JGB Watch: 10 Year Yields Drifts at Near Critical Levels

Back to my frequent JGB-Japan debt crisis watch.

Stable instability has resumed.

The 10 year JGB yield has reached levels which previously sparked an ensuing stock market crash.

Notice that each time JGBs (orange) hit the .89-90+% levels, the Japanese equity benchmark as measured by the Nikkei index (lemon green) took a big hit. Currently the 10 year yield trades at .88-.89%.

It is important to point out that such serve as observations on correlations or patterns whose relationship may change.

Nonetheless 10 year JGB support area seems at the .79-.81+% levels.

Given the sharp spikes in bonds almost everywhere, dismissing a contagion on JGBs would be reckless. My impression is that the ceiling or resistance levels could be tested or breached anytime soon.

Today, the Nikkei rebounded from the opening big losses, which apparently had been a carryover sentiment from the badly beaten US-Euro equity markets, to close on the green.

It remains to be seen if the current global risk asset meltdown will ease or merely pause before another wave of selling occurs.

Chart of the Day: The End of Easy Money

Again, presenting the yield of 10 year US treasury note without further comment

China’s PBOC: From Tapering to Easing?

The whimsical actions of China’s PBoC serves as roadmap to what central bankers will do once the pain in the system from their policies swells enough to threaten the survival of their political institutions.

From Bloomberg:

The People’s Bank of China added 50 billion yuan ($8.2 billion) to the financial system yesterday after a cash squeeze drove money-market rates to record highs, said Hao Hong, chief China strategist at Bank of Communications Co.

The sum was supplied to a single lender through short-term liquidity operations and more banks were in talks to obtain financing, Hong said in a phone interview, adding that this is “proper and appropriate” use of the mechanism. Overnight funds were lent at 5.1 percent and seven-day money at 5.4 percent, he said, citing unidentified people in the industry. A PBOC press official said he was unaware of the matter, requesting anonymity in keeping with bank policies.

The purported ferreting out of the shadow banking industry represents no more than token symbolism.

And it would seem that China’s government has commenced on the bailing out of politically privileged institutions via “The sum was supplied to a single lender” 

Such supposed “noble intended” goals of assailing the property bubbles and the shadow banks, are actually responses to the consequences of their previous policies. These appear to have been overshadowed by the imperatives of political stability which would be undermined by a full blown crisis. 

Besides, all these make good publicity especially from a new administration desiring to win the public's approval (except that media conceals the true nature: fighting monsters of their creation)

Nonetheless, at a certain point, no amount of easing will be enough to prevent the laws of economics from ventilating on the accrued unsustainable imbalances brought about by massive interventionism in the marketplace.

Was the 1996 Crash Trans World Airline Flight 800 been due to a wayward missile?

First the furor has been about the NSA spying exposé by whistleblower Edward Snowden, and now, another revelation on the alleged US government cover up on the 1996 crash of Trans World Airline Flight 800 

From the Daily Mail

A new documentary about the deadly Trans World Airline Flight 800 featuring interviews with former investigators claims that the official explanation given for the ill-fated flight is wrong.

The flight crashed off the coast of Long Island in 1996, killing all 230 people on board in what is the third-deadliest aviation accident in U.S. history.

The official explanation given by the National Transportation Safety Board was that the crash was caused by a gas tank explosion, but the documentary gives 'solid proof' there was an external detonation, its co-producer said.

Many eye-witnesses claimed they had seen a streak of fire heading towards the plane before it crashed. Theories have suggested it was a missile strike from a terrorist or U.S. Navy vessel, and that the incident was subject to a government cover-up.

But now the producers of TWA FLIGHT 800, which premieres on July 17, the anniversary of the crash, on cable network EPIX, said they have more than just eye-witness statements to call on.

'Of course, everyone knows about the eyewitness statements, but we also have corroborating information from the radar data, and the radar data shows a(n) asymmetric explosion coming out of that plane - something that didn't happen in the official theory,' Tom Stalcup told CNN's New Day.

