Asia Pacific up 0.2% to 151.6</li> <li>Gold spot up 0.1% to $1189.9/oz</li> <li>Eurostoxx 50 -0.4%, FTSE 100 flat, CAC 40 -1%, DAX -1%, IBEX -0.6%, FTSEMIB -0.1%, SMI -0.5%</li> <li>Asian stocks rise with the ASX outperforming and the Shanghai Composite underperforming; MSCI Asia Pacific up 0.2% to 151.6</li> <li>Nikkei 225 up 0.1%, Hang Seng down 0.1%, Kospi up 0.2%, Shanghai Composite down 0.2%, ASX up 1.1%, Sensex up 1.2%</li> <li>Steris to Contest U.S. Effort to Block Acquisition of Synergy</li> <li>Syngenta Said to Build Defenses Against a Higher Bid by Monsanto</li> <li>Douglas AG Plans 2015 IPO as Cosmetics-Market Expansion Forecast</li> <li>GE Said to Work With Deutsche Bank on Sale of Italy’s Interbanca</li> <li>Euro up 0.25% to $1.0976</li> <li>Dollar Index down 0.08% to 96.89</li> <li>Italian 10Yr yield down 2bps to 1.85%</li> <li>Spanish 10Yr yield down 1bps to 1.83%</li> <li>French 10Yr yield down 3bps to 0.81%</li> <li>S&amp;P GSCI Index up 0.7% to 432.3</li> <li>Brent Futures up 1.1% to $63.3/bbl, WTI Futures up 1.4% to $58.5/bbl</li> <li>LME 3m Copper up 0% to $6098/MT</li> <li>LME 3m Nickel down 0.5% to $12750/MT</li> <li>Wheat futures down 0.6% to 485.8 USd/bu</li> </ul> <p><strong>Bulletin Headline Summary From Bloomberg and RanSquawk</strong></p> <ul> <li>USD remains relatively flat during the European morning amid light newsflow, while GBP has underperformed amid desks reporting month-end demand in EUR/GBP</li> <li>European equities reside firmly in the red, with Greek banks the worst performers after Greece stated they are expecting a deal to be agreed on Sunday ahead of their IMF payment due on June 5th</li> <li>Today’s US GDP (Q1 S) reading is expected to show a substantial revision (Exp. -0.9%, Prev. 0.2%) given the recent slew of worse than expected US data</li> <li>Long-end Treasury yields drop in overnight trading before release of 1Q GDP revision; yesterday’s 7Y auction was awarded at 1.888%, highest 7Y stop since Dec. and second straight to stop through after previous seven tailed.</li> <li>Greece’s creditors said the government must make hard commitments to overhaul its finances or it won’t get a deal to unlock bailout payments</li> <li>Ukraine’s creditors put forward a restructuring proposal that includes maturity extensions of up to 10 years and reductions in interest payments of about $500 million</li> <li>Young traders who’ve known nothing but rock-bottom interest rates and rising markets are about to learn what higher rates from the Fed look like -- and their older, more experienced colleagues wonder how the youngsters will fare</li> <li>JPMorgan will cut thousands of jobs over the next year as the biggest U.S. bank by assets seeks to contain expenses and sells businesses, said a person with knowledge of the plans</li> <li>Support for Sepp Blatter extending his 17-year hold over&nbsp; global soccer weakened before his re-election bid, while the FIFA&nbsp; president blamed countries missing out on hosting the World Cup for his organization’s troubles</li> <li>Sovereign 10Y bond yields mostly lower except Portugal which is ~3bps higher. Asian stocks mixed; European stocks, U.S. equity-index futures fall. Crude oil, gold and copper higher</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>8:30am: GDP Annualized q/q, 1Q second, est. -0.9% (prior 0.2%)</li> <li>Personal Consumption, 1Q second, est. 2.0% (prior 1.9%)</li> <li>GDP Price Index, 1Q second, est. -0.1% (prior -0.1%)</li> <li>Core PCE q/q, 1Q second, est. 0.9% (prior 0.9%)</li> <li>9:00am: ISM Milwaukee, May, est. 50 (prior 48.08)</li> <li>9:45am: Chicago Purchasing Manager, May, est. 53.0 (prior 52.3)</li> <li>10:00am: U. of Mich. Sentiment, May final, est. 89.5 (prior 88.6)</li> <li>Current Conditions, May final (prior 99.8)</li> <li>Expectations, May final (prior 81.5)</li> <li>1 Yr Inflation, May final (prior 2.9%)</li> <li>5-10 Yr Inflation, May final (prior 2.8%)</li> </ul> <p><strong>As usual, here is DB's Jim Reid with the balance of the overnight summary</strong></p> <p>One thing I've noticed with China is that a lot of the days with big equity moves sees big swings late in the day and after we publish the EMR. Yesterday was a prime example as the Shanghai Comp was only down -1.4% as we went to print. Two and a half hours later at the close it was down -6.5%. So experience tells us that informing you that the same index is trading +0.12% this morning could be out of date by the close! Indeed as we discuss below we opened around -4% down before recovering. </p> <p>As briefly touched upon at the top, the Shanghai Comp actually tumbled as much as 4.2% in early trading before fighting back towards flat. Other China equities markets are up also this morning with the CSI 300 +0.61% and Shenzen Composite +1.04%. Elsewhere, the Nikkei (+0.19%) has extended its run of up days to 11 as it stands. On only 5 other occasions has such a run occurred, the longest being 15 days in 1988. The run is being helped by a weaker Yen of late, although this morning the currency is actually +0.15% firmer against the Dollar after slightly higher than expected inflation data. Despite the headline April print coming in as expected at +0.6% yoy, the core (+0.3% vs. +0.2% expected) and core-core (+0.4% vs. +0.3% expected) were above consensus. Household spending for the month was disappointing however (-1.3% yoy vs. +3.0% expected) while industrial production (+1.0% mom) was in line. Elsewhere in markets this morning, the Hang Seng (+0.30%) and Kospi (+0.32%) are both higher. </p> <p>Moving on, the Greece saga continues with headlines aplenty. Yesterday we heard more push back from the European side that Greece and its Creditors are still not in agreement and seemingly still struggling to come to terms on reforms. The IMF’s Lagarde was noted as saying that ‘things have moved, but there is still a lot of work to do’ in comments on German TV ARD. The European Economic Commissioner Moscovi said that the two sides are ‘certainly not the three quarters of the way’ and that ‘we need to work day and night’. The comments from the Greek side continue to paint a picture of progress and hope that a deal is imminent, which has been in stark contrast to the comments from the Creditors for some time now. Greek government spokesman Sakellaridis said yesterday that ‘this optimism is not just words, it is based on the experience of the previous weeks and the progress achieved’. Greece has seemingly over emphasised the ‘progress’ and achievement in negotiations for months now, so it’s worth being careful over interpreting most headlines coming from the Greece side. </p> <p>With 7 days to go now until the first June IMF repayment, and what’s seen as something of a make-or-break date, DB’s resident Greece expert George Saravelos yesterday published an update looking at the current state of play. George’s baseline remains the same, that an agreement between the government and its creditors is the marginally higher probability outcome. The difference now remains timing, with cash essentially exhausted and the potential for an agreement being needed to go through a referendum or parliamentary approval meaning non-payment to the IMF over the course of June is a distinct possibility. Ultimately, George believes that agreement without capital controls is the baseline (with a 60% probability). The alternative is that no agreement is reached and time/politics breaks down resulting in a suspension of ECB financing and imposition of capital controls (40% probability). Assuming an agreement is reached in some form, George believes that there is a roughly even split between this being done in 1.) a timely manner through Greek parliament (best case scenario) and 2.) not in time to pass through parliament before the IMF payment. In the case of the second scenario (a last minute agreement), any agreement in insufficient time essentially boils down to the domestic political situation and whether or not a change in coalition would be required. In this event, it is possible that the ECB provides interim financing to pay back the IMF via raising T-Bill issuance, but George considers it more likely that they allow Greece to fall into arrears at the IMF and the ECB makes a less binding increase in haircuts on ELA collateral, thus keeping the pressure on. One other point to note is that a number of reports have suggested that the IMF June payments could be bundled (for example in the Tovima report). George considers this unlikely and the IMF said yesterday that they have not been asked such a request from Greece, but it any case even if such an event materializes, it would only buy Greece a matter of a few weeks. </p> <p>Ultimately the factors driving this still remain deeply political and the relative outcome paths are still far from certain. Importantly though, next Friday’s IMF repayment due provides a key date and by then we should have a decent idea of where things stand.</p> <p>Back to markets yesterday, it was a softer day in equities as the initial China weakness and more Greece headlines reverberated. In the US the S&amp;P 500 and Dow closed -0.13% and -0.20% respectively, while in Europe the Stoxx 600 (-0.50%), DAX (-0.79%) and CAC (-0.86%) all fell. Oil markets seemed to play their part dragging down energy and industrial names. Brent (+0.84%) and WTI (+0.30%) eventually finished up on the day at $62.58/bbl and $57.68/bbl, however both traded as much as 1.5% down intraday and in turn reached the lowest levels since April 15th. With WTI and Brent -2.1% and -5.4% MTD respectively, the recovery seems to have stuttered somewhat of late with US output in particular still at 30-year highs. A report on Bloomberg that the biggest US ETF that tracks oil is heading for the largest two-month outflow in six years will not have helped sentiment. </p> <p>Over in Greece the ASE closed -1.69% to snap 2 consecutive days of gains, while Greek 2y and 10y yields were 27.5bps and 15.9bps higher respectively. Bond markets in Europe were mixed, influenced by the sentiment out of Greece. Core markets largely firmed with 10y Bund yields 2.4bps lower at 0.527%. Other core markets had similar gains while in the periphery Italy (+0.8bp), Spain (+3.6bps) and Portugal (+5.1bps) all ended higher. 10y Treasuries ended relatively unchanged on the day at 2.136% (+0.7bps) having traded in a fairly tight range. Indeed, yesterday’s data didn’t appear to offer too many surprises. Pending home sales for April rose +3.4% mom, ahead of expectations of +0.9% which helped push the annualized rate up to +13.4% yoy. Initial jobless claims (282k vs. 270k expected) meanwhile were solid if unspectacular and probably did little to sway payrolls expectations next week. The print did however mark the 12th consecutive week of a sub-300k reading. </p> <p>Fedspeak yesterday was focused on the divergent views of Minneapolis Fed President Kocherlakota and St Louis Fed President Bullard. The latter suggested that holding off on a rate rise would be a ‘recipe for asset price bubbles and a lot of mischief to happen’, before going on to say that his base case is for liftoff sometime this year. That compares to a 2016 timeline for Kocherlakota, who said that he still needs more evidence that the labour market conditions are returning to their 2006 levels before the Fed should move. </p> <p>Wrapping up yesterday’s data, Euro area economic confidence for May was slightly better than expected (103.8 vs. 103.5 expected) while the final consumer confidence reading was unchanged at -5.5. The German import price index was a tad better than expected (+0.6% mom vs. +0.5% expected) while in the UK the second reading of the Q1 GDP report confirmed the +0.3% qoq reading. 10y Gilts closed 5.8bps lower yesterday. </p> <p>Looking at the day ahead now, the early data releases in Europe this morning include Euro area money supply, German retail sales and also French PPI and consumer spending. Italy Q1 GDP is also expected. Over in the US this afternoon, eyes will be glued to the second revision for Q1 GDP in the US with the market expecting the report to be revised down to -0.9% qoq from the initial +0.2% print. DB’s Joe Lavorgna is a little bit more skeptical and has a forecast of -1.0%. It’s quite interesting to see that there was a similar trend in Q1 2014 GDP when the initial +0.1% reading was then downgraded to -1.0% at the second revision and then finally revised down to -2.1%. With the seasonal adjustment weightings being revised in the summer the sting may be taken out of the print for now. Also in the US today, we’ve got the ISM Milwaukee, Chicago PMI and final University of Michigan consumer sentiment reading for May.