Thursday, November 12, 2015

Unions Fight Inequality and Strengthen Democracy

How Unions Fight Inequality and Strengthen Democracy

November 2, 2015

Richard Eskow

A new study from the International Monetary Fund concludes that unions reduce inequality and foster a healthier economy for everyone, mainly by preventing the wealthiest among us from keeping the fruits of a collaboratively created prosperity for themselves.

The IMF study shows that a reinvigorated labor movement is essential to both a just economy and a well-functioning democracy. It deserves widespread attention – and should inspire concerted action.

Unionization Matters

The IMF is not considered a hotbed of leftism, yet the conclusion reached by research economists Florence Jaumotte and Carolina Osorio Buitron is clear. As they explained in a summary of their work, they found that “the decline in union density has been strongly associated with the rise of top income inequality” and that “unionization matters for income distribution.”

Jaumotte and Osorio Buitron examined the relationship between unionization and income inequality indicators in 20 advanced economies between 1980 and 2010. They found “a strong negative relationship between unionization and top earners’ income shares,” and concluded that this relationship “appears to be largely causal.”

In other words, the IMF authors found that the very wealthy capture a larger share of an economy’s overall income when fewer people belong to unions. They found this to be true even after controlling for other forces that can affect inequality, including technology, globalization, and financial deregulation.

Cause and Effect

Their findings are consistent with this country’s experience. Hourly wages kept pace with productivity gains in the United States for roughly a quarter-century after World War II, as the Economic Policy Institute observes.

As the EPI notes, “If the hourly pay of typical American workers had kept pace with productivity growth since the 1970s, then there would have been no rise in income inequality during that period.”

Union membership began declining in this country at roughly the same time as wages began to lag behind productivity. EPI noted the relationship between union membership and inequality back in 2012. The IMF study provides further insight into the forces behind that relationship.

Inequality Matters

But why does inequality even matter? There are those, mostly on the right, who argue it doesn’t. They claim that inequality is irrelevant as long as the economy is growing, perhaps because they assume that growing economies more effectively meet people’s basic needs.

But that’s not what’s happening. Stock markets may be booming, but wage stagnation in the United States is choking off the middle class. Basic needs like higher education are becoming increasingly unaffordable.

An economy can only grow in an equitable, well-distributed way when there is a large base of consumers to purchase goods and services. When all the wealth is concentrated among a very few people at the top, the majority is deprived of spending income. The wealthy few will have difficulty spending all their money – or even investing all of it – while millions of others are unable to make the purchases they want and need.

Despite right-wing mythology, the wealthy are not “job creators.” As economist J. Bradford DeLong says, “save for those in the top 0.01 percent who are going to use their money for useful purposes” – that is, by leaving it to charity – “the contribution they make to any reasonable utilitarian measure of societal welfare is zero.”

In other words, an economy for the rich is an economy where society as a whole suffers.

The Democracy Effect

Inequality is not the only adverse outcome of a weakened union movement. The IMF authors also conclude (reasonably enough) that decline in union membership has led to unions having less influence on public policy. That has led to a lower real minimum wage, weaker unemployment benefits, and weaker employment protection laws.

The IMF’s Jaumotte and Osorio Buitron cite Nobel Prize-winner Joseph Stiglitz’s work, which shows that highly concentrated wealth allows top earners to (in their words) “manipulate the economic and political system in their favor.”

To put it more plainly: The rules are rigged.

The evidence for that is all around us. The very wealthiest among us have captured a much larger share of the U.S. national income in recent decades. They have also, as a Princeton study shows, been able to dictate our national political agenda with little or no regard for what the majority wants.

Unrigging the Rules

How do we restore balance to our economy and our democracy? Tax policy clearly needs to be changed so that millionaires, billionaires, and corporations once again pay their fair share of taxes. Actual tax rates for all three groups have fallen dramatically in the last 50 years. And campaign financing needs to be reformed so that the wealthy can no longer “buy” candidates or single-handedly sponsor presidential campaigns.

We need to break up the too-big-to-fail banks, resist the financialization of our economy (where more and more of our national income goes to banking institutions), and regulate Wall Street more effectively.

And now, thanks to these IMF researchers, we also know that we need a stronger union movement, too.

Looking to Labor

American unions introduced many of the reforms we take for granted today. They gave us weekends off, workplace safety laws, the 40-hour work week, and dozens of other innovations. But these reforms are endangered, while others are needed – including guaranteed sick leave, vacation time, and caregiver leave.

