Sep 13

Today’s News 13th September 2017

  • Swedish Police "Cannot Cope" With Huge Numbers Of Rapes Since Migrants Arrived

    Authored by Paul Joseph Watson via InfoWars.com,

    A journalist investigating the rape of a 12-year-old girl in Sweden was told that police have not even interviewed the prime suspect two months later because authorities “cannot cope” with the sheer volume of cases since Sweden opened its borders to mass immigration two years ago.

    Back in July, the 12-year-old girl was dragged into a restroom by an older man in the center of Stenungsund before being beaten, raped and threatened with death.

    Knowing the identity of the culprit, the girl’s mother immediately reported him to police, but authorities have yet to even interrogate the suspect two months later despite knowing his name and address.

    According to journalist Joakim Lamotte, the girl is still being confronted and taunted by the rapist on the streets of Stenungsund.

    When Lamotte contacted authorities, he was told that the case hasn’t been acted on because police “cannot cope with the workload” of having so many rape cases to investigate.

    “Do you know how many rapes we have?” Lamotte was told by the police officer in a conversation he recorded and uploaded to YouTube.

     

    “No, I don’t. But I’ve talked to the mother and her daughter feels very bad because of this, and I know who this man is, I have his name, address, social security number and everything, and, I mean, you haven’t even interrogated him yet, isn’t that remarkable?” asked Lamotte.

     

    “Well, you might think so, but we have so many similar issues and so few people available we cannot cope with the workload,” responded the police officer.

     

    “That sounds unbelievable. A 12-year-old girl who is raped, it’s just a child,” said Lamotte.

     

    “We have 3-year-old children that get raped,” responded the police officer, sounding clearly exasperated.

    When asked if they were not able to prosecute rapists who molest 3-year-old children, the female officer responded, “Yes….these are the realities and it’s terribly regrettable. That’s all I can say about it.”

    Rapes have skyrocketed in Sweden over recent years. Authorities have claimed that this is due to the definition of rape being changed, but the spike occurred long after the change was made. Sex crimes in the country have doubled since 2012. The most recently available statistics showed that immigrants were 5.5 times more likely to carry out sexual assaults.

    Sex attacks as music festivals throughout Sweden are also soaring, with over 150 cases of assaults and 20 rapes being reported this summer.

    Earlier this year, Peter Springare, veteran police investigator and former deputy head of the division for serious crimes at the police in Örebro, made headlines after he wrote a Facebook post in which he detailed how the country was in “chaos” due to a never ending epidemic of serious crimes being committed by Muslim migrants.

    We previously highlighted Joakim Lamotte’s work back in February when he investigated the brutal gang rape of a Swedish woman who was racially abused by a group of men in Gothenburg who live streamed the assault to Facebook.

    When Lamotte attempted to get an update on the case from police in Gothenburg, he was told it was being treated as “aggravated rape” but that “no one even has begun working with the case yet”.

    According to a concerned mother who first brought the video to the attention of police in Gothenburg, she was shocked to see that they were disinterested and “sat and ate cheetos” while being seemingly more bothered by her for reporting the incident.

  • Bitcoin Tumbles Below $4000 – Down 21% From Record High

    For the first time since August 22nd, the USD price of Bitcoin has dropped below $4000 – down over 20% from its record highs on September 1st.

     

    Crackdowns by China (on ICOs and more recently confusion over Bitcoin exchanges) combined with JPMorgan's Jamie Dimon's comments today saw selling pressure extend as China opened…

    All but one of the top 15 cryptocurrencies are under pressure…

     

    As we noted earlier, what is ironic is that this is not the first time Jamie Dimon has lashed out at bitcoin: the last time Dimon slammed bitcoin was November 2015, at the Fortune Global Forum in San Francisco. Here’s what he had to say when asked directly about it by an audience member:

    “You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

     

    “Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

    Speaking to CNBC later in the day, Dimon said he’s skeptical governments will allow a currency to exist without state oversight: “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.” And yet, despite said "killing" Bitcoin remained well above $4,000.

    That said, Dimon conceded that he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses, saying that it "could hit $100,000 before it drops." The best argument Dimon has heard about owning bitcoin, is that it can be useful to people in places with no other options: “If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars,” he said. “So there may be a market for that, but it’d be a limited market.”

    What is also ironic is Dimon's admission that his daughter purchased some bitcoin, saying "it went up and she thinks she is a genius."