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="791" height="460" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/china%20teaser_0.jpg?1432896916" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-29/chinas-nauseating-volatility-continues-us-futures-flat-ahead-disastrous-gdp-report#comments Bond Chicago PMI China Consumer Confidence Consumer Sentiment Copper Creditors Crude Crude Oil Deutsche Bank ETC Gilts Greece headlines Initial Jobless Claims Italy Jim Reid Market Conditions Michigan Money Supply Nikkei Personal Consumption Portugal recovery St Louis Fed St. Louis Fed Ukraine University Of Michigan Volatility Yen Fri, 29 May 2015 10:56:30 +0000 Tyler Durden 507216 at http://www.zerohedge.com Greek Austerity And Economic Religion http://www.zerohedge.com/news/2015-05-29/greek-austerity-and-economic-religion <p><a href="http://www.theautomaticearth.com/2015/05/austerity-economics-and-religion/"><em>Submitted by Raul Ilargi Meijer via The Automatic Earth blog</em></a>,</p> <p><strong>There are many things going on in the Greece vs Institutions+Germany negotiations,</strong> and many more on the fringe of the talks, with opinions being vented left and right, not least of all in the media, often driven more by a particular agenda than by facts or know-how.</p> <p><strong>What most fail to acknowledge is to what extent the position of the creditor institutions is powered by economic religion</strong>, and that is a shame, because it makes it very difficult for the average reader and viewer to understand what happens, and why.</p> <p>Greek FinMin Yanis Varoufakis has often complained that he can&rsquo;t get the finance ministers and others to discuss economics. <a href="http://www.cnbc.com/id/102706580" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">As our mutual friend Steve Keen put it:</span></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Steve Keen said the finance minister was frustrated with the progress of Greece&rsquo;s talks with the euro zone, adding Varoufakis had compared the talks to dealing with &ldquo;divorce lawyers&rdquo;. Keen said the finance ministers of Europe refused to discuss certain euro policies, according to Varoufakis. [..] When asked what [Varoufakis and he] mainly discuss at the moment, Keen said, &ldquo;Mainly his frustration, the fact that the one thing that he can&rsquo;t discuss with the finance ministers of Europe is economics..&rdquo;</em></p> <p>&nbsp;</p> <p><em>&ldquo;He goes inside, he is expected to be discussing what the economic impact of the policies of the euro are and how to get a better set of policies, living within the confines of the euro and the entire European Union system, and he said they simply won&rsquo;t discuss it. He said it is like walking into a bunch of divorce lawyers, it is not anything like what you think finance ministers should be talking about..&rdquo;</em></p> </blockquote> <p>They won&rsquo;t discuss these things because they have found religion, in the sense that there is for them only one truth, to the exclusion of all others. They toe the preconceived line, because if they didn&rsquo;t they would lose their positions.</p> <p><strong>They are undoubtedly also very hesitant to discuss economics with Varoufakis because they are aware of his prowess in the field</strong>. They are much less knowledgeable, which makes it tempting to hide behind numbers, behind Germany, and behind their faith that their views are the only right ones. Which is precisely what Varoufakis challenges.</p> <p>You won&rsquo;t see the Pope in a muslim prayer five times daily with his face to Mecca, or an imam celebrating Holy Mass. And that&rsquo;s sort of alright, there&rsquo;s nothing that says everyone should have the same religion. But when it comes to a field such as economics, and certainly when multi-trillion dollar decisions are being taken, and people in the streets are already going broke and hungry, that is definitely not alright.</p> <p>The number one priority under such circumstances absolutely must be to find a solution, find it fast, and alleviate the suffering. Not to push through any particular policy or vision. Now, you can accuse Greece of not doing that, and the institutions and their pundits in the press do that on a 24/7 basis, but that view lacks substance.</p> <p><strong>The institutions demand more austerity measures for Greece, whereas it&rsquo;s plain to see that austerity is what has led to the misery of the people.</strong> In particular, pensions cuts are apparently still a point neither side wants to give in on. But not only have Greek pensions already been cut by 40% or so, they are the last straw for many entire families.</p> <p>Which means the entire pension system would need to be thoroughly reformed, not just pensions cut, or more, and more widespread, misery is in the offing. And there simply is no time to achieve that thorough reform before Greek repayment deadlines set in. Don&rsquo;t forget, the entire Syriza government hasn&rsquo;t been able (allowed) to do anything but negotiate. And is then accused of not doing enough.</p> <p><u><strong>This inflexible insistence on more austerity, and hence more misery, for the Greek people, is a good example of how religion driven the IMF, EU and ECB are. </strong></u>As I&rsquo;ve written many times, it&rsquo;s about power, not about money; it wouldn&rsquo;t cost all that much, but could achieve a lot, to let Greeks off the austerity hook for a bit. All it takes is flexibility when entering the negotiations. But there ain&rsquo;t much of that, if any, on the creditors&rsquo; side.</p> <p>Which is why <a href="http://www.bloomberg.com/news/articles/2015-05-27/target-of-greek-scorn-shapes-nation-s-fate-as-imf-s-storm-chaser" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">this Bloomberg piece</span></a> on the IMF&rsquo;s &lsquo;enforcer&rsquo; for Greece Poul Thomsen should bring a smile to our faces.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>A former IMF colleague of Thomsen&rsquo;s, Ashoka Mody, last month in a Bloomberg View column called for the fund to &ldquo;recognize its responsibility for the country&rsquo;s predicament&rdquo; and forgive much of Greece&rsquo;s debt. There&rsquo;s little sign that the IMF and Thomsen might bend the rules or cross their red lines now. While some issues such as short-term budget targets may be negotiable, the fund&rsquo;s position is that any Greek agreement must bring debt down to sustainable levels and include concrete commitment to reforms, especially cuts to public pensions.</em></p> <p>&nbsp;</p> <p><em><strong>&ldquo;We are open to new ideas and different ways to achieve a country&rsquo;s economic goals. We are a pragmatic institution,&rdquo;</strong> Thomsen said in a statement to Bloomberg News. &ldquo;But we also need to be mindful of economic realities. At the end of the day it needs to add up. And we need to ensure that we treat our member states equally, that we apply our rules uniformly.&rdquo;</em></p> </blockquote> <p>For all we know that&rsquo;s even the way he sees things. But the IMF is neither a flexible nor a beneficial institution. It&rsquo;s a power tool for the wealthy. The philosophy behind the institutions&rsquo; view of the negotiations, and indeed their entire view of economics in general, is constructed to follow the preferences of the wealthy, who have a strong vested interest in centralized control over just about everything, because more centralization makes it easier for them to exert this control.</p> <p>Syriza getting its way on reforms doesn&rsquo;t fit in that picture; before you know more parties want some say in their futures too. Most of all, though, different ideas on economics in general cannot be accepted. Everybody has to follow the IMF line of &lsquo;reforms&rsquo;, asset sales, privatizations, labor protection and austerity. Certainly everyone who owes the Fund money. That&rsquo;s its ultimate power tool.</p> <p>That the EU follows that line merely means it&rsquo;s and immoral and amoral institution, and a union only in name. The ECB follows the IMF line on economics, which means there&rsquo;s no room for aberrant views, no matter how well founded and thought through. There&rsquo;s no place in there for people like Varoufakis, or Steve Keen.</p> <p>It&rsquo;s not about knowledge or brilliance, it&rsquo;s about keeping the faith, because that keeps the power where it&rsquo;s at. Yeah, there&rsquo;s a hint of Galileo in there somewhere. The &lsquo;philosophy&rsquo; is neo-liberal mixed with let&rsquo;s say, Keynes-for-the-rich, aka QE.</p> <p>A nice example of how the IMF operates, and how far its power tentacles reach, came in a Guardian piece on <a href="http://www.theguardian.com/business/2015/may/24/greece-misery-need-chapter-11-bankruptcy-for-countries" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Chapter 11 bankruptcy for countries</span></a>, and why Argentina took its case to the UN, not the IMF:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>When Argentina tabled a motion calling for the UN to examine the issue of sovereign debt restructuring last autumn, 124 countries voted for it; 11, including the UK and the US, with their powerful financial lobbies, voted against; and there were 41 abstentions. Llorenti, who is chairing the UN &ldquo;ad hoc committee&rdquo; set up as a result of that vote, says <strong>the 11 countries that objected hold 45% of the voting power at the IMF</strong>. He believes they would prefer the matter to be tackled there, where they can shape the arguments: &ldquo;It&rsquo;s a matter of control, really.&rdquo;</em></p> </blockquote> <p>Another thing I&lsquo;ve said before is that the IMF is a prime example of why we should steer away from supra-national organizations. We can&rsquo;t make them run for our own benefit, they invariably end up being run for the benefit of the few, because their inherent lack of transparency and democracy makes them an irresistible target for sociopathic individuals, who seek control, not democracy, and for the elites whose interests they invariably end up representing.</p> <p><strong>There&rsquo;s the World Bank, NATO, the IMF, the EU. The UN is somewhat more democratic, but only somewhat. Behind the veil it&rsquo;s not at all.</strong></p> <p>Amongst the European finance minsters there should still be a few who may have doubts about what&rsquo;s happening to Greece, what&rsquo;s being demanded of it. And who realize that the purely political decision to bail out the banks that had lent to Greece, and shove their debts into the lap of all Europeans, who in turn pushed it right back into Greece&rsquo;s lap, is at best highly questionable.</p> <p>If these Europeans want to save their union, they need to be told that what they&rsquo;re doing right now is the exact wrong way to go about that, 180&ordm; wrong. What happens today is not holding or pulling the member states together, it&rsquo;s driving them apart.</p> <p>Perhaps it is indeed ultimately a choice between the banks and the people. And perhaps it scares them stiff not to choose the banks. With their limited knowledge of how economies function, they must believe the story of how everything will fall to pieces if the banks fail. Besides, if they question it, they&rsquo;re out.</p> <p><u><strong>But economics cannot be a religion, it cannot have this inflexibility and resistance to change. </strong></u>And neither can politics, not if we want our unions, our countries and our societies to survive, if we want to survive, and our children. Economics is not a science, though it very much longs for that status. It shouldn&rsquo;t be a religion either, however.</p> <p>There is nothing that says, or proves, that bailing out banks and forcing austerity on people (note the combination) is the best, or only, way to rescue an economy in trouble. That austerity is the way to rebuild an economy. These are mere ideas, conceived by people who studied textbooks.</p> <p>What Greece is asking for is a simple bottom beneath its society, lest it completely falls to bits, lest all it&rsquo;s left with is some right wing movement or another. But instead, the institutions&rsquo; approach to economics, to democracy and to power look to make a true solution for the Greek problem impossible.