What do we do now? The union movement has been politically demonized for decades. Union membership has plummeted, for a number of reasons. The labor movement needs to be revitalized and renewed, and that effort needs to be one of the major undertakings of our time.

Pro-corporate forces would have us believe that our economic woes are irreversible, that we are the victims of unstoppable, God-like forces like globalization and technology. But, while these forces are powerful, we now know that much of our destiny remains within our control.

The union movement is one of our democracy’s most potent economic tools. Its benefits flow not only to its members, but to society as a whole. The IMF paper is a research study, but it can also be taken as a call to arms.

Monday, September 21, 2015

Need New CA College Accreditor

SOAPBOX

SEPTEMBER 20, 2015C

New community college accreditor needed now

Task force exposed accrediting commission’s problems,

recommends replacing it

BY JOSHUA PECHTHALT, CFT

State Community College Chancellor Brice Harris has released his long-awaited Accreditation Task Force report, and the news is not good for the Accrediting Commission for Community and Junior Colleges.

The report, however, is good news for California, because it puts accreditation – the process of monitoring and reporting that provides assurance to students and taxpayers that a college offers a quality education – on a path toward renewal.

Joshua Pechthalt

The blue-ribbon task force, comprising faculty, administrators, college presidents, elected officials and other expert stakeholders, has starkly exposed the commission’s problems and recommends replacing it with another accreditor.

This is a welcome development. Unfortunately, it may not happen overnight.

Two years ago, the California Federation of Teachers, representing a majority of California’s community college faculty, filed a complaint with the U.S. Department of Education regarding the commission’s failure to comply with multiple accreditor standards – the behaviors by which an accreditor is measured to keep its own authorization. The department, agreeing, issued a letter detailing the commission’s lack of compliance with 15 standards. This opened the floodgates:

▪ The San Francisco city attorney won a court decision that the agency broke four laws in its effort to shutter City College of San Francisco. The college remains open.

▪ California’s Joint Legislative Audit Committee criticized the commission for its City College of San Francisco decision, absurd levels of secrecy, disproportionate rate of sanctions compared with other accreditors, and inconsistent treatment of colleges.

▪ The Community College Board of Governors rescinded regulatory language that had given the commission sole authority over accreditation of California’s community colleges.

▪ Assemblyman Phil Ting, D-San Francisco, authored Assembly Bill 1397 to make the commission more transparent and accountable. Receiving strong bipartisan support, Ting nonetheless placed it on hold until January to give the state chancellor a chance to move his task force’s recommendations forward.

The task force, finding the “California Community College system and its member institutions have lost confidence in the ACCJC,” concluded the colleges need to transition to another accreditor.

This represents a sea change in perceptions of the agency; the California Federation of Teachers’ critique has become mainstream opinion.

The faculty union’s formerly lonely position was partly due to the obscurity of accreditation itself. Necessary for students to earn transferable credits and financial aid, a college’s accreditation is always a complex process.

But in the hands of the commission, accreditation became needlessly bureaucratic, time-consuming, expensive, secretive and focused on things far removed from the classroom. It also became extraordinarily punitive, involving harsh sanctions leading to high levels of faculty anxiety, endless paperwork, student fears of disaccreditation and consequent enrollment losses.

As students fled sanctioned colleges, often to attend more expensive private schools, many endured terrible educational and financial outcomes.

Another reason the shift took so long was fear of the commission’s sanctioning powers and reputation for vindictiveness, which kept many college leaders silent. State Sen. Jim Nielsen provided a glimpse of what they were up against with the commission’s President Barbara Beno when he told colleagues, “I have never dealt with a more arrogant, condescending and dismissive individual.”

Change, finally, is coming. However, the path to another accreditor faces obstacles. The chancellor suggests the transition could take 10 years. This timeline contradicts his report, which notes, “Further delay in resolving the issues with the accreditor will have adverse effects on our colleges, on our students, and on California’s economy and future.”

Important considerations lie ahead, such as which accreditor makes sense. A new Accreditor must agree to take on California’s 113 colleges, and the U.S. Department of Education must recognize the new Accreditor’s expansion of responsibilities. These steps will take time, but not 10 years. The problem is clear. It needs fixing before more damage is done.