    And to think the Fed didn't even have to inject $4 trillion in liquidity to make her feel that way, unlike so many stock "investors."

    Shortly after Dimon's comment, the chairman and CEO of the CBOE, Ed Tilly – which plans to offer bitcoin futures soon – defended the cryptocurrency after Dimon’s remarks.

    “Like it or not, people want exposure to bitcoin,” Tilly said. Believers can bet on its rise, and Dimon is welcome to take the other side, he said. “We’re happy to be the ones in the middle.”

    * * *

    Incidentally, for those who "wasted their time" since Dimon's 2015 threat, Bitcoin is up 1,018%.

    *  *  *

    Perhaps most ironically, while US elites are talking their book in desparation at this 'new-fangled' virtual currency, Russia is working on legitimizing cryptocurrencies and is developing a legal framework that will govern transactions using digital currencies like Bitcoin.

    Russia’s First Deputy Prime Minister Igor Shuvalov previously said that the regulation would be delayed that was originally set for October.

    “In April, we announced that the draft law would be ready in October. However, the situation on the market made us, in addition to the main bill, consider several more options. And now all these projects are postponed, we are watching the situation to understand,” Sidorenko said.

    Speaking at the II Moscow Financial Forum, Russian Finance Minister Anton Siluanov reassured Russian users of Bitcoin and other cryptocurrencies that the government has no intention of outlawing or penalizing cryptocurrencies and is working on regulation.

    “The state understands indeed that crypto-currencies are real. There is no sense in banning them, there is a need to regulate them,” Siluanov said.

    Putin himself has embraced cryptocurrency and met with Ethereum Founder Vitalik Buterin, who instilled the advantages of Russia’s usage of the Blockchain Technology under Bitcoin.

  • Is North Korea Using Bitcoin To Get Around UN Sanctions?

    The latest round of United Nations sanctions against North Korea are designed specifically to prevent Kim Jong Un from obtaining hard currency. Luckily for the Kim regime, there’s always bitcoin.

    According to Bloomberg, the isolated country, facing further restrictions on exports that would bring in desperately needed Chinese yuan, has increasingly been turning to bitcoin to circumvent the sanctions.

    And to try and keep the illicit digital money flowing, the country has reportedly stepped up attacks against South Korean digital currency exchanges, causing disruptions in one of the largest markets for digital currencies like Ethereum and bitcoin, according to a new report from security researcher FireEye. In addition, the North has managed to breach an English-language bitcoin news website and collect bitcoin ransom payments from global victims of the malware WannaCry attack (although we thought that one had been linked to China?).

    “So far this year, FireEye has confirmed attacks on at least three South Korean exchanges, including one in May that was successful. Around the same time, local media reported that Seoul-based exchange Yapizon lost more than 3,800 bitcoins (worth about $15 million at current rates) due to theft, although FireEye said there are not clear indications of North Korean involvement.”

    According to Naeem Aslam, a contributor at Forbes, the North cultivated an “army of hackers” to go after digital-currency exchanges after the digital currency’s world-beating gains piqued Kim Jong Un’s interest.

    “North Korea has an army of hackers who are constantly targeting South Korea, the hectic trading hub for cryptocurrency. The strategy would aid the country in bypassing many trade restrictions which also include the new sanctions. Moreover, the massive popularity of the cryptocurrency gained Kim’s attention and for crypto traders, this represents an opportunity. A higher demand for cryptocurrency would only boost its price,” said Forbes contributor Naeem Aslam.”

    North Korea’s Reconnaissance General Bureau, which directly reports to Kim Jong Un, handles peacetime cyber operations from espionage to network disruptions and employs an estimated 6,000 officers, according to a 2016 report from the International Cyber Policy Centre at the Australian Strategic Policy Institute.

    A group within the RGB known as TEMP.Hermit is believed to be responsible for the attacks on the South Korean bitcoin exchanges. FireEye said it has been linked to a 2015 attack on South Korea’s nuclear industry. The hackers have also been tied by other security firms to last year’s attack on Samsung Electronics Co.’s corporate messenger app and the breach of Sony Corp.’s film studio, which the FBI blamed on North Korea.

    "They’re pretty capable actors in comparison to other North Korean activity we see,” said Luke McNamara, a researcher at FireEye and author of the new report. "They’ve been creative in how they use their cyber-espionage capability."