</p> <p><u><strong>That in turn would seem to make a Grexit, in some shape or another, the only way left to go. </strong></u>Why would anyone want to live in a world dominated by religious fanatics and their henchmen?</p> <p>Finally, as for what the euro, and hence the eurozone, were intended to do, here&rsquo;s Greg Palast from 2012, talking about father of the euro, Robert Mundell:</p> <p style="margin-left: 20px;"><a href="http://www.theguardian.com/commentisfree/2012/jun/26/robert-mundell-evil-genius-euro" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">Robert Mundell, Evil Genius Of The Euro </span></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;It&rsquo;s very hard to fire workers in Europe,&rdquo; he complained. His answer: the euro. <strong>The euro would really do its work when crises hit</strong>, Mundell explained. Removing a government&rsquo;s control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.</em></p> <p>&nbsp;</p> <p><em><strong>&ldquo;It puts monetary policy out of the reach of politicians,&rdquo;</strong> he said. &ldquo;[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.&rdquo; He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace &ndash; or the plumbing. [..] </em></p> <p>&nbsp;</p> <p><em>The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics &ndash; or as George Bush the Elder called it, &ldquo;voodoo economics&rdquo;: the magical belief in free-market nostrums that also inspired the policies of Mrs Thatcher. </em></p> <p>&nbsp;</p> <p><em>Mundell explained to me that, in fact, the euro is of a piece with Reaganomics: &ldquo;Monetary discipline forces fiscal discipline on the politicians as well.&rdquo; And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and <strong>send the European welfare state down the drain</strong>.</em></p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="253" height="180" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150528_faith.jpg?1432872768" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-29/greek-austerity-and-economic-religion#comments Bloomberg News Creditors European Union Eurozone Fail Germany Greece Monetary Policy Recession Sovereign Debt Transparency World Bank Fri, 29 May 2015 06:00:07 +0000 Tyler Durden 507214 at http://www.zerohedge.com Japan Issues Highest Alert, Evacuation Warnings After Volcano "Explosively" Erupts - No Injuries Reported http://www.zerohedge.com/news/2015-05-28/japan-issues-highest-alert-evacuation-warnings-after-volcano-explosively-erupts-no-i <p>First, earthquakes; then tsunamis; then household spending collapses for the 13th month in a row... and now Japan is dealing with a volcano. NHK reports that<strong> Kuchinoerabu-jima, a volcano on Kuchinerabu Islands (off the southern-most tip of Japan) has erupted &quot;explosively.&quot;</strong> Officials have asked local inhabitants to <strong>evacuate the area</strong>. As yet there are no reported injuries.</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano6.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano6_0.jpg" style="width: 600px; height: 225px;" /></a></p> <p>&nbsp;</p> <ul> <li><strong>*JAPAN PRIME MINISTER&#39;S OFFICE SETS UP CRISIS CENTER ON VOLCANO</strong></li> </ul> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/b7zJSpL392s" width="560"></iframe></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano5.jpg"><img height="332" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano5_0.jpg" width="600" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano1.jpg"><img height="453" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano1.jpg" width="600" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150520_volc.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150520_volc.png" style="width: 600px; height: 400px;" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano7.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano7.jpg" style="width: 600px; height: 329px;" /></a></p> <p>The volcano is at the southerm-most tip of Japan...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano2.jpg"><img height="584" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano2_0.jpg" width="600" /></a></p> <p>JMA Warning:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano3.jpg"><img height="866" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_volcano3.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>Bloomberg reports,</p> <ul> <li>Japan Meteorological Agency raises warning level on volcano on island of Kuchinoerabujima, off southern coast of Japan&rsquo;s Kagoshima, to highest level of 5 after &ldquo;explosive&rdquo; eruption.</li> <li>Level 5 warning calls for evacuations</li> <li>Pyroclastic flow after volcano has reached coast</li> </ul> <p><a href="http://www.data.jma.go.jp/svd/vois/data/tokyo/STOCK/volinfo/VJ20150529100732_509.html"><span style="text-decoration: underline;"><em><strong>Offcial JMA Statement:</strong></em></span></a></p> <p><strong>Volcano name Kuchinoerabujima eruption alarm (residential areas)</strong><br />Heisei 07 minutes at 27 May 29 June 10 Fukuoka District Meteorological Observatory Kagoshima Local Meteorological Observatory</p> <p>** (Heading) **</p> <p>&lt;Eruption warning to Kuchinoerabujima (eruption alert level 5, evacuation) Announces&gt;<br />?Please refer to the strict vigilance (correspondence of evacuation, etc.) in a residential area of ??interest.<br /><span style="text-decoration: underline;"><strong>&lt;Pull the eruption alert level from 3 (Iriyama regulation) to 5 (evacuation)&gt;</strong></span></p> <p>** (This statement) **<br />1. Situation and forecast alarm matters of volcanic activity<br />?The new Takeshi, explosive eruption occurred in 59 minutes at 09 today (the 29th). This<br />With the eruption, pyroclastic flow occurs, it has reached to the coast.<br />?Strict vigilance in Yakushima-cho Kuchierabujima residential areas the arrival of pyroclastic flow is expected (<br />Please refer to the correspondence) of the evacuation, and the like.</p> <p>2. Target municipalities, etc.<br />?In the following municipalities, please strict vigilance, such as evacuation in the residential areas<br />.<br />&nbsp; Kagoshima Prefecture: Yakushima-cho</p> <p>3. Such as disaster prevention on vigilance matters<br />?In the residential areas that stream of pyroclastic flow is imminent, strict vigilance (corresponding evacuation, etc.)<br />Please refer to the.<br />?Please follow the instructions of evacuation, etc. of Yakushima-cho.?</p> <p>&lt;Pull the eruption alert level from 3 (Iriyama regulation) to 5 (evacuation)&gt;</p> <p><em>** (Note: The description of the eruption alert level) **</em><br /><span style="text-decoration: underline;"><strong><em>[Level 5 (evacuation)]: required evacuation and the like from the dangerous residential areas.</em></strong></span><br /><em>[Level 4 (evacuation preparation)]: Prepare for evacuation in the necessary residential areas warning, disaster</em><br /><em>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Required evacuation, etc. requiring assistance person.??????</em><br /><em>[Level 3 (Iriyama regulation)]: climbing ban and Iriyama - site regulations to regulations dangerous areas</em><br /><em>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Etc.. Evacuation preparation, etc. of a disaster requiring assistance person depending on the situation.</em><br /><em>[Level 2 (crater peripheral regulation)]: - site regulations of the crater around.</em><br /><em>[Level 1 (normal)]: - site regulations into the crater depending on the situation.</em><br /><em>(Note: The target area of ??evacuation and regulations, differ depending on local conditions and volcanic activity)</em></p> <p>*&nbsp; *&nbsp; *</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="ja">?????????????? <a href="https://twitter.com/hashtag/volcano?src=hash">#volcano</a> <a href="https://twitter.com/hashtag/%E7%81%AB%E5%B1%B1?src=hash">#??</a> <a href="https://twitter.com/hashtag/JAPAN?src=hash">#JAPAN</a> <a href="http://t.co/9eS8VrG4Vt">pic.twitter.com/9eS8VrG4Vt</a></p> <p>&mdash; ????? (I am not Abe) (@denki_minto) <a href="https://twitter.com/denki_minto/status/604095639878639616">May 29, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="de">Volcano erupts in southern Japan, on Kuchinoerabu Island off Kagoshima. (NHK footage) <a href="http://t.co/aSurMriBmH">pic.twitter.com/aSurMriBmH</a></p> <p>&mdash; Jacob Schlesinger (@JMSchles) <a href="https://twitter.com/JMSchles/status/604094109842685952">May 29, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">A volcano has erupted in southern <a href="https://twitter.com/hashtag/Japan?src=hash">#Japan</a>. Lava has hit the coast. Small evacuation ordered <a href="https://twitter.com/CBCAlerts">@CBCAlerts</a> <a href="https://twitter.com/hashtag/cbc?src=hash">#cbc</a> <a href="https://twitter.com/hashtag/nhkworld?src=hash">#nhkworld</a> <a href="http://t.co/F739eZ9rAk">pic.twitter.com/F739eZ9rAk</a></p> <p>&mdash; Michael Dick (@CBC_Michael) <a href="https://twitter.com/CBC_Michael/status/604097103111921665">May 29, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>* * *</p> <p><a href="http://theeconomiccollapseblog.com/archives/40-volcanoes-are-erupting-right-now-and-34-of-them-are-along-the-ring-of-fire"><em>As Michael Snyder of The Economic Collapse blog</em></a>, <strong>you may not have noticed, but our planet is becoming increasingly unstable.</strong>&nbsp; According to <a href="http://www.volcanodiscovery.com/erupting_volcanoes.html" target="_blank" title="Volcano Discovery">Volcano Discovery</a>, 40 volcanoes around the globe are erupting right now, and only 6 of them are not along the Ring of Fire.&nbsp; If that sounds like a very high number to you, that is because it is a very high number.&nbsp; As I have <a href="http://endoftheamericandream.com/archives/the-number-of-volcanoes-erupting-right-now-is-greater-than-the-20th-centurys-yearly-average" target="_blank" title="written about previously">written about previously</a>, there were a total of <a href="http://healthintelligence.drupalgardens.com/content/volcanic-activity-within-last-10000-years" target="_blank" title="3,542 volcanic eruptions globally">3,542 volcanic eruptions</a> during the entire 20th century.&nbsp; When you divide that number by 100, that gives you an average of about 35 volcanic eruptions per year.&nbsp; So the number of volcanoes that are erupting right now is well above the 20th century&rsquo;s average <strong>for an entire calendar year</strong>.&nbsp; And of course we are witnessing a tremendous amount of earthquake activity as well.&nbsp; Nepal was just hit by the worst earthquake that it had seen <a href="http://endoftheamericandream.com/archives/there-will-be-earthquakes-the-crust-of-the-earth-violently-roars-to-life-in-chile-and-nepal" target="_blank" title="in 80 years">in 80 years</a>, and scientists are telling us that the Himalayas actually dropped <a href="http://factually.gizmodo.com/the-himalayas-dropped-3-feet-after-the-nepal-earthquake-1704285067" target="_blank" title="by an astounding 3 feet">by an astounding 3 feet</a> as a result of that one earthquake.&nbsp; How much more does our planet have to shake before people start paying attention?</p> <p>Of course the things that we have been seeing lately are part of a much larger long-term trend.&nbsp; Seismic activity appears to have been getting stronger over the past few decades, and now things really seem to be accelerating.&nbsp; The following is how&nbsp;<a href="http://thecostaricanews.com/are-earthquakes-and-volcano-activity-on-the-rise" target="_blank" title="one news source">one news source</a> recently summarized what we have been witnessing&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>If it seems like earthquakes and erupting volcanoes are happening more frequently, <strong>that&rsquo;s because they are</strong>. Looking at global magnitude six (M6) or greater from 1980 to 1989 there was an average of 108.5 earthquakes per year, from 2000 to 2009 the planet averaged 160.9 earthquakes per year: that is a 38.9% increase of M6+ earthquakes in recent years. Unrest also seems to be growing among the world&rsquo;s super-volcanoes. Iceland (which is home to some of the most dangerous volcanoes on the planet), Santorini in Greece, Uturuncu in Bolivia, the Yellowstone and Long Valley calderas in the U.S., Laguna del Maule in Chile, Italy&rsquo;s Campi Flegrei &ndash; almost all of the world&rsquo;s active super-volcanic systems are now exhibiting some signs of inflation, an early indication that pressure is building in these volcanic systems.