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The protests have brought troubling questions about security in the country, which is playing host this week to soccer's Confederations Cup and will welcome Pope Francis in July for a visit to Rio de Janeiro and rural Sao Paulo.

Brazilian demonstrations in recent years generally had tended to attract small numbers of politicized participants, but the latest mobilizations have united huge crowds around a central complaint: The government provides woeful public services even as the economy is modernizing and growing. The Brazilian Tax Planning Institute think tank found that the country's tax burden in 2011 stood at 36 percent of gross domestic product, ranking it 12th among the 30 countries with the world's highest tax burdens. Yet public services such as schools are in sorry shape. The Organization for Economic Co-operation and Development found in a 2009 educational survey that literacy and math skills of Brazilian 15-year-olds ranked 53rd out of 65 countries, behind nations such as Bulgaria, Mexico, Turkey, Trinidad and Tobago, and Romania. Many protesting in Brazil's streets hail from the country's growing middle class, which government figures show has ballooned by some 40 million over the past decade amid a commodities-driven economic boom. They say they've lost patience with endemic problems such as government corruption and inefficiency. They're also slamming Brazil's government for spending billions of dollars to host next year's World Cup soccer tournament and the 2016 Olympics while leaving other needs unmet.

A November report from the government raised to $13.3 billion the projected cost of stadiums, airport renovations and other projects for the World Cup. City, state and other local governments are spending more than $12 billion on projects for the Olympics in Rio. Nearly $500 million was spent to renovate Maracana stadium in Rio for the World Cup even though the venue already went through a significant face-lift before the 2007 Pan American Games.

Two ways these invisible robberies occur are:  fractional reserve banking, which is nothing more than banks lending money they don’t have; and deposit insurance, which “protects the bankers – not savers.” 

“because it owed the biggest banks in the world a lot of money and didn’t have the cash to pay up.”

five new rules

and the need for speed. 

The name of the game, according to Kiyosaki, is “cash flow.”

The focus has to be on cash flow, not on capital gains.

Businesses that provide passive cash flow. Income-producing real estate. Paper assets – stocks, bonds, savings, annuities, insurance and mutual funds. Commodities – gold, silver, oil, platinum, etc.

So when the President and the Congress reluctantly shake hands over this deal to avert disaster, understand that they have in great part only agreed to fuel the fire that has been burning down America's jobs factory for years, and thereby undermining government revenues and creating the apparent need for constant stimulus. 

The last decade of ultra low-interest rates, government stimulus efforts, and engagement with Communist China have clearly been an unmitigated disaster for the US economy.

In order to modernize the global economic system, at the center of which stand the US and the EU, the leaders of Brazil, Russia, India, China and South Africa have created the BRICS Stock Alliance and are creating their own development bank to finance large infrastructure projects. On the whole, despite fierce criticism of BRICS as an organization with no future, it is developing and increasing cooperation with its members and, in fact, BRICS is showing pretty good results. With the suspension of Russia’s participation in G8 and the strengthening of economic sanctions against Russia, specific industries may be targeted, including limits on imported commodities. While the West seeks to hit Russia hard, it is important to notice that Russia is ready to switch to other markets, including BRICS, with a view to expanding its trade.

As the Obama administration began to provide heavy weaponry to Harakat al-Hazm, the Washington Institute for Near East Policy published an analysis hailing Harakat Hazm as “rebels worth supporting,” going so far as to say that the group was “a model candidate for greater U.S. and allied support, including lethal military assistance.” That error was not as egregious as the appeal by three members of the DC foreign policy establishment “smart set” (including one former senior Bush administration National Security Council official) who argued in the pages of the January issue of Foreign Affairs for U.S. engagement with another Syrian “rebel” group, Ahrar al-Sham.

Earlier this week I reported on Harakat al-Hazm, which was the first of the “vetted moderates” to receive U.S. anti-tank weaponry earlier this year. Harakat al-Hazm is reportedly a front for the Muslim Brotherhood as well as Turkey and Qatar, its Islamist state sponsors. An L.A. Times article was published this past Sunday from the battle lines in Syria. The reporter recounted a discussion with two Harakat al-Hazm fighters who admitted, “But Nusra doesn’t fight us, we actually fight alongside them. We like Nusra.” Despite a claim by the L.A. Times that Harakat al-Hazm had released a statement of “rejection of all forms of cooperation and coordination” with al-Nusra Front, I published in my article earlier this week an alliance statement signed by both Jabhat al-Nusra and Harkat al-Hazm forging a joint front in Aleppo to prevent pro-Assad forces from retaking the town.