    And with the US likely to continue to push for still tighter sanctions as the North continues its provocative missile and nuclear tests – that is, until Russia and China finally say “enough” – the isolated country will likely deepen its reliance on the digital currency.

    “We definitely see sanctions being a big lever driving this sort of activity,” McNamara said. “They probably see it as a very low-cost solution to bring in hard cash.”

     

    "As more money goes into cryptocurrency exchanges and more people buy bitcoin and ethereum, exchanges become larger targets for this group,” said McNamara. He said so far he did not have evidence that Kim Jong Un’s regime has targeted cryptocurrency exchanges outside of South Korea, but did not rule out the possibility in the future.”

    And with so many shadowy digital currency exchanges operating throughout Asia, cashing out the country’s digital currency positions would be easy.

    “They could compromise an exchange and transfer those bitcoins to other exchanges elsewhere in Asia or exchange them for a more anonymous cryptocurrency,” said McNamara. “There are variety of things they could do to cash out.”

    As Aslam points out, increasing demand for digital currencies from North Korea could ultimately lift prices on a global scale as the country is increasingly forced to transact at in bitcoin, Ethereum and their peers. North Korea isn’t the only country that’s turning to bitcoin out of a sense of desperation. As the Atlantic pointed out earlier this month, thousands of Venezuelans have taken to minería bitcoin – or mining bitcoin – to try and get their hands on precious US dollars.

    Because, in some cases, it’s either that, or starvation.
     

  • This Fascinating City Within Hong Kong Was Lawless For Decades

    There are very few places on Earth that remain ungoverned, and even the tiniest islands and city-states tend to have rules in place for things like taxation and citizenship.

    Government control is an established reality for most of the world, but what would happen if a neighborhood in your city suddenly became a lawless free-for-all? What type of industries would emerge, and how would people cooperate within that environment to ensure basic services continued to operate?

    As Visual Capitalist's Nick Routley details below, one example from recent history sheds light on just how such a situation could work: Kowloon Walled City.

    Courtesy of: Visual Capitalist

     

    Kowloon Walled City

    Today’s infographic is a fantastic editorial illustration from South China Morning Post from 2013 that takes a detailed look at the inner workings of Kowloon Walled City (KWC).

    Often described as one of the most remarkable social anomalies in recent history, this bizarre enclave was more dense than any other urban area on the face of the planet.

    Kowloon Walled City Timeline

    The story of the KWC site begins in the Song Dynasty (960-1297) when a small fort was constructed to house soldiers who helped safeguard the salt trade. In the latter half of the 19th century, the small fort was expanded into a full garrison town as the threat of a British invasion hung over China.

    In 1898, the 99-year lease of Kowloon and the New Territories was established with one exception: the 2.7 hectare walled fortress. Because China never dropped its claim on the site and the British took a hands-off approach, the site became a sort of lawless enclave.

    After WWII, squatters began to fill the site and more permanent structures followed. By 1950, the population had grown to 17,000, and by 1990 over 50,000 people lived within a property the size of two rugby fields.

    kowloon walled city density people

    From Squatter Camps to Functioning Neighborhood

    There was a tendency to view KWC is an isolated bubble of vice within the city, but the sheer volume of business activity within the informal settlement shows that outside customers were more than happy to benefit from lower priced goods and services. This symbiosis has few parallels in modern history, and it makes KWC a fascinating situation to look back on.

    KWC is best known as an enclave of criminal activity and illicit businesses such as brothels and gambling dens, but that only tells one side of the story. Despite the lack of space and formal links to utilities, the neighborhood was remarkably productive. In fact, KWC was often been described as Hong Kong’s shadow economy because the hundreds of tiny workshops and factories scattered throughout the site provided products for businesses across Hong Kong.

    Kowloon Walled City Businesses

    People moved to KWC for many reasons, including bankruptcy, poverty, or to avoid deportation. Others went there to take advantage of the lack of law enforcement and regulations.

    One prominent example of skirting regulation was the high concentration of dental and medical practitioners operating within KWC. In addition to lower rents, doctors who immigrated to Hong Kong from China could avoid expensive licensing and retraining required by the colonial government. Industrial businesses were free to ignore fire, labor, and safety codes to produce goods at a lower cost, or to sell items that were considered taboo in the formal economy (e.g. restaurants serving dog meat).

    Law and Order

    Triads acted as a de facto city council by resolving civil conflicts, creating a volunteer fire brigade, and organizing garbage disposal. The tight-knit community within the settlement would also coordinate among themselves to conserve electricity and make repairs to shared infrastructure.

