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November 10, 2019

The MoA Week In Review - Open Thread 2019-66

Last week's posts at Moon of Alabama:

There are other government funded organization in Britain which, like the Integrity Initiative, write and tweet against the leader of the opposition: Home Office-backed counter-extremism group waging Twitter campaign against Corbyn - Middle East Eye

I am amazed how the Impeachment Circus and the mainstream media continue to ignore the facts of this story:

Joe Biden has been a favorite target for Trump-allied lawmakers. Many have adopted Trump’s unsubstantiated assertion that Biden pushed for the ouster of a Ukrainian prosecutor, Viktor Shokin, because he was investigating Burisma.

Other people get it:
Why the Only Thing Democrats Will Succeed in Impeaching Is Their Own Integrity Daniel Lazzare, Strategic Culture
Why Is Christopher Steele Still a Thing? - Matt Taibbi, Rolling Stone
The “Deep State” Is a Political Party - Jefferson Morley, New Republic

The CIA is emerging as a domestic political party.
...
Brennan put a friendly finger on my chest. “The CIA is not involved in domestic politics,” he said. “Period. That’s on the record.”

This he asserted confidently, at an event where he had just spoken about about influence campaigns on swing voters and implied that Hillary Clinton might be right in calling U.S. Representative Tulsi Gabbard a Russian asset. Even seasoned analysts, it seems, have their blind spots.

Motivation to impeach Trump is about control of Democratic Party - Rick Salutin, The Star

What shifted [House Speaker Nancy Pelosi] now? I’d say the answer is: this impeachment isn’t directed at Trump at all, it’s about undermining the rising left-wing opposition in the Democratic party. They are plausibly on the verge of seizing the party agenda away from the neo-liberal consensus of the Clinton-Obama decades — with issues like universal public health-care and equitable taxes. They’ve even found ways to fund campaigns without bowing to the corporate gods.

Related:
Pentagon Claims US Authority to Shoot Any Syrian Govt Official Who Tries to Take Control of Syrian Oil - Common Dreams

A day after we wrote the above Iran shot down a low flying drone that had penetrated its air space. CentCom made a statement that practically said "It was the CIA's drone, not ours."
This will only intensify U.S. 'regime change' efforts: Iran announces discovery of massive oil field

Iran has discovered a massive new oil field, President Hassan Rouhani said Sunday, a find that would boost its proven reserves by about a third in a rare piece of "good news" for an economy battered by US sanctions.

The police are quite brutally clearing the major protest sites. On Monday Prime Minister Abdul Mahdi will announce some additional reforms.
Iraq factions reach deal to save government, 'end protests'; PM urges return to normal life - Strait Times
Iraq’s feel-good ‘revolution’ - Asia Times

Other issues:

Potential new conflict areas:
Jordan to retake lands leased by Israel in 1994 peace accord

Jordan’s king announced Sunday that two pieces of land leased by Israel would be returned to the “full sovereignty” of Jordan as the two countries marked a chilly 25th anniversary of their landmark peace agreement.

Israel has controlled the agricultural lands for over 70 years and had been permitted to lease the areas under the 1994 peace agreement, with the assumption that the arrangement would be extended once again.

Benin President Orders Economic Decolonization From France
France still controls the foreign currency reserves of its former colonies in Africa. But the Françafrique and the Franc zone are coming to an end. The French will not like this and may well intervene, as they did in Libya.

When people in South America rage against rightwing governments the media ignores them or lies about it.
Chilean Protests: A Revolt against Neoliberalism the Media Refuses to Acknowledge - Alan Macleod, Mintpress
When the U.S. collaborates with rightwing extremists to launch coups against elected presidents U.S. media applaud.
US Plotting New Coup d’etat to Oust Bolivian President Evo Morales -21 Century Wire
No Evidence That Bolivian Election Results Were Affected by Irregularities or Fraud, Statistical Analysis Shows - CEPR
Evo Morales just announced new elections which he is likely to win.

737 MAX:
After Lion Air crash, Boeing doubled down on faulty 737 MAX assumptions - Dominic Gates, Seattle Times
The piece includes a link to a Boeing presentation from March 1, MCAS Development and Certification Overview, which has a few new details and includes several whoppers.

Use as open thread ...

Posted by b on November 10, 2019 at 14:32 UTC | Permalink

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financial matters @ 194

The best I can understand is that there are 2 different repo operations going on. One is the regular repo market that temporarily seized up in September. This was apparently due to JPM not having enough available funds to cover it. This happened because of winding back QE and increased requirements for reserves that needed to be kept on hand.

The other repo operation is between the Fed and the banks such as JPM to increase their reserves which essentially reverses the attempt at QE unwinding.

When everything works out it seems like the money is just being recycled by repurchase agreements. It would be interesting to know how much money is actually ‘bled out’ each night. Ie not added back into the reserves.

