May 26

Today’s News 26th May 2017

  • A New Financial System Is Being Born

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    If Bitcoin blew you away when you first discovered it, and continues to do so to this day, Spiral Dynamics can help explain why. Bitcoin was an expression in the physical world of the newly emergent leading-edge integral level consciousness. It drew lessons from history and attempted to take the best of orange and green worldviews and incorporate them into an entirely new form of money. We see the clear presence of free markets and individualism, as well as the intentional separation of the system from dominator hierarchies (bureaucratic government meddling), which had corrupted all money before it. Its greenness is evident in the fact that by design no individual or company controls the network. Global, decentralized, revolutionary technology. This is perhaps the perfect example of integral consciousness operating on our planet at this time from an economics standpoint, and why it has captured the imagination of so many, while at the same time being violently rejected by so many others.

     

    From February’s post: Why Increased Consciousness is the Only Path Forward

    Although I had heard about it much earlier, I didn’t truly start investigating Bitcoin until the summer of 2012. The more I learned the more my mind was blown away, and for a while I couldn’t think about anything else. What truly solidified its real world usefulness to me was when I discovered it had been used by Wikileaks to accept payments in the midst of a financial services blockade against the renegade publisher. This realization inspired my first Bitcoin related post in August 2012 titled, Bitcoin: A Way to Fight Back Against the Financial Terrorists? 

    In that piece, I linked to a Forbes article that detailed the revolutionary events taking place. We learned:

    Following a massive release of secret U.S. diplomatic cables in November 2010, donations to WikiLeaks were blocked by Bank of America, VISA, MasterCard, PayPal and Western Union on December 7th, 2010. Although private companies certainly have a right to select which transactions to process or not, the political environment produced less than a fair and objective decision. It was coordinated pressure exerted in a politicized climate by the U.S. government and it won’t be the last time that we see this type of pressure.

     

    Fortunately, there is way around this and other financial blockades with a global payment method immune to political pressure and monetary censorship.

     

    On its public bitcoin address, Wikileaks has taken in over $32,000 equivalent in more than 1,100 separate bitcoin donations throughout the blockade (1BTC = $10.00). But these amounts may be significantly higher, because it does not even include the individually-generated bitcoin addresses that WikiLeaks provides for donors upon request.

    I knew right then and there that Bitcoin had the potential to change the world. My passion for Bitcoin was always framed by my ten years working in the financial industry. Many of us who lived through the 2008 crisis knew the financial system was dead. We knew it was corrupt, archaic and terminal, so many of us began bracing for what might come next. We did what we thought made sense at the time, which included buying precious metals like gold and silver given their historic track record of protecting wealth in periods of paradigm-shifting financial disruption. Others took more extreme measures to protect themselves from the end of the financial system, but a small group forward thinking geeks decided to do something much better. They decided to build an alternative.

    Thus, Bitcoin was born and early adopters in the field of technology immediately began to build on top of it. As soon as I realized what was happening much of the “doom and gloom” that had enveloped my thinking began to lift. I now knew that even if the financial system crashed and burned tomorrow, the early stages of a new and far more honest financial system were already in place. The emergence of Bitcoin literally changed my life for the better as it allowed me to emerge from a cave of gloom and become optimistic about our long-term future. While I knew the path would be long and hard since the current entrenched interests wouldn’t give up without a fight, I could see a very bright light at the end of the tunnel, and the continued development in this space has been extraordinary to watch ever since.

    The global financial system as it stands completely archaic and corrupt. It enriches the wrong types of people for the wrong sort of behavior, and is entirely extractive and parasitic by design.  If there’s sector in the economy that needs a total redesign and reboot for the sake of humanity, it’s the financial system.

    Being involved in the crypto world for the past five years has been a breath of fresh air and a shot of adrenaline to my system. Traditional markets are a rigged snooze-fest by comparison, grotesque financial Potemkin villages designed to make overly indebted, predatory economies look good. What I find so fascinating about the current environment is that many of the dreams we all read about in the very early days of Bitcoin are starting to be implemented and designed, slowly but surely. For those of you who still have a difficult time conceptualizing exactly what’s happening in the space, I think the following tweet may help.

    //platform.twitter.com/widgets.js

    On that note, I want to talk about more than just Bitcoin, which I see as the reserve currency of the crypto world. Beyond Bitcoin, a lot of the buzz in the space right now revolves around a burgeoning phenomenon known as ICOs, or Initial Coin Offerings. So what are ICOs?

    Yesterday, TechCrunch published an interesting piece on the topic. Here are a few keys points:  

    Because this editor was still confused (I’m not proud), I talked yesterday with Stan Miroshnik, a UC Berkeley grad with an MBA from MIT who today runs L.A.-based Argon Group, one of the first digital finance-focused investment banks. Miroshnik nicely answered an array of questions about ICOs, including how these things get staged, how companies establish a value for their offerings, and more. If you’re still trying to get a handle of this latest investing trend, too, read on.

     

    TC: ICOs are everywhere suddenly.  When was the first ICO staged?