</p> </blockquote> <p>But of course most Americans are never going to care about any of this until it starts affecting them personally.</p> <p>Well, perhaps they should start paying attention to the warning signs.&nbsp; In recent weeks we have seen significant earthquakes <a href="http://endoftheamericandream.com/archives/michigan-texas-mississippi-california-idaho-and-washington-all-jolted-by-significant-earthquakes" target="_blank" title="in Michigan, Texas, Mississippi, California, Idaho And Washington">in Michigan, Texas, Mississippi, California, Idaho And Washington</a>.&nbsp; In addition, it is being reported that pressure is building in dormant volcanoes in <a href="http://dutchsinse.com/5032015-arizona-earthquake-at-dormant-volcanic-butte-kachina-village-az/" target="_blank" title="Arizona">Arizona</a> and <a href="http://dutchsinse.com/5082015-dormant-supervolcano-in-california-shows-movement-below-sign-of-california-pressure/" target="_blank" title="California">California</a>.&nbsp; Just because we have not had a killer earthquake or a large volcanic eruption in the U.S. in recent years does not mean that it will always be that way.&nbsp; Right now the entire planet appears to be waking up, and this especially seems to be true of the Ring of Fire.</p> <p>If you are not familiar with the Ring of Fire, just imagine a giant ring that runs around the outer perimeter of the Pacific Ocean.&nbsp; Approximately 90 percent of all earthquakes and approximately 75 percent of all volcanic eruptions occur within this area, and the entire west coast of North America is considered to be part of the Ring of Fire.</p> <p>For so long, the west coast has been incredibly blessed not to have experienced a major seismic event.&nbsp; But scientists tell us that it is only a matter of time.</p> <p>And right now, just about every other part of the Ring of Fire is shaking violently.</p> <p>For example, a magnitude 6.8 earthquake just hit Japan&nbsp;<a href="http://www.nbcnews.com/news/world/strong-quake-hits-japan-aftershock-devastating-2011-temblor-n358246" target="_blank" title="on Wednesday">on Wednesday</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A magnitude-6.8 earthquake that shook northeast Japan on Wednesday was an aftershock of the devastating 2011 quake that triggered a massive tsunami and nuclear power plant meltdown.</p> <p>&nbsp;</p> <p>&ldquo;We consider this morning&rsquo;s earthquake to be an aftershock of the 2011 Northeastern Pacific Earthquake,&rdquo; said Yohei Hasegawa, an official at the Japanese meteorological agency.</p> <p>&nbsp;</p> <p>The temblor, which struck just after 6 a.m. local time (5 p.m. ET Tuesday), was sparked by the Pacific tectonic plate &ldquo;subducting,&rdquo; or moving under, the main land plate, he added.</p> <p>Hasegawa warned that more tremors may be on the way.</p> </blockquote> <p>One Japanese expert is warning that Japan &ldquo;<a href="http://the-japan-news.com/news/article/0002137062" target="_blank" title="might have entered an era of great earthquakes and volcanic eruptions">might have entered an era of great earthquakes and volcanic eruptions</a>&ldquo;, and considering the immense devastation that the great earthquake and tsunami of 2011 caused, that is a very sobering assessment.</p> <p>Meanwhile, a series of very strong earthquakes have struck Papua New Guinea recently as well.&nbsp; The following comes from&nbsp;<a href="http://www.washingtonpost.com/world/strong-quake-rocks-papua-new-guinea-local-tsunami-possible/2015/05/07/da512006-f48c-11e4-bca5-21b51bbdf93e_story.html" target="_blank" title="the Washington Post">the Washington Post</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A powerful earthquake rattled Papua New Guinea on Thursday, the fourth strong quake to hit the South Pacific island nation in a week. The temblor prompted officials to issue a local tsunami warning, but it was lifted shortly afterward with no reports of damage.</p> <p>&nbsp;</p> <p>The 7.1-magnitude quake struck about 150 kilometers (94 miles) southwest of the town of Panguna on Bougainville Island at a depth of 23 kilometers (14 miles), the U.S. Geological Survey reported.</p> </blockquote> <p>Once again, just because things have always been a certain way does not mean that they will always be that way.</p> <p>As Americans, we are not accustomed to being concerned about major earthquakes and massive volcanic eruptions, but that could soon change in a big way.</p> <p>The truth is that our planet and our sun are changing in ways that are unpredictable and that our scientists don&rsquo;t completely understand.</p> <p>For example, a recent&nbsp;<a href="http://www.livescience.com/46694-magnetic-field-weakens.html" target="_blank" title="LiveScience article">LiveScience article</a> discussed the fact that scientists are deeply puzzled by the fact that the magnetic field of our planet is getting weaker <strong>10 times faster</strong> than previously believed&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Scientists already know that <a href="http://www.livescience.com/2897-earth-magnetic-field-flip-flops.html" target="_blank" title="magnetic north shifts">magnetic north shifts</a>. Once every few hundred thousand years the magnetic poles flip so that a compass would point south instead of north. While changes in magnetic field strength are part of this normal flipping cycle, data from Swarm have shown the field is starting to weaken faster than in the past. Previously, researchers estimated the field was weakening about 5 percent per century, <strong>but the new data revealed the field is actually weakening at 5 percent per decade, or 10 times faster than thought</strong>. As such, rather than the full flip occurring in about 2,000 years, as was predicted, the new data suggest it could happen sooner.</p> </blockquote> <p>And <a href="http://endoftheamericandream.com/archives/michigan-texas-mississippi-california-idaho-and-washington-all-jolted-by-significant-earthquakes" target="_blank" title="in a previous article">in a previous article</a>, I discussed how one scientist has discovered that activity on the sun is declining at a faster pace &ldquo;than at any time in the last 9300 years&rdquo; right now.</p> <p><strong>I don&rsquo;t pretend to have all the answers for why these things are happening, but clearly some very unusual things are taking place.</strong></p> http://www.zerohedge.com/news/2015-05-28/japan-issues-highest-alert-evacuation-warnings-after-volcano-explosively-erupts-no-i#comments ETC Greece Iceland Italy Japan Meltdown Michigan Nuclear Power Twitter Twitter Fri, 29 May 2015 03:33:05 +0000 Tyler Durden 507205 at http://www.zerohedge.com Martin Armstrong Warns "This Time Is Very Different" http://www.zerohedge.com/news/2015-05-28/martin-armstrong-warns-time-very-different <p><a href="http://armstrongeconomics.com/archives/30920"><em>Submitted by Martin Armstrong via ArmstrongEconomics.com</em></a>,</p> <p><strong>For years, I have warned that we will face our worst nightmare &ndash; the collapse of socialism.</strong> In the death throes of this abomination that even the <strong>Ten Commandments</strong> listed as a serious sin, equal to &ldquo;thou shalt not kill&rdquo;, government will become the ugly beast that will devour society to retain power.</p> <p><a href="http://i1.wp.com/armstrongeconomics.com/wp-content/uploads/2013/11/capitalism-vs-socialism.jpg"><img alt="capitalism-vs-socialism" class="size-full wp-image-15520 aligncenter" height="550" src="http://i1.wp.com/armstrongeconomics.com/wp-content/uploads/2013/11/capitalism-vs-socialism.jpg?resize=584%2C564" width="570" /></a></p> <p>&nbsp;</p> <p><strong>Of course, they will never see themselves that way,</strong> but they will justify in their minds that stripping us of our freedom, rights, privileges, and immunities, is necessary to maintain socialism for the good of the people.</p> <p><a href="http://i0.wp.com/armstrongeconomics.com/wp-content/uploads/2015/05/Thatcher-Socialism.jpg"><img alt="Thatcher-Socialism" class="alignnone size-full wp-image-30921" height="294" src="http://i0.wp.com/armstrongeconomics.com/wp-content/uploads/2015/05/Thatcher-Socialism.jpg?resize=584%2C301" width="570" /></a></p> <p>We are running out of other peoples&rsquo; money, as Margaret Thatcher warned.</p> <p>&nbsp;</p> <p><a href="http://i0.wp.com/armstrongeconomics.com/wp-content/uploads/2015/05/Marx-Changing-World.jpg"><img alt="Marx-Changing World" class="alignright wp-image-30922 size-medium" height="300" src="http://i0.wp.com/armstrongeconomics.com/wp-content/uploads/2015/05/Marx-Changing-World.jpg?resize=224%2C300" width="224" /></a></p> <p>Karl Marx, who sought to change society by sheer force, set all this in motion. <strong>What has taken place is really scary, for indeed they have altered society far more than anyone dares to ponder.</strong></p> <p><u><strong>Why is this Sovereign Debt Crisis collapse different from 1931? </strong></u>When the governments of the world defaulted on their debts in 1931, there were no pension funds. Government has exempted itself from all prudent reason for you take the state operated pension funds, like Social Security in the USA, where 100% of the money is in government bonds. They may have no intention of defaulting, but very few government have ever paid off their debts in the end. Then there are states who regulate pension funds requiring more than 80% to be in government bonds.</p> <p><u><strong>A Sovereign Debt Default this time around will wipe out socialism, yet the bulk of the people are clueless not merely about the risk, but the ramifications.</strong></u> Younger generations do not save to support their parents for that was government&rsquo;s job post-Great Depression. Socialism has altered thousands of years of family structure following the ranting of Karl Marx. This has been one giant lab experiment that ended badly in China and Russia and is coming to a local government near you.</p> <p>So this time it is&nbsp;<strong style="font-style: inherit;">SUBSTANTIALLY DIFFERENT</strong>. <strong>Government is now on the hook,</strong> which is part of the reason why they are <strong>moving to eliminate cash to prevent bank runs and to force society to comply with their demands</strong>. This is why we have people like <strong><a href="http://armstrongeconomics.com/archives/30446">Gordon Brown</a></strong>, who sold Britain&rsquo;s gold reserves in 1999 making the low, claiming now that eliminating cash will eliminate the boom and bust of the business cycle. Let&rsquo;s face it, Gordon Brown has&nbsp;<strong style="font-style: inherit;">NEVER</strong>&nbsp;been right when it comes to politics, not even once, and he has been the worst manager of finance that Britain has ever known. He sold the low in gold and now he presumes he can fulfill Marxism by eliminating cash. He postulates ideas that are theory without any support whatsoever. We cannot afford more arrogant people like this in politics who believe they have a right to experiment with society.</p> <p><u><strong>This time it is very different</strong></u>. <strong>They have wiped out society placing the entire scheme of socialism as a terrible nightmare that will end badly, and they have ruined the social family structure disarming people that for thousands of years was our very means of self-sufficient survival. </strong>These clown have set the tone for wiping out the dreams they sold the elderly, all while hunting taxes and causing job creation to implode as the youth has been converted into the lost generation. All this with pretend good intentions. Can you imagine the damage to society if they had actually intended this mess? <u><strong>They have lied to themselves and to the people. We have to crash and burn &ndash; that part is inevitable. Only when the economy turns down will we then argue over solutions.