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marmar

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Gender: Male
Hometown: Detroit, Michigan
Home country: Citizen of the world whose address is in the U.S.
Current location: Detroit, Michigan
Member since: Thu Oct 28, 2004, 11:18 PM
Number of posts: 69,383

Journal Archives

This is How Financial Chaos Begins


This is How Financial Chaos Begins
by Wolf Richter • February 12, 2016


It’s not contained.

There are over $1.8 trillion of US junk bonds outstanding. It’s the lifeblood of over-indebted corporate America. When yields began to soar over a year ago, and liquidity began to dry up at the bottom of the scale, it was “contained.”

Yet contagion has spread from energy, metals, and mining to other industries and up the scale. According to UBS, about $1 trillion of these junk bonds are now “stressed” or “distressed.” And the entire corporate bond market, which is far larger than the stock market, is getting antsy.

The average yield of CCC or lower-rated junk bonds hit the 20% mark a week ago. The last time yields had jumped to that level was on September 20, 2008, in the panic after the Lehman bankruptcy, as we pointed out. Today, that average yield is nearly 22%!

Today even the average yield spread between those bonds and US Treasuries has breached the 20% mark. Last time this happened was on October 6, 2008, during the post-Lehman panic:



At this cost of capital, companies can no longer borrow. Since they’re cash-flow negative, they’ll run out of liquidity sooner or later. When that happens, defaults jump, which blows out spreads even further, which is what happened during the Financial Crisis. The market seizes. Financial chaos ensues. ...............(more)

http://wolfstreet.com/2016/02/12/how-financial-chaos-begins/




This is How Financial Chaos Begins



This is How Financial Chaos Begins
by Wolf Richter • February 12, 2016


It’s not contained.

There are over $1.8 trillion of US junk bonds outstanding. It’s the lifeblood of over-indebted corporate America. When yields began to soar over a year ago, and liquidity began to dry up at the bottom of the scale, it was “contained.”

Yet contagion has spread from energy, metals, and mining to other industries and up the scale. According to UBS, about $1 trillion of these junk bonds are now “stressed” or “distressed.” And the entire corporate bond market, which is far larger than the stock market, is getting antsy.

The average yield of CCC or lower-rated junk bonds hit the 20% mark a week ago. The last time yields had jumped to that level was on September 20, 2008, in the panic after the Lehman bankruptcy, as we pointed out. Today, that average yield is nearly 22%!

Today even the average yield spread between those bonds and US Treasuries has breached the 20% mark. Last time this happened was on October 6, 2008, during the post-Lehman panic:



At this cost of capital, companies can no longer borrow. Since they’re cash-flow negative, they’ll run out of liquidity sooner or later. When that happens, defaults jump, which blows out spreads even further, which is what happened during the Financial Crisis. The market seizes. Financial chaos ensues. ...............(more)

http://wolfstreet.com/2016/02/12/how-financial-chaos-begins/




Meanwhile, in Southern California........


(Bloomberg) Steve Conley got the call early on Nov. 5. A natural gas storage well was leaking methane into the air at Aliso Canyon, near a Los Angeles suburb, and no one knew just how bad it was—could he get a read on it? Conley, an atmospheric scientist and a pilot, rushed to a small airport northeast of Sacramento. He’s flown more than 1,500 hours measuring emissions over oil and gas operations in one of his two single-engine Mooneys. Tubes mounted on each Mooney’s right wing suck air into two chemical analyzers stored in the luggage compartment. Soon Conley was soaring south across California’s Central Valley.

The leak had been spewing for about two weeks. Southern California Gas Co., the subsidiary of Sempra Energy that owns the facility at Aliso Canyon, had tried and failed to kill it. The previous night, homeowners from the nearby neighborhood of Porter Ranch had gathered to rail about the rotten-egg smell taking over their community. Tim O’Connor, a lawyer at the Environmental Defense Fund (EDF), attended the meeting, and feared the leak could be big enough to threaten not only the local community but also the earth’s climate.