     

    SM:  You have to go back to around 2013, when Mastercoin, a protocol on top the bitcoin blockchain, raised $500,000. Then you had a number of other milestone token sales, such as Ethereum in 2014, then the DAO, or Decentralized Autonomous Organization, which was built on the Ethereum blockchain and that stored and transmitted Ether and Ethereum-based assets and that raised the equivalent of $150 million last year.

     

    Momentum began to build after that, as a smaller group of [these offerings] grew in size, and by last fall, some companies were raising millions of dollars in minutes. That really kind of made people stand up and wonder if this is a new funding mechanism.

    TC: How many ICOs have there been to date?

     

    SM: There were 64 last year that collectively raised $103 million, excluding the DAO. So far this year, we’ve seen 25 offerings raise a bit more than $163 million, and we’re on track to see more than $210 million raised by the end of June.

     

    TC: So how do these ICOs work, practically speaking?

     

    SM: There’s a cadence to these things. You do the prep-work and get your project to a natural technical milestone. Then you pre-announce when you’re planning to have a token sale, describing some of the terms, and telling a story of the project and its goals. You publish a white paper and disclosure and give people a chance to read it and comment. There are also usually threads that develop on Reddit, Bitcointalk, Slack, Telegram and elsewhere, where people actively debate the merits of the product. Then, on the landing page on the aforementioned date, there’s typically a tool that enables purchasers to acquire the tokens in exchange for bitcoin or ether.

     

    TC: Is there a concern that U.S. regulators will crack down on these ICOs?

     

    SM: Lawyers are relying on case law that defines what a security is. The most well-known case is the “Howey Test,” created by the Supreme Court for determining whether certain transactions qualify as investment contracts. If they do, then those transactions are considered securities and are subject to certain disclosure and registration requirements. When tokens are structured basically as the sale of a service or product, they’re designed to make sure the various prongs of the test are not triggered.

     

    TC: What types of companies are primarily using ICOs?

     

    SM: It’s still a financing mechanism that’s very organic to the blockchain community.

     

    It all started with protocols like Ethereum raising funding through this mechanism, and it has stayed close to related projects, like the distributed storage company Storj and Civic, a company that provides identify through the blockchain and is announcing its token sale this Thursday. A lot of these founders and token buyers are part of bitcoin forums and Reddit, and that’s why [certain companies] are able to raise these large sums fairly quickly; they’re reaching out to thought leaders and getting their support and generating buzz about their projects. It’s  basically the open source community, now with an open-source funding mechanism.

     

    TC: What happens when people want to sell the tokens they’ve bought?

     

    SM: Well, first, you can use them in a company’s ecosystem. With Storj, maybe you buy storage. You can also accumulate these tokens over time, as a bet that with more enterprise demand for storage capacity, the coins will become more valuable, after which you can sell your tokens to someone else who needs to purchase storage space.

    There are also a number of cryptocurrency exchanges where these tokens trade. In the case of Storj, you can sell or buy on Poloniex or Bittrex.

     

    TC: Should VCs be nervous about ICOs? You mention Civic, which is staging an ICO. Civic has also raised some venture capital previously. But plenty of other companies seem to be skipping the VC part.

     

    SM: To some degree they should, but we’ve also talked with a lot of very smart VCs who are looking at this space, including August Capital, Tim and Adam Draper, Blockchain Capital. Many are doing the work to understand how to be involved and active in the space and the fundamental value of these protocols. Union Square Ventures has said it now has a mandate from its LPs to hold these assets.

     

    For companies that raise funds through a token sale and that have had traditional angel or venture rounds previously, for example, their equity investors get to skip one or two rounds of dilution, which is great; it means their returns are hyper-levered.

    There are two points I want to emphasize from the above. First, just how early we are in the development of this area. The numbers are absolutely tiny at this point despite all the hype. Recall that in 2017, we’ve seen 25 offerings raise a bit more than $163 million. That’s an infinitesimally small number in the scheme of things, thus room for growth is massive. That being said, people considering getting involved in this space as a buyer of ICOs need to be extraordinarily careful.

    Investing in general is risky and challenging, but putting money into an ICO adds several other layers of complexity and risk. First, as noted above these things are not equity investments since they aren’t allowed to be under current regulations. Therefore, you’re not simply investing in a startup, which is always extremely risky, but you’re making a bet that the token itself is useful and will accrue in value over time. Therefore, not only do you need to be right about the success of the business or product itself, but the token also must have a real value-creating purpose to succeed in the long-run. Many people will not understand this and think they are buying into the equity of the underlying businesses, which sets up a perfect environment for fraudsters. You also need to bear in minds there’s a ton of Bitcoin liquidity that is flooding around the space given the massive run its had. Most early Bitcoin adopters and investors are very passionate and dedicated to this space. They don’t want to sell coin for dollars, but want to put it in new projects to keep the broader ecosystem growing. I think this is a fantastic thing, but it also means there’s a lot of crypto currency sloshing around trying to find a home.

    Despite the risks, I think the emergence of the burgeoning token market is a game-changing and extraordinarily empowering development. The only thing preventing the crypto-coin world from rapidly displacing the middlemen and bureaucrats of the traditional financial system are the barriers around the traditional financial world. While we’d like to think these barriers are there to protect the little people, we all know that the SEC and other such regulatory bodies largely exist to protect the rich and powerful and secure their moat.

