Taper Caper: why tapering hasn't hurt the Stock Market yet.

We know that the strategy of the FED was to pump in money and inflate the value of the assets of the rich, especially the Stock Market. Then, when the economy has recovered, cut back on money printing (which 'money' is used to buy up bonds to keep interest rates low). In  order to delay a Market crash and to delay the rise in interest rates, the FED printed excess money. This excess money should last a few months until the Regime gets past the election.

 

 

Economic and political developments.

1. Liberals discover what we all know.
a. Remember when they discovered that men and women were different? Time magazine put it on the front page.
b. A recent discovery reported that if unemployment comp was shortened, people got jobs sooner. Who would have thunk?
c. And here comes the latest: small cars fare worse in collisions. Really? That is amazing!


I expect Liberals to discover that there has been cooling in the weather. That will be a shock and maybe the charlatan Algore will finally get his just desserts.


2. We hear of economic recovery in Spain and Europe. The Euro is falling in value though, which is not a good sign. Here in the US, companies are doing better and the hemorrhaging of job losses has slowed. Average family worth has been reduced by a quarter. Inflation is still moderate and the FED continues tapering. The Stock Market is now driven by institutions and they can not afford to stay out of the Market. Hence the continuation of the rally. The FED operates on the idea that the Stock Market gains will trickle down to  the economy. The economy is sputtering because of the increase in taxes due to Obamacare.


3. Foreign policy. The Obama regime continues to rack up success after success. Afghanistan is seeing a resurgence of the Taliban and Iraq is being partitioned along with Syria, with ISIS (the most virulent form of Islam) taking hold. Libya is now in the throws of a civil war and the Israelis are pounding Hamas in Gaza, while Kerry is doing his best to legitimize Hamas. The Ukrainians are shelling their citizens in Donetsk and surroundings and Russia is being pushed into a cold war with us. That will teach them to pass anti-homo propaganda laws. And on our Southern border, where there is no border any more.


If you hate America, these are good days for you.

INOVIO: on track to defeat infectious diseases and maybe cancer.

DNA vaccines are the holy grail of immunotherapy. Once the DNA sequence of a protein from a pathogen is known and synthesized, it can be prepared in a plasmid (a small circular piece of DNA), injected into cells and a degraded fragment of the protein presented on the cell surface by Human Mast Cell I or II for destruction by t cells.

 

The therapy works in vitro and in animals. In humans, the uptake of the DNA plasmid is greatly facilitated by electroporation:

 

http://www.jimmunol.org/content/164/9/4635.short

 

Inovio just presented data that show that its DNA vaccine increased HPV (Human Papilloma Virus) removal from 13% (placebo) to 40% with robust t cell response. Pre-cancerous lesion removal was increased from 30% (placebo) to 49%.

 

Inovio's stock is under strong attack by short sellers. These folk borrow INO stock and sell it, thus reducing the price of INOVIO. They do this to stop Inovio from selling stock at a good price and financing its activities including doing a Phase III study to have the FDA approve the treatment. Small pharma companies are often the target of the short sellers. Their hope (of the short sellers) is that they can bankrupt the company by driving its price into the cellar.

 

Should the company succeed, the short sellers will pay dearly.

 

The company has a number of trials in the starting phase.

Ukraine: The New York Times spills the beans.

The New York Times reports that the Obama regime is "sharing" intelligence with Ukraine:

http://www.nytimes.com/2014/07/27/world/europe/ukraine-rebels.html?_r=0

The regime claims that the info is not for targeting, but in fact that is precisely what is being done.

So, what is next? Will the Russians and the Chinese start destroying our satellites to stop the genocide of the Russians in the East of Ukraine? You can always rely on a Democrat (?) President to misunderestimate the danger of a bad calculation and get us into a shooting war.

Inovio: there is beef there.

Inovio has finally disclosed the results from their P2 study of vaccine against the HPV-mediated cervical lesions. The results are good, but not great. Helpful though.