</strong></u></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="413" height="368" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150528_arm.jpg?1432837524" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-28/martin-armstrong-warns-time-very-different#comments China default Martin Armstrong Sovereign Debt Fri, 29 May 2015 03:30:08 +0000 Tyler Durden 507179 at http://www.zerohedge.com Guest Post: America Has No Enemy More Lethal Than The Neocon http://www.zerohedge.com/news/2015-05-28/guest-post-america-has-no-enemy-more-lethal-neocon <p><a href="http://non-intervention.com/1612/america-has-no-enemy-more-dastardly-and-lethal-than-the-neoconservative/"><em>Submitted by Michael Scheuer via Non-Intervention.com</em></a>,</p> <p><strong>Those men who wrote our Constitution made it perfectly intelligible to anyone who cared to read it. They also left some flexibility in its articles to ensure that as time passed and circumstances changed the document would remain viable as the indispensable protector of the republic they created and of the liberty of citizens who delegated a limited amount of their sovereign power to the national government through its provisions. </strong>And after a long and often&nbsp; angry ratification debate, the first congress added a bill of rights to the Constitution as that document&rsquo;s first ten amendments. These amendments were fully as clear as the text &mdash; perhaps more so &mdash; but less flexible than the body of the document because they dealt with the tenets of republican liberty which, if regularly and deliberately violated by the national government, would require that Americans, to paraphrase Jefferson, demolish the existing government and erect a new one that would better safeguard their liberties and their republic&rsquo;s security.</p> <p><strong>In recent decades, however, Americans have been treated to an endless stream of politicians, academics, lawyers, and pundits who describe the opaqueness of the Founder&rsquo;s Constitution and the need for &ldquo;experts&rdquo; to decipher or infer what the document means. </strong>As a result, we now have presidents who take the country to war on their whim; politicians who are legally bribed by &ldquo;campaign contributions&rdquo; from rich individuals, corporations, labor unions, and foreign lobbies and governments based on an absurd reading of the Constitution; a public that is increasingly endangered by flamboyant blasphemers who seek violence and war under the protection of the First Amendment; and the routine criminality of executive branch officials who refuse to obey their oath of office to execute the laws. We also have the overwhelming majority of both political parties willing to destroy the Fourth Amendment in the name of providing for national security against an enemy they have resolutely refused to either stop motivating or militarily annihilate. <strong>Together these realities amount to a more-than-full justification for Americans to recall that, as Jefferson wrote, &ldquo;it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.&rdquo;</strong></p> <p>In the midst of America&rsquo;s third consecutive despotic presidency &mdash; each more despotic than its predecessor, and all more than Nixon &mdash; the citizenry now sees two singularly courageous individuals standing up and saying the destruction of the Fourth Amendment must stop. The junior senator from Kentucky, Mr. Paul, and FOX&rsquo;s senior judicial analyst, Judge Andrew Napolitano, have been and are saying that it is unconstitutional for any congress and/or president to order NSA to collect the electronic communications of all Americans. <em>(<strong>NB: </strong>Note to Congressman Gowdy: Can&rsquo;t you get Hillary Clinton&rsquo;s e-mail from NSA? Or is the unconstitutional collection system rigged so the corrupt elite are exempt?)</em> If the U.S. educational system was not run by people who yearn and work for despotism, and if that system taught civics and history instead of political indoctrination, the senator and the judge would not be so alone in their opposition to tyranny. <em>(<strong>NB:</strong> Perhaps the sheep-like silence and passivity of much of the public toward this deliberate and cynical violation of their constitutionally protected rights is the best reason for destroying the federal Department of Education at the first opportunity.)</em></p> <p><strong>Those who support the destruction of the 4th Amendment, of course, do so because they have knowingly failed to provide for the security of the United States since Osama bin Laden declared war on the nation in August, 1996.</strong> The threat from al-Qaeda, and now from its progeny, the Islamic State, exists and is still growing because we have had three presidents who refused to either stop motivating the Islamists to attack us or to annihilate them, their supporters, and their infrastructure with U.S. military power. Instead, they have made Americans pay with the currency of their soldier-children&rsquo;s lives and limbs and their liberty for the government&rsquo;s deliberate failure to protect the republic against enemies foreign and domestic. Indeed, the last three presidents and their lieutenants have provided the bulk of America&rsquo;s domestic enemies, and their transparently unconstitutional and enemy-protecting behavior is ample, accumulated justification for&nbsp;Americans to begin to look for ways to devise&nbsp;&rdquo;Guards for their future security.&rdquo;</p> <p>Last Thursday evening (21 May 2015) on Bret Baier&rsquo;s excellent &ldquo;Special Report&rdquo;, Judge Napolitano concisely and clearly explained the intention of the White House and Congress to continue their illegal evisceration &mdash; it began with the Mr. Bush&rsquo;s Patriot Act &mdash; of the Constitution&rsquo;s 4th Amendment. Napolitano convincingly made his point and then another panelist &mdash; the Neoconservative Charles Krauthammer&ndash; replied that he was &ldquo;dead wrong.&rdquo; Krauthammer and his Neocon brothers, who labored mightily for the 2003 invasion of Iraq (lost war 1), the 2014 re-intervention (lost war 2), and now for the return ground troops to Iraq to lose again &mdash; pray God, three strikes and they are exiled to Israel &mdash; have been accurately described by the erudite political scientist Claes G. Ryn as the &ldquo;New Jacobins&rdquo;.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="text-decoration: underline;"><em>The new Jacobin does not want competition in prescribing the right model [of government]. &hellip; The new Jacobin is convinced that he knows what is best for all mankind, and if much of mankind shows reluctance to follow his lead, it is to him a sign that injustice, superstition, and general backwardness or a misconceived modernistic radicalism is standing in the way of progress. The new Jacobin is not content with voicing his own ideas and letting the peoples of the world make their own decisions. They must recognize the superiority of his principles. Governments that do not do so appear to him perverse. &hellip; The world must be rid of unenlightened, undemocratic societies. If persuasion and diplomatic pressure fail, the forces of democracy should be willing to resort to military means, especially against powers that have the temerity of openly defying the United States. The new Jacobin desires strong, activist government that can enact what he considers virtuous purposes.</em></span></p> </blockquote> <p>Intolerably,<strong> individuals fitting Professor Ryn&rsquo;s description dominate both American political parties and for decades have made foreign policy for the United States</strong>. Since the early 1990s they have brought America constant war and its reliable companion, the steadily broadening erosion of constitutional liberty. The names of these people are well known. Beyond Krauthammer, the following are, to name just a few, members of the Jacobin/Neocon fold: Hillary Clinton, Marco Rubio, Madeline Albright, Lindsey Graham, Jeb Bush, Joseph Lieberman, Ted Cruz, Mike Huckabee, Barack Obama John Boehner, Joe Biden, Bill Kristol, John Bolton, and the 90-plus Senators who did not join Kentucky&rsquo;s junior senator in defending the 4th Amendment.<strong> All of them, to judge by their words, believe it is the absolute right of the United States to intervene politically and militarily abroad wherever and whenever it chooses, and to impose by force what they define as &ldquo;universal values&rdquo;.</strong></p> <p>But their words are lies, there are no such things as universal values. <strong>There is only one value common to all men in all times and that is the universal lust for gaining and exercising arbitrary power, and that power is exactly what the Jacobin/Neocon crowd is after. </strong>They want power abroad and they want power over the American citizenry at home. They have proven they cannot attain power abroad &mdash; having lost every war they started &mdash; and they cannot get power at home unless Americans permit them to continue to systematically hollow out the Constitution and the Bill of Rights.</p> <p><strong>On that score, however, they are incrementally succeeding, and this success is the reason that Americans must begin thinking about what &ldquo;new Guards for their future security&rdquo; might be appropriate.</strong> And to ensure U.S. citizens can realistically discuss all options for preventing or destroying tyrannical government at home, the Founders left them the Second Amendment.<em><span style="text-decoration: underline;"><strong> After all, as Jefferson asked in 1787, &ldquo;And what country can preserve its liberties, if the rulers are not warned from time to time, that this people preserve the spirit of resistance? Let them take arms.&rdquo;</strong></span></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="288" height="183" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150528_neocon.jpg?1432849053" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-28/guest-post-america-has-no-enemy-more-lethal-neocon#comments Barack Obama Fail First Amendment Guest Post Iraq Israel Joe Biden national security White House Fri, 29 May 2015 03:15:58 +0000 Tyler Durden 507193 at http://www.zerohedge.com Chinese Stocks Are Crashing http://www.zerohedge.com/news/2015-05-28/chinese-stocks-are-crashing <p>The Shanghai Composite has extended yesterday's losses and is now <strong>officially in "correction" - down over 11% from its highs yesterday</strong>.</p> <p><strong>This is the biggest 2-day drop since August 2009</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_china_1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_china_1_0.jpg" width="600" height="314" /></a></p> <p>The much-heralded Shenzhen Composite is also down over 11% from yesterday's highs...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_china_3.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_china_3_0.jpg" width="600" height="302" /></a></p> <p>&nbsp;</p> <p>Intraday, a small opening ramp has been demolsihed in Shenzhen, CHINEXT, and CSI-300...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_china_2.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_china_2_0.jpg" width="600" height="317" /></a></p> <p>&nbsp;</p> <p>*&nbsp; *&nbsp; *</p> <p><a href="http://www.zerohedge.com/news/2015-05-22/glimpse-endgame-how-chinas-formerly-richest-man-crashed-his-own-stock-when-he-tried-">This has all happened since Hanergy's CEO exposed the endgame of the biggest Ponzi market ever</a></p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150527_crash.jpg" width="600" height="376" /></p> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="951" height="503" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150528_china_2.jpg?1432864758" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-28/chinese-stocks-are-crashing#comments Shenzhen Fri, 29 May 2015 02:35:24 +0000 Tyler Durden 507213 at http://www.zerohedge.com Elizabeth Warren Needs You To Help Her "Blow Debt Free College Wide Open" http://www.zerohedge.com/news/2015-05-28/elizabeth-warren-needs-you-help-her-blow-debt-free-college-wide-open <p>In “<a href="http://www.zerohedge.com/news/2015-03-14/cancel-all-student-debt-petitions-begin">Cancel All Student Debt — The Petitions Begin</a>,” we outlined The White House’s plan to explore “new bankruptcy options” for former students who, by virtue of an anemic US economic “recovery” or by virtue of their having majored in a subject that was exceedingly unlikely to land them a good job in <em>any</em> economy, find themselves in dire financial straits. On the heels of that, the calls began for the government to simply “cancel” the country’s $1.3 trillion student debt pile. Here, in what is a classic passage, is how we assessed the situation:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Sure, why not: leaving aside the very touchy topic of personal responsibility and accountability, in a world in which record debt is merely "replaced" by even more debt, and in which profits are privatized but losses are always socialized with taxpayers and future generations bearing the brunt in the form of a record $18.2 trillion in public debt (and some $7 trillion more if one adds the government-backed GSEs which one should), why not go ahead and "cancel" the debt. And don't bother trying to explain the simple math that debt is never cancelled, as every liability is someone's asset, and that asset holder will demand to be made whole in the form of more debt elsewhere or else, like Hank Paulson in 2008, it will scream mutual assured destruction and threaten to blow up the world unless bailed out.