    We saw this under Obama’s Mary Jo White, and we will surely see it under Trump’s pick Jay Clayton, who seems to have all sorts of conflicts, including a wife who works at Goldman Sachs. The SEC doesn’t protect the people, but as long as it pretends to, it can continue to function as a gatekeeper for financial oligarchs and slow down the pace of displacement of the dying financial system with the new parallel one currently being created.

    All of that is fine I suppose, and innovation in the crypto world will continue until one day we will actually see equity offerings in startups to regular people as opposed to just allocations to the wealthiest clients of brokerage firms. The innovation in this space has the potential to flatten the world of investing in a meaningful and powerful way, starting today with tokens, but ultimately in many other ways as well. It’s gonna take time, but it’ll happen.

    At this point, I just want to briefly address the common retort that “governments will never let this happen,” which I get all the time. Here’s what I had to say about it yesterday on Twitter, and I don’t really have much to say beyond this.

    To conclude, I’d like to dedicate this post to all the brilliant geeks and the dynamic entrepreneurs pushing hard every day to realize this incredible dream of a decentralized future. A future that breaks down barriers, removes middlemen and empowers humanity to take its next evolutionary leap forward. You are the ones creating this brand new world brimming with potential and optimism, and I want to thank for all you have done and continue to do.

  • Former Navy Seal To Katy Perry: 'Go To Hell… Hold One Of Your Concerts In Syria And See How It Goes'

    Katy Perry, a woman so crazy Russell Brand divorced her over text message, broke down in tears Saturday night at a concert and urged the crowd ‘not to let terrorists win’ in response to the Manchester bombing. Tuesday morning, she went on the radio to tell everyone all we need is open borders, hugs, and love in response to horrific terrorism. Basically this.

    Paul Joseph Watson can bring you fully up to speed:

      

    And today on Fox, former Navy Seal Carl Higbie who was responsible for triggering an entire CNN panel last week, had a few choice words for Ms. Perry – daring her to hold a concert in Syria if she thinks peace and love is all it’ll take to conquer ISIS:

    “We don’t have people who respect the culture of the United States of America. You have people like Katy Perry, for instance. I mean, this woman has said ‘oh we need to give them hugs, hug it out. Go to hell Katy Perry.

     

    “Hold one of your concerts in Syria and see how it goes.”

     

      

     

    What a strange, out of touch woman…

    Content originally generated at iBankCoin.com * Follow on Twitter @ZeroPointNow

  • Greg Gianforte Crushes Opponent in Congressional Run-Off, In Spite of Body Slamming Reporter

    The vapid taste of loss must get repetitive for Democrats in America. In spite of the scandals, the Russians, and John Podesta’s email box being the laughing stock of the entire world, they keep losing. The Republican candidate for Congress, Greg Gianforte, grabbed a reporter from The Guardian, Ben Jacobs, by his neck, body slammed him to the ground, and then pounded on him — Saul Rosenberging his glasses. Yet, on election night, despite the negative press, the good people from Montana voted in droves for Gianforte.

    With 84% of precincts reporting, Gianforte had 172,743 votes — or 50.4% of the vote, compared to Quist who has 150,007 votes, 43.8% of the vote, according to Edison Research.

    It’s embarrassing, really.

    Being the rugged gentlemen that he is, Rep. Gianforte apologized tonight, just before he graciously accepted his win.

    Here’s how the rural folk felt about the whole body-slamming ordeal.

    Via CNN:

    “We whole-heartedly support Greg. We love him,” said Karen Screnar, a Republican voter who had driven all the way from Helena to support Gianforte. Screnar said she and her husband have known Gianforte for the better part of a decade. After Gianforte was charged with misdemeanor assault, Screnar said she was only “more ready to support Greg.”

    “We’ve watched how the press is one-sided. Excuse me, that’s how I feel. (They’re) making him their whipping boy so to speak through this campaign,” Screaner said. “There comes a point where, stop it.”

    Her husband, Terry, chimed in that he believed Gianforte was “set up.”

    The left argues that the GOP is an out of control train-wreck, being led down wayward paths by Trump-Hannity and now Gianforte. Drama aside, even if that was true, what’s more alarming is the fact that people are so sick of establishment politics, they’d rather vote for a man who punches reporters in the face, rather than cordially declining his questions.
    Content originally published at iBankCoin.com

  • Has The Drug War Incentivized Police To Treat Citizens Like Terrorists?

    Authored by Duane Norman via Free Market Shooter blog,

    A video of a Florida Sheriff making a promo video to scare has been making the rounds recently.  Casey Research recently covered the affair, noting the following quote from Sheriff Grinnell:

    “Enjoy looking over your shoulder, constantly wondering if today’s the day we come for you. Enjoy trying to sleep tonight, wondering if tonight’s the night our SWAT team blows your front door off the hinges. We are coming for you.”

    The video (reproduced below, with commentary from Casey Research) is as surreal as the above picture implies…

    Sheriff Grinnell delivered this message last month while flanked by four combat-ready officers wearing ski masks. It looks like someone from ISIS directed it.