Human Papillary Virus (HPV) causes lesions on the genitalia and elsewhere. The virus is transmitted through sexual contact and enters the body through any breaks in the skin. The female reproductive system (the cervix primarily) are its primary targets. Left untreated, about a quarter of the infected individuals fight off the infection, the rest can get cervical cancer. There are two companies producing vaccines to prevent infection, but when infection occurs, there is no treatment.

Inovio has tested a DNA serum against the infection once it is in full bloom. Thirty percent of those receiving placebo (no vaccine) recovered vs a recovery of 49% of those receiving the vaccine. In the placebo group, 13% was virus-free, vs 40% in the treated group. There was a report of "robust" t-cell response in the treated group.

Researchers have learned a lot about cell biology from trying to find "the cancer gene." As the length of the names of genes involved in cancer grew, it became obvious that this was the wrong tack to follow. But, chromosomal breaks seemed to be involved. That is why INOVIO's vaccines hold out hope.

HPV is a DNA virus that carries the code for two proteins: E6 and E7. When the HPV DNA gets dragged into the cell, it is then incorporated into the cell's DNA and the proteins are expressed. E6 results in altered centriole formation ( the center that is involved in separating the new chromosomes from the old ones in the dividing cell). You even get chromosomal breakage. E7 complexes with another protein (E2) which normally ties up a tumor forming factor (p56). Once p56 is free, it promotes uncontrolled cell division.

Inovio's vaccine (3100) contains the DNA sequence for E6 and E7, probable promoters and maybe a sequence necessary for the antigen forming units to recognize the E6 and E7. How the vaccine works is a little fuzzy, but it works. Inovio is planning three P1 studies against cancers, a P3 study to fight off HPV infection and a number of studies against influenza, HIV and hepatitis C. 

Japan: toward a robot army and a war with China.

Japan is losing demographically. It has fewer children. China is in a similar situation. But, Japanese PM Abe has did one better than Obama: he nullified the pacifist clause of Japan's Constitution. ASince, Japan does not have the manpower, it will depend on drones and robot soldiers. The bone of contention between China and Japan is the Senkaku Islands and its oil wealth.

http://www.defenseone.com/technology/2014/07/how-japan-fell-love-americas-drones/89195/

Why the anti-Russia hysteria?

The anti-Russia hysteria did not start with the downing of HN17. We saw it during the Winter Olympics and it intensified after Russia reclaimed the Crimea. I can only shake my head as Senator (the Dunce) McCain demands ever greater punishment of Russia, but even supposedly more reasonable people (such as FOX News) are foaming at the mouth. Why?

The downing of HN17 was clearly a planned fiasco, orchestrated by the Ukrainian government and aided by US satellites. Russian officials forgot that the BUK missiles need to be guided by radar, else the missiles seek out the nearest airplane. The diversion of HN17 into a combat zone by Ukrainian authorities clearly puts the onus on them. After all, the Rebels were mainly trying to keep Ukrainian planes away from their missions of bombing, strafing and rocketing Donetsk and its surrounding villages. We know why the Ukrainian govt became party to all this: it can not defeat the Rebels without forcing Russia to stop aiding the Rebels.

As to why the Liberal Press treats Russia like they treat Conservative Republicans, the reasons lie in Mr Putin's policies. He has resurrected the influence of the Russian Orthodox Church and under his leadership, Russia has enacted laws to restrict homosexual propaganda. Both of these actions are anathema to the Socialists that rule the American and the European Press. The idiots of the Left Wing believe that any enemy of Christianity is to be embraced, so they are promoting the Islamization of Europe. Ironically, Islam promises not only to restrict homosexual propaganda, but to kill homosexuals.

http://www.cbn.com/tv/embedplayer.aspx?bcid=1509282970001

HN17 not the only plane shot down over E Ukraine.

