Tribune

Why The Founding Fathers, Gandhi and the Dalai Lama Were All AGAINST Gun Control

Chemical Weapons, Russian Warships and Terrorists

"A great civilization is not conquered from without, until it has destroyed itself from within. The essential causes of Rome's decline lay in her people, her morals, her class struggle, her failing trade, her bureaucratic despotism, her stifling taxes, her consuming wars." A number of sources list this as a quote, but it is a synthesis of the Epilogue "Why Rome Fell". It is valid then as well as now. America as we know it won't collapse, but Americans have been unusually successful in dealing with "bureaucratic despotism". They will be successful again. Bankruptcy of another experiment in bureaucratic despotism will prompt a refreshing turn to reform of bullying politics. What we have now is an 'Ineptocracy'.

Another week begins which means all eyes turn to Europe which is getting increasingly problematic once more, even if the central banks have lulled all capital markets into total submission, and a state of complete decoupling with the underlying fundamentals. The primary event last night without doubt was Catalonia's definitive vote for independence. While some have spun this as a loss for firebrand Artur Mas, who lost 12 seats since the 2010 election to a total of 50, and who recently made an independence referendum as his primary election mission, the reality is that his loss has only occurred as as result of his shift from a more moderate platform. The reality is that his loss is the gain of ERC, which gained the seats Mas lost, with 21, compared to 10 previously, and is now the second biggest Catalan power. The only difference between Mas' CiU and the ERC is that the latter is not interested in a referendum, and demand outright independence for Catalonia as soon as possible, coupled with a reduction in austerity and a write off of the Catalan debt. As such while there will be some serious horse trading in the coming days and week, it is idiotic to attempt to spin last night's result as anything less than a slap in the face of European "cohesion." And Catalonia is merely the beginning. Recall: "The European Disunion: The Richest Increasingly Want To Fragment From The Poorest" - it is coming to an insolvent European country near you.

The Hostess bankruptcy liquidation, the result of a bungled negotiation between the company, its equity sponsors, its striking workers, and the labor union, over what has been defined as unsustainable benefits and pension benefits, is rapidly becoming a Ding Ding farce. The latest news in what promises to be an epic Chapter 22 fight is that the judge, pressured by various impaired stakeholders, among which none other than the US trustee, is that the bankruptcy Judge Robert Drain has ordered the company and its unions to seek private mediation to attempt averting what the company has already said is an inevitable unwind of operations. More to the point, and as we predicted on Friday, if there is an outright purchase of the company, it will be a standalone entity, without its unions: Hostess will draw strategic buyers and private-equity investors for its brands, Rayburn said, without naming potential bidders. The company is “more attractive” to buyers without the unions, he said. In other words, if the Union had hoped that their workers would be retained by the purchasing entity, their dreams just got shattered. But while the Union may be sad, it is about to add another emotion to its arsenal: blind fury. Because it is here that things get truly surreal. As the US Trustee, a Justice Department official responsible for protecting creditors, disclosed, as part of the winddown of Hostess, wants to pay as much as $1.75 million in incentive bonuses to 19 senior managers during the liquidation.

Entrepreneurs, venture capital investors, artisans, and mom-and-pop business owners have had it.

Did we say Arab Fall? We meant global fall. From the Star Tribune: "Thousands of Kashmiri Muslims protested Friday against an anti-Islam film, burning U.S. flags and calling President Barack Obama a "terrorist," while the top government cleric here reportedly demanded Americans leave the volatile Indian-controlled region immediately. In the southern Indian city of Chennai, protesters threw stones at the U.S. Consulate, shattering some windows and burning Obama in effigy. Police quickly cleared the area, arresting more than 100 protesters. U.S. Embassy officials in Delhi did not immediately comment." And elsewhere: "In Bangladesh, about 5,000 hardline Muslims marched in Dhaka's streets after Friday prayers, burning U.S. and Israeli flags and calling for the death of the filmmaker. Police prevented them from marching toward the U.S. Embassy several miles away." And elsewhere: "In Indonesia, the world's most populous Muslim nation, about 200 protesters chanted slogans and held up signs in a largely peaceful protest outside the heavily guarded U.S. Embassy in Jakarta. American diplomatic outposts increased security worldwide this week after clips of the film went viral online and sparked violent protests in the Middle East. About 20 protesters outside the U.S. Embassy in Kuala Lumpur, Malaysia, shouted "Allahu akbar!" and handed reporters a letter addressed to the U.S. ambassador expressing their anger over the movie and calling for greater respect for religions."