</em></p> </blockquote> <p>Since then we’ve gone on to elaborate on the math behind underreported delinquency rates and taken an in-depth look at IBR, the “<a href="http://www.zerohedge.com/news/2015-04-27/meet-ibr-student-loan-bubbles-dirty-secret">dirty little secret</a>” that could end up costing taxpayers billions over time.&nbsp;</p> <p><span style="font-size: 1em; line-height: 1.3em;">Finally, we highlighted a plan by Presidential candidate Bernie Sanders which <a href="http://www.zerohedge.com/news/2015-05-19/make-college-free-taxing-stock-trades-dem-presidential-candidate-says">would tax stock trades</a> in order to make college free for everyone.</span></p> <p>In the (perhaps misguided) spirit of free college for all we bring you the following from Senator Elizabeth Warren who wants you to “stand with her” to make “debt-free college” a reality.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Stand with Elizabeth Warren: Support debt-free college</em></p> <p><em><br /></em></p> <p><em>Join Campaign For America's Future and support Brian Schatz, Elizabeth Warren, Raul Grijalva, Keith Ellison, and other progressive leaders in Congress to get the debt out of college. These progressive champions are launching a new resolution to build support for debt-free college:</em></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong><em>"Resolved, that Congress supports efforts to ensure that, through a combination of efforts, all students have access to debt-free higher education, defined to mean having no debt upon graduation from all public institutions of higher education."</em></strong></span></p> <p>&nbsp;</p> <p><em>Our goal is simple: Get Congress on record in support of debt-free college and spark a movement to make it a reality. This resolution can be the start of something big -- but <strong>we need your support to blow it wide open. Are you with us?</strong></em></p> </blockquote> <div> <div><em><a href="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/05/Warren.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/05/Warren_0.jpg" width="600" height="350" /></a></em></div> <div><em>* &nbsp;* &nbsp;*</em></div> <div>Anyone who has ever dreamed of "blowing something wide open" with Elizabeth Warren can do so by clicking <a href="https://takeaction.ourfuture.org/action/stand_with_warren?utm_source=email&amp;utm_medium=email&amp;utm_campaign=yourcampaign">here</a>.</div> </div> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="255" height="141" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/Warren.png?1432850600" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-28/elizabeth-warren-needs-you-help-her-blow-debt-free-college-wide-open#comments Bernie Sanders Elizabeth Warren Hank Paulson Hank Paulson Mutual Assured Destruction Reality Fri, 29 May 2015 02:30:00 +0000 Tyler Durden 507195 at http://www.zerohedge.com The Clinton Foundation Paid Sidney Blumenthal $10K/Month As He Gave Horrible Libya Advice To State Dept http://www.zerohedge.com/news/2015-05-28/clinton-foundation-paid-sidney-blumenthal-10kmonth-he-gave-horrible-libya-advice-sta <p class="story-body-text story-content" id="story-continues-2">Submitted by Mike Krieger via Liberty Blitzkrieg blog,</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>Mr. Gowdy&rsquo;s chief interest, according to people briefed on the inquiry, is a series of memos that </em></strong><strong><em>Mr. Blumenthal &mdash; who was not an employee of the State Department &mdash; wrote to Mrs. Clinton about events unfolding in Libya before and after the death of Col. Muammar el-Qaddafi. According to emails obtained by The New York Times, Mrs. Clinton, who was secretary of state at the time, took Mr. Blumenthal&rsquo;s advice seriously, forwarding his memos to senior diplomatic officials in Libya and Washington and at times asking them to respond. Mrs. Clinton continued to pass around his memos even after other senior diplomats concluded that Mr. Blumenthal&rsquo;s assessments were often unreliable.</em></strong></p> <p>&nbsp;</p> <p><strong><em>But an examination by The Times suggests that Mr. Blumenthal&rsquo;s involvement was more wide-ranging and more complicated than previously known, embodying the blurry lines between business, politics and philanthropy that have enriched and vexed the Clintons and their inner circle for years.</em></strong></p> <p>&nbsp;</p> <p class="story-body-text story-content"><strong><em>While advising Mrs. Clinton on Libya, Mr. Blumenthal, who had been barred from a State Department job by aides to President Obama, was also employed by her family&rsquo;s philanthropy, the Clinton Foundation, to help with research, &ldquo;message guidance&rdquo; and the planning of commemorative events, according to foundation officials. </em></strong></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><strong><em>Much of the Libya intelligence that Mr. Blumenthal passed on to Mrs. Clinton appears to have come from a group of business associates he was advising as they sought to win contracts from the Libyan transitional government. The venture, which was ultimately unsuccessful, involved other Clinton friends, a private military contractor and one former C.I.A. spy seeking to get in on the ground floor of the new Libyan economy.</em></strong></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content">&ndash; From the <em>New York Times</em> article:&nbsp;<a href="http://www.nytimes.com/2015/05/19/us/politics/clinton-friends-libya-role-blurs-lines-of-politics-and-business.html?_r=0">Clinton Friend&rsquo;s Memos on Libya Draw Scrutiny to Politics and Business</a></p> </blockquote> <p class="story-body-text story-content">Keeping tabs on the shadiness, cronyism and ineptitude of Hillary Clinton while she was Secretary of State alone is a full time job. I&rsquo;m not even kidding, it feels like every day I wake up to another story that in itself should be enough to disqualify her as a Presidential candidate. Yet she remains the front runner to win in 2016, which proves without a shadow of a doubt that America is not a functioning democracy, but a clownish <strong><a href="http://libertyblitzkrieg.com/2014/04/16/new-report-from-princeton-and-northwestern-proves-it-the-u-s-is-an-oligarchy/">oligarch-owned Banana Republic</a></strong>.</p> <p class="story-body-text story-content">Before I get into the many disturbing and dangerous angles to&nbsp;the Sidney Blumenthal story, it&rsquo;s important to highlight what a complete and total disaster U.S. foreign policy in Libya has been during the Obama Administration. Rather than helping the situation, NATO destroyed the nation and left it far worse than it ever was under<em>&nbsp;</em>Qaddafi. I highlighted this fact in detail earlier this year in the post,&nbsp;<strong><a href="http://libertyblitzkrieg.com/2015/02/23/the-forgotten-war-understanding-the-incredible-debacle-left-behind-by-natos-libya-intervention/" rel="bookmark" title="Permanent Link to The Forgotten War – Understanding the Incredible Debacle Left Behind by NATO in Libya">The Forgotten War &ndash; Understanding the Incredible Debacle Left Behind by NATO in Libya</a></strong>. Here&rsquo;s an excerpt:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>In retrospect, Obama&rsquo;s intervention in Libya was an abject failure, judged even by its own standards. Libya has not only failed to evolve into a democracy; it has devolved into a failed state. Violent deaths and other human rights abuses have increased severalfold. Rather than helping the United States combat terrorism, as Qaddafi did during his last decade in power, Libya now serves as a safe haven for militias affiliated with both al Qaeda and the Islamic State of Iraq and al-Sham (ISIS). The Libya intervention has harmed other U.S. interests as well: undermining nuclear nonproliferation, chilling Russian cooperation at the UN, and fueling Syria&rsquo;s civil war.?</em></strong></p> <p>&nbsp;</p> <p><strong><em>As bad as Libya&rsquo;s human rights situation was under Qaddafi, it has gotten worse since NATO ousted him. Immediately after taking power, the rebels perpetrated scores of reprisal killings, in addition to torturing, beating, and arbitrarily detaining thousands of suspected Qaddafi supporters. The rebels also expelled 30,000 mostly black residents from the town of Tawergha and burned or looted their homes and shops, on the grounds that some of them supposedly had been mercenaries. Six months after the war, Human Rights Watch declared that the abuses &ldquo;appear to be so widespread and systematic that they may amount to crimes against humanity.&rdquo;?</em></strong></p> <p>&nbsp;</p> <p><strong><em>As a consequence of such pervasive violence, the UN estimates that roughly 400,000 Libyans have fled their homes, a quarter of whom have left the country altogether. ?</em></strong></p> </blockquote> <p>You wonder how American &ldquo;leaders&rdquo; can be so inept, and then you realize that they have no idea what they are doing. Rather than making informed policy decisions, U.S. leaders and their &ldquo;advisors&rdquo; are mainly thinking about how they can make millions in&nbsp;the wake of death and destruction they created. Don&rsquo;t believe me? Read the following excerpts <a href="http://www.nytimes.com/2015/05/19/us/politics/clinton-friends-libya-role-blurs-lines-of-politics-and-business.html?_r=0">from the <em>New York Times</em></a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="story-body-text story-content"><em>Mr. Gowdy&rsquo;s chief interest, according to people briefed on the inquiry, is a series of memos that Mr. Blumenthal &mdash; who was not an employee of the State Department &mdash; wrote to Mrs. Clinton about events unfolding in Libya before and after the death of Col. Muammar el-Qaddafi. According to emails obtained by The New York Times, Mrs. Clinton, who was secretary of state at the time, took Mr. Blumenthal&rsquo;s advice seriously, forwarding his memos to senior diplomatic officials in Libya and Washington and at times asking them to respond. Mrs. Clinton continued to pass around his memos even after other senior diplomats concluded that Mr. Blumenthal&rsquo;s assessments were often unreliable.</em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><em>But an examination by The Times suggests that Mr. Blumenthal&rsquo;s involvement was more wide-ranging and more complicated than previously known, embodying the blurry lines between business, politics and philanthropy that have enriched and vexed the Clintons and their inner circle for years.</em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><em>While advising Mrs. Clinton on Libya, Mr. Blumenthal, who had been barred from a State Department job by aides to President Obama, was also employed by her family&rsquo;s philanthropy, the Clinton Foundation, to help with research, &ldquo;message guidance&rdquo; and the planning of commemorative events, according to foundation officials. </em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><em><strong>Much of the Libya intelligence that Mr. Blumenthal passed on to Mrs. Clinton appears to have come from a group of business associates he was advising as they sought to win contracts from the Libyan transitional government.</strong> The venture, which was ultimately unsuccessful, involved other Clinton friends, a private military contractor and one former C.I.A. spy seeking to get in on the ground floor of the new Libyan economy.