There was a troop carrier, an Antonov cargo plane and an SU-25 that were shot down before HN17. The Ukrainians claim that 3 SAM carriers came to Ukraine from Russia and so they knew that the capability existed to shoot down an airliner. Was HN17 deliberately routed over a combat zone so that it might be shot down? Was this a setup to justify the hysterical anti-Russian response in the Press?

http://live.wsj.com/video/more-planes-than-just-mh17-shot-out-of-ukraine-sky/1B3EA7E3-1738-453C-AA24-34DC884E5386.html?mod=trending_now_video_4#!1B3EA7E3-1738-453C-AA24-34DC884E5386

The story of the downed airliner HM17.

1. There is no question that HM17 was downed by a surface to air missile fired from Ukrainian territory.

2. There is very good evidence that the missile was fired by the Separatists.

3. The Separatists have a Ukrainian mechanized brigade bottled up on three sides against the Russian border. They can be supplied only by air. The Separatists thought that they were shooting at a Ukrainian plane on a resupply mission.

4. HM17 was diverted into a dangerous area. Previous Malaysian flights flew South of the combat area to avoid the possibility of being shot down.

5. Who ordered HM17 to fly over a combat zone?

Find lots of stuff at this site:

http://www.dailymail.co.uk/news/article-2696975/Putin-blames-Ukraine-loss-Flight-MH17-298-innocent-souls-DOESNT-deny-Russian-separatists-shot-missile-McCain-warns-Hell-pay.html

Putin's Ukraine U-turn:

Putin's Ukraine U-turn: why it makes sense for Russia to allow Kiev victory

Russia's president has agreed to new talks aimed at resolving the conflict in eastern Ukraine, and has renounced the right to use military force in the country. Balázs Jarábik explains why

•                         
•    

• Balázs Jarábik for Eurasia Outlook, part of the New East network
•  

Pro-Russian militant of the Vostok battalion guards a checkpoint on 8 July, 2014 in Donetsk, eastern Ukraine. Photograph: Dominique Faget/AFP/Getty Images

Eastern Ukrainian separatists have emerged as Russian President Vladimir Putin’s biggest critics in the past few weeks.

Their pleas for Russia to intervene militarily have been ignored. Moreover, as they were pleading for help, Putin turned to his legislature and asked it to rescind his mandate to use military force in Ukraine.

This modest policy change in Moscow was reaffirmed in the Berlin agreement on 2 July, which called for a ceasefire and new talks aimed at resolving the conflict. The key element of the new agreement is strengthening control of the Russian-Ukrainian border amid the closure of border checkpoints and incidents of shelling on Russian territory from the Ukrainian side of the border. Kiev and Western governments are intent on sealing the border and cutting off the separatists’ supplies. If implemented, this will be an important gesture by Moscow amid Kiev’s stepped-up campaign of so-called anti-terrorist operations.

It is also noteworthy that the word “junta” has disappeared from Russian state media’s descriptions of the government of Ukraine. In addition, Ukraine and Russia have held new talks about gas deliveries and future plans for Crimea. In retrospect, the build-up of Russian troops along the border in recent weeks appears to have been a face-saving act, or even a hedge against the possible movement into Russia of fighters from eastern Ukraine.

Putin’s policy shift makes sense for a number of reasons, but could be delicate for him domestically, even though many Russians prefer supporting eastern Ukraine via economic and military aid over invading.

Russia's Prime Minister Dmitry Medvedev (L) chairs a meeting on Crimea at the Gorki state residence outside Moscow, on 8 July, 2014. Photograph: RIA Novosti/Reuters

First, unlike in Crimea, local support for establishing a quasi-state in southern and eastern Ukraine under the name of Novorossiya has been weak. Ukrainians have united in opposition to Russia. The government has moved to re-build the armed forces and succeeded in organising credible presidential elections despite the chaos in the east.

The tragic events in Odessa, in which dozens of people died in a fire and street fighting, proved to be a turning point. Instead of fueling pro-Russian sentiments, the Odessa events further mobilised Ukrainians against continued Russian efforts to destabilise key oblasts.