At the same time U.S.-provided FSA weapons caches were being mysteriously raided by ISIS and Jabhat al-Nusra, one of the senior FSA commanders in Eastern Syria, Saddam al-Jamal, defected to ISIS. In March, Jabhat al-Nusra joined forces with the FSA Liwa al-Ummah brigade to capture a Syrian army outpost in Idlib. Then in early July I reported on FSA brigades that had pledged allegiance to ISIS and surrendered their weapons after their announcement of the reestablishment of the caliphate. More recently, the FSA and Jabhat al-Nusra teamed up last month to capture the UN Golan Heights border crossing in Quneitra on the Syria/Israel border, taking UN peacekeepers hostage. But the Free Syrian Army is not the only U.S.-armed and trained “rebel” force in Syria that the Obama administration is having serious trouble keeping in the “vetted moderate” column.

At the time their article appeared, however, Ahrar al-Sham was led by one of al-Qaeda chief Ayman al-Zawahiri’s top lieutenants and former Bin Laden courier, Mohamed Bahaiah (aka Abu Khaled al-Suri). This is why the article was originally subtitled “An Al-Qaeda affiliate worth befriending.” Giving too much of the game away for non-Beltway types, that subtitle was quickly changed on the website to “An Al-Qaeda-linked group worth befriending.” That dream of “befriending al-Qaeda” was dealt a major blow earlier this week when a blast of unknown origin killed most of Ahrar al-Sham’s senior leadership. Bereft of leadership, many analysts have rightly expressed concern that the bulk of Ahrar al-Sham’s forces will now gravitate towards ISIS and other terrorist groups.

While a McClatchy article on the explosion laughably claimed that the dead Ahrar al-Sham’s leaders represented the group’s “moderate wing” who were trying to come under another fictional “vetted moderate” alliance to obtain the next anticipated flood of U.S. weapons, others have observed that tributes to the dead leaders have poured in from al-Qaeda leaders for their “moderate wing” allies. This is what the D.C. foreign policy establishment has reduced itself to when it comes to Syria — cozying up to al-Qaeda (or Iran and Assad) in the name of “countering violent extremism,” namely ISIS, and entertaining each other with cocktail party talk of “moderate wings” of al-Qaeda. As my colleague Stephen Coughlin observes, our bipartisan foreign policy establishment has created a bizarre language about Iraq and Afghanistan to avoid the stark reality that we lost both wars. This is the state American foreign policy finds itself in on the 13th anniversary of the 9/11 attacks by al-Qaeda.

As congressional Republicans and Democrats alike will undoubtedly rush in coming days to throw money at anyone the Obama administration deems “vetted moderates” to give the appearance of doing something in the absence of a sensible, reality-based strategy for understanding the actual dynamics at work in Syria and Iraq, an urgent reexamination of who the “vetted moderates” we’ve been financing, training and arming is long overdue. It is also essential to know to whom the State Department has contracted the “vetting.” This is especially true as ISIS leaders are openly bragging about widespread defections to ISIS amongst FSA forces that have been trained and armed by the U.S. Predictably, the usual suspects (John McCain and Lindsey Graham) who have been led wide-eyed around Syria by the “vetted moderate” merchants and have played the administration’s “yes men” for a fictional narrative that has never had any basis in reality will undoubtedly hector critics for not listening to their calls to back the “vetted moderate” rebels last year when they could have contained ISIS — an inherently false assumption. These usual suspects should be ashamed of their role in helping sell a fiction that has cost 200,000 Syrians their lives and millions more their homes while destabilizing the entire region. Shame, sadly, is a rare commodity in Washington, D.C.

Notwithstanding Obama’s siren call for immediate action, Congress should think long and hard before continuing to play along with the administration and D.C. foreign policy establishment’s “vetted moderate” fairy tale and devote themselves to some serious reflection and discussion on how we’ve arrived at this juncture where we are faced with nothing but horribly bad choices and how to start walking back from the precipice. As we remember the thousands lost on that terrible day thirteen years ago, truly honoring their memory deserves nothing less.