     

    Grinnell’s message was aimed at local drug dealers. You see, Lake County has a serious opioid problem. And like many other places in the US, it’s fighting its drug problem as if it were a war.

    …but this is hardly the first time a video like this has been produced, and it likely won’t be the last.  Last year, former Sheriff Clay Higgins, known as the “Cajun John Wayne” in Louisiana, released the below video calling out the “Gremlins” gang, and before his resignation, was known for making many similar videos:

    Some notable quotes from Sheriff Higgins:

    • You won’t walk away.  Look at you. Men like us, son, we do Dumbbell presses with weights bigger than you.
    • Young man, I’ll meet you on solid ground, anytime, anywhere. Light or heavy, it makes no difference to me.
    • You will be hunted, you will be tracked. And if you raise your weapon to a man like me, we’ll return fire with superior fire.
    • You don’t like the things I’ve told you tonight?  I’ve got one thing to say – I’m easy to find.

    This guy certainly has enough one-liners to be worthy of the “Cajun John Wayne” moniker, but it seems none of the police or community leaders behind him bothered to ask why criminals engage in such violent behavior; they are trying to profit from the obscenely high price of illegal drugs.  And when it comes to profit, the criminals are hardly alone.

    Free Market Shooter has covered the problems with Civil Asset Forfeiture in the past…

    Martin Armstrong of Armstrong Economics explains how police have every reason to seize assets, largely because these civil asset forfeitures are literally funding police departments:

     

    Between 1989 and 2010, U.S. attorneys seized an estimated $12.6 billion in asset forfeiture cases. The growth rate during that time averaged +19.4% annually. In 2010 alone, the value of assets seized grew by +52.8% from 2009 and was six times greater than the total for 1989. Then by 2014, that number had ballooned to roughly $4.5 billion for the year, making this 35% of the entire number of assets collected from 1989 to 2010 in a single year. According to the FBI, the total amount of goods stolen by criminals in 2014 burglary offenses suffered an estimated $3.9 billion in property losses. This means that the police are now taking more assets than the criminals.

    …but if you take a closer look at the forfeitures themselves, you’ll realize just how many of them are related to the war on drugs:

    “Thirty-six percent of all local police departments received money, property, or goods from a drug asset forfeiture program during 2002 (table 32). These departments employed 78% of all local police officers. At least 80% of the departments in each population category of 25,000 or more had drug asset forfeiture receipts.”

     

    “There can be few components of law enforcement programmes which actually cost nothing. The asset forfeiture provision of the federal law for crop suppression (relating mainly to cannabis in the State of Kentucky), proved to be such a case, costing the United States Government $13.7 million, but yielding a return of $53 million in 1991, or almost $4 in assets seized for every $1 invested by the Drug Enforcement Administration.”

     

    “The advent of a now common police tactic, called the “reverse sting,” illustrates the shift in priorities from crime control to funding raids. In a reverse sting, an officer attempts to sell drugs to an unsuspecting buyer. The method permits the police to seize the buyer’s cash rather than a seller’s drugs, which have no value to the agency.

     

    “During the past decade, law enforcement agencies increasingly have turned to asset seizures and drug enforcement grants to compensate for budgetary shortfalls, at the expense of other criminal justice goals. We believe the strange shape of the criminal justice system today—the law enforcement agenda that targets assets rather than crime, the 80 percent of seizures that are unaccompanied by any criminal prosecution, the plea bargains that favor drug kingpins and penalize the “mules” without assets to trade, the reverse stings that target drug buyers rather than drug sellers, the overkill in agencies involved even in minor arrests, the massive shift towards federal jurisdiction over local law enforcementis largely the unplanned by-product of this economic incentive structure.”

    So the drug war has created a massive financial incentive for police to seize property from individuals, one that many departments could require to stay afloat.  What do you think happens next?

    As Free Market Shooter has covered previously for Single Dude Travel, raids from SWAT teams have become commonplace, with police becoming better armed by the day:

    Our nation’s policing system has become profit-driven instead of crime-driven, largely due to the failure of the war on drugs, and the fact that cops have been given surplus military hardware from the armed forces at bargain basement prices. SWAT team raids have gone from a few hundred per year in the 1970s to 50,000 annually, largely because they call SWAT in when “Special Weapons And Tactics” aren’t really needed, such as when apprehending a credit card scammer or raiding an organic farm for the filmiest of reasons. When a SWAT team nearly kills a 19-month old baby with a flashbang grenade, in a raid without the suspect present, how are there no charges filed?

    And now that police are all armed to the teeth looking for property to seize, what happens next?  The practice is applied everywhere.  If you look at a report on the “most outlandish SWAT team raids” across the country, you’ll see just how common it is to have a SWAT team called in:

    • Armed agents raid animal shelter in search of baby deer—and kill it.
    • Girl’s home wrongfully raided with flashbangs despite door being open.
    • SWAT team raids DJ’s studio to enforce copyright law.
    • SWAT squad invades private poker game.
    • SWAT team raids man’s home in search of stolen koi fish.
    • Sex toys, condoms and pajamas seized in drug/prostitution SWAT team raid.
    • Peaceful monks arrested in SWAT team action.
    • Feds raid Amish dairy farm—twice—for selling unpasteurized milk.
    • Police unlawfully invade a series of barbershops without warrants.
    • Police forcibly search and detain 19 patrons in gay bar.
    • SWAT team confiscates wood used to make instruments during illegal raid.