Are crashing markets and increasing number of political exposes indicative of imploding governments?

JGB Watch: Global Bond Markets Riot, Equities Hemorrhage

Back to my JGB-Japan debt crisis watch.

The Japanese financial markets are back into their natural state: stable instability.

The JGB yields of 5, 10, and 30 year maturities have all been trading higher as of this writing

I will not say that this has been due to the Bernanke 2014 taper.

Intraday 10 year JGB yields opened low (even when the US Treasury counterpart zoomed) and seesawed steeply between the .81+% and .85+% twice.

As of this writing 10 year yields are near the peak of the trading session.

The latest update on outstanding JGBs reveals of an increase of 5.3% to ¥969.12 trillion, with the Bank of Japan’s (BoJ) holdings hitting an all time high of ¥127.88 trillion at the end of March, up 43.8% from the previous year. (Japan Times) The BoJ’s share of total JGBs now accounts for 13.2% as against 12% in December 2012 as shown above as per Japan’s Ministry of Finance

The report also says that JGB holdings by overseas investors grew 6.5 percent to ¥81.55 trillion, also a record high as of the fiscal yearend, the BOJ said.

While foreign punters increased their JGB holdings, cash rich resident Japanese appear to be in a “capital flight” mode

From the Bloomberg,

Japan’s companies stockpile of cash reached a record in the first quarter as they poured investment abroad, underscoring Prime Minister Shinzo Abe’s challenge to boost the nation’s investment and wages.

Private companies’ cash and deposits rose 5.8 percent from a year before, to 225 trillion yen ($2.4 trillion) -- an amount in excess of the size of Italy’s economy or the liquid assets held by American firms, Bank of Japan data showed in Tokyo. Businesses held 55 trillion yen in direct investment abroad.

The cash and deposit holdings of Japan’s non-financial companies reached a record in the January-to-March period, according to BOJ figures dating back to 1979. The $2.4 trillion equivalent compares with the $1.8 trillion in liquid assets -- such as cash, deposits and money-market fund shares -- held by nonfinancial U.S. firms, according to Federal Reserve data.

So instead of domestic investments, in contravention to the desires of politicians, the Japanese are acting to preserve the purchasing power of their savings via overseas investments or placements. 

And without investments to spur productivity growth, there will hardly be sufficient sources of funding for the towering debt which the Japanese government continues to accumulate.

BoJ officials publicly exhibit "confidence" on the supposed success of Abenomics. But such confidence does not seem to be shared by the people within the institution as insiders appear to be apprehensive over the chances of success of Abenomics.

This report from the Wall Street Journal reveals of the cracks in the officialdom promoting Abenomics: (bold mine)

But for bank officials tasked with making sure the bond market operates smoothly, things have been anything but smooth over the past three months, as they scrambled to tame wild swings in bond yields triggered by the BOJ’s decision in April to double its already massive purchases of Japanese government bonds.

“They seem real desperate, asking us what they can do to contain the situation,” an official at a Japanese trust bank said recently.

“Mr. Kuroda comes across as being unfazed by the rises, but those at the Market Operations Division are determined to push them down,” added the official who declined to be identified, given the bank’s relationship with the BOJ.

The three-dozen officials at the BOJ’s Market Operations Division have suddenly found themselves in the spotlight after the bank, under Mr. Kuroda’s leadership, adopted bold monetary loosening measures in early April.

And anxious they should be.

Wild vacillation of the JGBs has also been reflected on the Nikkei which slumped 1.74% today.

Asian markets hemorrhaged badly today from a combo of interest rate risks factors seen via unstable JGBs, the spike in US treasury yields and the bedlam over at China’s credit markets

ASEAN bond markets likewise bled today. Today’s actions appears ominous to my recent warnings that the Philippine bond bubble is an accident waiting to happen

Europe’s stock markets as of this writing are also in deep red.

The French 10 year yield has also skyrocketed as of this writing.