Joshua Pechthalt is president of the California Federation of Teach

Read more here: http://www.sacbee.com/opinion/op-ed/soapbox/article35795502.html#storylink=cpy

Sunday, September 20, 2015

AFT: Why Strong Unions Are Good

When Unions Are Strong, Families Are Strong

by Randi Weingarten, Pres. AFT

Republicans have staked out endless signature issues: shutting down the government, vilifying immigrants, denouncing rights like paid sick leave and equal pay because they are "women's issues," privatizing education, and -- wait for it --obliterating the rights of working people to negotiate together for better wages and benefits that can sustain their families.

New Jersey Gov. Chris Christie recently said that our teachers union deserves a "punch in the face." Fellow presidential longshot and Wisconsin Gov. Scott Walker wants to nationalize his plan to destroy public sector unions. Yet unions are now more popular with Republicans than Christie and Walker are. That's right, thelatest polling shows that while Christie and Walker have negligible support among Republican voters (1.5 and 3 percent, respectively), a full 42 percent of Republicans support unions.

In fact, support for unions is increasing. Last month's Gallup poll showed that in just one year, support for unions grew five points to nearly 60 percent. And according to the Brookings Institution, more than 50 percent of nonunion workers say that if an election was held in their workplace tomorrow, they would vote for union representation.

So why would a governor advance an agenda that both presses his finger on the scale of inequality against working people and places a dead weight on the economy, as it has in Wisconsin? Especially since we know that when working people are supported, as they've been in neighboring Minnesota, the economy is strengthened?

The same wealthy special interests and CEOs who back Walker's policies and manipulate economic rules in their favor want to make it even harder for working people to come together, speak up and get ahead.

All across the country, though, people understand that unions are good for their families. Journalist Denis Hamill recently wrote about the sea change when his father's factory was unionized: Workers' terrible pay and working conditions improved immediately. Unionization was a lifeline, lifting families out of tenements and into the middle class.

That's still the case, as a new study from researchers at Harvard University, Wellesley College and the Center for American Progress shows. Children in areas with higher union membership have more economic mobility, and children in union households have better outcomes.

Unions also give women a leg up. According to a new report from the Institute for Women's Policy Research, the wage gap between men and women narrows for union women, from 77 cents for women in general compared with every dollar a man earns, to 89 cents for union women. And a union contract makes an even bigger difference for women of color.

Unions like the American Federation of Teachers are strengthening our families, schools and economy -- at the bargaining table, ballot box and beyond.

Take what we're doing in McDowell County, W.Va. -- the eighth-poorest county in the nation. Our union brought together public and private partners who have collectively invested more than $16 million in the last four years. The county, which was built on the coal industry, is being transformed by things it never had before--like widespread broadband access, dental care and addiction treatment.

And in New York City, our union's work in encouraging infrastructure investments by pension funds is creating jobs by helping to finance the building of the new LaGuardia Airport. Five years ago, we made a commitment--through the Clinton Global Initiative with the AFL-CIO and the Building Trades -- to invest $10 billion of our members' pension funds into infrastructure. We've already created tens of thousands of good jobs, and the LaGuardia project furthers this commitment.

Yet we are still the object of unrelenting attacks. Politicians like Christie and Walker, and the wealthy special interests that support their plans, want to eliminate unions because they see anything that helps working families get a bigger piece of the economic pie as eroding their power.

The U.S. Supreme Court case Friedrichs v. California Teachers Association is their latest tactic. Focused exclusively on public service workers -- like teachers, nurses and firefighters -- the case could undermine unions' efforts to make our voices heard on issues that affect all of us: fighting for smaller class sizes, working so we can all retire with dignity, holding billionaires accountable for paying their fair share, and making sure employers understand we are working harder and harder just to get by.

Walker has said that the way to eliminate unions is to "divide and conquer." But that's not what Americans want. Hardworking Americans know that, as Hillary Clinton has said, "When unions are strong, families are strong. And when families are strong, America is strong."

Follow Randi Weingarten on Twitter: www.twitter.com/rweingarten

Wednesday, September 9, 2015

L.A. Port at Record Levels,

Electronics, auto parts and clothes from Asia are streaming through the second-busiest U.S. port at record levels, signaling retailers’ confidence in the economy and consumers’ eagerness to buy.