The tragic events in Odessa, in which dozens of people died in a fire and street fighting, proved to be a turning point

Second, Russia’s failure to fulfill quickly the promise of a better life for Crimea has cut into support for Moscow in southern and eastern Ukraine. The number of Russians supporting the idea of defending ethnic Russians in neighbouring countries or annexing territories where they live has significantly declined since March.

Third, Moscow has not been able to find credible political leaders in Ukraine to take ownership of the Novorossiya project. Russia’s reliance on Viktor Medvedchuk, the unpopular chief of staff of former President Leonid Kuchma, as the proxy for Putin is indicative of Russia`s weakening political position in Ukraine. Putin’s desire to get Medvedchuk, with whom he has strong personal ties, into Ukrainian politics is likely to keep Russia’s position weak. Medvedchuk is simply not electable; Moscow’s concept of federalisation is supported only by 13% of Ukrainians.

The mother of Dmitriy Nikityuk, a Cossack, at his funeral in Odessa on 8 May, 2014. Nikityuk died in the burning trade union building fire that killed most of the 40 people that died after riots erupted. Photograph: Vadim Ghirda/AP

Fourth, a continuing military conflict in eastern Ukraine poses a growing threat to stability inside Russia itself as the fighting could spill across the border.

Fifth, Moscow is not keen to subject itself to further economic, reputational and other damage from international sanctions amid its own declining economic performance. The Kremlin understands, of course, that Europe is reluctant to introduce new sanctions and wants to take advantage of the new opening to avoid them.

With little insight into Kremlin decision-making, one can only speculate about the connection between Russian politics and events in Ukraine: Crimea’s annexation was a victory for the siloviki, and they took the lead in re-shaping Russian foreign policy. Now it appears that “soft power advocates” (Volodin, Surkov, Chesnakov, etc) may be gaining at their expense. The Kremlin’s current strategy relies more on soft, rather than on military power, a move which may allow Moscow to move away from the threat of further territorial expansion to an expansion of Russia’s long-term influence in Ukrainian politics.

Nonetheless, the destabilisation of Ukraine is by no means off the table in Moscow. But the two imminent goals — a gas deal and a workable modus vivendi for Crimea — require agreements with the new Ukrainian government. Crimea cannot be turned into a success story unless water, electricity, gas and food supplies flow from Ukraine. And Moscow is more than capable of exploiting Ukraine's overwhelming challenges and internal political fragmentation by political means.

In Poroshenko, Putin has acquired a legitimate partner who speaks out on behalf of peace

In Poroshenko, Putin has acquired a legitimate partner who speaks out on behalf of peace. It probably was not lost on Poroshenko — or on Putin — that more Ukrainians supported negotiations with the separatists than the military option.

Ukraine's President (then President-elect) Petro Poroshenko, right, walks past Vladimir Putin during the commemoration of the 70th anniversary of D-Day in France, on 6 June, 2014. Photograph: Christophe Ena/AP

Even though the prolonged ceasefire resulted in two rounds of negotiations and the freeing of eight OSCE observers, it also took the lives of 27 Ukrainian soldiers. Further inaction might have caused Poroshenko a loss of trust among many Ukrainians who see the eastern Ukraine insurgency as a conflict with Russia. As a result, he had no choice but to end the ceasefire even though his use of military force may strengthen support for federalisation in the region in the near term. The rapidly growing refugee crisis — with residents fleeing eastern Ukraine to other parts of the country as well as to Russia — is a reminder of the seriousness of the conflict.

Thus, both Poroshenko and Putin have to walk a very fine line because of their respective domestic political situations. Perhaps Moscow will realise that Poroshenko could gain much-needed political capital if he can deliver a military victory that would empower him to make the deals that Russia needs and wants from him. The ball is in Putin’s court.

Balázs Jarábik is a visiting scholar at Carnegie Endowment for International Peace focussing on Ukraine and eastern Europe

 

AJ adds: Both Putin and Poroshenko are playing a chess game that can go bad any time. To be sure, challenge of Russia's annexation of Crimea would amount to war and not just between Russia and the Ukraine, but possibly NATO and Russia. Then there is the problem of supplying the Crimea. This problem may push Russia to occupy East and South East Ukraine, if the problem is not resolved soon. For now, Mr Putin is making friends in Latin America such as getting deals of nuclear power with Argentina. Come this weekend, he should be home and taking a new look at the Ukraine. In the meantime, Poroshenko is overplaying his game by using heavy weapons in E Ukraine. We live in interesting times.

WHY NBC GOT RID OF THE FUNNIEST MAN ON LATE NIGHT TV-Jay Leno

  
Word is leaking out from
 Hollywood executives in-the-know that the Obama
 White House had been leaning on, pressuring executives
 at NBC for the last
 two years to replace Jay Leno because the comedian was
 criticizing
 President Obama every night. Obama didn't like it
 and considered it a racist attack on him.

  Since his inauguration in Jan. 2009 Obama had
enjoyed three
 years of very, very friendly routines from all the late
 night comics
 on ABC, CBS, and  Leno at NBC - there was
 no criticism at all.

 But after data came to light that $100's of
 millions had been
 spent on First Family vacations during a
 recession, Mrs. Obama's unpopular
 new laws that changed food in America's schools and
 other negative news
 including the disastrous Obamacare rollout &
 website mess, Jay
Leno took his comedy to a different level and his
 ratings skyrocketed
 - none of the other comics were so bold.
THESE ONE-LINERS MIGHT BE THE REASON NBC GOT RID OF THE
 FUNNIEST MAN
 ON LATE NIGHT - JAY LENO

  Of course NBC was on board when Jay Leno went after
 Republican George W. Bush every night for 8 years but
 they couldn't stomach the fact that Leno's jokes
 about Obama were always
 right on target about the first black
 president...and left-leaning
 Democrat executives at NBC were being harassed by Obama
 himself who thought the comedy was a racist attack on him.
 
 GOLDEN OLDIES FROM JAY:

  "I was going to start off tonight with
 an Obama joke, but
 I don't want to get audited by the IRS."
 
  On NSA surveillance:
 
  "We wanted a president who listens to all
 Americans - now
 we have one."
 
  On a new IRS commissioner:
 
  "He's called 'acting commissioner'
 because he has to act like
 the scandal doesn't involve the White House."
 
  On closing the Guantanamo
 prison for terrorists:
 
  "If he really wants to close it, turn it into
 a government-funded solar power company. The doors will
 be shut in a month."

  Concerning the Benghazi ,
 Associated Press, and IRS scandals:
 
  "Remember in the old days when President
 Obama's biggest
 embarrassment was Joe Biden?"
 
  On Obama saying he didn't know about the
 IRS scandal:
 
  "He was too busy not knowing anything about
 Benghazi to not know anything about the
 IRS."

 “The White House has a new slogan about
 Benghazi
 
  : Hope and change the subject."

  "It's casual Friday, which means
 that at the White House,
 they're casually going through everybody's
 phone calls and records."
 
  "It is not looking good for President
 Obama.
 
 Today his teleprompter took the fifth."

  "Fox News has changed its slogan from
 'Fair and Balanced' to 'See, I told you so!'"
 
  On Obama's commencement address:
 
  "He told the young graduates their future is
 bright unless, of course, they want jobs."
 
  On a Chicago
 man who set a record for riding a Ferris wheel:
 
  "The only other way to go around and around in a
 circle that many times is to read the official report on
 Benghazi ."
 
 
 
  On White House claims of ignorance on
 the scandals:
 
 "They took 'Don't Ask, Don't Tell'
 out of the Pentagon and moved it
 into the White House."
 
  Now the last and I think best!—
 
  "These White House scandals are not going
 away anytime soon.  It's gotten so bad that People in
 Kenya are now saying he’s 100 percent American.
 

 

Ukraine: Russia stays out - for now.

Perhaps deterred by further sanctions, Russia has pulled back its horns and is set to abandon separatists Russians - for now. At least, that is what is reported in the international press.

President Putin is in Brazil, at the World Cup and then will meet with BRIC leaders. But, this writer has suspicions.

The Ukrainians have signed agreements with the West, continue their advances toward Donetsk (which has been virtually depopulated) and have stopped supplies from reaching the Crimea via land.

To be sure, Russia can supply Crimea via sea, but it is costly. And the West is egging on Ukraine to continue its claims to Crimea.

But, for a time, the Russians are staying home. We hear Russian leaders say that ties with the West are important and must be maintained. Even public opinion in Russia has backed off from an invasion, let alone an annexation of the Ukraine. It looks as if another group of brave men is about to make a last stand. If they do and are abandoned, Russia will suffer a great loss of face and its compatriots will be dissed elsewhere. That is why I believe that the current "peaceful bear" may be a part of a gambit. Did not Russia wait with  Crimea until the Winter Olympics were over? Now, Mr Putin is expected to show up at the World Cup closing ceremony as the host for the next World Cup. Hummm.

Cycles of war heat up.

Larry Edelson maintains that gold prices are responding to an increase in the cycles of war. Here are the flash points:

1. Israel is poised to invade the Gaza strip. Iron dome is shooting down 90% of rockets from Gaza.

2. Ukraine. Rebels destroy Ukrainian column near Russian border in Luhansk. Ukrainians suffered a total of 23 killed and 90 wounded during last day. Pres Poroshenko promises to exterminate rebels.

3. Iraq. Kurdish forces seize two oil fields. ISIS grabs some low level radioactive stuff and chemical weapons left over from Saddam's "non-existent" stockpile.

4. Japan vs China. Japanese Japanese legislation makes it easier for Japan to arm itself. Japanese plan robot army.

Obama regime PLANNED invasion of USA.

by Larry Odom

A month or two ago news broke that Obama’s HHS was calling for private contractors to help transport illegal aliens throughout the interior United States. What made this already big news even bigger is the fact that the original call for proposals came out in January, long before the bulk of the illegal alien surge began. The breaking news you’re about to read is ten times bigger, because the following proves the Obama administration was bankrolling America’s churches back in 2010. And the tens of millions were flowing in to prepare for the invasion currently underway. The following is a small taste of what’s out there in grant records. This is just the tip of the iceberg, folks. Between Dec 2010 and Nov 2013, the Catholic Charities Diocese of Galveston received $15,549,078 in federal grants from Health & Human Services for “Unaccompanied Alien Children Project” with a program description of “Refugee and Entry Assistance.” Last year, the Catholic Charities Diocese of Fort Worth received $350,000 from Department of Homeland Security for “citizenship and education training” with a program description of “citizenship and immigration services.” Between September 2010 and September 2013, the Catholic Charities of Dallas received $823,658 from the Department of Homeland Security for “Citizenship Education Training” for “refugee and entrant assistance.” From Dec 2012 to January 2014, Baptist Child & Family Services received $62,111,126 in federal grants from Health & Human Services for “Unaccompanied Alien Children Program.” Any questions? H/T Terri Harris Hill for the tip and initial research. - See more at: http://www.libertynews.com/2014/07/exclusive-hhs-bankrolled-catholic-and-baptist-church-from-2010-to-2013-to-prepare-for-obamas-2014-invasion/#sthash.93biUrok.dpuf

Golden cross of gold.

 

When the 50 Day Moving Average goes above the 200 Day Moving Average it is called the golden cross. Supposedly, it signifies a rally.

How Obama regime lost Iraq.

When Democrats are in power they lose important areas to the bad guys. Like China, Vietnam, North Africa. And now Iraq.

1. First, they failed to secure an agreement to leave a residual force;
2. They failed to deliver weapons to Iraq: 34 F-16 fighter planes, 24 Apache attack helicopters, 24 Beechcraft AT-6 Texan II armored turboprops.
3. In addition, in June U.S. contractors employed by Bell Helicopter, Beechcraft and General Dynamics Land Systems have all pulled their support personnel out of Iraq, depriving Iraqis of maintenance and repair for their U.S.-manufactured Bell ARH-407 armed reconnaissance helicopters, Beechcraft T-6 military trainer aircraft and M-1 tanks. Given the deteriorating security situation, a knowledgeable source says that virtually all U.S. contractor personnel have left Iraq.

You can depend on Democrats to allow the bad guys to win.

Others noticed what happened.  The Russians sent Sukhoi fighters and technicians to service them. And Iranians sent some troops to protect Shiite shrines. ISIS has begun the destruction of Shiite shrines (such as the tomb of Jonah) and mosques.

Update from Puerto Rico.

By Michael Lewitt, from Money Morning.

 

 

 

 

 

The great economist Hyman Minsky coined the term "Ponzi finance" to describe the situation when borrowers use more borrowed money to pay their debts.

The U.S. government engages in Ponzi finance every day since it is incapable of repaying the more than $17 trillion it has borrowed.

 

On a smaller scale, the Commonwealth of Puerto Rico has been engaging in Ponzi finance - but unlike the United States, Puerto Rico can't simply keep printing more money to pay its debts.

In recent weeks, it has become apparent that Puerto Rico and the holders of its municipal bonds are going to have to pay the piper...

These Bonds Obscured the Inevitable

Earlier this year, with much financial media fanfare, Puerto Rico sold $3.5 billion of 8% Series A General Obligation Bonds due July 1, 2035. The underwriters priced the March 11, 2014 bond offering at 93 cents on the dollar in order to provide buyers - which were mostly favored accounts like hedge funds and large mutual fund bond complexes - with what we in the business call a "quick flip."

 

The bonds traded as high as 100 after the sale before settling down to the mid-90s. The bonds are currently trading at 85 and regulators are looking into how the deal was sold.

Puerto Rico is hopelessly insolvent. The island has $71 billion of debt, more per capita debt than any municipal entity associated with the United States. It has no industrial base and tourism comprises a surprisingly small part of its economy. The island's economy has shrunk by 11% since 2006.

With no hope of ever repaying its debt, the March 2014 bond offering was used to repay some short-term obligations and let everyone pretend that Puerto Rico is not bankrupt for another couple of years.

 

Recognizing the inevitable, however, in late June the governor of Puerto Rico proposed legislation that would allow the Commonwealth's public corporations to restructure their debts through a process similar to bankruptcy

 

This proposal broke an unwritten understanding that these public corporations were acting as conduits for the Commonwealth and were treated as benefitting from both the backing of the Commonwealth and the specific revenue streams of their businesses. The proposed legislation is being seen as breaking that compact and leaving investors in the corporations without the ability to rely on the backing of the Commonwealth.

 

In the aftermath of the Governor's proposal, Moody's Investor Service downgraded Puerto Rico's general obligation bonds to B2 from Ba2 and its sales-tax debt to junk status. Long-term bonds of its troubled electric utility, Puerto Rico Electric Power Authority (PREPA), have traded down to the 40s. Investors are recognizing what they should have realized a long time ago - these corporations are likely to default.

 

Investors who relied on the backing of the Commonwealth for their Puerto Rican corporate bonds were fools.

 

The Russians' last stand in Ukraine.

With the fall of Slovyansk, Kramatorsk and Druzhkivka last week, Russian rebels in the Ukraine are preparing for a last stand in the town of Donetsk.


Slovyansk was taken by artillery and air force and the city is in ruins. But Donetsk has a population of a million and is the industrial heartland of the Ukraine. While, Ukraine's President promises to continue the liquidation of the "terrorists," Donetsk will be a tougher nut to crack without using heavy weapons.


President Putin is under heavy pressure to intervene and the decision will come in the next two weeks. It depends on how long Donetsk holds out.


The rebels suffered heavy casualties last week in their retreat from Slovyansk.

The BRIC alliance and the US Dollar.

While numerous massively indebted administrations around the world hope to divert the attention of what's left of their struggling middle class away from its daily impoverished existence and distract it with flashing lights and glitzy animations showing another all time market high on a daily basis, a significantly more important shift taking place behind the scenes is appreciated by very few: the ongoing de-dollarization of the world. For the latest example of how increasingly more countries are setting the stage for the final currency war, we go again to Russia where VOR's  Valentin Mândr??escu explains that slowly but surely the BRICS - that proud Goldman acronym which was conceived to perpetuate the great American way of life by releasing trillions in US-denominated debt in heretofore untapped markets - are morphing into an anti-dollar alliance.

BRICS is morphing into an anti-dollar alliance, From VOR

Before the crucial visit to Beijing next week, the governor of the Russian Central Bank, Elvira Nabiullina met Vladimir Putin to report on the progress of the upcoming ruble-yuan swap deal with the People's Bank of China and Kremlin used the meeting to let the world know about the technical details of its international anti-dollar alliance.

On June 10th, Sergey Glaziev, Putin's economy advisor published an article outlining the need to establish an international alliance of countries willing to get rid of the dollar in international trade and refrain from using dollars in their currency reserves. The ultimate goal would be to break the Washington's money printing machine that is feeding its military-industrial complex and giving the US ample possibilities to spread chaos across the globe, fueling the civil wars in Libya, Iraq, Syria and Ukraine. Glaziev's critics believe that such an alliance would be difficult to establish and that creating a non-dollar-based global financial system would be extremely challenging from a technical point of view. However, in her discussion with Vladimir Putin, the head of the Russian central bank unveiled an elegant technical solution for this problem and left a clear hint regarding the members of the anti-dollar alliance that is being created by the efforts of Moscow and Beijing:

“We've done a lot of work on the ruble-yuan swap deal in order to facilitate trade financing. I have a meeting next week in Beijing”, she said casually and then dropped the bomb: “We are discussing with China and our BRICS parters the establishment of a system of multilateral swaps that will allow to transfer resources to one or another country, if needed. A part of the currency reserves can be directed to [the new system].” (Prime news agency)

It seems that [the] Kremlin chose the all-in-one approach for establishing its anti-dollar alliance. Currency swaps between the BRICS central banks will facilitate trade financing while completely bypassing the dollar. At the same time, the new system will also act as a de facto replacement of the IMF, because it will allow the members of the alliance to direct resources to finance the weaker countries. As an important bonus, derived from this “quasi-IMF” system, the BRICS will use a part (most likely the “dollar part”) of their currency reserves to support it, thus drastically reducing the amount of dollar-based instruments bought by some of the biggest foreign creditors of the US.

Skeptics will surely claim that a BRICS-based anti-dollar alliance will not manage to deprive the dollar of its global reserve currency status. Instead of arguing against this line of thought, it is easier to point out that Washington is doing its best to enlarge the ranks of the enemies of the dollar. Asked by the Russia 24 channel to comment on Nabiullina statements, Sergey Kostin, the president of the state-owned VTB bank and one of the staunchest supporters of anti-dollar policies, offered an interesting perspective on the situation in Europe:

“I think the work on ruble-yuan swap line will finalized in the nearest future and the way for ruble-yuan settlement will be open. Moreover, we are not the only ones with such initiatives. We know about the statements made by Mr. Noyer, chairman of the Bank of France. As a retaliation for what Americans have done to BNP Paribas, he opined that the trade with China must be done in yuan or euro.”

If the current trend continues, soon the dollar will be abandoned by most of the significant global economies and it will be kicked out of the global trade finance. Washington's bullying will make even former American allies choose the anti-dollar alliance instead of the existing dollar-based monetary system. The point of no return for the dollar may be much closer than it is generally thought. In fact, the greenback may have already [be] past its point of no return on its way to irrelevance.

From Zerohedge,

AJ adds: Wonder what is ticking off the BRICS. Is it the printing of Dollars that cheapen the worth of all Dollars? Is it the way Barak Hussein and friends run down the US to anyone who listen? Or maybe even the stuffing of the US with third world hordes of future Democrats? Just wonder.