Four of what I see as the very critical bond markets (Japan, France, China and the US) appear to be in  varying degree of seizure. 

And these has upset a broad spectrum of risk assets from stocks to commodities across the globe.

If the steep gyrations in the global bond markets are sustained, then the previous booms will metastasize into a global debt crisis sooner than later.  

As Bernanke Talks the Taper, China’s PBoC Tapers!

Step aside Ben Bernanke, the PBoC has moved ahead.

The Fed’s announced prospective tapering of QE has been programmed on the latter half of this year and which may totally end in 2014. 

But Bernake’s counterpart in China, the PBoC can’t seem to wait, they have began to bleed dry the financial system in order to force out the shadow banks.

From Bloomberg: (bold mine)

China’s benchmark money-market rate climbed to a record as the central bank refrained from using reverse-repurchase agreements to ease a cash crunch in the world’s second-biggest economy.

The financing system must “support economic transformation and upgrading in a more forceful way, serve real economy development in a better way, promote domestic demand in a more targeted way and prevent financial risks in a more concrete way,” the central government said yesterday in a statement after a meeting led by Premier Li Keqiang. The central bank did not conduct open-market operations to add or drain funds, though 40 billion yuan ($6.5 billion) was injected via an auction of six-month deposits from the Finance Ministry.

Aimed at the shadow banks?

The one-year interest-rate swap, the fixed cost needed to receive the floating seven-day repo rate, fell five basis points to 4.45 percent in Shanghai, according to data compiled by Bloomberg. It jumped a record 51 basis points yesterday and touched an all-time high of 4.71 percent today.

Chinese regulators are forcing trust funds and wealth managers to shift assets into publicly traded securities as it seeks to curb lending that doesn’t involve local banks, according to Fitch Ratings.

Interest rates in key global markets have already been in an upside trend even before the "tapering" chatters, and the realized actions by the PBoC and the anticipated actions from the Fed will exacerbate such phenomenon that will percolate into the rest of the world.

In a world addicted to easy money, tightening of the money environment will bring into light the credit risks from heavily leveraged financial system and debt burdened governments. Boom will become a bust.

Caveat emptor

Chart of the Day: Bernanke’s 2014 Taper

Presented without further comment the yield of the 10 year US Treasury from US Fed Chair Bernanke’s 2014 taper.

JGB Watch: Calm markets; Will the Fed Taper tonight? Yawn

Back to my JGB-Japan debt crisis watch.

JGB yields have traded mixed today in what seems as relative composed markets.

JGB 30 year yields modestly rose as 10 year yields marginally declined.

Foreigners reportedly reduced their JGB holdings which now accounts for 8.4% of total outstanding debt from 8.7% last December.

Today, Bank of Japan’s Governor Haruhiko Kuroda announced that “he will do the utmost to avoid sharp rises in long-term interest rates helped the market slightly - but not to an extent that it offset selling in superlong bonds” (Reuters)

One day of calm markets does not a trend make. Good luck to Mr. Kuroda on what seems as wishful thinking.

The relatively tranquil JGB markets allowed Japan’s stock markets to regain some grounds. Today the Nikkei 225 bounced by 1.83%

Yet the propaganda to promote Abenomics continues.

Some of mainstream media continues to mislead the public on the supposed impact of Abenomics.

Early today, Japan's updated merchandise trade data was announced. Interestingly here are two contrasting reports

From Bloomberg:

Japan’s exports surged by the most since 2010 as the yen weakened and shipments to the U.S. jumped, boosting Prime Minister Shinzo Abe’s campaign to revive the world’s third-largest economy

Today’s data may help to sustain confidence in Abe’s efforts to jump-start the economy with fiscal and monetary stimulus and a rollback of regulations restricting business. Volatility in stocks and bonds has threatened to damp sentiment as Abe and central bank Governor Haruhiko Kuroda seek to pull the nation out of a 15-year deflationary malaise.

Yes exports surged alright, but that’s only half of the picture.

