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The ‘End of Dreams’, and the Saving of Appearances
Zao Wu-Ki The red sun 1950
Dear Raul, We took the hint on a recent posting your site that referred to one of Alastair’s articles! …. and below is a comment piece he has done. It is an attempt to be strategic at where we’re going.
Anytime, guys! My first reaction to that piece was that Alastair makes Donald Trump and Jared Kushner’s role in the Saudi crackdown seem very large, which makes the role played by deep state America look small in comparison. And I’m not so sure about that. The riddle of ‘who’s playing who?’ is not a straightforward one. But that’s by no means a criticism (I ain’t criticizing no MI6!). It’s a question.
First, here are two paragraphs of that article to ‘get in the mood’:
Aaron Miller and Richard Sokolsky, writing in Foreign Policy, suggest “that Mohammed bin Salman’s most notable success abroad may well be the wooing and capture of President Donald Trump, and his son-in-law, Jared Kushner.” Indeed, it is possible that this “success” may prove to be MbS’ only success. “It didn’t take much convincing”, Miller and Sokolski wrote: “Above all, the new bromance reflected a timely coincidence of strategic imperatives.”
…click on the above link to read the rest of the article…
The Reverse Midas Touch of Saudi Arabia’s Crown Prince is Turning the Middle East to Dust
KUDOS TO GERMANY’S spooks. Back in December 2015, the German foreign intelligence agency, BND, distributed a one-and-a-half-page memo to various media outlets titled: “Saudi Arabia — Sunni regional power torn between foreign policy paradigm change and domestic policy consolidation.” The document was pretty astonishing, both in its undiplomatic bluntness and remarkable prescience.
“The current cautious diplomatic stance of senior members of the Saudi royal family will be replaced by an impulsive intervention policy,” the memo warned, focusing on the role of Mohammed bin Salman, who had been appointed as deputy crown prince and defense minister at the age of 30 earlier that year.
Both MBS, as he has come to be known, and his elderly father King Salman, the BND analysts wrote, want Saudi Arabia to be seen as “the leader of the Arab world” with a foreign policy built on “a strong military component.” Yet the memo also pointed out that the consolidation of so much power in a single young prince’s hands “harbors a latent risk that in seeking to establish himself in the line of succession in his father’s lifetime, he may overreach,” adding: “Relations with friendly and above all allied countries in the region could be overstretched.”
And so it has come to pass. In fact, despite being repudiated at the time by a German government more concerned about diplomatic and commercial relations with Riyadh, the BND warning turned out to be eerily prophetic.
Consider recent events in the Gulf. Can you get more “impulsive” than rounding up 11 fellow princes, including one of the world’s richest menand the commander of the national guard, and holding them at the Ritz Carlton on charges of corruption?
…click on the above link to read the rest of the article…
How Broke is the House of Saud?
Salvador Dalí The oecumenial council 1960
A short and incomplete list of the actors: Sunni, Shiite, Saudi Arabia, US, Russia, Turkey, ISIS, Syria, Iran, Iraq, Libya, Kurds, Lebanon, Hezbollah, Hamas, Qatar, Israel, United Arab Emirates (UAE), Houthis, perhaps even Chechnya, Afghanistan, Pakistan. I know I know, add your favorites. So what have we got, or what do we know we’ve got? We seem to have the US lining up with Israel, the UAE and Saudi Arabia against Russia, Iran, Syria, Hezbollah. Broadly. But that’s just a -pun intended- crude start.
Putin has been getting closer to the Saudis because of the OPEC production cuts, trying to jack up the price of oil. Which ironically has now been achieved on the heels of the arrests of 11 princes and scores of other wealthy and powerful in the kingdom. But Putin also recently signed a $30 billion oil -infrastructure- deal with Iran. And he’s been cuddling up to Israel as well.
In fact, Putin may well be the most powerful force in the Middle East today. Well played?! He prevented the demise of Assad in Syria, which however you look at it at least saved the country from becoming another Iraq and Libya style failed state. If there’s one thing you can say about the Middle East/North Africa it’s that the US succeeded in creating chaos there to such an extent that it has zero control left over any of it. Well played?!
…click on the above link to read the rest of the article…
Here’s Why Housing Must be Propped Up
Here’s Why Housing Must be Propped Up
If housing tanks, the last prop under the veneer of middle class wealth collapses.
The Powers That Be have gone to extraordinary lengths to prop up housing by whatever means are necessary since the collapse of the housing bubble in 2008: the Federal Reserve has pushed mortgages rates down by buying mortgage-backed securities, the federal housing agencies (FHA, VA) have issued millions of low-down payment loans, and the federal government has essentially taken over the mortgage industry, backing 90+% of all mortgage loans.
Why is the status quo so keen on propping up housing? If we examine this chart of U.S. and Chinese household assets, we understand why Chinese authorities would be keen to prop up housing values–75% of China’s household assets are in real estate. Meanwhile, U.S. household assets are predominantly financial:
So why are U.S. authorities going all out to prop up housing if it represents such a modest share of total household wealth? I see two dynamics at work.
The majority of household assets are owned by the top 10%, and this includes the majority of financial assets. The top .1% own 22% of all U.S. household wealth, the top 1% own 35% and the top 10% own 75%.
Households below the top 10% may have financial assets such as insurance policies, 401K accounts or pensions funded by employers, but a house is typically the largest store of value the household owns.
If you want to make the top 1% and top 10% happy, you prop up stocks and bonds. if you want to make the 60% of the populace who own a home happy, you prop up housing.
2. Housing is the only real source of the wealth effect for households below the top 10%.
…click on the above link to read the rest of the article…
Who Runs the Fed?
Who Runs the Fed?
The 2008 financial crisis challenged many orthodox assumptions in finance and economics, including the proper role and accountability of central banks. The U.S. Federal Reserve, commonly known as the Fed, is the world’s most powerful central bank.
One major source of Federal Reserve power is its role as “lender of last resort,” lending directly to commercial banks through its so-called discount lending window. Traditionally, only commercial banks had access to the Fed’s discount lending since non-bank financial institutions were not subject to the same reserve and capital requirements as those imposed on banks. The other major source of the Fed’s power is its ability to purchase short-term Treasury securities. These restrictions on Fed lending and asset purchases helped support the central bank’s political independence from Congress and the White House by ensuring that Fed policy was socially neutral and did not favor particular sections of financial markets or particular private constituencies. But as the Federal Reserve’s lending and asset purchase powers expanded in unprecedented ways in 2008, these traditional restrictions were swept aside, exposing the flaws of central bank independence.
The Fed is also able to create money—U.S. dollars, also known as Federal Reserve notes—which means there is virtually no limit to the amount of money it can lend and no limit to the volume of assets it can purchase without adding to public-sector borrowing or deficits. During the 2008–2009 financial crisis, the Fed extended more than $16 trillion in low interest loans to all kinds of financial institutions in distress, including borrowers who traditionally lacked access to its discount window such as hedge funds and foreign commercial banks and central banks. Also, beginning in 2008, the Fed launched several asset purchase programs, known as “quantitative easing” (or QE), to purchase more than $3.5 trillion in U.S. Treasury securities and mortgage-backed securities (MBS).
…click on the above link to read the rest of the article…