Swatch Group UHR.VX Chief Executive Nick Hayek called the Swiss National Bank's decision to discontinue the minimum exchange rate on the Swiss franc a "tsunami" for the Alpine country and its economy.   "Words fail me! Jordan is not only the name of the SNB president, but also of a river… and today's SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country," Hayek said in an emailed statement on Thursday.   Swiss watchmakers, which are also grappling with weak demand in Asia, are very exposed to moves in the Swiss franc exchange rate because their production costs are largely in Swiss francs, but most of their sales are done abroad.   Shares in Swatch Group fell 15 percent at 1056 GMT, while Richemont CFR.VX was down 14 percent, underperforming a 9 percent drop in the Swiss market index .SSMI following the SNB's announcement.    "Absolutely shocking ... For companies with international operations – translated earnings are going to be lower and if companies make products in Switzerland it is going to hurt margin. It is a terrible day for corporate Switzerland," Kepler Cheuvreux analyst Jon Cox said

Indeed, in retrospect, it does seem foolhardy that the SNB, whose balance sheet ballooned to record proportions just to defends it currency for over three years would give up so easily. The one silver lining, so to say, is that gold prices in CHF just crashed by some 13%. Some more soundbites from strategists, none of whom foresaw this stunning move:

However, the best soundbites today will surely come from US hedge funds which are just waking up to the biggest FX shocker in years, and of course, any retail investors who may have been long the EURCHF, and who are not only facing epic margin calls, but are unable to cover their positions, as one after another retail FX brokerage has commenced "Rubling" the Swissy and the CHF pair is suddenly not available for trading for retail accounts. To say that today will be interesting, is an understatement.

Bloomberg's dready summary of the US economy is generally spot on, and is to be expected when any nation finally leaves, voluntarily or otherwise, the stranglehold of a global reserve currency. What Bloomberg failed to account for is what happens to the remainder of the Petrodollar world. Here is what we said last time: Outside from the domestic economic impact within EMs due to the downward oil price shock, we believe that the implications for financial market liquidity via the reduced recycling of petrodollars should not be underestimated. Because energy exporters do not fully invest their export receipts and effectively ‘save’ a considerable portion of their income, these surplus funds find their way back into bank deposits (fuelling the loan market) as well as into financial markets and other assets. This capital has helped fund debt among importers, helping to boost overall growth as well as other financial markets liquidity conditions. ... [T]his year, we expect that incremental liquidity typically provided by such recycled flows will be markedly reduced, estimating that direct and other capital outflows from energy exporters will have declined by USD253bn YoY. Of course, these economies also receive inward capital, so on a net basis, the additional capital provided externally is much lower. This year, we expect that net capital flows will be negative for EM, representing the first net inflow of capital (USD8bn) for the first time in eighteen years. This compares with USD60bn last year, which itself was down from USD248bn in 2012. At its peak, recycled EM petro dollars amounted to USD511bn back in 2006. The declines seen since 2006 not only reflect the changed global environment, but also the propensity of underlying exporters to begin investing the money domestically rather than save. The implications for financial markets liquidity - not to mention related downward pressure on US Treasury yields – is negative.

Considering the wildly violent moves we have seen so far in the market confirming just how little liquidity is left in the market, and of course, the absolutely collapse in Treasury yields, with the 30 Year just hitting a record low, this prediction has been borne out precisely as expected. And now, we await to see which other country will follow Russia out of the Petrodollar next, and what impact that will have not only on the world's reserve currency, on US Treasury rates, and on the most financialized commodity as this chart demonstrates...

... but on what is most important to developed world central planners everywhere: asset prices levels, and specifically what happens when the sellers emerge into what is rapidly shaping up as the most illiquid market in history.

• 3,000 km range, extensible to “over 4,000 km” with the help of additional drop tanks. The SU-34 can also refuel in mid-air. • It can fly in TERCOM (Terrain Contour Matching) mode for low-level flight, and has software to execute a number of difficult maneuvers. • Leninets B004 phased array multimode X-band radar, which interleaves terrain-following radar and other modes.

Clearly the aircraft is impressive as it has demonstrated against terrorist centers in Syria. Now, however, beginning this month it will add a “game-changer” in the form of a new component. Speaking at the Dubai Air Show on November 12, Igor Nasenkov, the First Deputy General Director of the Radio-Electronic Technologies Concern (KRET) announced that this month, that is in the next few days, SUKHOI SU-34 fighter-bombers will become electronic warfare aircraft as well. Nasenkov explained that the new Khibiny aircraft electronic countermeasures (ECM) systems, installed on the wingtips, will give the SU-34 jets electronic warfare capabilities to launch effective electronic countermeasures against radar systems, anti-aircraft missile systems and airborne early warning and control aircraft. KRET is a holding or group of some 95 Russian state electronic companies formed in 2009 under the giant Russian state military industry holding, Rostec.

