Home Refinance Calculator: Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

CIA Torture Reports: Frozen to Death; Rectal Rehydration, Broken Limbs; 54 Countries Assist US; Dick Cheney War Criminal
Temper Tantrum in Greece; Snap Elections May Pave Way for Eurozone Exit; Expect Bribes
Physical Gold and Silver vs. Paper Gold and Silver: How Much Markup Are You Willing to Pay?
ECB Kills Covered Bond Market; Buyers of Only Resort; Japanization of Europe Continues

CIA Torture Reports: Frozen to Death; Rectal Rehydration, Broken Limbs; 54 Countries Assist US; Dick Cheney War Criminal

Posted: 09 Dec 2014 04:36 PM PST

Today the US released its CIA report on torture. The results are shocking. For example, the New York Times provides 7 Key Points From the C.I.A. Torture Report.

The C.I.A.'s interrogation techniques were more brutal and employed more extensively than the agency portrayed.
The C.I.A. interrogation program was mismanaged and was not subject to adequate oversight.
The C.I.A. misled members of Congress and the White House about the effectiveness and extent of its brutal interrogation techniques.
Interrogators in the field who tried to stop the brutal techniques were repeatedly overruled by senior C.I.A. officials.
The C.I.A. repeatedly underreported the number of people it detained and subjected to harsh interrogation techniques under the program.
At least 26 detainees were wrongfully held and did not meet the government's standard for detention.
The C.I.A. leaked classified information to journalists, exaggerating the success of interrogation methods in an effort to gain public support.

Here's the full 525-page sanitized and redacted Congressional Study on CIA Torture. Various reports and excerpts follow:

Rectal Rehydration, Broken Limbs, 180 Hrs of Sleep Deprivation

The Guardian reports Rectal Rehydration and Broken Limbs: Grisliest Findings in CIA Torture Report.

While parts of the programme had been known – and much more will never be revealed – the catalogue of abuse is nightmarish and reads like something invented by the Marquis de Sade or Hieronymous Bosch.

Detainees were forced to stand on broken limbs for hours, kept in complete darkness, deprived of sleep for up to 180 hours, sometimes standing, sometimes with their arms shackled above their heads.

Prisoners were subjected to "rectal feeding" without medical necessity. Rectal exams were conducted with "excessive force". The report highlights one prisoner later diagnosed with anal fissures, chronic hemorrhoids and "symptomatic rectal prolapse".

The report mentions mock executions, Russian roulette. US agents threatened to slit the throat of a detainee's mother, sexually abuse another and threatened prisoners' children. One prisoner died of hypothermia brought on in part by being forced to sit on a bare concrete floor without pants.

Frozen to Death

At COBALT, the CIA interrogated in 2002 Gul Rahman, described as a suspected Islamic extremist. He was subjected to "48 hours of sleep deprivation, auditory overload, total darkness, isolation, a cold shower and rough treatment".

CIA headquarters suggested "enhanced measures" might be needed to get him to comply. A CIA officer at COBALT ordered Rahman be "shackled to the wall of his cell in a position that required the detainee to rest on the bare concrete floor".

He was only wearing a sweatshirt as a CIA officer has ordered his clothes to be removed earlier after judging him to be uncooperative during an interrogation.

The next day, guards found Rahman dead. An internal CIA review and autopsy assessed he likely died from hypothermia – "in part from having been forced to sit on the bare concrete floor without pants".

Forgotten Man Chained to a Wall

One CIA interrogator at COBALT reported that "'literally, a detainee could go for days or weeks without anyone looking at him', and that his team found one detainee who 'as far as we could detrmined', had been chained to a wall in a standing position for 17 days'.' Some prisoners were said to be like dogs in kennels: "When the doors to their cells were pened, 'they cowered.'"

Lies

What did all of this accomplish? The answer as any rational person might speculate is "nothing".

Please consider Senate Report on CIA Torture Claims Spy Agency Lied About 'Ineffective' Program.

Also consider Stop Believing the Lies: America Tortured More than 'Some Folks' – and Covered It Up.