The Port of Long Beach -- which is poised to overtake neighboring Port of Los Angeles next year to become the No. 1 shipping gateway in the country -- had a record month in July, with cargo volume up 18 percent from July 2014. Figures being released later this month will show unprecedented traffic again in August, and early signs in September are “very very encouraging,” Jon Slangerup, the Long Beach port’s chief executive officer, said in an interview at Bloomberg’s offices in New York last week.

Overall, the two ports are handling 4 percent more cargo this year than last, Slangerup said. With consumers showing no letup, he predicted a record year for Long Beach in 2015, taking out pre-recession highs set in 2007. West Coast ports are poised to regain share lost earlier in the year, when backlogs led clients to divert cargo to East Coast destinations like Savannah, Georgia, he said.

“When you look at the macros, you look at unemployment, consumer confidence, savings, available discretionary spending, all of those numbers suggest that we have more to spend,” Slangerup said. “The economy here is super strong relative to the rest of the world, and the strongest I’ve seen it in a very long time.”

Traffic at the Port of Los Angeles has been less impressive; after the second-best month ever in March, volume was down in three of the next four months. Still, the overall trend is encouraging, and orders for next year suggest volumes will pick up late this year, saidGene Seroka, executive director of the Port of Los Angeles.

“It’s not just a big one-time spike during the peak season,” Seroka said.

Both ports lost business during a dispute between the labor union for 20,000 dockworkers and their employers, which all but paralyzed the 29 commercial seaports on the West Coast for four months. Slangerup said in February that labor issues accounted for 80 percent of a bottleneck that kept as many as 36 vessels idling at sea for days at a time.

In the interview last week, however, he said he realized that labor had “very little to do” with the disruptions, that the difficulties had more to do with organizational glitches and inefficient cargo-handling practices.

Since March, truckers, shippers and terminal operators at both Southern California ports have been meeting to better coordinate operations and speed cargo through the port complex. Union representatives have joined the conversations.

“They recognize that by being at the table in our discussions with everybody, just how critical a link they are and how they have the ability to make and break it,” Slangerup said. “They get it. They lost a lot of hours.”

The Federal Maritime Commission granted Los Angeles and Long Beach permission on Feb. 26 to work together by taking measures such as creating a pool of truck chassis to haul cargo containers. The logjam largely disappeared by May.

Retailers such as Wal-Mart Stores Inc. and Home Depot Inc. have expressed confidence in the Port of Long Beach, while maintaining a four-corner strategy that includes cargo through other gateways, Slangerup said. Port officials have met with more than 300 customers, some of whom spent millions of dollars daily on alternate routes.

“Nobody is going to spend 30 percent more just because they don’t like the system,” Slangerup said.

The adjacent ports on San Pedro Bay handle almost a third of all cargo entering and leaving the U.S. They moved $470 billion in goods last year, more than double that of the Port of New York and New Jersey.

The West Coast ports rely heavily on trade with China, where economic growth has been slowing and the government unexpectedly devalued the yuan in August, rattling global markets. China accounted for 49 percent of the value of cargo moving through Los Angeles last year, and 48 percent of the tonnage in Long Beach, according to data from both ports.

Imports from Asia to North America, aided by record car sales, increased more than 10 percent in June from a year earlier, according to Bloomberg data.

“These are some of the largest numbers in our history, far exceeding the pre-recession numbers,” Slangerup said.

Overall, the climate for global shipping is improving, according to an analysis by Bloomberg Intelligence. About 78 percent of the Bloomberg Intelligence global marine shipping peer group is expected to generate positive earnings per share this year and 83 percent next year, up from 65 percent in 2014, according to research by analysts Lee Klaskow and Talon Custer.

The dispute cost Los Angeles about 400,000 units of cargo, equivalent to more than two weeks of volume, Seroka said. “A lot of the numbers post-agreement look pretty good, but we lost a heck of a lot of business.”

To keep their lead and regain earlier losses, the Southern California ports are spending a combined $5.8 billion to expand capacity, replacing a bridge and dredging harbors to accommodate the biggest vessels, and automating unloading, warehousing and other activity.

The projects could maintain the West Coast dominance in handling ever-larger container ships from Asia, as rivals in New York-New Jersey; Norfolk, Virginia, and Savannah also increase capacity and add automated features to speed cargo movement.

Early next year, some large ships that have docked in Southern California will have more options when new locks and a deeper channel in the Panama Canal allow them to reach the East Coast and Gulf Coast. Slangerup downplayed the threat, saying that drought caused by climate change may make it harder to fill the locks.

“They may not be able to operate at certain times of the year,” Slangerup said.

To accommodate the latest generation of larger ships, East Coast ports have to dredge their harbors after major storms year-round, Slangerup said.

"They can dredge all they want, but they’re fighting Mother Nature because every time a storm comes in, they have to dredge again," he said.

Los Angeles and Long Beach have other built-in advantages, including an inland rail infrastructure, that limit any migration of cargo, said Chas Deller, chief executive of 10XOCEANSOLUTIONS Inc., a maritime consulting company in the San Francisco Bay Area.

“Los Angeles and Long Beach will always be the No. 1 choice,” Deller said.

Thursday, August 27, 2015

Teamsters Win NLRB Case Against Use of Temp Status

More companies may be held responsible for labor-law violations committed by contractors and forced to negotiate wages and benefits with their workers under a decision by a politically split U.S. labor board.

The National Labor Relations Board, in a closely watched case, on Thursday unveiled a new standard for determining which companies are “joint employers” of workers paid by another business such as a franchisee or contractor.

Previously, employers were responsible only if they had direct control over working conditions. The standard, in use for three decades, is “increasingly out of step with changing economic circumstances, particularly the recent dramatic growth in contingent employment relationships,” the board ruled.

The case involved a Teamsters organizing drive of employees at a staffing facility who were working in a recycling facility owned by Browning-Ferris Industries Inc., a Houston-based waste management company. The case drew attention from labor, businesses and Republicans in Congress, who vow to try to block the panel’s decision.

The decision will be applied in separate cases pending against McDonald’s Corp. in which the labor board’s general counsel has accused the restaurant chain of labor violations at its franchisees.

Temporary Employment

The board cited a rise in temporary employment in its decision. Almost 2.9 million Americans had jobs through temporary agencies in 2014, or 2 percent of the workforce, up from 1.1 million in 1990, the board said.

The NLRB’s change means that companies that have the power to influence the conditions of workers through contracts or franchise agreements may be deemed joint employers. Business groups said now companies would become less efficient by tying them more directly to their contractors or other businesses that are now a step removed.

The International Franchise Association, a Washington-based business group, said the decision is a “seismic shift” in labor law.

“If allowed to go into effect, the impact of this new joint-employer rule would be sweeping and widespread, create havoc for the franchise industry and, ultimately, would inflict serious damage to our nation’s economy,” Steve Caldeira, the group’s chief executive, said in a statement.

‘Unprecedented’ Obligations

The decision was derided by the board’s two Republicans, who wrote a 29-page dissent -- eight pages longer than the opinion -- saying it will “subject countless entities to unprecedented new joint-bargaining obligations.”

The three Democrats said the Republicans’ dissent was “long and hyperbolic,” and misstates the standard “and grossly exaggerates its consequences.”

Chuck Cohen, an attorney at Morgan Lewis in Washington and former member of the board, said the standard is likely to be challenged in court.

“This doctrine is so far-reaching, I’m assuming it will end up in the Supreme Court,” Cohen said.

The NLRB decided to move away from criteria used for three decades in a case involving Browning-Ferris and the Teamsters union trying to draw the company to the negotiating table along with a staffing company, Phoenix-based Leadpoint Business Services.

The board found Browning-Ferris was a joint employer.

Wilma Liebman, a former head of the labor board who advocated for the new standard, said shifts in the workforce threatened to make basic protections provided by labor laws “illusory.”

Often the company with deeper pockets that hires a subcontractor sets conditions of employment through a contract, she said. These companies should be at the bargaining table, she said.

“The nature of employment and the nature of the economy has changed a lot,” Liebman said in an interview.

China Dumps US Bonds - Dollar in Danger

It's Official: China Confirms It Has Begun Liquidating Treasuries, Warns Washington

Submitted by Tyler Durden on 08/27/2015 20:27 -0400

On Tuesday evening, we asked what would happen if emerging markets joined China in dumping US Treasurys. For months we’ve documented the PBoC’s liquidation of its vast stack of US paper. Back in July for instance, we noted that China had dumped a record $143 billion in US Treasurys in three months via Belgium, leaving Goldman speechless for once.

We followed all of this up this week by noting that thanks to the new FX regime (which, in theory anyway, should have required less intervention), China has likely sold somewhere on the order of $100 billion in US Treasurys in the past two weeks alone in open FX ops to steady the yuan. Put simply, as part of China's devaluation and subsequent attempts to contain said devaluation, China has been purging an epic amount of Treasurys.