From US news:

Japan's trade deficit rose nearly 10 percent in May to 993.9 billion yen (nearly $10.5 billion) as rising costs for imports due to the cheaper yen matched a rebound in exports, the Ministry of Finance reported Wednesday.

Exports rose 10.1 percent in May over a year earlier to 5.77 trillion yen ($60.7 billion) while imports also surged 10 percent, to 6.76 trillion yen ($71.1 billion), the ministry said. Japan's trade deficit in May 2012 was 907.93 billion yen.

So whatever gains from exports has been effectively neutralized by imports. The result: the widening of trade deficits. 

Add to the bulging trade deficit the substantial deterioration of Japan’s fiscal balance, this means that the Japanese will have to dip into their rapidly depleting savings or increase on their colossal debt burden just to finance such deficits.

So deteriorating fiscal, trade and price instability in Japan’s economy will hardly “help to sustain confidence” in Abenomics.

Why is this important? Because media’s framing of the above event exposes on the bias for reckless policies. Some media outfit clearly serves as PR outfits of politicians.

In the same context, people are being conditioned to believe that FED’s convening 'later' (Philippine PM time) will be critical the financial markets.

For instance this headline screams “Will Ben Bernanke let interest rates rise? World markets wait.”

I have repeatedly been pointing out that US treasury yields have been ascendant since July 2012. This happened despite the FED’s QE 3.0 last September which had only a 3-month effect of lowering of UST yields.

Abenomics and ECB’s interest rate cut last May likewise failed to suppress coupon rates of the UST and of their respective bond markets.

French 10 year yields has been rising prior to the supposed Bernanke “Taper talk”.

And so with 10 year JGBs

The point is that yields have been rising even before the so-called Bernanke Taper Talk and will continue to rise regardless of the outcome of today’s FED meeting overtime.

The difference will be on the immediate effects from today’s policy actions.

If the FED will unexpectedly expands QE, then this may have temporarily dampen yields which should spike the stock markets for a short time. But given the diminishing marginal efficiencies of such easing programs, rates will continue to advance later.

Yet if the FED leaves the current program unchanged, then yields will likewise trend higher. 

A Fed "taper" will accelerate the current uptrend.

As pointed out yesterday, US president Obama has hinted on Bernanke’s exit 

If this will hold true, even if another money printer will replace Mr. Bernanke, uncertainty over a regime transition may compound on the pressure to drive yields higher.

For every transition of the FED chairmanship since William Miller in March 1978, increases in FED Fund rates occurred.

10 year yields also reflect on the same pattern, as Bob Wenzel at the EPJ noted

As Federal Reserve chairman Paul Volcker left the Fed chairmanship in August 1987, the interest rate on the 10 year note climbed from 8.2% to 9.2% between June 1987 and September 1987. This was followed, of course by the October 1987 stock market crash.

As Federal Reserve chairman Alan Greenspan left the Fed chairmanship at the end of January 2006, the interest rate on the 10 year note climbed from 4.35% to 4.65%. It then climbed above 5%. 

The current environment seems like the proverbial calm before the bond market storm.

“This is Glock Block”: The Growing use of Private Security in the US

In many parts of the US, homeowners have reportedly been taking security matters into their own hands.

From Economic Collapse Blog  (hat tip Zero Hedge) [bold original]

All over the United States, frustrated homeowners are banding together, arming themselves and patrolling their own streets.  One of the primary reasons this is happening is because police budgets all over the nation are being slashed at a time when violent crime rates in the United States are increasing and many our our largest cities are being transformed into crime-infested war zones.  So instead of waiting for government to come up with a solution, many Americans are taking matters into their own hands.  For example, one community group in Milwaukie, Oregon has started posting flyers with an ominous message for potential criminals: "This is a Glock block. We don’t call 911."  You can see a photo of this flyer right here.  One of the founders of the "Glock Block" is a breast cancer survivor named Coy Tolonen. She decided to arm herself after a thief stole one of her favorite statues out of her front yard while she was watching...