    Despite the lack of formally recognized land ownership, people still bought and sold property within KWC. In one example, a construction company struck an exchange deal with the owner of a four-story building. The owner would retain a ground floor flat in a newly constructed thirteen-story building on the site.

    The Bitter End

    In 1993, after intense rounds of buy-out offers and forced relocations, Kowloon Walled City was demolished and converted into a park. Many of the businesses were forced to close forever as rents in the rest of Hong Kong were not affordable for most of the owners.

    All this intensity of random human effort and activity, vice and sloth and industry, exempted from all the controls we take for granted, resulted in an environment as richly varied and as sensual as anything in the heart of the tropical rainforest. The only drawback is that it was obviously toxic.

    – Greg Girard, author of City of Darknes

  • US Threatens To Cut Off China From SWIFT If It Violates North Korea Sanctions

    In an unexpectedly strong diplomatic escalation, one day after China agreed to vote alongside the US (and Russia) during Monday’s United National Security Council vote in passing the watered down North Korea sanctions, the US warned that if China were to violate or fail to comply with the newly imposed sanctions against Kim’s regime, it could cut off Beijing’s access to both the US financial system as well as the “international dollar system.”

    Speaking at CNBC’s Delivering Alpha conference on Tuesday, Steven Mnuchin said that China had agreed to “historic” North Korean sanctions during Monday’s United Nations vote. “We worked very closely with the U.N.  I’m very pleased with the resolution that was just passed.  This is some of the strongest items.  We now have more tools in our toolbox, and we will continue to use them and put additional sanctions on North Korea until they stop this behavior.”

    In response, Andrew Ross Sorkin countered that “we haven’t been able to move the needle on China, which seems to be the real mover on this, in terms of being able to apply the real pressure. What do you think the issue is?  What is the problem?”

    The stunner was revealed in Mnuchin’s answer: “I think we have absolutely moved the needle on China.  I think what they agreed to yesterday was historic.  I’d also say I put sanctions on a major Chinese bank.  That’s the first time that’s ever been done.  And if China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system.  And that’s quite meaningful.”

    And to underscore his point, the Treasury Secretary also said that “in North Korea, economic warfare works. I made it clear that the President was strongly considering and we sent a message that anybody that wanted to trade with North Korea, we would consider them not trading with us.  We can put on economic sanctions to stop people trading.

    In other words, to force compliance with the North Korean sanctions, Mnuchin threatened Beijing with not only trade war, but also a lock out from the dollar system, i.e. SWIFT, something the US did back in 2014 and 2015 when it blocked off several Russian banks as relations between the US and Russia imploded.

    Of course, whether the US would be willing to go so far as to use the nuclear option, and pull the dollar plug on its biggest trade partner, in the process immediately unleashing an economic depression domestically and globally is a different matter.  So far Washington has been reluctant to impose economic sanctions on China over concerns of possible retaliatory measures from Beijing and the potentially catastrophic consequences for the global economy. Washington runs a $350 billion annual trade deficit with Beijing, while the PBOC also holds over $1 trillion in US debt.

    Ironically, the biggest hurdle to the implementation of the just passed sanctions may be the president himself.  “We think it’s just another very small step, not a big deal,” Trump told reporters at the start of a meeting with Malaysian Prime Minister Najib Razak. “I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen,” said Trump who has vowed not to allow North Korea to develop a nuclear ballistic missile capable of hitting the United States.

    Separately, at a hearing of the House Foreign Affairs Committee on Tuesday, Republican Chairman Ed Royce said the U.S. should target major Chinese banks, including Agricultural Bank of China Ltd. and China Merchants Bank Co., for aiding Kim’s regime. Russia also came in for criticism. Assistant Treasury Secretary Marshall Billingslea said in prepared remarks to the committee that North Korean bank representatives “operate in Russia in flagrant disregard of the very resolutions adopted by Russia at the UN.”

    While China and Russia supported the latest UN sanctions, officials made clear they were troubled by Haley’s comments in the Security Council that the U.S. would act alone if Kim’s regime didn’t stop testing missiles and bombs. They emphasized the world body’s resolution also emphasized the importance of resolving the crisis through negotiations. “The Chinese side will never allow conflict or war on the peninsula,” Foreign Ministry spokesman Geng Shuang said in a statement on Tuesday.

