First Congress Member Allowed To Read Secret Treaty Says “There Is No National Security Purpose In Keeping This Text Secret … This Agreement Hands The Sovereignty Of Our Country Over To Corporate Interests” - By WashingtonsBlog (20/6/13) PDF Print E-mail
WashingtonsBlog   
Thursday, 20 June 2013 09:26

Corporations Push to Overrule National Laws

We reported last year:

Democratic Senator Wyden – the head of the committee which is supposed to oversee it – is so furious about the lack of access that he has introduced legislation to force disclosure.

Republican House Oversight Committee Chairman Darrell Issa is so upset by it that he has leaked a document on his website to show what’s going on.

What is everyone so furious about?

An international treaty being negotiated in secret which would not only crack down on Internet privacy much more than SOPA or ACTA, but would actually destroy the sovereignty of the U.S. and all other signatories.

It is called the Trans-Pacific Partnership (TPP).


Wyden is the chairman of the trade committee in the Senate … the committee which is supposed to have jurisdiction over the TPP. Wyden is also on the Senate Intelligence Committee, and so he and his staff have high security clearances and are normally able to look at classified documents.



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What You Need To Know About Federal Reserve Meeting - By Bill Hall (20/6/13) PDF Print E-mail
Bill Hall   
Thursday, 20 June 2013 08:41

Money & Markets

The Federal Reserve's rate-setting meeting yesterday and today is, so far, the year's most important investor event.

That's the conventional wisdom, given that investors are trying to divine when Chairman Ben Bernanke will curtail the $85-billion-a-month stimulus program that's propelled the benchmark S&P 500 by 143 percent since the post-crash low in March 2009.

But it doesn't really matter. That's because the central bank will only ease back its bond buying if the economy is strong enough to grow on its own. So, either way, stocks ought to gain, at least in theory.

The much bigger problem is the mountain of debt — an estimated $4 trillion by the end of this year — printed by the Fed. It's clear that the central bank is trying to use debt to solve the debt crisis of 2008. Yet, in the long run, more debt can only cure the problem if it generates real economic growth.

Stalled Economy

There's no evidence, so far, that it's working. Over the past four years — a time period that excludes the giant slump in late 2008 and early 2009 — the economy has grown an average of 2 percent a year. That isn't enough to increase company profits, lower unemployment or, yes, enable the U.S. to pay off its debt. (That's why tax increases are inevitable, but that's another issue.



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The Paradox Of QE And Interest Rates - By Karl Denninger (19/6/13) PDF Print E-mail
Karl Denninger   
Wednesday, 19 June 2013 10:12

Market Ticker

There has been much digital ink spilled over QE and interest rates -- the Fed's claim that it is "suppressing" interest rates in the market and will continue to be effective in doing so.

Let's cut the crap -- there is a direct clash between what The Fed wants and what it is doing.

Interest rates are a combination of time value, the risk you will not get paid and inflation.

That is, nobody ever intentionally lends someone money at a loss.

Therefore, if The Fed generates positive inflation by diluting the currency, thereby raising the cost of living for the people and reducing the purchasing power of a unit of currency in relationship to tangible goods and services the interest rate must rise, all other things being equal.

The government, along with others, like low rates because they believe it allows them to borrow "cheaply." But this is a chimera among governments and large corporations, because if the currency is diluted then it is inevitable that as purchasing power is destroyed discretionary income is also reduced and therefore the money that can be either taxed to pay (by government) or spent into the economy to pay (by corporations) is also reduced.

Japan has boxed themselves into this corner -- if rates go up, even a little bit, they're screwed -- their government cannot pay the interest charges as their debt rolls to a higher coupon.



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Biggest Bond Bubble In History Is Turning Into Carnage - By Wolf Richter (19/6/13) PDF Print E-mail
Wolf Richter   
Wednesday, 19 June 2013 10:08

testosteronepit

“We’ve intentionally blown the biggest government bond bubble in history,” confessed Andy Haldane, Executive Director of Financial Stability at the Bank of England, to Members of Parliament in London last week. The bursting of that bubble was a risk he felt “acutely,” he warned. There have already been “shades of that.” And he saw “a disorderly reversion in the yields of government bonds” as the “biggest risk to global financial stability.”

And “shades of that,” as Haldane put it with classic British humor, namely understatement, are visible everywhere.

Ten-year Treasury notes have been kicked down from their historic pedestal last July when some poor souls, blinded by the Fed’s halo of omnipotence and benevolence, bought them at a minuscule yield of 1.3%. For them, it’s been an ice-cold shower ever since. As Treasuries dropped, yields meandered upward in fits and starts. After a five-week jump from 1.88% in early May, they hit 2.29% on Tuesday last week – they’ve retreated to 2.19% since then. Now investors are wondering out loud what would happen if ten-year Treasury yields were to return to more normal levels of 4% or even 5%, dragging other long-term interest rates with them. They know what would happen: carnage!

Wholesale dumping of Treasuries by exasperated foreigners has already commenced. Private foreigners dumped $30.8 billion in Treasuries in April, an all-time record. Official holders got rid of $23.7 billion in long-term Treasury debt, the highest since November 2008, and $30.1 billion in short-term debt. Sell, sell, sell!

Bond fund redemptions spoke of fear and loathing: in the week ended June 12, investors yanked $14.5 billion out of Treasury bond funds, the second highest ever, beating the prior second-highest-ever outflow of $12.5 billion of the week before. They were inferior only to the October 2008 massacre as chaos descended upon financial markets. $27 billion in two weeks!



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Bank Of America Whistle-Blower Bombshell: “We Were Told To Lie” To Rip Off Borrowers - By David Dayen (19/6/13) PDF Print E-mail
David Dayen   
Wednesday, 19 June 2013 10:03

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