For the past few days, we have seen many of the same resentful politicians and former CIA leaders in charge of the torture-denial regime being handed virtual royalty status by the American media to respond to pre-emptively respond to the report without much of any pushback. Dick Cheney basically got to write his own interview in the New York Times, while Michael Hayden, the former NSA and CIA director in charge of lying to the Senate for years, was handed softball after softball by Bob Schieffer of CBS News to make his case. It is borderline propaganda.

Still Classified

Borderline propaganda? No, it's blatantly obvious political propaganda of the worst kind. By the way, the full committee study, at 6,700 pages, remains classified. What the hell else has yet to be disclosed?

Map: 54 Countries Assist US

Vox has a nice Map of 54 countries that helped the CIA with its torture-linked rendition program.

The CIA torture program was even bigger than the details released in the Senate Intelligence Committee torture report might suggest. The reason is that the CIA didn't just have its own torture program, run out of its "black site" secret detention and torture prisons broad. It also used a vast network of other countries to help capture, detain, transport, and, yes, torture detainees.

That network is best shown by looking at the CIA's extraordinary rendition program. This is the program under which the CIA would detain and transport suspected terrorists with the help of foreign governments. In all, a stunning 54 countries participated in the CIA-run rendition program. Here they are:

Whether or not all 54 of those countries are complicit in the CIA torture program is debatable. The program could work in a number of different ways; each of these countries supported the CIA's rendition program, but not every country directly participated in torture. ...

Cheney Praises Torture

Yesterday, in advance of the release, Former Vice President Dick Cheney Dismissed Senate Report.

The reported conclusion by the Senate Intelligence Committee that the C.I.A. misled the White House, he added, "is just a crock."

"They deserve a lot of praise," Mr. Cheney said. "As far as I'm concerned, they ought to be decorated, not criticized."

Dick Cheney War Criminal

My take is that Dick Cheney is a war criminal. He should be tried in a court of law, and if justice is served, sentenced to death and buried in the same grave as Sadaam Hussein.

The same goes for everyone involved in the torture schemes especially former CIA director George Tenet.

There is absolutely no excuse for this kind of behavior. Ever.

By the way, at a meeting on December 12, 2002, Tenet assured president Bush that the evidence that Iraq had WMDs amounted to a "slam dunk case."

Obama's Limp Response

Today president Obama issued this limp response: "I hope that today's report can help us leave these techniques where they belong, in the past. ... It reinforces my long-held view that these harsh methods were not only inconsistent with our values as nation, they did not serve our broader counterterrorism efforts or our national security interests."

No charges will be filed and the rest of the classified report will be swept under the rug. And just two days ago Obama transferred Six Guantanamo Detainees to Uruguay.

The detainees were a Tunisian, a Palestinian and four Syrians who were captured in Pakistan and Afghanistan more than a decade ago and turned over to U.S. forces. "Defense Secretary Chuck Hagel initially was reluctant to approve the transfer."

Obama's Promise to Close Guantánamo Bay Torture Facility

In 2008 president Obama promised to close our Guantánamo Bay Detention Facility in Cuba. We are still there.

On January 28, 2013, The Wire posted a Timeline of Obama's Failed Promise to Close Gitmo noting "the office responsible for closing the prison has itself been closed."

On January 22, 2014, the National Journal reported Five Years After Obama Vowed to Shut It Down, Guantanamo Bay Remains Open.

"The pace of the push to close the controversial camp has slowed in recent years, and doesn't show signs of picking up."

On this day in 2009, President Obama issued an executive order that called for the Guantanamo Bay detention facility to be closed within a year. A month later, in his first State of the Union address, the president told Americans he had ordered the closure of the controversial camp in Cuba, and "will seek swift and certain justice for captured terrorists." Guantanamo, which remains open, has not been mentioned in the president's annual speech since.

Why is the US Still in Cuba?

Can anyone please explain why the US is still running a torture operation in Cuba?

Obviously not. As usual, it's nothing but a pack of lies from this president.

Color Me Cynical

As far as torture goes, I am cynical of Obama's announcements.