• Merkel Adviser: Unlimited ECB Bond Purchases Would Violate Mandate (Dow Jones)
• Illinois' credit rating downgraded after pension reform failure (Chicago Tribune)
• Correspondence and collusion between the New York Times and the CIA (Guardian)
• ECB action prospects underpin Italian bond auction (Reuters)
• Ryan puts down calculator, picks up bullhorn (Reuters)
• Barclays Names New CEO (WSJ)
• Barclays’s New CEO: Analysts React (WSJ)
• September Offers 15 Days to Cement Crisis Solutions (Bloomberg)
• Iran's Nuclear-Arms Guru Resurfaces (WSJ)
• Rocket blasts off to put NASA radiation belt probes into orbit (Reuters)
• Citi to Settle Suit for $590 Million (WSJ)
• Swiss-Style Latvian Banking Hub Thrives on Ex-Soviet Cash (Boomberg)

European equities are seen modestly higher at the midpoint of the European session, with the utilities and financials sectors leading the way higher. As such, the Bund is seen lower by around 40 ticks at the North American crossover. The closely-watched Spanish 10-yr government bond yield is seen lower on the day, trading at 6.85% last, as such, the spread between the peripheral 10-yr yields and their German counterpart has been seen tighter throughout the European morning. Issuance of 6-month bills from the Italian treasury passed by smoothly, selling EUR 9bln with a higher yield, but not an increase comparable with yesterday’s auction from the Spanish treasury. The decent selling from Italy today may pave the way for tomorrow’s issuance of 5- and 10-year bonds, which will be closely watched across the asset classes. Data of note has come from Germany, with the state CPIs coming in slightly higher than the previous readings, proving supportive for the expectation of national CPI to come in flat at 0.0% over the last month.

Despite already being engaged in drone wars in Pakistan, Somalia, Yemen, and still occupying Afghanistan, the U.S. is being duped into yet another war based on shaky evidence and at the behest of deep-pocketed special interests.  This is coming even while a secretive cyber war already being waged to damage Iran’s nuclear capability.  According to the Pentagon, “computer sabotage coming from another country can constitute an act of war.”  Not only that, but the draconian sanctions thus far placed on Iran are doing enormous harm to the citizens who hardly have a say in what their government does.  The Belgium-based SWIFT payment system that facilitates most international payments has already denied service to many Iranian banks.  With the imposing of an oil embargo from the European Union just around the corner (July 1^st) that will all but make it impossible for oil tankers to be insured by Lloyd’s of London, an actual naval blockade is being floated by U.S. lawmakers.  Much like the Antebellum South and Japan, Iran too is being pushed into a corner.... Then and now, wealthy special interests are a driving force behind American imperialism.  Lies will be spun till they are seen as facts.  When the truth comes out, the irreparable damage will already be done.  Like anything the state lays its filthy hands on, war is a racket.  The beneficiaries of the ruling class’s gleeful foray into mass murder are few in number.  The masses, still brainwashed into feverish nationalism, end up paying the costs with their pilfered income, eroded liberty, and, ultimately, their own lives.

Just because try hard as it may, the Chairman's printer simply can't issue infinite electronic equivalents of the 79 proton element, newspapers with a circulation of 435,000 (same as the Chicago Tribune) on this side of the Ganges will hardly ever be allowed to show the following anti-patriotic advertisement. 

Contrary to BP's Happy Talk, the Gulf Ecosystem Is Being Decimated ...

Another CEO made the news headline for alledgedly having "inappropriate relationship" with a female employee.

And they eat too LITTLE real food ...

In the not quite 100 years since the founding of your institution, America has exchanged central banking for a kind of central planning and the gold standard for what I will call the Ph.D. standard. I regret the changes and will propose reforms, or, I suppose, re-reforms, as my program is very much in accord with that of the founders of this institution. Have you ever read the Federal Reserve Act? The authorizing legislation projected a body “to provide for the establishment of the Federal Reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper and to establish a more effective supervision of banking in the United States, and for other purposes.” By now can we identify the operative phrase? Of course: “for other purposes.” As you prepare to mark the Fed’s centenary, may I urge you to reflect on just how far you have wandered from the intentions of the founders? The institution they envisioned would operate passively, through the discount window. It would not create credit but rather liquefy the existing stock of credit by turning good-quality commercial bills into cash— temporarily. This it would do according to the demands of the seasons and the cycle. The Fed would respond to the community, not try to anticipate or lead it. It would not override the price mechanism— as today’s Fed seems to do at every available opportunity—but yield to it.