    In a soundbite late on Tuesday, Japan’s Nikkei quoted prime minister Shinzo Abe who said that “in the end, [the North Korean] problems should be solved through diplomatic dialogue,” adding that Japan will “work together with the international community to apply maximum pressure, so that North Korea commits to perfect, verifiable and irreversible denuclearization.” For Japan to engage with the regime, he stressed it would have to be “on the condition that North Korea commits to” this complete denuclearization.”

    Which, of course, won’t happen: “sanctions of any kind are useless and ineffective,” Russian President Vladimir Putin told reporters earlier this month at a summit in Xiamen, China. “They’ll eat grass, but they won’t abandon their [nuclear] program unless they feel secure.

    Predictably, North Korea’s Foreign Ministry slammed the sanctions saying it “condemns in the strongest terms and categorically rejects” the United Nations adding more sanctions, North Korea’s state-run KCNA reported on Wednesday morning. Instead, North Korea warned it “will redouble efforts to increase its strength” as it seeks to establish “practical equilibrium” with U.S.

    And so, not only is the entire geopolitical circle jerk back at square one, but the ball is again back in North Korea’s court, while the decision on whether or not to launch another ICBM really depends on whether China will give it the quiet go ahead; a China which responds notoriously poorly to being threatened in the global financial arena, like for example when the US threatens to kick it out of the global dollar system…

  • Calls To Imprison "Climate Change Deniers" Grow In The Wake Of Hurricane Irma

    When retired Georgia Tech professor Judith Curry penned a blog post on her “Climate Etc.” website suggesting that it was scientifically irresponsible to tie the intensity of Hurricanes Harvey and Irma directly to climate change, she probably didn’t expect that she might trigger 1,000’s of progressives to call for her immediate imprisonment.  Unfortunately, for both Curry and society at large, that is exactly what happened. 

    Here is part of Curry’s post that potentially resulted in this latest ‘mass-triggering’ event:

    It is premature to conclude that human activities–and particularly greenhouse gas emissions that cause global warming–have already had a detectable impact on Atlantic hurricane or global tropical cyclone activity. That said, human activities may have already caused changes that are not yet detectable due to the small magnitude of the changes or observational limitations, or are not yet confidently modeled (e.g., aerosol effects on regional climate).

    As the Washington Times notes, Curry’s comments only served to further enrage Al Gore’s climate change crusaders who promptly ramped up their calls to imprison anyone with the audacity to present any data and/or question, in any way, climate models which should be accepted as proven fact…even though they’re subjective and highly sensitive any number of input variables.

    That is the kind of talk that could get policymakers who heed her research hauled before the justice system, if some of those in the climate change movement have their way.

     

    “Climate change denial should be a crime,” declared the Sept. 1 headline in the Outline. Mark Hertsgaard argued in a Sept. 7 article in the Nation, titled “Climate Denialism Is Literally Killing Us,” that “murder is murder” and “we should punish it as such.”

     

    The suggestion that those who run afoul of the climate change consensus, in particular government officials, should face charges comes with temperatures flaring over the link between hurricanes and greenhouse gas emissions.

     

    “In the wake of Harvey, it’s time to treat science denial as gross negligence — and hold those who do the denying accountable,” said the subhead in the Outline article, written by Brian Merchant.

     

    Brad Johnson, executive director of Climate Hawks Vote, posted last week on Twitter a set of “climate disaster response rules,” the third of which was to “put officials who reject science in jail.”

    PB

     

    And while we’re not sure if imprisonment is the right punishment, it does seem a bit outrageous for a Georgia Tech climate scientist to challenge the opinions of both the Pope and Sir Richard Branson on climate change...who does she think she is? 

    Meanwhile, Pope Francis said the two Category 4 storms offer proof of catastrophic climate change, even though they are the first two major hurricanes to make landfall on the U.S. mainland in 12 years.

     

    “You can see the effects of climate change with your own eyes, and scientists tell us clearly the way forward,” said the pontiff, adding that leaders have a “moral responsibility” to take action.

     

    “Man-made climate change is contributing to increasingly strong hurricanes causing unprecedented damage,” Mr. Branson said in a Friday statement. “The whole world should be scrambling to get on top of the climate change issue before it is too late for this generation, let alone the generations to come.”