I suspect the biggest change will be for the CIA to stop putting its torture practices in reports as opposed to actually stopping the torture.

Cynicism aside, there is a zero percent chance president Obama will ever hold those responsible for the torture accountable.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Temper Tantrum in Greece; Snap Elections May Pave Way for Eurozone Exit; Expect Bribes

Posted: 09 Dec 2014 02:02 PM PST

Yesterday, Greek prime minister Antonis Samaras called a snap presidential election hoping to retain power even though he failed to deliver on his promise to end Greece's €245bn troika-sponsored bailout.

Today, the markets threw a fit. Yield on the Greek 10-year bond soared from 7.258% to 8.17%. This is below the spike high on October 16, but the trend is clear. Yield is up 257 basis points (2.57 percentage points) since September 10.

Greece 10-Year Bond Yield

I commented on this on October 16, predicting snap elections: Greece 10-Year Bond Yield Soars to 9% as Prime Minister's Gambit Explodes; Snap Elections Likely, and Opposition Syriza Would Win.

The hissy fit resumed today, following the actual snap elections announcement.

Athens Composite Stock Index

That was the biggest one-day decline since December 1987. Balk shares led the way. Attica Bank lost over 26% and Piraeus Bank declined 17%.

Exit Fears Once Again in Greece

The Financial Times reports Snap Election in Greece Reignites Fears for Eurozone

Greece's political woes re-erupted as a threat to global financial stability yesterday, triggering the biggest drop on the Athens stock exchange since the 1980s and sending reverberations through world markets.

The trigger for the plunge was prime minister Antonis Samaras' announcement of a snap presidential election. If he fails to win sufficient support for his candidate, an early general election could follow which investors fear will bring to power the radical left Syriza party.

Such an outcome would reignite fears about Greece's place within Europe's monetary union. Syriza wants to renegotiate the country's sovereign debt and hike public spending, moves which would put Athens at loggerheads with its creditors.

By bringing forward the first round of the presidential election to December 17 — with further votes on December 23 and 29 — Mr Samaras appears to be gambling that independent MPs and those from smaller parties will back his candidate rather than face political and financial chaos triggered by a Syriza victory. He needs 180 votes, but the governing coalition only has 155.

On Tuesday, yields on Greek bonds maturing in three year's time rose above 8 per cent, 25 basis points higher than equivalent 10 year yields, an indication that investors were growing increasingly concerned about the country's ability to service its debts in the near future.

Question at Hand

Will the stock market decline and surge in yields help or hurt Samaras?

Certainly the political class in Greece, in Germany, in France, in the US and for that matter everywhere will be out in full force denouncing Syriza.

Nonetheless, Samaras will fail on the first two presidential votes. It's the third vote that matters. In the past, the IMF, EU, and other outside influences swayed enough politicians to matter. It's by no means certain they can do so again.

National Elections vs. Presidential Election

By the way, these aforementioned snap elections are to elect the president, a largely ceremonial post. The Greek constitution mandates dissolution of Parliament and a national election should the Greek parliament fail to appoint a president. Syriza holds a substantial lead in national elections.

Expect Bribes

If it appears the final vote for president is headed the wrong way, watch German Chancellor Angela Merkel come out with some wishy-washy praise for Samaras including some small offer of debt relief or other favors.

If threats and praise do not work but the vote is close, there's always money under the table to buy a few needed votes.

Should bribes fail, expect the stock and bond markets to react with even greater volatility ahead of the next national election because Syriza party leader, Alexis Tsipras, threatens to renegotiate Greek debt.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Physical Gold and Silver vs. Paper Gold and Silver: How Much Markup Are You Willing to Pay?

Posted: 09 Dec 2014 10:57 AM PST

I am a gold bull, but I am also concerned about seriously misleading hype regarding alleged shortages.

For example, a friend recently emailed an article that contained this claim: Gold Selling for at least 50% over Spot in Asia-Rob Kirby.

According to Rob Kirby "In the Asian market, if you could find physical bullion as cheap as spot plus 50%, you'd be doing really, really, really well and you'd be hard pressed to find serious tonnage at that price in Asia."