    So, how do you stop police from treating civilians like they would treat terrorists?  The best place to start is removing the incentive structure that has been created by the war on drugs, which brings us back to Casey Research’s commentary:

    Illegalizing something does nothing but create a black market and give people a reason to induce other people to get high. I mean, people have been drinking alcohol for about the last 10,000 years. But it didn’t become a real problem until the Eighteenth Amendment and the Volstead Act passed in 1920. At that point, it financed the mafia.

     

    Laws turn simple bad habits into massive and profitable criminal enterprises.

     

    The government learned absolutely nothing from the failure of alcohol prohibition. What they’re doing with drugs makes an occasional, trivial problem into a national catastrophe…

    However, do not expect that to happen anytime soon; again, as Free Market Shooter has covered in the past, new Attorney General Jeff Sessions is adamant about expanding the war on drugs:

    And, in case you weren’t aware, this is the same Jeff Sessions who is on the record as being not only against medicinal marijuana, it is the same Jeff Sessions that has stated that marijuana is only slightly less awful than heroin:

     

         And I am astonished to hear people suggest that we can solve our heroin crisis by legalizing marijuana – so people can trade one life-wrecking dependency for another that’s only slightly less awful.

    Then again… it’s not like the prior ten attorney generals did anything but continue the war on drugs.  Remember what Casey said about “massive profitable criminal enterprises”?

  • Visualizing How The Big 5 Tech Giants Make Their Billions

    Hitting record high after record high, tech companies have displaced traditional blue chip companies like Exxon Mobil and Walmart as the most valuable companies in the world.

    Here are the latest market valuations for those same five companies:

    Together, they are worth $2.9 trillion in market capitalization – and they combined in FY2016 for revenues of $555 billion with a $94 billion bottom line.

    BRINGING HOME THE BACON?

    Despite all being at the top of the stock market food chain, Visual Capitalist's Jeff Desjardins points out that the companies are at very different stages.

    In 2016, Apple experienced its first annual revenue decline since 2001, but the company brought home a profit equal to that of all other four companies combined.

    On the other hand, Amazon is becoming a revenue machine with very little margin, while Facebook generates 5x more profit despite far smaller top line numbers.

    HOW THEY MAKE THEIR BILLIONS

    Each of these companies is pretty unique in how they generate revenue, though there is some overlap:

    • Facebook and Alphabet each make the vast majority of their revenues from advertising (97% and 88%, respectively)
    • Apple makes 63% of their revenue from the iPhone, and another 21% coming from the iPad and Mac lines
    • Amazon makes 90% from its “Product” and “Media” categories, and 9% from AWS
    • Microsoft is diverse: Office (28%), servers (22%), Xbox (11%), Windows (9%), ads (7%), Surface (5%), and other (18%)

    What does that look like?

     

    Courtesy of: Visual Capitalist

    Lastly, for fun, what if we added all these companies’ revenues together, and categorized them by source?

    Note: this isn’t perfect. As an example, Amazon’s fast-growing advertising business gets lumped into their “Other” category.

    Hardware, e-commerce, and and advertising make up 76% of all revenues.

    Meanwhile, software isn’t the cash cow it used to be, but it does help serve as a means to an end for some companies. For example, Android doesn’t generate any revenue directly, but it does allow more users to buy apps in the Play Store and to search Google via their mobile devices. Likewise, Apple bundles in operating systems with each hardware purchase.

  • Paul Craig Roberts On JFK At 100

    Authored by Paul Craig Roberts,

    This Memorial Day, Monday, May 29, 2017, is the 100th birthday of John Fitzgerald Kennedy, the 35th President of the United States.

    JFK was assassinated on November 22, 1963, as he approached the end of his third year in office. Researchers who spent years studying the evidence have concluded that President Kennedy was assassinated by a conspiracy between the CIA, Joint Chiefs of Staff, and Secret Service. (See, for example, JFK and the Unspeakable by James W. Douglass)

    Kennedy entered office as a cold warrior, but he learned from his interaction with the CIA and Joint Chiefs that the military/security complex had an agenda that was self-interested and a danger to humanity. He began working to defuse tensions with the Soviet Union.

    His rejections of plans to invade Cuba, of the Northwoods project, of a preemptive nuclear attack on the Soviet Union, and his intention to withdraw from Vietnam after his reelection, together with some of his speeches signaling a new approach to foreign policy in the nuclear age (see for example), convinced the military/security complex that he was a threat to their interests.

    Cold War conservatives regarded him as naive about the Soviet Threat and a liability to US national security. These were the reasons for his assassination. These views were set in stone when Kennedy announced on June 10, 1963, negotiations with the Soviets toward a nuclear test ban treaty and a halt to US atmospheric nuclear tests.