</em></p> </blockquote> <p class="story-body-text story-content">A free market economy this is not.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="story-body-text story-content"><em>The projects &mdash; creating floating hospitals to treat Libya&rsquo;s war wounded and temporary housing for displaced people, and building schools &mdash; would have required State Department permits, but foundered before the business partners could seek official approval.</em></p> </blockquote> <p class="story-body-text story-content">Quite the business model. Bomb countries into oblivion, then make money building hospitals and temporary housing for displaced people. You can&rsquo;t make this up.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="story-body-text story-content"><em>It is not clear whether Mrs. Clinton or the State Department knew of Mr. Blumenthal&rsquo;s interest in pursuing business in Libya; a State Department spokesman declined to say. Many aspects of Mr. Blumenthal&rsquo;s involvement in the planned Libyan venture remain unclear. <strong>He declined repeated requests to discuss it.</strong></em></p> </blockquote> <p class="story-body-text story-content">Of course he did.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="story-body-text story-content"><em><strong>&ldquo;We were thinking, &lsquo;O.K., Qaddafi is dead, or about to be, and there&rsquo;s opportunities,&rsquo;</strong>&nbsp;&rdquo; Mr. White said in a brief telephone interview. He added, &ldquo;We thought, &lsquo;Let&rsquo;s try to see who we know there.&rsquo;&nbsp;&rdquo;</em></p> <p class="story-body-text story-content"><em>Mr. White declined to answer follow-up questions about what role Mr. Blumenthal was playing in the business venture. But Mr. Grange described Mr. Blumenthal as an adviser to Mr. White&rsquo;s company, along with two other associates: Tyler Drumheller, a colorful former Central Intelligence Agency official, and Cody Shearer, a longtime Clinton friend.</em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><em>Even as their plans sputtered, Mr. Blumenthal continued to draw on the business associates for information about Libya as he shaped his memos to Mrs. Clinton. Sometimes the two realms became blurred.</em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><strong><em>In January 2012, for example, Mr. Blumenthal sent Mrs. Clinton a memo describing efforts by the new Libyan prime minister to stabilize his fragile government by bringing in advisers with experience dealing with Western companies and governments.</em></strong></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><em>Among &ldquo;the most influential of this group,&rdquo; Mr. Blumenthal wrote, was a man named Najib Obeida, who worked at the fledgling Libyan stock exchange. Mrs. Clinton had the memo forwarded to her senior State Department staff.</em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><em><strong>What Mr. Blumenthal did not mention was that Mr. Obeida was one of the Libyan officials Mr. Grange and his partners hoped would finance the humanitarian projects.</strong> The day before Mr. Blumenthal emailed Mrs. Clinton, Mr. Grange wrote to a senior Clinton aide at the State Department to introduce the venture with Mr. Obeida in Libya and seek an audience with the United States ambassador there. Mr. Grange said he had not received a reply.</em></p> </blockquote> <p class="story-body-text story-content">Can you believe this? This clown Blumenthal was pretending to be passing on real intelligence to Hillary (and she repeatedly passed on his nonsense), all the while working to further business interests.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="story-body-text story-content" id="story-continues-8"><em>Mr. Blumenthal sent Mrs. Clinton at least 25 memos about Libya in 2011 and 2012, many describing elaborate intrigues among various foreign governments and rebel factions.</em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><em><strong>Mrs. Clinton circulated them, frequently forwarding them to Jake Sullivan, her well-regarded deputy chief of staff, and requesting that he distribute them to other State Department officials.</strong> Mr. Sullivan often sent the memos to senior officials in Libya, including the ambassador, J. Christopher Stevens, who was killed in the 2012 attacks in Benghazi.</em></p> <p class="story-body-text story-content">&nbsp;</p> <p class="story-body-text story-content"><strong><em>In many cases, Mr. Sullivan would paste the text from the memos into an email and tell the other State Department officials that they had come from an anonymous &ldquo;contact&rdquo; of Mrs. Clinton.</em></strong></p> </blockquote> <p class="story-body-text story-content">He didn&rsquo;t even have the decency&nbsp;to admit where the information was coming from, since Mr.&nbsp;Blumenthal was specifically banned by the Obama Administration from serving under Hillary in an official capacity. And&nbsp;you wonder why the American political system is circling&nbsp;the toilet bowl.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="story-body-text story-content"><strong><em>But the skepticism did not seem to sour Mrs. Clinton on Mr. Blumenthal. She continued to forward Mr. Blumenthal&rsquo;s memos, often appending a note: &ldquo;Useful insight&rdquo; or &ldquo;We should get this around asap.&rdquo;</em></strong></p> <p class="story-body-text story-content"><em>The emails suggest that Mr. Blumenthal&rsquo;s direct line to Mrs. Clinton circumvented the elaborate procedures established by the federal government to ensure that high-level officials are provided with vetted assessments of available intelligence.</em></p> </blockquote> <p>The above certainly explains why American foreign policy is such a dangerous joke, but it gets even worse. It appears the&nbsp;entire time Blumenthal was providing the State Department with inaccurate, crony and clownish &ldquo;intelligence&rdquo; on Libya, he was earning $10,000 per month from the Clinton Foundation. We learn <a href="http://www.politico.com/story/2015/05/clinton-foundation-sidney-blumenthal-salary-libya-118359.html?hp=t2_r">from <em>Politico</em></a> that:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><em>Sidney Blumenthal, a longtime confidant of Bill and Hillary Clinton, earned about $10,000 a month as a full-time employee of the Clinton Foundation while he was providing unsolicited intelligence on Libya to then Secretary of State Hillary Clinton, according to multiple sources familiar with the arrangement.</em></em></p> <p>&nbsp;</p> <p><em>Blumenthal was added to the payroll of the Clintons&rsquo; global philanthropy in 2009 &mdash; not long after advising Hillary Clinton&rsquo;s presidential campaign &mdash; at the behest of former president Bill Clinton, for whom he had worked in the White House, say the sources.</em></p> <p>&nbsp;</p> <p><em>Blumenthal&nbsp;<a href="http://www.politico.com/story/2015/05/benghazi-panel-subpoenas-blumenthal-118125.html" target="_blank">has been subpoenaed</a>&nbsp;by the U.S. House committee investigating the 2012 attack on the U.S. consulate in Benghazi, Libya, and Clinton&rsquo;s handling of it. He is expected to testify next week about a series of memos containing sometimes specious intelligence on the situation in Libya, which he sent to Hillary Clinton&rsquo;s personal email account.</em></p> <p>&nbsp;</p> <p><em>Clinton, whose efforts to hire Blumenthal as an adviser at the State Department were rebuffed by top aides to President Barack Obama, last week&nbsp;<a href="http://www.politico.com/story/2015/05/hillary-clinton-sidney-blumenthal-118098.html" target="_blank">defended her relationship</a>&nbsp;with her old ally but also minimized his influence.</em></p> </blockquote> <p>To summarize, I think Ben Mathis-Lilley <a href="http://www.slate.com/blogs/the_slatest/2015/05/28/sidney_blumenthal_clinton_foundation_salary_10_000_a_month.html#">at <em>Slate </em></a>put&nbsp;it best<em>:</em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>To recap&nbsp;the&nbsp;<a href="http://www.slate.com/blogs/the_slatest/2015/05/19/hillary_clinton_press_conference_non_answers_to_bad_questions.html">whole situation</a>: In 2011 and 2012, Hillary Clinton, as secretary of state, used an&nbsp;<a href="http://www.slate.com/blogs/the_slatest/2015/03/13/hillary_clinton_email_review_searched_for_some_words_deleted_everything.html">off-books email account</a>&nbsp;to discuss national policy with a private citizen who&nbsp;<a href="http://www.slate.com/blogs/the_slatest/2015/03/30/sidney_blumenthal_hillary_clinton_and_the_foreign_agents_registration_act.html">might have been violating the law</a>&nbsp;by participating in the conversation, who had a related business interest (though not a &ldquo;financial interest&rdquo;?) in the subject of his advice that he may or may not have disclosed to the government, and who was simultaneously employed in a questionable &ldquo;full-time&rdquo; capacity at significant expense to a nonprofit that has been accused of acting as the bag man for a Clintonian influence-peddling operation.</em></strong></p> </blockquote> <p>Must be nice.</p> <p><img alt="Screen Shot 2015-05-28 at 11.23.35 AM" class="alignnone wp-image-24428" height="228" src="http://libertyblitzkrieg.com/wp-content/uploads/2015/05/Screen-Shot-2015-05-28-at-11.23.35-AM.jpg" width="302" /></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="233" height="215" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150528_blumen.jpg?1432847002" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-28/clinton-foundation-paid-sidney-blumenthal-10kmonth-he-gave-horrible-libya-advice-sta#comments Barack Obama Cronyism Iraq New York Times Obama Administration President Obama SPY White House Fri, 29 May 2015 02:15:32 +0000 Tyler Durden 507191 at http://www.zerohedge.com This Is What Happens When A Millennial Tries To Get A Job http://www.zerohedge.com/news/2015-05-28/what-happens-when-millennial-tries-get-job <p>In “<a href="http://www.zerohedge.com/news/2015-05-27/global-youth-unemployment-hits-35-million-recent-grads-lean-parents">Global Youth Unemployment Hits 35 Million As Recent Grads Lean On Parents</a>,” we documented what we have called the “pitiable plight” of recent college graduates whose degrees now cost in excess of $35,000 and who are entering a job market bereft of real opportunities for gainful employment. The OECD estimates that in member countries, as many as 35 million people aged 16-29 are out of work. In a related story, Sallie Mae (from which the nation’s number-one issuer of student loan-backed ABS was spun last year) recently reported that better than two-thirds of parents expect to provide financial support to their children post-graduation. With this in mind, consider the following data on youth unemployment in the US.</p> <p>From <a href="https://generationopportunity.org/press-releases/youth-unemployment-at-13-8-in-april/">Generation Opportunity</a> (a nonprofit):</p> <ul> <li><strong style="font-size: 1em; line-height: 1.3em;">The effective (U-6) unemployment rate for 18-29 year olds, which adjusts for labor force participation by including those who have given up looking for work, is 13.8 percent (NSA). The (U-3) unemployment rate for 18-29 year olds is 7.9 percent (NSA).</strong></li> <li><strong style="font-size: 1em; line-height: 1.3em;">The declining labor force participation rate has created an additional 1.828 million young adults that are not counted as “unemployed” by the U.S. Department of Labor because they are not in the labor force, meaning that those young people have given up looking for work due to the lack of jobs.</strong></li> <li><span style="font-size: 1em; line-height: 1.3em;">The effective (U-6) unemployment rate for 18-29 year old African-Americans is 19.6 percent (NSA); the (U-3) unemployment rate is 12.8 percent (NSA).</span></li> <li><span style="font-size: 1em; line-height: 1.3em;">The effective (U-6) unemployment rate for 18-29 year old Hispanics is 14.1 percent (NSA); the (U-3) unemployment rate is 9 percent (NSA).</span></li> <li><span style="font-size: 1em; line-height: 1.3em;">The effective (U-6) unemployment rate for 18-29 year old women is 11.7 percent (NSA); the (U-3) unemployment rate is 7.5 percent (NSA).