Kirby, who specializes in acquiring large amounts of physical gold for clients, sees physical gold bullion selling for at least "50%" over spot, which would put the price of gold in Asia at least $1,800 per ounce. Kirby also says, "Prices being paid right now in Asia make a mockery of the prices being shown in COMEX and the LBMA (London Bullion Market Association). These paper markets have divorced themselves from the laws of economics.

Misleading Gold Hype

Kirby's statement is purposeful hype. The phrase that Kirby relies on to make his statement semi-factual is "serious tonnage of bullion". However, people don't generally buy serious tonnage of bullion. Instead, they buy bars.

Even with that phrase, I would expect arbitrage to whittle away at the alleged 50% markup.

Markups normally decline the more one buys. Anyone can ascertain that by checking refinery, mint and bullion dealer prices for direct sales online.

Of course, if someone demands "tonnage" of bullion or coins and "tonnage" is not available, then one cannot readily get it at any price.

Regardless, the average person can buy physical gold and silver in small or large quantities with very tiny markups. I will mention numerous ways in just a moment but first let's consider silver.

Silver Bars and Coins

Reader Mark emailed me a few weeks ago when silver was trading at $15.72. Mark complained that his dealer wanted $24.50 for an American Silver Eagle (ASE).

That's a markup of $8.78, nearly 56% over spot! On silver bars, the dealer markup was spot plus $3.50. That's a markup of about 22%.

That small coins and bars are so expensive does not mean there is a shortage of silver. Nor does it mean there is a difference between physical silver and paper silver. All it means is there is a shortage of silver eagles and small bars.

I believe it's crazy to pay such prices. And although I am pretty sure one can find better dealers with lower markups, coins and small bars are simply not the best way to go in my opinion.

Three Options

Mark asked me for some options. I noted three of the most popular vault options for gold and silver, but there are others. Here is my standard reply to such inquiries:

In general, I do not recommend purchasing gold and silver coins and small bars because the markup is generally very high. There are additional concerns and risks should you want to sell your holdings. Finally, should you decide to take delivery yourself, there are ongoing storage concerns, including insurance.

All things considered, there is a great deal of merit in audited, safe storage. I prefer holding metal outside the country for obvious reasons. Others disagree. If you want immediate physical possession yourself, much of the following discussion does not apply.

Three popular choices for holding gold in vaults are GoldMoney, BullionVault, and Perth Mint.

GoldMoney and BullionVault offer allocated programs. In allocated programs you have title to what you purchase.

Perth Mint offers allocated and unallocated programs. It's important to distinguish between the two. Unallocated gold is a financial asset; you own a liability of the Perth Mint. You do not own metal.

The Perth Mint does offer allocated storage, but is very expensive. Perth charges 1.00% per annum for storing gold, whereas GoldMoney charges 0.12% at most locations, 0.18% at others per its fee schedule.

Perth maintains that its unallocated program is 100% metal-backed, but also admits theoretical exposure should the Mint becomes insolvent. However, Perth Mint operates under a Government Guarantee that many will find sufficient.

GoldMoney holdings are in audited vaults in Singapore, Hong Kong, Canada, London and Switzerland. The bars are individually numbered and assigned. You may own a percentage of a bar.

GoldMoney is based in Jersey, an English speaking country off the coast of France. Jersey has some of the strongest property rights laws in the world.  GoldMoney sells at the market ask plus a mark-up. BullionVault is commission based on top of a bid-ask spread. BullionVault's combined commission + spread may at times be lower than the mark-up at GoldMoney. However GoldMoney guarantees a trade, they are a broker dealer. And GoldMoney allows one to sell at the market bid with no mark-up (i.e., no commission when selling).

I prefer allocated storage over unallocated storage. Because Perth Mint allocated storage cost is so high, I prefer GoldMoney and BullionVault to Perth Mint.

GoldMoney is unique in that it allows for direct metal-to-metal exchanges between any of the following metals: gold, silver, platinum, palladium. Other dealers may provide a two-step gold-silver process (i.e. sell one and use the proceeds to buy the other).