It’s mostly petty crime that neighbors are sick and tired of:  stolen lawn ornaments, vandalism.  But for neighbors like Tolonen, a breast-cancer survivor, that’s enough: “I will defend myself — and my home,” she told KOIN 6 News.

Tolonen recently had a beloved statue she calls “Lilly Rose” stolen off her front porch. She said she even saw the man who stole it and tried to chase him down — but he got away.

This was the last straw for Tolonen, who decided to take a class to get her concealed carry permit.

We are seeing similar things happen in other areas of the nation.  As I wrote about yesterday, the size of the police force has been cut in half in the city of Detroit over the past ten years.  Meanwhile, crime rates have skyrocketed.  So frustrated citizens are now teaming up with the police to patrol their own neighborhoods...

Volunteers given radios and matching T-shirts help officers protect neighborhoods where burglaries, thefts and thugs drive away people who can’t rely on a police force that lost a quarter of its strength since 2009. With 25 patrols on the streets, the city hopes to add three each year. Meanwhile, the homicide rate continues rising.

In some wealthier neighborhoods around the country, citizens are pooling their resources and are hiring private security firms to ward off criminals.  Just check out what is happening in Oakland...

After people in Oakland’s wealthy enclaves like Oakmore or Piedmont Pines head to work, security companies take over, cruising the quiet streets to ward off burglars looking to take advantage of unattended homes.

“With less law enforcement on the streets and more home crime or perception of home crime, people are wanting something to replace that need,” says Chris de Guzman, chief operating officer of First Alarm, a company that provides security to about 100 homes in Oakland. “That’s why they’re calling us and bringing companies like us aboard to provide that deterrent.”

According to Steve Amitay, the executive director of the National Association of Security Companies, this is also happening in other high crime cities such as Atlanta and Detroit.  In fact, it is being projected that the "private cop" business is going to absolutely boom in the years ahead.

But not everyone can afford to hire private cops.  Those with more limited resources are trying to cope with rising crime any way that they can.

Read the rest here

Lessons:

The erosion of people’s trust on incumbent institutions represents as symptoms of growing signs of institutional failure

Private sector can provide security services for the community. 

The coming global debt crisis will force a shift of many of the so-called government provision of "public goods" into the private sector.

JGB Watch: Are Rising Yields a sign of Communications Failure? Obama Hints of Bernanke's Retirement

Back to my JGB-Japan debt crisis watch.

Media says that today’s successful debt auction, which had a "solid demand" for 20-year JGBs, signifies the return to stability.

From Reuters:

Japanese government bond prices gained after a solid 20-year-bond auction indicated returning stability in the market after weeks of turbulence in the wake of the Bank of Japan's launch of its massive bond-buying program in April….

Solid demand for the 20-year auction helped fuel the rises in bond prices in the secondary market.

The finance ministry sold ¥1.1 trillion of 20-year bonds with a 1.7% coupon and a lowest price of 100.10, yielding 1.693%, in line with street forecasts.

Current yield actions hardly suggests of any meaningful improvements despite the supposed “solid demand” as 10 year JGBs has been rangebound for the past 3 days. 

Again this reveals of a seemingly complicit media whose bias has been to promote Abenomics. Unfortunately, Japan's latest populist economic policies basically represents “doing the same things over and over again and expecting different results”.

The three day consolidation period by the JGBs has evidently given a reprieve to Japan's embattled stock markets. Japan's major benchmark, the Nikkei 225, has bounced off its recent lows.

Today the Nikkei closed with marginal losses. 

The seeming equanimity in major bond markets has also allowed many Asian bourses to recover significantly from the recent selloffs. The question is-- if the current serenity is sustainable or not?

Even abroad, mainstream media seem as either lost in confusion or purposely diverting or misleading people’s attention from real issues.

The mainstream attributes rising bond yields to “communications failure”

From yesterday’s Bloomberg article:

What central banks may have the world over is a failure to communicate.