</span></li> </ul> <p>“College graduates will spend the upcoming month looking toward their futures – but as they celebrate, their ability to get a job remains top of mind. Young people have seen their economic situation improve in 2015. While we’re glad for that, April’s jobs report still shows a 13.8 percent youth unemployment rate, a discouragingly high number for those who are hoping to embark on their careers in the next few weeks,” the group’s Director of Policy Engagement at Generation Opportunity Luke Kenworthy says. </p> <p><strong>“If you look at the numbers starting in 2009, we’ve been in the longest sustained period of unemployment since the Bureau of Labor Statistics began collecting their data following World War II.</strong> This misconception that we don’t want jobs or that we’re lazy and entitled is nonsense,” a spokesman added, in a statement to Newsweek.</p> <p>According to the OECD, one of the reasons recent graduates have so much trouble finding jobs is that their degrees aren’t preparing them for life in the workplace with 10% of new graduates displaying poor literacy skills and 14% exhibiting subpar numeracy skills. </p> <p>But it’s not just the skills gap. College degrees (even graduate degrees) have become so commonplace (thanks in part to the proliferation of student loans) that they are no longer sufficient in and of themselves to guarantee their holders will find good jobs. <span style="text-decoration: underline;"><strong>One 25-year old who lives in the nation’s capital <a href="http://www.newsweek.com/2015/06/05/millennial-college-graduates-young-educated-jobless-335821.html">told Newsweek</a> that even with her master’s degree, she has found waitressing is the better option in today’s job market:</strong></span></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Millennials face higher university tuitions and student loan debt than ever before, as well as stiffer competition when they enter the workforce. A 25-year-old who recently earned a master’s and is living with a friend in Washington, D.C., tells Newsweek she is waitressing while looking for a job better suited to her qualifications.</em><em style="font-size: 1em; line-height: 1.3em;"><strong>“It’s hard,” she says. “They don’t want to pay you extra for your master’s. There are enough people with master’s degrees that they can require them.”</strong></em></p> </blockquote> <p>As a reminder...</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/05/WaitersBartenders1.jpg" width="532" height="381" /></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/05/WaitersBartenders2.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/05/WaitersBartenders2.jpg" width="532" height="352" /></a></p> <p>Millennials have also discovered what we’ve been harping on for months: for most Americans, there simply is <a href="http://www.zerohedge.com/news/2015-03-11/mystery-americas-missing-wage-growth-has-been-solved">no wage growth</a>.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Millennials are getting lower earnings compared with the nation’s median income, versus people of that age a decade ago. “We find that because of the difficulties facing millennials, they are delaying these important life decisions, like getting married, buying a home, starting a family,” Pasch says.</em></p> <p>&nbsp;</p> <p><em><strong>In a study by Carnevale’s center at Georgetown, the age at which young adults on average reach the median wage, across education levels, increased from 26 to 30 between 1980 and 2012.</strong> Those hardest hit were high school graduates and young men. Full-time employment for high school graduates declined 13 percentage points for the period, while the rate for university graduates declined by 8 points. As of 2012, young men earned only 58 percent of the mean wage, down from 85 percent in 1980.</em></p> </blockquote> <p>Circling back to the issue of whether millennials are getting what they paid for (or, more appropriately, what they <a href="http://www.zerohedge.com/news/2015-05-26/primer-indebted-students-here-are-your-options">almost certainly didn't pay for</a> and never will) from US colleges and universities, it's looking increasingly likely that the push to educate America's youth (spearheaded by easy access to borrowed money) may end up backfiring, as prospective students assess the difficulty recent graduates have had in finding jobs that are commensurate with their experience and ask themselves if four years of their lives and $35,000 in debt is really worth it. Here's Newsweek again:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em><strong>Carnevale says graduates are feeling let down by their universities, even as the institutions jack up the cost of tuition.</strong> “I don’t know if you noticed,” he says, “but we have a debate raging in this country right now over whether universities are supposed to teach for enlightenment or to prepare students for the job market. You still see presidents at some very prestigious universities arguing for the former, not the latter.”</em></p> </blockquote> <p>Of course that could be because graduates from "very prestigious universities" are often i) deeply connected thanks to family pedigree and ii) heavily recruited, making it easier for them to find jobs and thus rendering the distinction between teaching "enlightenment" and teaching hard skills less meaningful. Whatever the case, you can probably count "presidents at some very prestigious universities" unconcerned because as the following excerpt makes clear, they're doing just fine.&nbsp;</p> <p>Via <a href="http://www.bloomberg.com/news/articles/2015-05-26/ivy-league-pay-soars-taking-cue-from-corporate-america">Bloomberg</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Ivy League presidential pay is looking more like the big leagues.</em></p> <p>&nbsp;</p> <p><strong><em>Columbia University paid President Lee Bollinger $4.6 million in 2013, a 36 percent increase from the year before, according to a tax filing released Tuesday. Yale University recently revealed it paid former President Richard Levin a bonus of $8.5 million when he retired in 2013 after 20 years.</em></strong></p> <p>&nbsp;</p> <p><em>Presidential pay at elite universities is increasingly resembling that of corporate America, with performance bonuses and exit packages. While colleges say the rewards reflect the complexity of running multi-billion-dollar organizations, professors, alumni and others have questioned whether it is appropriate for nonprofits.</em></p> </blockquote> <p>Here to sum up what it's like to be a millennial with a newly-minted $35,000 degree hunting for a job in America is another recent graduate from the DC area who told Newsweek the following:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>“You’re like, ‘I’ll do anything and apply for everything, but usually it’s an electronic filing and you’re spending all your time on it and never hear back. <strong>So far, I have applied for around 30 jobs, if not more, and have heard back on two of them.</strong> I didn’t get either job because I don’t have enough experience. These are entry-level jobs, but experienced people are taking them.”</em></p> </blockquote> <p>Good luck millennials and remember, there's <a href="http://www.zerohedge.com/news/2015-05-11/governments-career-suggestion-massively-indebted-college-grads-become-farmers">always the farm</a>.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="607" height="332" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/Waitress.png?1432839623" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-28/what-happens-when-millennial-tries-get-job#comments 8.5% Bureau of Labor Statistics Corporate America Sallie Mae Student Loans Unemployment Washington D.C. Fri, 29 May 2015 02:05:33 +0000 Tyler Durden 507184 at http://www.zerohedge.com Super-Tanker Surge Signals More Crude Carnage To Come http://www.zerohedge.com/news/2015-05-28/super-tanker-surge-signals-more-crude-carnage-come <p><strong>&quot;The supply of oil continues to build,&quot;</strong> warns the CEO of one super-tanker fleet, and &quot;all of this oil needs to go somewhere,&quot; which is why the surge in super-tankers to a seven year high strong suggests all is not well in the world&#39;s hopeful &#39;demand&#39; picture. With <strong>charter rates up a stunning 57% in the last few weeks</strong> with millions of barrels being stored on ships is<strong> another indication that the oil glut is yet to dissipate </strong><em>(and in fact, <a href="http://www.bloomberg.com/news/articles/2015-05-27/oil-bulls-beware-soaring-tanker-rates-show-supply-glut-persists-ia7cvht4">as Bloomberg reports</a>, is getting worse - with almost half a billion barrels of oil in transit to buyers at the start of June, the most this year)</em>. With OPEC&#39;s meeting around the corner, a sudden realization of this rising glut may send prices plummeting once again.</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_tanke.jpg"><img height="366" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150528_tanke_0.jpg" width="600" /></a></p> <p>Four months into oil&rsquo;s rebound from a six-year low,<strong> the tanker market is sending a clear signal that the rally is under threat.</strong> <a href="http://www.bloomberg.com/news/articles/2015-05-27/oil-bulls-beware-soaring-tanker-rates-show-supply-glut-persists-ia7cvht4">As Bloomberg reports, </a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A sudden surge in demand for supertankers drove benchmark charter rates 57 percent higher in the two weeks through May 20. OPEC will have almost half a billion barrels of oil in transit to buyers at the start of June, the most this year, while analysts say about 20 million barrels is being stored on ships in another indication <span style="text-decoration: underline;"><strong>the glut has yet to dissipate</strong></span>.</p> <p>&nbsp;</p> <p><strong>The Organization of Petroleum Exporting Countries is pumping the most oil in more than two years, determined to defend market share rather than prices. </strong>A record cut to the number of active U.S. drilling rigs and billions of dollars of spending reductions by companies since last year&rsquo;s price plunge has yet to translate into a slump in barrels produced. The world is pumping about 1.9 million barrels a day more crude than it needs, according to Goldman Sachs Group Inc.</p> <p>&nbsp;</p> <p><strong>&ldquo;Supply of oil continues to build,&rdquo;</strong> said Paddy Rodgers, the chief executive officer of Antwerp, Belgium-based Euronav NV, whose supertanker fleet can haul 56 million barrels of crude. &ldquo;All of this oil needs to go somewhere,&rdquo; he wrote in an e-mail May 19.</p> <p>&nbsp;</p> <p><strong>Daily rates for supertankers on the industry&rsquo;s benchmark route reached $83,412 on May 20, from $52,987 on May 6, </strong>according to the Baltic Exchange in London. While rates since retreated to $65,784, they&rsquo;re still the highest for this time of year since at least 2008.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><strong>Spare tanker capacity in the Middle East has seldom been tighter.</strong> The combined excess of ships competing for the region&rsquo;s exports stood at 6 percent last week, the lowest for the time of year in Bloomberg surveys of shipbrokers that started in 2009.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><strong>&ldquo;The summer is not usually the time when rates really should go high,&rdquo;</strong> Odysseus Valatsas, chartering manager at Dynacom Tankers Management in Glyfada, Greece, said by phone May 21.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>Last night&#39;s API inventory build also throws the &quot;peak production&quot; hopers meme under the bus.</p> <p>Of course, for those looking for a silver lining here, there is always the kiss of death to super-tanker fleet operators...</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Gartman: &quot;Long of Seven Units of Oil Tanker Equities; Short of the S&amp;P futures&quot;</p> <p>&mdash; zerohedge (@zerohedge) <a href="https://twitter.com/zerohedge/status/603221962375208960">May 26, 2015</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1128" height="688" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150528_tanke.jpg?1432817396" /> </div> </div> </div> http://www.zerohedge.com/news/2015-05-28/super-tanker-surge-signals-more-crude-carnage-come#comments Crude Goldman Sachs goldman sachs Greece Market Share Middle East OPEC Fri, 29 May 2015 01:30:36 +0000 Tyler Durden 507183 at http://www.zerohedge.com