    Of course, while we would never question the opinions of the Pope and/or a Knight, we do find the following chart on U.S. hurricane strikes by decade to be somewhat perplexing.  Why, for example, were U.S. hurricane strikes above average for almost every decade between 1870 and 1950 before declining in the 1950s through 2000?  If hurricane frequency can suddenly be linked directly to climate change in 2017, shouldn’t it have produced similarly alarming hurricanes in the 80’s, 90’s and 2000’s?  If we’re not mistaken, CO2 output has pretty much consistently risen since man first started building fires…

    Hurricanes

    Of course, maybe the extreme weather events have simply shifted away from the U.S. and global hurricane strikes are the more relevant metric…except not…

    Globa;

    Oh well, we probably just don’t understand the math…

  • Bitcoin Tumbles After Jamie Dimon Calls It A Fraud: "Would Fire Anyone Trading It"

    Surprised by the sudden air pocket below bitcoin? Curious if this was caused by some new, unconfirmed Chinese crackdown on bitcoin traders, exchanges, and other money launderers?

    No, the answer is Jamie Dimon, who in an angry outburst during the same conference in which he preannounced JPM’s 20% trading revenue drop, lashed out at the cryptocurrency, calling it a “fraud” which is “worse than tulip bulbs. It won’t end well”, will “blow up” and “someone is going to get killed.” Oh, and in conclusion, “any trader trading bitcoin” will be “fired for being stupid.

    • DIMON: BITCOIN IS A “FRAUD”; “WORSE THAN TULIP BULBS”
    • DIMON: BITCOIN WILL EVENTUALLY BLOW UP
    • DIMON: BITCOIN WON’T END WELL
    • DIMON: WOULD FIRE ANY TRADER TRADING BITCOIN FOR BEING STUPID

    So how does Jamie really feel? 

    Of course, if “a trader” bought $100,000 of Bitcoin in 2010, they’d be roughly 3x richer than billionaire Jamie, but that’s another story.

    What is more surprising, is that bitcoin actually reacted to this angry outburst by the JPM CEO, sliding sharply, and dragging the entire cryptocurrency space with it.

    Or perhaps not surprising at all as hundreds of JPM traders quietly liquidated their accounts moments after hearing Dimon’s threat…

    Curiously, as Bitcoin sold off, gold finally saw a modest bid:

    As for Dimon’s personal vendetta with the digital currency, one twitter commentator said it best:

    //platform.twitter.com/widgets.js

    What is ironic is that this is not the first time Jamie Dimon has lashed out at bitcoin: the last time Dimon slammed bitcoin was November 2015, at the Fortune Global Forum in San Francisco. Here’s what he had to say when asked directly about it by an audience member:

    “You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

     

    “Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

    Speaking to CNBC later in the day, Dimon said he’s skeptical governments will allow a currency to exist without state oversight: “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.” And yet, despite said “killing” Bitcoin remained well above $4,000.

    That said, Dimon conceded that he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses, saying that it “could hit $100,000 before it drops.” The best argument Dimon has heard about owning bitcoin, is that it can be useful to people in places with no other options: “If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars,” he said. “So there may be a market for that, but it’d be a limited market.”

    What is also ironic is Dimon’s admission that his daughter purchased some bitcoin, saying “it went up and she thinks she is a genius.”

    And to think the Fed didn’t even have to inject $4 trillion in liquidity to make her feel that way, unlike so many stock “investors.”

    Shortly after Dimon’s comment, the chairman and CEO of the CBOE, Ed Tilly – which plans to offer bitcoin futures soon – defended the cryptocurrency after Dimon’s remarks.

    “Like it or not, people want exposure to bitcoin,” Tilly said. Believers can bet on its rise, and Dimon is welcome to take the other side, he said. “We’re happy to be the ones in the middle.”

    * * *

    Incidentally, for those who “wasted their time” since Dimon’s 2015 threat, Bitcoin is up 1,018%.

  • "It's Not Worth Fighting" – Hedge Funds Are Dumping Their China Shorts

    Pretty soon, China bears will be as rare as the Giant Panda.

    At least that’s what Bloomberg suggested in a story about how Chinese markets have continued to defy proclamations that country’s economy would soon collapse in an avalanche of bad debt, exposing rampant corporate fraud. Or that a rash of outflows and the pressure of short sellers would force a massive yuan devaluation. Or that the exposure of rampant fraud and abuse in its corporate sector would tank local markets, which rely heavily on shady investment products.