Officials are struggling to spell out their visions for monetary policy, often amid a chorus of competing views. Chairman Ben S. Bernanke is trying to manage expectations about when the Federal Reserve will slow asset purchases and raise interest rates. Bank of Japan Governor Haruhiko Kuroda’s reflation-push is backfiring by driving up bond yields. European Central Bank President Mario Draghi is dashing investors’ hopes he once kindled for extra stimulus.

Does the rising yields of 10 and 30 year US treasuries since July 2012 (as discussed last weekend) look like a “communications failure”?

Remember that Bernanke's FED implemented unlimited QE 3.0 in September of 2012, where yields has already been on the rise. Ironically QE 3.0 only had a rather short-lived 3-month effect of lowering rates.

Yet Bernanke’s "Taper Talk' last May 22nd occurred when yields had already been soaring. 

Rising yields from the above chart looks more like the diminishing returns from monetary policies. Or that they exhibit symptoms of the unraveling of current policies. In short such are signs of policy failures, and hardly from communications deficiency.

Oh by the way, US President Obama seems to be hinting of a Ben Bernanke retirement in January 2014.

From Bloomberg:

President Barack Obama said Federal Reserve Chairman Ben S. Bernanke has stayed in his post “longer than he wanted,” one of the clearest signals the central bank chief will leave when his current term expires next year.

“Ben Bernanke’s done an outstanding job,” Obama said in an interview with Charlie Rose that aired yesterday, when asked about nominating him for another term subject to Senate approval. “He’s already stayed a lot longer than he wanted or he was supposed to.”

Obama likened Bernanke’s tenure to that of outgoing Federal Bureau of Investigation Director Robert Mueller, who stayed on for two years after his term expired in 2011 and is leaving his post in September. Bernanke’s second four-year stint at the central bank ends Jan. 31.

Not to worry, Mr. Bernanke’s replacement will most likely be another money printer. 

Nonetheless I suspect that Mr. Bernanke's seemingly crafty move represents the proverbial passing of the “hot potato” or the unintended effects from his policies to his successor. If true then this would be a nice escape job for Mr. Bernanke.

Quote of the Day: We need whistle-blowers

The U.S. government is on a secrecy binge. It overclassifies more information than ever. And we learn, again and again, that our government regularly classifies things not because they need to be secret, but because their release would be embarrassing.

Knowing how the government spies on us is important. Not only because so much of it is illegal -- or, to be as charitable as possible, based on novel interpretations of the law -- but because we have a right to know. Democracy requires an informed citizenry in order to function properly, and transparency and accountability are essential parts of that. That means knowing what our government is doing to us, in our name. That means knowing that the government is operating within the constraints of the law. Otherwise, we're living in a police state.

We need whistle-blowers.

This is from renowned security technologist expert Bruce Schneier  writing at the Atlantic

Chart of the Day: Filipinos are the Biggest Gin Guzzlers in the world

Interesting data on global alcohol consumption

Filipinos reportedly holds the title as world’s biggest gin guzzlers, according to a recent study. 

Aside from gin, the Philippines ranks third in rum consumption.

From the Economist

ASIA'S growing middle classes are driving demand in the global spirits market. According to IWSR, a market-research firm, consumption last year grew by 1.6% to 27 billion litres—and China, the world’s biggest market, quaffed 38% of that. The national liquor, baijiu, accounts for a whopping 99.5% of all spirits consumed there, so China does not even feature in rankings of the best-known internationally consumed spirits, below. The most popular of these is vodka, mainly because it is drunk in copious amounts in Russia. Russians downed nearly 2 billion litres of the stuff in 2012, equivalent to 14 litres for every man, woman and child. (Unsurprisingly, perhaps, Russians are among the biggest drinkers in the world, according to the most recent World Health Organisation data.) The Filipinos' taste for gin can be attributed in part to good marketing and to the spirit's long-established toe-hold in the local market. Ginebra San Miguel, a firm that makes the world's two best-selling brands, started operations there in 1834.