Bear in mind I do have a relationship with GoldMoney. It will not affect the price you buy or sell at, but I feel the need to point out the relationship.

If you decide to go with GoldMoney, please select this GoldMoney link containing my referral code. It costs you nothing more, but as an incentive to use this link, new accounts will receive six months free storage. 

The following applies to US citizens:

I am not a tax accountant but please remember that offshore accounts are taxable and must be disclosed to the IRS. Only the gains are taxed when you sell, not the holdings.

Reporting of Foreign Bank and Financial Accounts may apply to accounts that total in excess of $10,000. Please see Report of Foreign Bank and Financial Accounts for more information.

Please do your own due diligence. There are numerous alternatives and you may find an alternative you like better.

The important point is that unless you insist on taking immediate possession of small quantities of silver and gold, there are numerous ways you can buy physical gold, silver, and platinum at tiny markups.

And as long as you can buy precious metals at small markups, these stories of physical metal prices vs. paper metal prices are purposeful hype.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

ECB Kills Covered Bond Market; Buyers of Only Resort; Japanization of Europe Continues

Posted: 09 Dec 2014 12:59 AM PST

ECB president Mario Draghi set out to stimulate bank lending by purchasing covered bonds. Yields plunged, which is precisely what Draghi wanted.

Now, the average covered bond yield of 0.53% is so low that investors won't touch them. Numerous bond deals have been cancelled due to lack of demand. The buyer of only resort is the ECB.

This all transpired since September.

Please consider ECB Blamed for Covered Bond Shortage.

Covered bond supply has reached its lowest level in nearly two decades as the European Central Bank has been accused of crowding out investors from the market by pushing up prices and depressing yields.

European covered bond volumes total $166.2bn for the year to date, the lowest figure since 1996 according to Dealogic. This is in spite of an ECB programme announced in September aiming to stimulate the market.

Last month Allied Irish Banks took the unusual step of postponing a planned 10-year covered bond deal amid market speculation that the yield offered was too low to tempt investors.

"There have been a whole series of deals which have been pulled — not just [the AIB] one," said a London-based banks analyst. "The ECB is crowding out investors. Covered bond spreads have tightened and real money investors say they are not getting rewarded for the risks they are taking."

By purchasing covered bonds, the ECB wants to offer additional funding for banks, which, it hopes, will use the cash to boost lending to the real economy.

But amid lower bank funding needs and sluggish economic growth covered bond supply has dried up in traditionally large markets such as Germany. Year-to-date volumes have declined 5 per cent year on year and are less than half the volumes in 2011.

"Buying covered bonds is not the silver bullet that will drive Europe out of the deflationary spiral," said a London-based debt banker. "It does point towards sovereign QE."

Japanization of Europe Continues

Economic madness did not help Japan, and it will not cure Europe either. But Central Bankers do not care about losses or failures.

Central bank policy remains: "If it doesn't work, do more of it". And so they will, On December 4, the ECB announced a Broad Stimulus Plan, All Assets but Gold on the Table for Purchase.

ECB President Mario Draghi said that policy makers "won't tolerate" a prolonged period of low inflation, and that officials discussed "all assets but gold" as potential targets for purchases. The council asked internal committees last month to design new unconventional stimulus measures to help fuel growth and inflation.

Japan issued numerous statements of a similar nature over the past two decades. And after decades of fighting deflation with more debt hoping to spur inflation (an amazingly counterproductive strategy), Japan is caught in a trap of its own making.

Japan wants inflation but it's balance sheet is so bloated that a rise in interest rates of a mere 2% or so would consume 100% of government revenue. No investors would touch Japanese bonds in this setup.

Buyers of Only Resort

The buyer of only resort for Japanese government bonds is the Bank of Japan.

The ECB is on a similar same path. Having cornered covered bonds, the ECB wants to expand the program to other assets.

The Law of Bad Ideas is clearly in play.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Home Refinance Calculator

Tuesday, December 9, 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

No comments:

Post a Comment