As the Mooney flew closer, O’Connor, who’d hired Conley, phoned Aliso’s on-site incident commander with a heads-up about the flight. The SoCalGas staffer refused to approve the flyby, O’Connor says. “They said that the events on the hill were too dangerous and any additional distraction at that time could create an unsafe condition.” This didn’t make immediate sense to O’Connor. Conley wanted to fly a mile downwind of the leak to measure its plume, not directly overhead, and the whole area bordered the flight path of a nearby airport—planes in the distance were a common sight. Nevertheless, O’Connor gave SoCalGas the benefit of the doubt. Conley was a few miles out when O’Connor texted, instructing him to turn around. SoCalGas stands by its reasoning.

Two days later, Conley again flew to Aliso, this time on the state’s dime. Conley started flying back and forth downwind of the site, taking measurements and gaining elevation with each pass. As data populated his screen, he recalls thinking, “What the hell is that?” The levels appeared to be at least 15 times greater than he’d ever observed. Equipment malfunction? The second analyzer showed the same readout. “This isn’t an error,” he concluded. After 17 laps, he reached the top of the plume and headed home. ....................(more)

http://www.bloomberg.com/news/articles/2016-02-10/how-do-you-stop-the-biggest-gas-leak-ever




As Congressional Black Caucus PAC Prepares to Back Clinton, Barbara Lee Withholds Endorsement




Published on Feb 11, 2016

http://democracynow.org - After the New Hampshire vote, the focus of the Democratic race has largely become South Carolina. Senator Bernie Sanders and former Secretary of State Hillary Clinton are making concerted efforts to win the state’s African-American vote. The Congressional Black Caucus PAC is expected to endorse Clinton today. Meanwhile, on Wednesday Sanders met with the Rev. Al Sharpton in Harlem and received an unexpected boost when acclaimed writer Ta-Nehisi Coates announced on Democracy Now! that he would vote for the Vermont senator. We talk to Rep. Barbara Lee (D-CA) about why she has not yet endorsed either candidate. She also points out today’s Clinton endorsement is coming from the Congressional Black Caucus Political Action Committee, not the Congressional Black Caucus.



Hillary's Superdelegate Coup Just Confirms to Millennials: The System Is Rigged


(HuffPost) I try to imagine what life must look like to a Millennial voter. If you were are between the ages of 18-29, in your reality:

• Marijuana has always been medical;
• Gay people have always been positively portrayed on TV;
• We've always been at war in the Middle East;
• The economy collapsed somewhere between fifth grade and college; and
• No one you know can afford college or you're in mountains of debt from having attended.

So it's no surprise that Bernie Sanders is crushing Hillary Clinton among the Millennial voters. She still thinks medical marijuana needs more research; only supported gay marriage three years ago; supported all the Mid-East wars and would engage more; takes $675,000 from the criminal banksters because "that's what they offered"; and thinks a reasonable college affordability plan is one where students work 10 hours a week and parents pay "what they can".

But I wonder what kind of surprise awaits the Millennial voter the more he or she sees the results of their hard work canvassing for voters to Feel the Bern.

First, in Iowa, they battle for a statistical tie, with just a quarter-percent of the vote between Hillary and Bernie. So, naturally, the delegates from Iowa are divided fairly. Bernie gets 21 delegates and Hillary gets... 29? ...............(more)

http://www.huffingtonpost.com/russ-belville/hillarys-superdelegate-co_b_9206252.html




You Can Buy a Copy of Marx’s ‘Capital’ Signed by Carly Fiorina on eBay To Benefit Bernie Sanders


from In These Times:



You Can Buy a Copy of Marx’s ‘Capital’ Signed by Carly Fiorina on eBay To Benefit Bernie Sanders
But time is running out.

BY Branko Marcetic


If Karl Marx had lived long enough to see Carly Fiorina’s failed GOP campaign, he might’ve been impressed with the former Hewlett-Packard CEO. After all, Marx only preached about the overthrow of capitalism—Fiorina had actual hands-on experience bringing a major corporation to its knees.

Perhaps that’s why Fiorina personally signed a copy of Marx’s Capital Volume I in 2007 at a Manhattan Barnes & Noble, a priceless piece of political memorabilia now up for sale on eBay.

Peter Hogness, a labor activist in New York and a former high school classmate of Fiorina's in Palo Alto, is selling the book. He says the signing took place during a 2007 book tour for her memoir, Tough Choices. He presented Capital to Fiorina during a book-signing event and asked if she would sign it instead of her memoir. “Oh, I've read this!” she said upon seeing Marx's classic work of political economy. She agreed to sign it.