Russia’s advances in what is euphemistically termed in military jargon, Electronic Counter Measures or ECM, is causing some sleepless nights for the US Pentagon top brass to be sure. In the battles in eastern pro-Russian Ukraine earlier this year, as well as in the Black Sea, and now in Syria, according to ranking US military sources, Russia deployed highly-effective ECM technologies like the Krasukha-4, to successfully jam hostile radar and aircraft. Lt. General Ben Hodges, Commander of US Army Europe (USAREUR) describes Russian ECM capabilities used in Ukraine as “eye-watering,” suggesting some US and NATO officers are more than slightly disturbed by what they see. Ronald Pontius, deputy to Army Cyber Command’s chief, Lt. Gen. Edward Cardon, told a conference in October that, “You can’t but come to the conclusion that we’re not making progress at the pace the threat demands.” In short, Pentagon planners have been caught flat-footed for all the trillions of wasted US taxpayer dollars in recent years thrown at the military industry.

During the critical days of the March 2014 Crimean citizens’ referendum vote to appeal for status within Russia, New York Times reporters then in Crimea reported the presence of Russian electronic jamming systems, known as R-330Zh Zhitel, manufactured by Protek in Voronezh, Russia. That state-of-the-art technology was believed to have been used to prevent the Ukrainian Army from invading Crimea before the referendum. Russian forces in Crimea, where Russia had a legal basing agreement with Kiev, reportedly were able to block all communication of Kiev military forces, preventing a Crimean bloodbath. Washington was stunned.

Thereafter, in April, 2014, one month after the accession of Crimea into the Russian Federation, President Obama ordered the USS Donald Cook into the Black Sea waters just off Crimea, the home port of Russia’s Black Sea Fleet, to “reassure” EU states of US resolve. Donald Cook was no ordinary guided missile destroyer. It had been refitted to be one of four ships as part of Washington’s Aegis Ballistic Missile Defense System aimed at Russia’s nuclear arsenal. USS Donald Cook boldly entered the Black Sea on April 8 heading to Russian territorial waters. On April 12, just four days later, the US ship inexplicably left the area of the Crimean waters of the Black Sea for a port in NATO-member Romania. From there it left the Black Sea entirely. A report on April 30, 2014 in Russian newspaper Rossiyskaya Gazeta Online titled, “What Frightened the American Destroyer,” stated that while the USS Donald Cook was near Crimean (Russian by that time) waters, a Russian Su-24 Frontal Aviation bomber conducted a flyby of the destroyer. The Rossiyskaya Gazeta went on to write that the Russian SU-24 “did not have bombs or missiles onboard. One canister with the Khibin electronic warfare complex was suspended under the fuselage.” As it got close to the US destroyer, the Khibins turned off the USS Donald Cook’s “radar, combat control circuits, and data transmission system – in short, they turned off the entire Aegis just like we turn off a television by pressing the button on the control panel. After this, the Su-24 simulated a missile launch at the blind and deaf ship. Later, it happened once again, and again – a total of 12 times.”

While the US Army denied the incident as Russian propaganda, the fact is that USS Donald Cook never approached Russian Black Sea waters again. Nor did NATO ships that replaced it in the Black Sea. A report in 2015 by the US Army’s Foreign Military Studies Office assessed that Russia, “does indeed possess a growing EW capability, and the political and military leadership understand the importance…Their growing ability to blind or disrupt digital communications might help level the playing field when fighting against a superior conventional foe.” Now new Russian Khibini Electronic Counter Measure systems are being installed on the wingtips of Russia’s SUKHOI SU-34 fighter-bombers going after ISIS in Syria.

A second highly-advanced new Russian military technology that’s raising more than eyebrows in US Defense Secretary ‘Ash’ Carter’s Pentagon is Russia’s new Bumblebee which Russia’s military classifies as a flamethrower. In reality it is a highly advanced thermobaric weapon which launches a warhead that uses a combination of an explosive charge and highly combustible fuel. When the rocket reaches the target, the fuel is dispersed in a cloud that is then detonated by the explosive charge. US Military experts recently asked by the US scientific and engineering magazine Popular Mechanics to evaluate the Bumblebee stated that, “the resulting explosion is devastating, radiating a shockwave and fireball up to six or seven meters in diameter.” The US experts noted that the Bumblebee is “especially useful against troops in bunkers, trenches, and even armored vehicles, as the dispersing gas can enter small spaces and allow the fireball to expand inside. Thermobarics are particularly devastating to buildings — a thermobaric round entering a structure can literally blow up the building from within with overpressure.”