Posted by: financial matters | Nov 12 2019 23:30 utc | 201

Magnier

"#Lebanon is in front of a crossroad: a possible civil war or the "Axis of the resistance" will have to stand down and give concessions to @saadhariri. It is up to the PM ad interim to consult with the #US and return with an answer. He was given the maximum possible to form a gov."

"I'll share a possible civil war scenario soon. However, the Axis offered Hariri most of his requests to accommodate him and allow the country to continue. The aim is to spoil the US plan aiming to trigger a chaos in #Lebanon or early elections. A tactical withdrawal is possible."

"not excluded that @Gebran_Bassil (& other key figures) stands down for a while, allowing space to form a govnt. It is unwise to allow Hariri to get away & pulls out of the government in this critical situation. It is important that Hariri is held responsible & implements reforms."

The bottom line...
"#Lebanon and #Iraq are linked: a concession in Beirut will follow also in Baghdad. The Axis will have to stand down until the end of Trump's mandate."
https://twitter.com/ejmalrai

Most have underestimated Trump, taking him to be no more than his Twitter persona. He is a dangerous opponent.

Posted by: Peter AU1 | Nov 13 2019 4:56 utc | 202

@ financial matters who wrote
"
The best I can understand is that there are 2 different repo operations going on.
"
There are 3 REPOs and a POMO going on

On an overnight basis there is a REPO and Reverse REPO.
The overnight REPO (loans w/ Treasuries & MBS as collateral) to the primary private banks) started out in late October at $75 billion and because of oversubscription was raised to $130 billion

The overnight Reverse REPO (buying Treasuries from the Shadow Banking sector) started in late October and I can't find the limits but is basically paying the shadow banking system money overnight for their cash/Treasuries because they are unwilling to lend to each other or the primary private banks.

On a 2-week basis there are REPO (loans to the primary private banks w/ Treasuries & MBS as collateral) that started in mid-November and were initially set at $35 billion and because of oversubscription were raised to $45 billion

The POMO is a Permanent Open Market Operation (purchases from the primary private banks of Treasuries & MBS) that bought $20 billion between mid-August to mid-September, another bought $20 billion between mid-September to mid-October and $60 billion between mid-October to mid-November....totaling $100 billion of US taxpayers money, so far, and is expected to continue at the $60 billion/month until, supposedly, the middle of next year. (This is the one that should concern folks the most because the economy has supposedly not crashed yet and here the Fed is "foaming the runway" of the private banking system on the backs of Americans already

MBS = Mortgage Backed Securities

Posted by: psychohistorian | Nov 13 2019 6:05 utc | 203

psychohistorian @ 203.    thanks

The involvement of the shadow banking system (largely made up of hedge funds) is interesting.  When the repo market seized up and interest rates went from 2% to 10% the major banks like JPM would have loved to get some of that action but were constrained by limited available reserves due in part to regulatory issues.  The hedge funds aren't burdened with regulations.  But it seems risky to have our money markets dependent on shadow bank financing.

As you mention the Fed has been stepping in to try and get more reserves to the banks so that they can use them to cover repo operations and get the interest rates back down.

There is a part of this that I find confusing.  We are told that the Fed (and similarly the Bank of Japan, etc) can build up huge balance sheets injecting large amounts of money into bank reserves (including 'excess' reserves which are available for such things as covering the repo market) because these reserves don't leak out to the economy and thus lead to inflation.

But if these reserves are used to cover repo operations I don't see how they aren't leaking into the economy as they are essentially buying things like MBS and stock funds from dealers. These are supposed to be repurchased but that assumes nothing goes wrong. I think we are likely seeing 'inflation' here in creating bubbles like in the housing and equity markets.

It would seem that an even deeper issue is that we have our money market funds dependent on things like the repo market and the fx swaps market which are being supported by the Fed.

https://www.investopedia.com/articles/economics/09/money-market-reserve-fund-meltdown.asp

""On September 16, 2008, The Reserve Primary Fund broke the buck when its net asset value (NAV) fell to 97 cents per share. It was one of the first times in the history of investing that a retail money market fund had failed to maintain a $1 per share NAV. The implications sent shockwaves through the industry.""
-----------

I'm not sure what we've done to help insure that this doesn't happen again.

Posted by: financial matters | Nov 13 2019 13:18 utc | 204

@ financial matters who wrote
"
But if these reserves are used to cover repo operations I don't see how they aren't leaking into the economy as they are essentially buying things like MBS and stock funds from dealers.
"

It is my understanding that this money is going into the primary and shadow private bankers pockets

And yes, it is domed to happen again because it is a casino where the private/shadow banking system is playing with public money and since they are too big to fail, they always win.

Posted by: psychohistorian | Nov 13 2019 15:16 utc | 205

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