Philippine gin consumption has been estimated as having a 43.5% of the world market, according to the ginvodka.org

The Philippines is the world’s largest gin market. The Philippines spirits market comprises nearly 50 million cases and is dominated by domestically produced spirits (98%). The Gin market, in which San Miguel is by far the largest brand, is 22M cases (62% of the market) but this is very approximate. In global terms, Philippine gin accounts for 43.5% of the world gin market. Imported gins account for a miniscule proportion of the market but some UK owned gin brands are produced locally.

I wouldn’t exactly equate gin consumption as signs of a “growing middleclass”, since local gin and rum are the cheapest alternative among available alcohol spirits.

I have no data on the domestic distribution of gin and rum sales for both local and international brands, but I suspect that the bulk of the sales from local brands may come from the provinces.

A growing middle class should translate to a shift to pricier alternatives.

By the way, vodka consumption represents as the largest share of alcohol mainly due to Russian consumption as noted above.

Man of Steel: One heck of an unorthodox Superhero movie

Man of Steel,  for me, signifies as one heck of an unorthodox superhero movie

In stereotyped movies, superheroes have been assumed to possess the politically correct ethical behavior. But not this one.

This movie extends to the shaping of Clark Kent’s values and character mostly by his foster father and mentor, Jonathan Kent.

Like the ethics of good old kung fu movie days, the elder and fatherly Kent, impressed upon his son of the importance of self-discipline, in the fear that his adapted son’s supernatural powers would be spurned and rejected by the human society.

Gosh, this fabulous dialogue—between dad Kent and his extra-terrestrial 13-year old son over the latter’s lifesaving of his schoolmates from a drowning school bus—represents a deontological dilemma something which philosophers from different ideological camps would passionately debate on…

All quotes from the IMDb.

Jonathan Kent: You have to keep this side of yourself a secret.

Clark Kent at 13: What was I supposed to do? Let them die?

[brief pause]

Jonathan Kent: Maybe...

The elder Kent knew that the supernatural powers of son would be put to good use one day, but until then should refrain from exposing himself…

Jonathan Kent: You're not just anyone. One day, you're going to have to make a choice. You have to decide what kind of man you want to grow up to be. Whoever that man is, good character or bad, it's going to change the world.

The sacrificing of the life of Jonathan Kent in order for Clark to realize the importance of self-discipline, in a tornado disaster, served as the climax of Clark’s moral and character training.

The movie importantly depicts of one of the greatest battles of our time: freedom versus collectivism. 

Superman’s nemesis General Zod wanted to resurrect genetically-engineered (and programmed) Kryptonians in earth via a genocide of the human race. General Zod brought into light Jeremy Bentham’s consequentialist “greatest good for the greatest number” utilitarianism

General Zod: No matter how violent, every action I take is for the greater good of my people.

Sounds familiar?

On the other hand, the reason Clark Kent’s biological Krypton father, Jor-el, sent his son Clark Kent/Kal-El (Kryptonian name) to earth was for the latter to steer his own destiny (freedom).

Jor-El: What if a child dreamed of becoming something other than what society had intended? What if a child aspired to something greater?

Such ideological conflict between Jor-el and General Zod, which was carried over by son Clark Kent/Kal-El, represents the crux of the movie.

For all the film’s other minor blemishes, the Man of Steel seems as a refreshing entertainment film against the predominant populist pseudo politically correct themes.

Ron Paul: Obama’s Syria Policy Looks a Lot Like Bush’s Iraq Policy

As the civil war in Syria escalates (which risks becoming a regional or global conflagration), former US Congressman Ron Paul slams the Obama administration for assimilating the deception employed by Bush administration in justifying the Iraq war.

Here is Ron Paul (from Ron Paul’s Texas Straight Talk)

President Obama announced late last week that the US intelligence community had just determined that the Syrian government had used poison gas on a small scale, killing some 100 people in a civil conflict that has claimed an estimated 100,000 lives. Because of this use of gas, the president claimed, Syria had crossed his “red line” and the US must begin to arm the rebels fighting to overthrow the Syrian government.

Setting aside the question of why 100 killed by gas is somehow more important than 99,900 killed by other means, the fact is his above explanation is full of holes. The Washington Post reported this week that the decision to overtly arm the Syrian rebels was made “weeks ago” – in other words, it was made at a time when the intelligence community did not believe “with high confidence” that the Syrian government had used chemical weapons.

Further, this plan to transfer weapons to the Syrian rebels had become policy much earlier than that, as the Washington Post reported that the CIA had expanded over the past year its secret bases in Jordan to prepare for the transfer of weapons to the rebels in Syria.

The process was identical to the massive deception campaign that led us into the Iraq war. Remember the famous quote from the leaked “Downing Street Memo,” where representatives of British Prime Minister Tony Blair’s administration discussed Washington’s push for war on Iraq?

Here the head of British intelligence was reporting back to his government after a trip to Washington in the summer of 2002:

“Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy.”

That is exactly what the Obama Administration is doing with Syria: fixing the intelligence and facts around the already determined policy. And Congress just goes along, just as they did the last time.

We found out shortly after the Iraq war started that the facts and intelligence being fixed around the policy were nothing but lies put forth by the neo-con warmongers and the paid informants, like the infamous and admitted liar known as “Curveball.” But we seem to have learned nothing from being fooled before.

So Obama now plans to send even more weapons to the Syrian rebels even though his administration is aware that the main rebel factions have pledged their loyalty to al-Qaeda. Does anyone else see the irony? After 12 years of the “war on terror” and the struggle against al-Qaeda, the US decided to provide weapons to the allies of al-Qaeda. Does anyone really think this is a good idea?

The Obama administration promises us that this is to be a very limited operation, providing small arms only, with no plans for a no-fly zone or American boots on the ground. That sounds an awful lot like how Vietnam started. Just a few advisors. When these few small arms do not achieve the pre-determined US policy of regime change in Syria what is the administration going to do? Admit failure and pull the troops out, or escalate? History suggests the answer and it now appears to be repeating itself once again.

The president has opened a can of worms that will destroy his presidency and possibly destroy this country. Another multi-billion dollar war has begun.

By the way, news reports say that Iran will be sending 4,000 troops to fight alongside Bashar al-Assad's forces

The above only shows how arbitrary policies such as "war on terror" can be conveniently used to advance agendas of vested interest groups, and of the opaqueness of such policies, as seen through the alliance between the Obama administration and alleged terror groups in seeking to attain another political objective: the ouster of the Syrian government. The world of politics is all about smoke and mirrors.

Quote of the Day: Financial markets do not work like real markets

The first thing we need to keep in mind is that the euro and the US dollar are currencies subject to monetary central planning. They are monopoly monies controlled and issued by central banks. Their quantity is determined by the decisions of the monetary central planners who oversee them; they influence the amount of "reserves" banks have for lending purposes, and through this control over the supply of money in the banking system can manipulate a variety of interest rates, especially in the short run.

As a consequence, financial markets do not work like real markets. We cannot be sure what the amount of real savings may be in the society to support real and sustainable investment and capital formation. We cannot know what the "real cost" of borrowing should be, since interest rates are not determined by actual, private sector savings and investment decisions. And, therefore, there is no guarantee that the amount of investments undertaken and their time horizons are compatible with the available resources not also being demanded and used for more immediate consumer goods production in the society.

This is why countries around the world periodically experience booms and busts, inflations and recessions − not because of some inherent instabilities or "irrationalities" in financial markets, but because of monetary central planning through central banking that does not allow market-based financial intermediation to develop and work as it could and would in a real free-market setting.

This is from former FEE President, author and professor Richard Ebeling in an interview with Anthony Wile at the Daily Bell

When the crisis comes don't blame the markets for what is truly a product of monetary central planning