We don’t go into yet another new highly secret Russian military technology recently subject of a Russian TV report beyond a brief mention, as little is known. It is indicative of what is being developed as Russia prepares for the unthinkable from Washington. The “Ocean Multipurpose System: Status-6” is a new Russian nuclear submarine weapons system designed to bypass NATO radars and any existing missile defense systems, while causing heavy damage to “important economic facilities” along the enemy’s coastal regions. Reportedly the Status-6 will cause what the Russian military terms, “assured unacceptable damage” to an adversary force. They state that its detonation “in the area of the enemy coast” (say, New York or Boston or Washington?) would result in “extensive zones of radioactive contamination” that would ensure that the region would not be used for “military, economic, business or other activity for a long time.” Status-6 reportedly is a massive torpedo, designated as a “self-propelled underwater vehicle.” It has a range of up to 10 thousand kilometers and can operate at a depth of up to 1,000 meters. At a November 10 meeting with the Russian military chiefs, Vladimir Putin stated that Russia would counter NATO’s US-led missile shield program through “new strike systems capable of penetrating any missile defenses.” Presumably he was referring to Status-6.

However the necessary infrastructure to support intra-ASEAN trade growth is lagging behind with a delay in the completion of the Trans-Asia Highway in Cambodia, and vastly inadequate border checkpoints between Malaysia and Thailand in Sadao and Kelantan. Some infrastructure development projects have been severely hit by finance shortfalls within member states. There are a number of outstanding issues concerning the growth and development of the AEC. The ASEAN Secretariat based in Jakarta has a small staff, where the best talent is lacking due to the small salaries paid. The Secretariat unlike the EU bureaucratic apparatus in Brussels relies on cooperation between the member state governments for policy direction, funding and implementation of the AEC. Thus the frontline of AEC implementation are the individual country ministries, which presents many problems, as some issues require multi-ministry cooperation and coordination, which is not always easy to achieve as particular ministries have their own visions and agendas. Getting cooperation of these ministries isn’t easy. There are numerous structural and procedural issues yet to be contended with. At the inter-governmental level, laws and regulations are yet to be coordinated and harmonized. So in-effect there is one community with 10 sets of regulations in effect this coming January 1st. Consumer laws, intellectual property rights, company and corporate codes (no provision for ASEAN owned companies), land codes, and investment rules are all different among the individual member states.

One of the major issues weakening the potential development of the AEC is the apparent lack of political commitment for a common market by the leadership of the respective ASEAN members. Thailand is currently in a struggle to determine how the country should be governed. Malaysia is in the grip of corruption scandals where the prime minister is holding onto power. Myanmar is going through a massive change in the way it will be governed. Indonesia is still struggling with how its archipelago should be governed. There is a view from Vietnam that business within the country is not ready for the AEC. Intense nationalistic sentiments among for example Thais, exasperated by the recent Preach Vihear Temple conflict along the Thai-Cambodian border need to be softened to get full advantage out of the AEC. The dispute in the International Court of Justice over Pedra Branca, and the Philippine rift with China over the South China Sea show the delicacy of relationships among ASEAN members. The recent Thai court decision on the guilt of Zaw Lin and Win Zaw Tun in the murder of two young British tourists may also show how fragile intra-ASEAN relationships can be. The AEC is going to fall far short of achieving its full potential of becoming a major influence in global trade. The AEC is not intended to be the same model as the EEC. The AEC is far from being any fully integrated economic community. The lack of social, cultural, and political integration within the ASEAN region indicates the massive job ahead that Europe had been through decades ago. There is still a lot of public ignorance about what the AEC is, and lack of excitement or expectation for what should be a major event within the region. Respective national media are scant on information about the forthcoming launch of the AEC.

At first glance, the “bail-in” resembles the normal capitalist process of liabilities restructuring that should occur when a bank becomes insolvent. . . . The difference with the “bail-in” is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead. . . . In principle, depositors are the most senior creditors in a bank. However, that was changed in the 2005 bankruptcy law, which made derivatives liabilities most senior. Considering the extreme levels of derivatives liabilities that many large banks have, and the opportunity to stuff any bank with derivatives liabilities in the last moment, other creditors could easily find there is nothing left for them at all.

 Citibank is particularly vulnerable to swaps on the price of oil. Brent crude dropped from a high of $114 per barrel in June 2014 to a low of $36 in December 2015.

In short, the goal of the bail-in scheme is to place losses on private creditors. Alternatives that allow them to escape could soon be blocked.