    The Oswald coverup story never made any sense and was contradicted by all evidence including tourist films of the assassination. President Johnson had ro cover up the assassination, not because he was part of it or because he willfully wanted to deceive the American people, but because to give Americans the true story would have shaken their confidence in their government at a critical time in US-Soviet relations. To make the coverup succeed, Johnson needed the credibility of the Chief Justice of the US Supreme Court, Earl Warren, to chair the commission that covered up the assassination. Warren understood the devastating impact the true story would have on the public and their confidence in the military and national security leadership and on America’s allies.

    As I previously reported, Lance deHaven-Smith in his book, Conspiracy Theory in America, shows that the CIA introduced “conspiracy theory” into the political lexicon as a technique to discredit skepticism of the Warren Commission’s coverup report. He provides the CIA document that describes how the agency used its media friends to control the explanation.

    The term “conspiracy theory” has been used ever since to validate false explanations by discrediting true explanations.

    President Kennedy was also determined to require the Israel Lobby to register as a foreign agent and to block Israel’s acquisition of nuclear weapons. His assassination removed the constraints on Israel’s illegal activities.

    Memorial Day is when Americans honor those in the armed services who died serving the country. JFK fell while serving the causes of peace and nuclear disarmament. In a 1961 address to the United Nations, President Kennedy said:

    “Today, every inhabitant of this planet must contemplate the day when this planet may no longer be habitable. Every man, woman and child lives under a nuclear sword of Damocles, hanging by the slenderest of threads, capable of being cut at any moment by accident or miscalculation or by madness. The weapons of war must be abolished before they abolish us. It is therefore our intention to challenge the Soviet Union, not to an arms race, but to a peace race – to advance together step by step, stage by stage, until general and complete disarmament has been achieved.”

    Kennedy’s address was well received at home and abroad and received a favorable and supportive response from Soviet leader Nikita Khrushchev, but it caused consternation among the warhawks in the Joint Chiefs of Staff. The US led in terms of the number of nuclear warheads and delivery systems, and this lead was the basis for US military plans for a surprise nuclear attack on the Soviet Union. Also, Many believed that nuclear disarmament would remove the obstacle to the Soviet Army overrunning Western Europe. Warhawks considered this a greater threat than nuclear armageddon. Many in high military circles regarded President Kennedy as weakening the US viv-a-vis the Soviet Union.

    The assassination of President Kennedy was an enormous cost to the world. Kennedy and Khrushchev would have followed up their collaboration in defusing the Cuban Missile Crisis by ending the Cold War long before the military/security complex achieved its iron grip on the US government. Israel would have been denied nuclear weapons, and the designation of the Israel Lobby as a foreign agent would have prevented Israel’s strong grip on the US government. In his second term, JFK would have broken the CIA into a thousand pieces, an intention he expressed to his brother, Robert, and the Deep State would have been terminated before it became more powerful than the President.

    But the military/security complex struck first, and pulled off a coup that voided all these promises and terminated American democracy.

    *  *  *

    Finally, in one of the most iconic political speeches of the 20th century, at his 1961 inauguration address, President Kennedy told his fellow Americans to "ask not what your country can do for you, ask what you can do for your country". To mark the 100 year anniversary of his birth on Monday, Statista's Martin Armstrong has taken a look at what Kennedy's country did for him after his untimely death.

    Infographic: What JFK's Country Did For Him | Statista

    You will find more statistics at Statista

  • Pennsylvania Coroner Says Dying Addicts Keep Morgue Full "Most Nights"

    The coroner’s office in Montgomery County, Pennsylvania is literally running out of room for all the bodies that are piling up because of America’s worsening synthetic opioid epidemic, according to Triblive.com.

    As the story notes, heroin isn’t responsible for these deaths; rather, Synthetic opioids like fentanyl, carfentanil and their many analogues are the chief culprit.

    As Triblive reports:

     

    “Lab-created, designer opioids have far outpaced heroin as a killer of addicts, and they've kept the coroner's office full on most nights.

     

    "If this pace continues, I'm not really sure what we're going to do," said Montgomery County, Ohio, coroner Dr. Kent Harshbarger. "We had 13 (bodies) yesterday, and 12 of them were overdoses."

     

    The county’s coroner had to expand his cooler last month because its 36-body capacity wasn’t enough. It now has room for 42 bodies, and the country still occasionally runs out of space.

    “It’s full every night.”

    Harshbarger even ran out of space one day earlier this year, again because of overdoses, and was forced to send some bodies to a local funeral home for storage. He also occasionally rents refrigerated trailers that can be brought in when deaths spike.

    In Allegheny County, health officials, instances of fentanyl-related overdoses surpassed those of heroin for the first time in 2016. Six hundred people overdosed and died in the county last year – most from opioids, said Dr. Karen Hacker, director of the Allegheny County Health Department.

    Having surpassed gun homicides for the first time in 2015, the epidemic of heroin and opioid related deaths in the US continues to grow, amid the dismal failure of the 'war on drugs.’ Lawmakers, who have only just begun to wake up to the crisis, have requested more data about the synthetic opioid fentanyl, including how it is trafficked and how many people it has killed.