But even as the cat was out of the bag for Zero Hedge readers and even as, to mix colorful escape metaphors, the genie has been out of the bottle since mid-August for China which, thanks to a steadfast refusal to just float the yuan and be done with it, will have to continue selling USTs by the hundreds of billions, the world at large was slow to wake up to what China’s FX interventions actually implied until Wednesday when two things happened: i) Bloomberg, citing fixed income desks in New York, noted "substantial selling pressure" in long-term USTs emanating from somebody in the "Far East", and ii) Bill Gross asked, in a tweet, if China was selling Treasuries.

Sure enough, on Thursday we got confirmation of what we’ve been detailing exhaustively for months. Here’s Bloomberg:

China has cut its holdings of U.S. Treasuries this month to raise dollars needed to support the yuan in the wake of a shock devaluation two weeks ago, according to people familiar with the matter.

Channels for such transactions include China selling directly, as well as through agents in Belgium and Switzerland, said one of the people, who declined to be identified as the information isn’t public. China has communicated with U.S. authorities about the sales,said another person. They didn’t reveal the size of the disposals.

The latest available Treasury data and estimates by strategists suggest that China controls $1.48 trillion of U.S. government debt, according to data compiled by Bloomberg. That includes about $200 billion held through Belgium, which Nomura Holdings Inc. says is home to Chinese custodial accounts.

The PBOC has sold at least $106 billion of reserve assets in the last two weeks, including Treasuries, according to an estimate from Societe Generale SA. The figure was based on the bank’s calculation of how much liquidity will be added to China’s financial system through Tuesday’s reduction of interest rates and lenders’ reserve-requirement ratios. The assumption is that the central bank aims to replenish the funds it drained when it bought yuan to stabilize the currency.

Now that what has been glaringly obvious for at least six months has been given the official mainstream stamp of fact-based approval, the all-clear has been given for rampant speculation on what exactly this means for US monetary policy. Here’s Bloomberg again:

China selling Treasuries is “not a surprise, but possibly something which people haven’t fully priced in,” said Owen Callan, a Dublin-based fixed-income strategist at Cantor Fitzgerald LP.“It would change the outlook on Treasuries quite a bit if you started to price in a fairly large liquidation of their reserves over the next six months or so as they manage the yuan to whatever level they have in mind.”

“By selling Treasuries to defend the renminbi, they’re preventing Treasury yields from going lower despite the fact that we’ve seen a sharp drop in the stock market,” David Woo, head of global rates and currencies research at Bank of America Corp., said on Bloomberg Television on Wednesday. “China has a direct impact on global markets through U.S. rates.”

As we discussed on Wednesday evening, we do, thanks to a review of the extant academic literature undertaken by Citi, have an idea of what foreign FX reserve liquidation means for USTs. "Suppose EM and developing countries, which hold $5491 bn in reserves, reduce holdings by 10% over one year - this amounts to 3.07% of US GDP and means 10yr Treasury yields rates rise by a mammoth 108bp ,"Citi said, in a note dated earlier this week.

In other words, for every $500 billion in liquidated Chinese FX reserves, there's an attendant 108bps worth of upward pressure on the 10Y. Bear in mind here that thanks to the threat of a looming Fed rate hike and a litany of other factors including plunging commodity prices and idiosyncratic political risks, EM currencies are in free fall which means that it's not just China that's in the process of liquidating USD assets.

The clear takeaway is that there's a substantial amount of upward pressure building for UST yields and that is a decisively undesirable situation for the Fed to find itself in going into September. On Wednesday we summed the situation up as follows: "one of the catalysts for the EM outflows is the looming Fed hike which, when taken together with the above, means that if the FOMC raises rates, they will almost surely accelerate the pressure on EM, triggering further FX reserve drawdowns (i.e. UST dumping), resulting in substantial upward pressure on yields and prompting an immediate policy reversal and perhaps even QE4."

Well now that China's UST liquidation frenzy has reached a pace where it could no longer be swept under the rug and/or played down as inconsequential, and now that Bill Dudley has officially opened the door for "additional quantitative easing", it would appear that the only way to prevent China and EM UST liquidation from, as Citi puts it, "choking off the US housing market," and exerting a kind of forced tightening via the UST transmission channel, will be for the FOMC to usher in QE4.