The Federal Reserve, European Central Bank and central banks in Canada, Britain, Switzerland and Japan said in a joint announcement that they will extend the timing of and lower the interest rate paid on “swaps,” arrangements that have been used intermittently since late 2007 to funnel dollars to the banking systems of countries where there is need.Key to this new strategy is the decision by the US Federal Reserve bank to print dollars and make those dollars available very inexpensively for the European Central Bank and other major European banks to ensure funds and liquidity. While this will help mask the challenges in the Eurozone and the Eurozone banks, the Fed rushing to Europe's rescue will result in a further weakening of the dollar (look at the price of oil increase), promoting additional inflation, and ultimately hurting the American people. But these impacts are considered 'necessary' if the can is to be kicked even further down the road - future pain always being seen as better and easier than experiencing a lessor pain today.
Precipitating the need for this action by these central banks were signs yesterday the EU financial crisis was accelerating. Businesses were starting to scramble as credit and liquidity tightened as banks prepared themselves for the fallout of at least one and most likely several EU member nations defaulting on their debt obligations in December 2011. In their bond sales yesterday, the Italian 10 year bonds (reflecting the borrowing costs of the Italian government) reached an all time high - 7.56%.
Pessimism also remained strong regarding the EU community and the Euro currency. The Economist believes that the point of no return has been passed - that...
...no single action can save the euro. This is not just because Germany wants others to feel the pain for a long time, but also because the damage from poor leadership and procrastination is so extensive. The euro will require a full redesign through new treaties, with Eurobonds and possibly much else besides. If this is to happen, though, it must first survive. It is time for Mrs Merkel to grasp that her country risks being caught up in the euro’s catastrophic failure—and for Mr Draghi to admit that he risks finding himself without a job.President Obama is on record saying that the US taxpayer will not be bailing out Europe - but questions regarding that do have to be raised given the actions of the Federal Reserve to print large amounts of dollars to provide liquidity for the EU and ECB.
For example, with the Obama Administration, appearances and perception becomes far more important than reality. US Economic data that is being reported by the US Government is being skewed in order to present the best possible face...sacrificing credibility and accuracy in order to provide a positive political viewpoint. We've seen and suspected this with the US jobless numbers and weekly reports of new filers for unemployment. Numbers are presented before being quietly 'reset' several weeks or a quarter later downwards. The downgrades rarely get reported by the mainstream media.
Unfortunately for the President, these shenanigans from the various outlets of his 'Ministry of Truth' are not helping his polling numbers. President Obama's approval numbers have now fallen below those levels of Jimmy Carter at this stage of their Presidency - and Carter's numbers were the lowest of the 20th century. Among independents, the voters who overwhelmingly put Barack Obama into the White House, the President is tanking. He's down another 10% with pure independents and losing more ground with those just on either side of the political center - down 9% with moderate / conservative Democrats and down 8% with liberal / moderate Republicans.
Part of this is the direct result of a President who remains focused on ideology and doing what is best for his political agenda than what is best for the country. Michael Ramirez highlights the jobs massacre the President is conducting...
The latest example - the EPA's latest CAFE standards for the US auto industry - doubling the fleet average requirement from 27 mpg today to 54 mpg by 2025. The result of this regulatory fiat - far higher prices for cars - $2,500 to $3,200 per car for compliance, the likely loss of low priced cars (sub $15,000) because they will no longer be economically viable to produce, and tens of thousands of jobs.
In response to the Iranian Revolutionary Guard and the Iranian Government assault on the British Embassy in Tehran yesterday, the UK is closing the Iranian Embassy in London, ordering all Iranian staff from the country, and downgrading diplomatic relations to the lowest possible level short of severing relations entirely. Despite the claims from Tehran that the actions were the spontaneous actions of Iranian 'students', the assault was not an accident, not spontaneously organized, and not done by 'students'. None of those things happen in today's Iran. The effort was organized by the Iranian Government to send a message to Britain reminiscent of November 1979.
President Obama continued to demonstrate his contempt for our closest ally - in comments yesterday he referred to the British Embassy as the 'English' Embassy - demonstrating either an accidental or willful contempt towards Great Britain - thinking it being just England... Of course, if a Republican made such a statement, it would be one of the ledes on the evening news across the country.
Early this morning, 1,400 LAPD members, including some in riot gear, took action to clear OccupyLA from their encampment of City Hall Park adjacent to LA's City Hall. More than 200 OccupyLA protesters were arrested as they refused to vacate the area, more than 2 days after LA's Mayor Villiaraigosa ordered their eviction after nearly 2 months of occupation. The protesters used social media to try to increase their ranks as communists, marxists, union members, and a few anarchists tried to claim their occupation was protected by First Amendment rights.
The OccupyLA protesters are vowing to regroup and to occupy other locations inside Los Angeles. They are scheduling future 'General Assembly' meetings for LA's Pershing Square and remain committed to shutting down the Port of Los Angeles via demonstrations on December 12. This is the next major 'day of action' for the OccupyWallStreet movement - as they seek to close other major west coast ports (Oakland, Portland, etc) on that day.
Early returns from the two days of elections in Egypt reflect some of the worst worries and concerns of observers - the Muslim Brotherhood, which advocates the establishment of an Islamic state based on the Q'uran and Shari'a, has about 40% of the popular vote. This increases the likelihood that the Arab Spring will effectively replaced secular dictators with fundamentalist Islamic dictatorships.
On a slightly lighter note - UK grocery chain Sainsbury's is reporting that their leading sellers this past month were not the traditional grocery staples like milk, but non-grocery products like the Call of Duty 3 video game and Treacher's whisky.
Wrapping up today's summary of the major news are a couple of lists.....the top 10 hammy villain performances in movies....followed by 10 more hammy villain performances.