    The ramifications of the crisis stretch far beyond hospitals and morgues: Ohio saw a 13% increase in children in foster care last year, which officials suspect is linked to the growing number of overdose deaths.
     

  • ESPN And The Bursting Of The Sports Bubble

    Authored by William Anderson via The Mises Institute,

    When the cable TV sports giant ESPN announced 100 layoffs recently, including letting go a number of high-profile broadcasters, a lot of people took notice, and well they should: things no longer are business as usual in sports broadcasting, and we are not even at the beginning of the end, and maybe not even the end of the beginning.

    Like the slow crashing of the retail sector as online purchase firms like Amazon begin their domination, we are seeing a sea change in sports broadcasting and that is going to mean big changes are down the road not only for ESPN, but for all of the sports entities that depend upon the huge payouts that ESPN provides. To put it mildly, a lot of people are about to see their lives change drastically as consumer choices drive sports broadcasting in a new direction.

    Enough with the superlatives. What is happening with ESPN, and why is it important? As Clay Travis of the sports website Outkick the Coverage has been writing for more than a year, the main ESPN business plan, the one that brings in the most revenues to the firm, is doomed to near-extinction, and there is nothing ESPN can do about it. Writes Travis:

    In the past five years ESPN has lost 11,346,000 subscribers according to Nielsen data.

     

    If you combine that with ESPN2 and ESPNU subscriber losses this means that ESPN has lost over a billion dollars in cable and satellite revenue just in the past five years, an average of $200 million each year. That total of a billion dollars hits ESPN in the pocketbook not just on a yearly basis, but for every year going forward.

     

    It's gone forever.

    Since it began to grow in popularity in the late 1970s, cable (and later, satellite) television has offered its customers coverage with “bundles,” that is different payments allow cable subscribers to expand their viewership as payments increase. For example, a “basic” cable subscription would allow the customers to view, say, 15 channels including the ABC-CBS-NBC-PBS lineup plus other channels such as CNN or Fox. A higher-tier subscription would add other channels, including ESPN and its associated channels and others such as The Food Channel or assorted movie channels.

    One problem with bundling, of course, is that subscribers will pay for channels that they rarely or do not watch. For example, I have a basic subscription with Direct TV, but maybe watch 10 channels at most, even though dozens are available. (I don’t include ESPN or any of the other sports channels in my monthly package.)

    As technology has improved in telecommunications, the ability of providers to further segment packages has meant that cable and satellite subscribers are able to eliminate the channels they don’t want to watch, and that means that many are unhooking from ESPN. Continues Travis:

    ESPN is losing 10,000 subscribers every day so far in 2017. In the past six years they have lost 13 million subscribers and that subscriber loss is escalating each year. That's billions of dollars in lost revenue.

     

    Every year for the next five years ESPN is spending more and bringing in less. You don't have to be Warren Buffett to see that's a business problem. 

    He goes on to the heart of the matter:

    ESPN is spending over eight billion dollars on sporting rights this year and by 2021 I believe they will be losing money regardless of how many people they fire. ESPN can't fire employees into profitability. It's just not possible. These firings are going to become a yearly thing and they still aren't going to prevent the business from dying. 

    True, ESPN, as well as all commercial broadcasters, receive advertising revenue, but advertising alone, along with subscriptions from people who choose to purchase ESPN in their cable/satellite packages, will not be enough for the network to meet its obligations to the various organizations it pays for the rights to broadcast their events. From the National Football League (NFL), to the National Hockey League (NHL), to the National Basketball Association (NBA) to the National Collegiate Athletic Association (NCAA), ESPN has paid billions of dollars, money that is funneled into high athlete salaries, not to mention salaries of coaches, university athletic directors, and, indirectly into the building and maintaining of magnificent sports facilities.

    The revenues lost to ESPN are lost forever, and even given the rise of smart phones and Internet streaming, the current state of affairs is unsustainable and the sports landscape is going to change, and the changes will be extensive. It is here that Austrian economics gives us insight into how at least some of the changes will proceed.

    Carl Menger, who we know as the “founder” of the Austrian school of economics, in his path-breaking book Principles of Economics in 1871 demonstrated conclusively that the value of the factors of production was based not on costs derived from other costs of production, but rather the value of the factors was imputed via the value consumers placed upon the final goods. This view contradicted the standard British classical view that the value of consumption goods was derived from the value of the factors of production, and it placed Menger in the Pantheon of the early Marginalists.

    In laying out his theory, Menger used tobacco and the factors used to produce it. If people suddenly stopped using tobacco, he reasoned, then the value of the factors would change quickly relative to their ability to be transferred to other uses. The more specialized the factor, the greater the change in its value. For example, the land on which tobacco is grown would then be used for other purposes, such as growing corn or wheat, or even pasture for cows or sheep. Highly-specialized tools used only for growing or harvesting tobacco, however, would see a steep drop in value and maybe would have to be abandoned altogether.