Hogness says Capital seemed like a more interesting choice than Fiorina’s memoir for his bookshelf. Sure enough, at Goodreads, Marx’s treatise has a 4.17 average star rating—narrowly edging out the 3.63 average rating for Tough Choices. (Hogness says he bought and read Tough Choices, and “it's not a bad read.”)

He believes the book was appropriate given Fiorina’s record. ..................(more)

http://inthesetimes.com/article/18866/carly-fiorina-karl-marx-tough-choices-capital-authograph




Who Endorsed Hillary Clinton? The Congressional Black Caucus or Its PAC Filled with Lobbyists?




Published on Feb 12, 2016

http://democracynow.org - This week’s endorsement of former Secretary of State Hillary Clinton for president by the Congressional Black Caucus political action committee prompted some confusion due to a lack of familiarity with the PAC. We look at the many lobbyists who comprise its board, including those who work for Purdue Pharma, the makers of highly addictive opioid OxyContin, and others who represent Philip Morris and Wal-Mart, the largest gun distributor in America. We also speak with the CBC PAC’s chair, Rep. Gregory Meeks, who notes the PAC "also includes the labor groups, labor organizations," and argues, "We in the Congressional Black Caucus have to raise money so we can elect folks. But if you look at how the Congressional Black Caucus votes, no one can say that they don’t vote in a very progressive way." Our guest Jeffrey Sachs, a leading economist, notes it is important to understand "what this endorsement meant" and adds, "Our politics has been corrupted by the money. That’s why our policies are so bizarre."


Corporations Killed Medicine. Here's How to Take It Back


Corporations Killed Medicine. Here's How to Take It Back

Saturday, 13 February 2016 00:00
By Fran Quigley, Foreign Policy in Focus | Report


Along the path toward the creation of a global capitalist system, some of the most significant steps were taken by the English enclosure movement.

Between the 15th to 19th centuries, the rich and the powerful fenced off commonly held land and transformed it into private property. Land switched from a source of subsistence to a source of profit, and small farmers were relegated to wage laborers. In Das Kapital, Marx described the process by coining the term land-grabbing. To British historian E.P. Thompson, it was "a plain enough case of class robbery."

More recently, a similar enclosure movement has taken place. This time, the fenced-off commodity is life-saving medicine. Playing the role of modern-day lords of the manor are pharmaceutical corporations, which have taken a good that was once considered off-limits for private profiteering and turned it into an expensive commodity. Instead of displacing small landholders, this enclosure movement causes suffering and death: Billions of people across the globe go without essential medicines, and 10 million die each year as a result.

Many people curse the for-profit medicine industry. But few know that the enclosure erected around affordable medicines is both relatively new and artificially imposed. For nearly all of human history, attempting to corner the markets on affordable medicines has been considered both immoral and illegal.

It's time now to reclaim this commons, and reestablish medicines as a public good. ...............(more)

http://www.truth-out.org/news/item/34784-corporations-killed-medicine-here-s-how-to-take-it-back




Robert Scheer Speaks With Nomi Prins About the Connection Between Washington and Wall Street (audio)


Audio link at: http://www.truthdig.com/avbooth/item/audio_robert_scheer_speaks_with_nomi_prins_about_the_20160212


In this week’s “Scheer Intelligence”—the Truthdig editor-in-chief’s podcast on KCRW—author, journalist and former investment banker Nomi Prins explains the culture of Wall Street and its influence on government.

Prins worked as a managing director at Bear Stearns and Goldman Sachs for several years before leaving the financial sector around the time of the Enron crisis to become one of its sharpest critics. She has written several books about the relationship between Washington and Wall Street, including “All the Presidents’ Bankers: The Hidden Alliances that Drive American Power” and “Other Peoples’ Money: The Corporate Mugging of America.”

Scheer and Prins discuss that relationship and the players who have kept it going in spite of devastating effects on many Americans. In addition, Prins talks about the lack of an “accountability gene” within many in the finance industry.

Lastly, we hear about how Wall Street has influenced and may continue to influence the presidential candidates and outcome of this year’s election.




Marco Robio (cartoon)





http://www.truthdig.com/cartoon/item/marco_robio_20160211



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