    We’ve repeatedly noted when fund managers who once loudly touted their China-related positions either moderated, or changed their minds completely. Just last week, Corriente Advisors’ Mark Hart announced the end of a seven-year options position that would’ve seen a massive payoff if the yuan dropped 50%. As we noted, he’d spent $240 million rolling over the options.

    Before that, Kyle Bass, during an appearance on Adventures in Finance, said that while he was 100% certain his thesis will ultimately prove correct, calling the timing has obviously proven difficult.

    Bass, in his interview, cited shady retail investment products that have been used to backstop $40 trillion in debt with only $2 trillion in equity as a looming sign of a collapse. (We’ve also noted other questionable financing deals like the use of collateralized commodity transactions, which we discuss in greater detail in “Did China's Bronze Swan Just Arrive? Copper Inventories Crash Most In History”).

    Kyle Bass

    Bloomberg has a more complete accounting of how hedge fund managers’ views on China have “evolved” this year, as the promise of the Shanghai Composite’s massive correction, and subsequent yuan devaluation in 2015 proved to be teasers for deeper declines that never materialized. 

    Crispin Odey (Odey Asset Management): Said the yuan would slide 30% against the dollar after its 1.8% devaluation in August 2015.

    Here’s Bloomberg:

    “Odey has moderated his views – somewhat. He’s shorting metal stocks on expectations that China’s economy will slow in the second half. But he says betting against the yuan is no longer worth the trouble. ‘They can control their currency very easily,’ he said in an Aug. 8 interview, citing China’s massive current-account surplus. ‘It’s not really worth fighting very much.’”

    Kevin Smith (Crescat Capital): Smith said the yuan was “massively overvalued” before the August 2015 devaluation. Now, he is one example of a bear who’s standing by his position despite absorbing stomach-churning losses.

    “Smith is sticking to his bearish bets via currency options and short positions in Chinese stocks, even after his macro fund lost about 12 percent so far this year. He said last month that his “mid-target” for the yuan is a 70 percent plunge over the next year.”

    John Burbank (Passport Capital): He said in late 2015 that a hard landing in China could trigger a global recession. In May 2016, he called for a major yuan devaluation. Though he hasn’t publicly commented on China in a while, Bloomberg says a July 31 investor letter suggests his “views have moderated.”

    While he predicted China’s restrictions on housing and credit this year would be “detrimental” for commodity demand in the second half, he noted that the Communist Party continues to support the economy.

    “Recent economic data has in fact been supportive of a continuation of strong growth near-term, with a slowdown possibly pushed to 2018,” Burbank said.

    Douglas Greenig (Florin Court Capital): He said in June 2016 that China might devalue its currency because of Brexit.

    Now his “quantitative modeling” has changed his mind; he’s now a China bull.

    “Locals could sell more currency, but foreign inflows may offset that,” he said in a phone interview.

    In summary, Chinese markets have performed strongly this year. Despite calls for further weakness, the yuan has rallied more than 6 percent from its eight-year low against the dollar in December. Chinese credit markets have quieted down after a period of turbulence triggered by a PBOC crackdown on rampant lending, and the Shanghai Composite Index has rallied to its highest level in nearly two years.

    Still, at least for yuan bears, there may be a silver lining. The PBOC recently struck down a policy that required sales desks to hold 20% of revenues from sales of FX derivatives in reserve – effectively opening the door to short-sellers as the bank ironically now seeks to stem the currency’s advance against the dollar.
     

  • Let's Make America Free Again: 230 Years After The Constitution, We're Walking A Dangerous Road

    Authored by John Whitehead via The Rutherford Institute,

    “I tell you, freedom and human rights in America are doomed. The U.S. government will lead the American people in — and the West in general — into an unbearable hell and a choking life.”—Osama bin Laden (October 2001)

    Ironically, we mark the 16th anniversary of the 9/11 attacks in the same week we celebrate the 230th anniversary of the U.S. Constitution.

    While there has been much to mourn since 9/11, there has been very little to celebrate.

    Here is what it means to live under the Constitution today.

    The First Amendment is supposed to protect the freedom to speak your mind (the media, as well), worship, assemble, and protest nonviolently without being bridled by the government. Despite the clear protections found in the First Amendment, Americans continue to be censored, silenced and prosecuted for challenging government misconduct and corruption.

    The Second Amendment was intended to guarantee “the right of the people to keep and bear arms.” Essentially, this amendment was intended to give the citizenry the means to resist tyrannical government. Yet while gun ownership has been recognized by the U.S. Supreme Court as an individual citizen right, Americans remain powerless to defend themselves against SWAT team raids and militarized government agents armed to the teeth.

    The Third Amendment prohibits the military from entering any citizen’s home without “the consent of the owner.” Yet with the police increasingly training like, acting like, and arming themselves like military forces, we now have what the founders feared most—a standing army on American soil.

    The Fourth Amendment prohibits the government from conducting surveillance on you or touching you or invading you, unless they have some evidence that you are guilty of a crime. Unfortunately, the Fourth Amendment has been all but eviscerated by an unwarranted expansion of police powers that include strip searches, surveillance and home invasions.

    The Fifth Amendment and the Sixth Amendment work in tandem. These amendments supposedly ensure that you are innocent until proven guilty, and government authorities cannot deprive you of your life, your liberty or your property without the right to an attorney and a fair trial before a civilian judge. However, in our suspect/surveillance society, these fundamental principles have been upended.

    The Seventh Amendment guarantees citizens the right to a jury trial. Yet when the populace has no idea of what’s in the Constitution, that inevitably translates to an ignorant jury incapable of distinguishing justice and the law from their own preconceived notions and fears.

    The Eighth Amendment is supposed to protect the rights of the accused and forbid the use of cruel and unusual punishment. However, the Supreme Court’s determination that what constitutes “cruel and unusual” depends on the “evolving standards of decency that mark the progress of a maturing society” leaves us with little protection in the face of a society lacking in morals altogether.

    The Ninth Amendment provides that other rights not enumerated in the Constitution are nonetheless retained by the people. Popular sovereignty—the belief that the power to govern flows upward from the people rather than downward from the rulers—has been turned on its head by a centralized federal government that sees itself as supreme.

    As for the Tenth Amendment’s reminder that the people and the states retain every authority that is not otherwise mentioned in the Constitution, that assurance of a system of government in which power is divided among local, state and national entities has long since been rendered moot by the centralized Washington, DC, power elite—the president, Congress and the courts. Through its many agencies and regulations, the federal government has stripped states of the right to regulate countless issues that were originally governed at the local level.

    If there is any sense to be made from this recitation of freedoms lost, it is simply this: our individual freedoms have been eviscerated so that the government’s powers could be expanded.

    Yet those who gave us the Constitution and the Bill of Rights believed that the government exists at the behest of “We the People.” We have the power to make and break the government.

    Still, it’s hard to be a good citizen if you don’t know anything about your rights or how the government is supposed to operate.

    Americans are constitutionally illiterate.

    Most citizens have little, if any, knowledge about their basic rights. And our educational system does a poor job of teaching the basic freedoms guaranteed in the Constitution and the Bill of Rights.

    Thirty-five percent of Americans cannot name a single branch of the government. Only a quarter of Americans know it takes a two-thirds vote of the House and Senate to override a presidential veto. One in five Americans incorrectly thinks that a 5-4 Supreme Court decision is sent back to Congress for reconsideration. And more than half of Americans do not know which party controls the House and Senate.

    Only one out of a thousand adults could identify the five rights protected by the First Amendment. Teachers and school administrators do not fare much better. One study found that one out of every five educators was unable to name any of the freedoms in the First Amendment. In fact, while some educators want students to learn about freedom, they do not necessarily want them to exercise their freedoms in school.

    Government leaders and politicians are also ill-informed.

    So what’s the solution?

    Thomas Jefferson recognized that a citizenry educated on “their rights, interests, and duties”  is the only real assurance that freedom will survive. As Jefferson concluded in 1820: “This is the true corrective of abuses of constitutional power.”

    From the President on down, anyone taking public office should have a working knowledge of the Constitution and the Bill of Rights and should be held accountable for upholding their precepts. I’d go so far as to require students to pass a citizenship exam before graduating from grade school.

    Here’s an idea to get educated and take a stand for freedom: anyone who signs up to become a member of The Rutherford Institute gets a wallet-sized Bill of Rights card and a Know Your Rights card.

    If this constitutional illiteracy is not remedied and soon, freedom in America will be doomed.

    As I make clear in my book Battlefield America: The War on the American People, we have managed to keep the wolf at bay so far. Barely.

    Our national priorities need to be re-prioritized.

    For instance, Donald Trump wants to make America great again.

    I, for one, would prefer to make America free again.

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