    What does this have to do with the demise of ESPN? As noted earlier, the network pays billions of dollars for rights to broadcast sports events, and it is unlikely that as ESPN loses the revenues that permit it to pay large sums, other networks will be able to take up that slack. That means the organizations that now receive this money are looking at “haircuts” down the road, which includes the NCAA and collegiate athletic teams.

    The ESPN funding allows for the network to broadcast a number of collegiate sports events that ordinarily would not rate enough of an audience, and its large payouts also allow for coaches to receive record-high salaries that would not be possible if these programs depended just on ticket sales and other donations. And while it is tempting to say that “ESPN pays for this,” in reality, it is the consumer of cable/satellite television that ultimately decides the size of the ESPN payouts, and consumers are stating their preferences with their checkbooks, and there is nothing ESPN can do about it.

    Without cable/satellite subscribers being willing to pay extra for the sports channels, and without the viewership that draws advertisers, ESPN revenues will fall, and that means that the factors that make up the “product” that appears on ESPN broadcasts also are going to lose value, as long as other networks don’t take up the slack (and it is doubtful they will). Thus, one is looking at a long, steady decline and the world of televised sports is going to have to adjust to the new reality.

    Unfortunately, as Travis has pointed out many times, ESPN during this ratings slide has taken a hard turn toward the political left, which has further alienated a lot of conservative viewers. Writes Travis:

    As ESPN has lost 10,000 cable and satellite subscribers every day in 2017, seen ratings collapse for all original programming, and recently embarked on the firing of 100 employees as part of a desperate cost cutting move to save its business. The network’s sports media defenders have desperately argued that the network’s embrace of far left wing politics has not had any impact on its collapsing viewership. That’s despite the fact that there have been two different studies that have demonstrated Republican voters have abandoned the network’s original programming in the past year.

    In that regard, one can argue that ESPN has done what numerous (and especially elite) colleges and universities have done the past several years: create a hostile atmosphere for white male students all the while wanting them to be paid customers. One cannot both seek to offend and attack the same people one wishes to purchase their services without courting disaster, yet higher education and ESPN are doing just that.

    To a certain extent, one can argue that both higher education and ESPN have benefited from “bubble” economies, and as consumer choice becomes directed elsewhere, the bubbles burst. As Carl Menger demonstrated, the bursting of the bubbles will mean that some factor owners will have to receive less pay in order to remain employed, while other factors will have to be transferred to other uses altogether or simply become unemployed. All soothing rhetoric aside, the world of sports broadcasting is going to see major changes in the next decade as consumers have their say.

  • FBI Refuses To Hand Over "Comey Memos" To Congress

    House Oversight Committee Chairman Jason Chaffetz said today that the FBI had decided to withhold documents, including memos, notes, summaries, and recordings, requested by his committee in regards to the ongoing Russia probe. This was revealed in a letter sent by Chaffetz to the FBI responding to the agency’s decision to withhold documents requested by the Committee on May 16, 2017.

    The FBI’s denial to cooperate is presented below:

    According to a statement by the Oversight Committee, “Chaffetz requested memos, notes, summaries, and recordings to assist in the Committee’s investigation of the FBI’s independence, and which are outside the scope of the Special Counsel’s investigation.”

    The documents are due June 8, 2017, but that may not happen as it appears the FBI is suddenly unwilling to cooperate.  

    As Chaffetz elaborates, after a New York Times report that former Federal Bureau of  Investigation Director James Corney memorialized the content of phone calls and meetings with the President in a series of memoranda, he requested those memoranda and any related notes, summaries, and recordings. The FBI is withholding those documents, citing to the appointment of Robert Mueller as Special Prosecutor. According to a letter from your staff: “In light of this development and other considerations [the Bureau] is undertaking appropriate consultation to ensure all relevant interest implicated by your request are properly evaluated.

    The letter states:

    “The Committee has its own, Constitutionally-based prerogative to conduct investigations. But the Committee in no way wants to impede or interfere with the Special Counsel’s ability to conduct his investigation.  In fact, the Committee’s investigation will complement the work of the Special Counsel. Whereas the Special Counsel is conducting a criminal or counterintelligence investigation that will occur largely behind closed doors, the Committee’s work will shed light on matters of high public interest, regardless of whether there is evidence of criminal conduct.

     

    “The focus of the Committee’s investigation is the independence of the FBI, including conversations between the President and Comey and the process by which Comey was removed from his role as director.  The records being withheld are central to those questions, even more so in light of Comey’s decision not to testify before the Committee at this time.”

     

    “I am seeking to better understand Comey’s communications with the White House and Attorney General in such a way that does not implicate the Special Counsel’s work.”

    As Chaffetz concludes, “Congress and the American public have a right and a duty to examine this issue independently of the Special Counsel’s investigation. I trust and hope you understand this and make the right decision-to produce these documents to the Committee immediately and on a voluntary basis.

    The American public is certainly looking forward to the FBI’s release of the full content of the Comey’s memos, not only those relating to his meetings with Trump, but just as importantly, with Loretta Lynch, as well as Barack Obama and/or Hillary Clinton.

    Full text of Chairman Chaffetz letter can be viewed here.
    Full text of FBI letter can be viewed here.

Digest powered by RSS Digest

%d bloggers like this: