Today’s News 23rd February 2019

  • "Humanitarian Intervention" And The New World Order, Part 3

    Authored by Vladislav Sotirovic via Oriental Review,

    Read Part 1 here…

    Read Part 2 here…

    NATO’s Aggression Against Serbia and Montenegro in 1999

    The NATO launched a military intervention against the Federal Republic of Yugoslavia (Serbia and Montenegro) on March 24th, 1999 in the name of protection of human rights of Kosovo Albanians. In other words, the 78 days of barbaric air-strikes were formally justified by “humanitarian intervention” which was mainly based on the false flags and fake news (like the Rachak case) by Western corporate mass media or brutal lies from the ground (like by William Walker – a Head of the Kosovo Verification Mission).

    In essence, regional organizations like the NATO, according to the UN Charter, do not have the right to interfere in internal affairs of any country, not even in internal affairs of their own member states. This superior international document and instrument of global security explicitly demand the approval of the UNSC for the undertaking of any armed action by any regional organization. The NATO never asked and never became authorized to carry out military intervention against Serbia and Montenegro in 1999 and, therefore, according to modern Public International Law, this “humanitarian” intervention under arms was a pure act of brutal aggression against a sovereign country and as such a crime against peace. Subsequently, human rights served in this case just as a justification for the realization of certain geopolitical aims in the Balkans. It became of crystal visibility in February 2008 when Kosovo Albanians proclaimed an independent Republic of Kosovo which became recognized by all US’ satellites around the world. In 1999 NATO did not bomb Serbia and Montenegro for the sake of Kosovo independence but only to protect “human rights” (of Albanians). However, the same NATO nothing did to continue the protection of human rights (of Kosovo Serbs and other non-Albanians) after the war when the province became put under complete protectorate and control by the NATO who nothing did to prevent comprehensive ethnic cleansing of the province committed by Albanian extremists (former members of the KLA).

    Although, as it is presented above, every armed intervention is strictly prohibited by both Public International Law and the UN Charter, the NATO, established in 1949 on the foundation of Article 51 of the UN Charter which is dealing with the right to collective and individual self-defense, attacked the FYR on March 24th, 1999 with continual barbaric air-strikes for the next 77 days. The term “air-strikes”, the NATO was regularly used at its own press conferences during the aggression on Serbia and Montenegro like the term “collateral damage” for the mass destruction and civilian casualties resulted by the NATO bombing. In their official statements, NATO’s officials declaratively claimed that the focal reason for those (illegal) air-strikes was a set of humanitarian issues among them the most important have been three:

    1) protection of individual human rights,

    2) violation of Albanian rights in Kosovo as a national minority, and

    3) prevention of the potential policy of genocide and ethnic cleansing against ethnic Albanians by Yugoslavia’s security forces.

    Nevertheless, the aggression was accompanied by dirty and powerful media propaganda which was, of course, directly supported by a number of politically “correct” legal and human rights experts for the purpose to wash the brains of the Western audience. Most of them justified the aggression with the right of Kosovo Albanians to self-determination, although such right is not supported by any valid international instrument if the right to self-determination means the destruction of territorial integrity of the country. However, the same experts did not recognize the same right to self-determination to Croatia’s and Bosnia’s Serbs during the break up of ex-Yugoslavia.

    Former Yugoslav President Slobodan Milosevic, center, with court security guards at left and right, appears before the U.N. war crimes tribunal in The Hague, Tuesday July 3, 2001. Milosevic walked into the U.N. tribunal courtroom, Tuesday, without lawyers to represent him against charges of war crimes against ethnic Albanians in Kosovo in 1999. Milosevic died in his prison cell in the Hague on March 11, 2006 allegedely of a heat attack jist a few months begore the verdict to be annouced.

    To keep in our mind, according to Public International Law and the UN Charter, the aggression also includes bombing by the armed forces of one country against the territory of another country or use of any arms and armed forces of one country against the territory of another as, for instance, NATO used Kosovo Albanian KLA as ground forces during the Kosovo War. But the crucial fact in relation to the 1998−1999 Kosovo War was that since there was no real humanitarian catastrophe before the NATO aggression starred on March 24th, 1999 against the FRY, it had to be created what exactly NATO did during the air-strike campaign of 78 days in order to justify its occupation of the province after the war followed by Kosovo’s secession from Serbia in 2008.

    Violation Of Human Rights In Kosovo

    No one claims that human rights of all citizens including and ethnic Albanians in Kosovo-Metochia have not been violated to a certain extent before NATO’s military campaign in 1999. This fact was approved in several resolutions by the UNSC before the NATO aggression but what is systematically hidden as a fact is that original flagrant violation of human rights in the province came from the side of Albanian KLA as this terrorist organization launched a widespread policy of attacking, kidnapping and killing of the Serbs in order to provoke Serbia’s security forces who reacted as they did it by violation of human rights of those Albanians who participated in the actions of and/or supported the KLA’s activities. Here we have to keep in mind that a majority of Kosovo’s Albanians did not support the methods of combat by the KLA including and Dr. Ibrahim Rugova – a political leader of Kosovo’s Albanians. In order to calm down a political situation in the province, the Yugoslav Government concluded with different international organizations, like the OSCE or the NATO, several agreements allowing the OSCE monitoring mission in Kosovo-Metochia. The Yugoslav Government as well as agreed to restrain the activities by its security forces if the opposite side (the KLA) would do the same. That the Albanian side before NATO’s aggression was committing war crimes is clear from the invitation to both the Yugoslav and Kosovo’s Albanian sides by the international community to cooperate with the UN special Tribunal (est. 1993) for the crimes committed on the territory of ex-Yugoslavia (including Kosovo-Metochia too). The fact was that regarding this invitation to cooperate with the Tribunal’s prosecutor in the Hague, the leaders of the “Albanian national community” were also invited but not only the Yugoslav side to participate in the investigation for all offenses within the jurisdiction of the Tribunal. The Albanian side was, in other words, invited to participate in the investigation of personal involvement of the KLA members in the crimes committed against other ethnic groups in Kosovo-Metochia, with the final political aim to secede the province from the FRY.

    Nevertheless, in no one resolution on Kosovo before March 24th, 1999, it was not mentioned any “threat to peace” in the province nor did they order the UNSC to form international armed forces with the right to re-establish the peace and order in Kosovo, that was to undertake certain armed actions against Serbia and Montenegro. In 1998, the FRY as a sovereign state was combating separatist Albanian movement in Kosovo-Metochia, in some cases with inordinate use of force, but, nevertheless, there was no real humanitarian catastrophe at that time. The recent historical experience of violation of human rights according to contemporary definition, in the province suggests that the critical situation was escalating with the creation of the KLA in 1995 which took comprehensive terrorist actions for the sake to bring about the secession of Kosovo from Serbia. The Yugoslav security forces came into serious conflict with different groups of the KLA, and the judiciary of the FRY accompanied by relevant experts and scholars justifiably qualified the armed actions of Kosovo’s separatists as classic terrorism and criminal acts against a sovereign state.[iv]

    Former leader of KLA Ramush Haradinaj arrested on 5 January 2017 on a Serbian arrest warrant by French border police upon his arrival at EuroAirport Basel Mulhouse Freiburg on a flight from Pristina. Serbian authorities urged France to extradite Haradinaj, citing that he personally took part in the torture, murder, and rape of civilians. On 27 April 2017, a French court turned down a Serbian request to extradite Ramush Haradinaj and released him. Since September 9, 2017 Haradinaj is the Prime Minister of self-proclamed Kosovo.

    In essence, there were prior to NATO’s aggression on the FRY the problems of protection of human rights in Kosovo-Metochia, but certainly no to such extent as it was exaggerated by the Western mass media and policymakers at least no bigger than in many other corners of the world like in Colombia or Turkey’s eastern part populated by ethnic Kurds. Surely, the situation in regard to human rights in Turkey since 1994 onward is much more serious than it was in Kosovo-Metochia in 1998 as the Kurdish human and minority rights are drastically violated like in 1994 when a large number of the Kurdish villages were destroyed by the Turkish police and regular army’s forces and when almost one million of ethnic Kurds fled Turkey to neighboring states but the US administration simply did nothing to protect the Kurdish human rights. Even no initiative was launched for the UN to undertake a legitimate international action in order to prevent Turkey’s authorities to stop with the production of a humanitarian catastrophe.

    Producing Humanitarian Catastrophe But Characterized As No Aggression

    The focal result of NATO’s bombing of Serbia and Montenegro was a huge number of refugees of all nationalities from Kosovo-Metochia that became, in fact, a real humanitarian catastrophe. However, during such exodus of people, NATO’s military aggression under the umbrella of the “armed humanitarian intervention” became even strengthened in spite of all prohibitions which have been existing in Public International Law. However, during and after the bombardment of the FRY, the UN resolutions, like the UNSC Resolution of June 10th, 1999, simply did not mention the bombardment at all for a very reason: if mentioned it would have to be officially qualified as “aggression” what means a violation of Public International Law and the UN Charter. In this case, however, due to the established voting system in the UNSC (threat of using Russian and Chinese veto rights), no resolution could be adopted. The Resolution of June 10th, 1999, in fact, is speaking only about deployment of international security forces including and those of the NATO in the province after the war for the sake to “…establish safe environment for all people in Kosovo, as well as to facilitate safe return of all displaced people and refugees to their homes”. In other words, nowhere in the whole text of the resolution is mentioned the bombardment of the FRY and, therefore, a pure act of aggression against a sovereign state. That was the same with another previous resolution adopted during the aggression (Resolution 1239 on May 14th, 1999) which does not say any single word about NATO’s bombardment but instead it only says that international community expresses serious concern in respect to the humanitarian catastrophe in and around Kosovo as a result of continuing crisis but who produced this crisis is absolutely unclear from the text of the resolution. The same text confirms the rights of all refugees and displaced persons to return to their homes in a safe and dignified manner but what was a real background of the crisis is not clear. According to the UN resolutions on Kosovo, the NATO barbaric bombardment and a classic act of aggression on a sovereign state, in fact, believe or not, never happened!

    We have to mention that there were several attempts by Russia and China in the UNSC to adopt an appropriate resolution in which would be recognized that NATO’s air-strikes in 1999 really happened on the ground and subsequently they had to be characterized as “aggression”. However, such resolution’s proposals failed as not being adopted for the only reason – used veto rights by the USA, the UK, and France (the Western obstruction).

    Arguments Against Humanitarian Intervention

    There are several focal objections by the scholars, policy-makers, and lawyers to humanitarian intervention advocated at various times. Here, we will address the most important arguments against humanitarian intervention taking primarily the case of NATO’s bombing of the FRY in 1999:

    1. No real basis for humanitarian intervention in Public International Law. The common good is best preserved by maintaining a ban on any use of force not authorized by the UNSC. Interveners have typically either claimed to be acting in self-defense according to the “implied authorization” of the UNSC resolutions and the UN Charter or have refrained from making any reasonable legal argument based on Public International Law at all.

    2. States do not intervene for primarily humanitarian reasons. States always have mixed real reasons for humanitarian and other interventions and are very rarely prepared to sacrifice their own soldiers overseas. It means that humanitarian intervention is guided by calculations of national interest but not by what is best for the victims in whose name the intervention is formally carried out.

    3. States are not allowed to risk the lives of their own soldiers in order to save strangers. Political leaders do not possess any moral right to shed the blood of their own citizens on behalf of suffering foreigners. Citizens are having the exclusive responsibility of their own state, and their state is entirely their own business and, therefore, if a civil authority has broken down this is the responsibility only of the citizens and political leaders of that state but not of the foreign powers.

    4. The issue of abuse. In the absence of a not politically colored mechanism for deciding when a real humanitarian intervention is permissible, states have a possibility to espouse humanitarian motives just as a formal pretext to morally cover the pursuit of national self-interest as, for instance, A. Hitler did with the Sudetenland.

    5. Selectivity of response. States all the time apply principles of humanitarian intervention selectively following their own national interest but not real protection of human rights. In other words, a state’s behavior is always governed by what the Government decides to be in their interest and, therefore, states are selective about when they choose to intervene. As an example, the selectivity of response is the argument that NATO’s “humanitarian” intervention in Kosovo in 1999 could not be driven by real humanitarian concerns as it has done nothing to address, for instance, the very much larger humanitarian catastrophe in Darfur, a province in West Sudan (Darfur genocide).

    6. A problem of moral principles. There is no generally reached consensus on a set of moral principles about humanitarian intervention which should not be permitted in the face of disagreement about what constitutes extreme cases of the violation of human rights.

    7. Practically, humanitarian intervention does not work. Humanitarian intervention is not workable as the outsiders cannot impose human rights especially by those who have the same problem in their homes. Democracy can be established only by a domestic struggle for liberty but not from the outside. It means that human rights cannot take root if they are imposed by outsiders. The argument is that the oppressed people should by themselves overthrow non-democratic authority.

    Conclusion

    The norms of Public International Law and doctrine of collective security after 1945 presented above, unfortunately, did not stop different forms of armed interventions around the globe but especially by the US – a country which became a global champion of aggression. Armed “humanitarian” interventions are still going to be a reality of the present and future international relations under the umbrella of the R2P.

    After the Cold War, the most brutal, illegal and shameful “humanitarian intervention” was in the southern Serbian province of Kosovo-Metochia in 1999 that was, in fact, NATO’s aggression against the FRY in a form of an air campaign. However, beside this example of “humanitarian intervention” as a violation of Public International Law, there were many similar interventions before like when in 1983 the USA invaded a sovereign state of Granada with some 8.000 soldiers under justification to protect the lives of about 1.000 American citizens living there under the belief that they were threatened due to the unrest in this country. However, the real reason of such “humanitarian intervention” has been of purely political and geostrategic nature rather than humanitarian one as US’ troops occupied the whole island (state) of Granada including and those parts in which US’ citizens did not live. The focal proof of abuse of Public International Law was a fact that the American troops de facto occupied Granada as they stayed on the island even after all the American citizens had left and changed the Government of it.

    From the presentation above, it is quite clear that NATO’s military action against Serbia and Montenegro in 1999 cannot be characterized as a just war of “humanitarian intervention” even according to the criteria by the 17th-century Dutch philosopher Hugo Grotius not to speak about the modern set of criteria incorporated into the UN Charter and Public International Law. Therefore, the action was rather a classic example of brutal military aggression against a sovereign state covered by politicized Western mass media. It is true that “media are not only spectator in modern conflicts, but must be considered active participants forming public opinion and also creating and directing threat perception” that was exactly the case of the 1998−1999 Kosovo War when the Western corporate mass media succeeded to convince public opinion that NATO’s “humanitarian intervention” was a just war.

  • These Are The Richest Towns In America

    With its proximity to Stanford University, and the corporate campuses of Google and Facebook, the leafy Bay Area suburb of Atherton, Calif. has placed first in Bloomberg‘s Richest Places annual index for the third year in a row, with an average household income above $450,000.

    Mansion

    Atherton Mayor Bill Widmer said the tree-lined streets and lot sizes of at least an acre offer residents enough privacy while still being close to the bustle of Silicon Valley. “We value a semi-rural environment,” said Widmer, who moved to Atherton in 1996. “There are few sidewalks and many places don’t have streetlights.”

    Atherton

    Scarsdale, a tony Westchester County suburb north of Manhattan, moved up to the No. 2 spot on this year’s list as its residents enjoyed a $30,000 increase in annual household income.

    “We moved here, as many did, because of the outstanding school system,” said Scarsdale Mayor Dan Hochvert, a 40-year resident. “That’s one of the primary drivers.”

    According to the survey, more than half of the top 100 richest places in America were either in the New York City area or California. A handful in the Midwest and Southwest also made the list.

    Map

     

    In the US, wealth is largely concentrated in six counties: Westchester in New York, Bergen in New Jersey and Fairfield in Connecticut, Cook County (better known as Chicago), Los Angeles County, and Montgomery County, Maryland, which borders Washington, D.C.

    Map

    See the full list below:

    BBG

  • Saul Alinsky's 13 Rules For 'Have-Nots' To Gain Power

    Submitted by Bilal Hafeez of Nomura

    Obama used his ideas on his path to the US Presidency, Hilary Clinton wrote her thesis on his work, and grass-roots movements, from both the left and now the right, treat his work as the template for action. Yet many people have never heard of the American Saul Alinsky. He is thought be the founder of modern community organising and wrote one of the most influential books on setting up grass-roots movements: the 1971 book “Rules For Radicals”. The basic philosophy was to give power to the have-nots. In his introduction he wrote:

    “WHAT FOLLOWS IS for those who want to change the world from what it is to what they believe it should be. The Prince was written by Machiavelli for the Haves on how to hold power. Rules for Radicals is written for the Have-Nots on how to take it away”

    The book goes on to give lessons on how to take power away from the “haves”. Naturally, it was heavily used by the counter-cultural movement in the 1970s, but has increasingly be used in mainstream political campaigns. Perhaps, the most enduring part of the book is Alinsky’s 13 rules for radicals. Here they are with some of his additional notes:

    1. “Power is not only what you have, but what the enemy thinks you have.” Power is derived from 2 main sources – money and people. “Have-Nots” must build power from flesh and blood.
    2.  “Never go outside the expertise of your people.” the result is confusion, fear, and retreat.
    1. “Whenever possible, go outside the expertise of the enemy.” Here you want to cause confusion, fear, and retreat.
    1. “Make the enemy live up to its own book of rules.” You can kill them with this, for they can no more obey their own rules than the Christian church can live up to Christianity.
    1. “Ridicule is man’s most potent weapon.” It is almost impossible to counterattack ridicule. Also it infuriates the opposition, who then react to your advantage.
    1. “A good tactic is one your people enjoy.” If your people are not having a ball doing it, there is something very wrong with the tactic.
    1. “A tactic that drags on too long becomes a drag.” Man can sustain militant interest in any issue for only a limited time, after which it becomes a ritualistic commitment, like going to church on Sunday mornings. New issues and crises are always developing, and one’s reaction becomes, “Well, my heart bleeds for those people and I’m all for the boycott, but after all there are other important things in life”—and there it goes.
    1.  “Keep the pressure on. Never let up.” [use] different tactics and actions, and utilize all events of the period for your purpose.
    1. The threat is usually more terrifying than the thing itself.
    1. “The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.” It is this unceasing pressure that results in the reactions from the opposition that are essential for the success of the campaign. It should be remembered not only that the action is in the reaction but that action is itself the consequence of reaction and of reaction to the reaction, ad infinitum. The pressure produces the reaction, and constant pressure sustains action.
    1.  “If you push a negative hard and deep enough it will break through into its counterside [positive] this is based on the principle that every positive has its negative. We have already seen the conversion of the negative into the positive, in Mahatma Gandhi’s development of the tactic of passive resistance.
    1.  “The price of a successful attack is a constructive alternative.” You cannot risk being trapped by the enemy in his sudden agreement with your demand and saying “You’re right—we don’t know what to do about this issue. Now you tell us.”
    1. “Pick the target, freeze it, personalize it, and polarize it.” the opposition must be singled out as the target and “frozen.”…in a complex, interrelated, urban society, it becomes increasingly difficult to single out who is to blame for any particular evil. There is a constant…passing of the buck. …Obviously there is no point to tactics unless one has a target upon which to center the attacks… If an organization permits responsibility to be diffused and distributed in a number of areas, attack becomes impossible.

    So the next time you see a political movement or campaign in action, compare their tactics to the list above and you’ll know how you are being manipulated!

  • Dianne Feinstein Snaps At Group Of Environmental Activist Children

    A highly-edited video making the rounds shows Sen. Dianne Feinstein (D-CA) lecturing a group of climate activist children on Friday, after she was asked to support the Green New Deal championed by the DNC’s “new hotness,” Rep. Alexandria Ocasio-Cortez (AOC). 

    Armed with an impassioned letter and memorized talking points, the children belonging to three Bay Area environmentalist groups (Sunrise Bay Area, Youth Versus the Apocalypse, and Earth Guardians San Francisco) implored Feinstein to support the Green New Deal. 

    The Senator responded: “Ok, I’ll tell you what. We have our own Green New Deal.” 

    The video skips forward to the children warning Feinstein that “some scientists have said that we have 12 years to turn this around” – referring to a conclusion by a recent UN-backed report that man-made climate change will become irreversible if carbon emissions are not significantly reduced over the next 12 years (which Ocasio-Cortez turned into “the world is gonna end in 12 years if we don’t address climate change“).

    It’s not gonna get turned around in 10 years,” responded Feinstein – drawing a harsh rebuke from an angry chaperone. 

    “Senator if this doesn’t get turned around in 10 years you’re looking at the faces of the people who are going to be living with these consequences,” said the adult – as one of the children chimed in “the government is supposed to be for the people and by the people and for all the people!” 

    Feinstein was not amused. 

    I’ve been doing this for 30 years. I know what I’m doing. You come in here and you say “it has to be my way or the highway.” 

    “I don’t respond to that,” shot back Feinstein. 

    “I’ve gotten elected. I just ran. I was elected by almost a million vote plurality. And, I know what I’m doing. So, you know, maybe people should listen a little bit. -Dianne Feinstein

    One kid shot back “I hear what you’re saying but we’re the people who voted you. You’re supposed to listen to us, that’s your job.” 

    “How old are you?” challenged Feinstein.

    “I’m 16. I can’t vote,” said the girl. 

    Well you didn’t vote for me,” replied the Senator.

    Watch: 

    One can hardly blame Feinstein for her annoyance at a pack of children forcing her to support the Green New Deal at camerapoint, as the senior Democrat appeared to win by a nose in the court of public opinion.

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    She probably didn’t score too many points with younger Democrats, however. 

    The full version of the video reveals that it was actually a mostly cordial visit. 

    Perhaps the most on-point reaction comes from The Hill‘s Buck Sexton:  

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.jshttps://platform.twitter.com/widgets.jshttps://platform.twitter.com/widgets.js

  • Body Cam Video They Don’t Want You To See: Arizona Cop Takes Down Knife-Wielding Jihadist

    Authored by Mac Slavo via SHTFplan.com,

    The media is quick to pounce on narratives that serve their agenda, but when it comes to actual news stories about the dangers of real hate and terrorism in America they are often silent.

    This is the case with the following report, which apparently was so damaging to the mainstream agenda that not only did they refuse to cover it, but Maricopa refused to release the video until they were sued.

    In the video, an individual is confronted by a Maricopa County, Arizona officer. The individual, as seen below, first indicates to the officer that he wants to “talk about” political issues.

    All seems well for about 20 seconds, when the man seems to completely lose his marbles when asked to produce identification. He first begins throwing rocks at the officer, then pulls a knife, at which point things take a turn for the worse for this peaceful protester:

    https://platform.twitter.com/widgets.js

    Why it was so difficult for Maricopa County to release this video remains a mystery.

  • Gene-Edited CRISPR Twins May Have Supercharged Brains, And Silicon Valley Wants In On It

    A pair of Chinese twins who were gene-edited for resistance to HIV may also have ‘supercharged’ brains, along with possible resistance to age-related cognitive diseases such as Alzheimer’s. 

    In a controversial experiment led by Chinese scientist He Jiankui, the embroys of seven couples had their genes “edited” using a tool known as CRISPR. By removing a gene called CCR5, Jiankui sought to create a natural immunity to HIV – which requires CCR5 to enter blood cells. 

    Based on new research, however, Jiankui may have also left the twins, Lulu and Nana, with improved memory and enhanced cognition, according to MIT Technology ReviewThey may also enjoy some degree of protection from Alzheimer’s Disease and other maladies which are rapidly being linked to chronic inflammation, as some groups of mice without CCR5 – or who have been given CCR5 inhibitors, experience less severe dementia or Alzheimer’s symptoms. 

    He Jiankui

    “The answer is likely yes, it did affect their brains,” says UCLA neurobiologist Alcino J. Silva, whose lap discovered a link between CCR5 and the brain’s ability to form new connections. 

    “The simplest interpretation is that those mutations will probably have an impact on cognitive function in the twins,” says Silva, adding that the exact effect on the girls’ cognition cannot be predicted, which is “why it should not be done.”

    Jiankui’s human experiments drew harsh rebuke after news of Lulu and Nana’s birth in late October or early November, and has reportedly been fired from his position at the Southern University of Science and Technology (SUSTech) in Shenzhen, China. Jiankui says there are more gene-edited babies on the way. 

    The experiment has been widely condemned as irresponsible, and He is under investigation in China. News of the first gene-edited babies also inflamed speculation about whether CRISPR technology could one day be used to create super-intelligent humans, perhaps as part of a biotechnology race between the US and China.

    There is no evidence that He actually set out to modify the twins’ intelligence. MIT Technology Review contacted scientists studying the effects of CCR5 on cognition, and they say the Chinese scientist never reached out to them, as he did to others from whom he hoped to get scientific advice or support. –MIT Technology Review

    In 2016, Silva and professor Miou Zhou of the Western University of Health Sciences in California showed that removing the CCR5 gene from mice significantly improved their memoryMoreover, ” Silva and a large team from the US and Israel say they have new proof that CCR5 acts as a suppressor of memories and synaptic connections,” according to the report. 

    According to their new report, appearing in the journal Cell, people who naturally lack CCR5 recover more quickly from strokes. What’s more, people missing at least one copy of the gene seem to go further in school, suggesting a possible role in everyday intelligence. –MIT Technology Review

    “We are the first to report a function of CCR5 in the human brain, and the first to report a higher level of education,” said UCLA biologist S. Thomas Carmichael – who led the study. 

    Silicon Valley wants in on it

    Silva tells the MIT Technology Review that “because of his research, he sometimes interacts with figures in Silicon Valley and elsewhere who have, in his opinion, an unhealthy interest in designer babies with better brains.” 

    When word of Jiankui’s experiment went public, Silva says he immediately questioned whether enhanced cognition was the real goal of the experiment. 

    “I suddenly realized—Oh, holy shit, they are really serious about this bullshit,” said Silva. “My reaction was visceral repulsion and sadness.”

    He Jiankui acknowledged that he knew about the potential cognitive benefits of removing the CCR5 gene discovered by the UCLA team during a Q&A session, though he said “I am against using genome editing for enhancement.”

    The benefits of CCR5 removal are currently being tested on both stroke patients and people with HIV-induced memory issues

    In those studies, one of which is under way at UCLA, people are being given an anti-HIV drug, Maraviroc, which chemically blocks CCR5, to see if it improves their cognition.

    Silva says there is a big difference between trying to correct deficits in such patients and trying to create enhancement. “Cognitive problems are one of the biggest unmet needs in medicine. We need drugs, but it’s another thing to take normal people and muck with the DNA or chemistry to improve them,” he says. “We simply don’t know enough to do it. Nature has struck a very fine balance.” –MIT Technology Review

    Could it be conceivable that at one point in the future we could increase the average IQ of the population? I would not be a scientist if I said no. The work in mice demonstrates the answer may be yes,” said Silva. “But mice are not people. We simply don’t know what the consequences will be in mucking around. We are not ready for it yet.”

  • As Yellowstone Awakens, Dr. Michio Kaku Warns That It Could "Literally Tear The Guts Out Of The USA"

    Authored by Michael Snyder via The Economic Collapse blog,

    One day it will happen. 

    Scientists assure us that one day the absolutely massive Yellowstone supervolcano will once again experience a Category 8 eruption, and if it happened today it would “literally tear the guts out of the United States of America”.  That is why what has been happening at Yellowstone in recent months is so alarming.  We know that the ground has been rising and that “a 465-mile-long piece of molten rock” is moving upwards directly under Yellowstone.  And we also know that the major geysers at Yellowstone were more active last year than in any other year in any of our lifetimes.  Are these signs that an eruption is coming?  We better hope not, because as Dr. Michio Kaku recently told Fox News, there is “a sleeping Godzilla underneath Yellowstone”

    Dr Kaku told Fox News: “Forget the image of Yogi Bear representing Yellowstone.

    We’re talking about a sleeping Godzilla underneath Yellowstone, that if it erupts in a maximum eruption called Category 8, it can literally tear the guts out of the United States of America.

    Instead of having 50 states of the Union, we would have 30 states of the Union.

    We live at a time when seismic activity has been increasing all over the world, and Yellowstone has also been exhibiting very unusual behavior.

    However, Dr. Kaku says that we shouldn’t worry too much, because he believes that we will get warnings about a Yellowstone eruption in advance

    “Unlike a meteor from outer space, where you get no warning whatsoever, we get warnings.

    “If you see movies like Pompeii, you know that there are days, in fact, weeks of eruptions building up, rumbling inside, underneath the pocket of lava.

    “So there would be enough time, several weeks, to begin evacuation if and when such an unlikely event were to take place.”

    But what if we have been ignoring the warnings that we have already been getting?

    For example, Steamboat geyser erupted more times in 2018 than in any other year in history.  The following comes from National Geographic

    The Yellowstone Volcano Observatory reports that Steamboat has now set a record by erupting a whopping 32 times in 2018, a personal best for the geyser for a single calendar year. Previously, this geyser made it as high as 29 paroxysms back in 1964.

    Other nearby geysers have also been behaving fairly interestingly of late. Ear Spring Geyser, for example, has been pretty quiet since 1957, but it erupted spectacularly a few months back—and sprayed human garbage from the 1930s everywhere.

    Prior to last year, there had not been an eruption of the Steamboat geyser for three and a half years.

    In addition, the ground under Yellowstone has been steadily rising for the last few years, and the area was hit by 121 earthquakes in the month of December alone

    “In the area of Norris Geyser Basin, GPS data indicate a minor amount of uplift over the past few months, with a total uplift of about 2cm during 2018, also continuing the trend that has been ongoing since 2015.”

    In the same Yellowstone update, the USGS revealed a total of 121 earthquakes were recorded in the Yellowstone area in December 2018 alone.

    It is indeed possible that when Yellowstone finally erupts that we will get more of a warning than this.

    But it is also possible that we will not.

    When Yellowstone blows, life as you have known it will instantly be over.  If you are not in the immediate kill zone, you will have an opportunity to try to survive, but it won’t be easy.  One survivalist expert suggests that everyone should “head east as fast as you can”

    He added: “Zone one, which is a radius of 100 miles, could see 70,000 people die instantly.

    “Zone two, which starts after 100 miles, would be covered in 10ft of volcanic ash at 450C.

    “After the second zone, your chances of surviving increase, but still head east as fast as you can.

    “Beyond zone six is where you would be the safest in the US for the short term, but the wind will greatly determine where ash falls.”

    Personally, I don’t know if that is the best approach.  The roads will be absolutely clogged, and there is no way that you are going to outrun the volcanic ash.  If you get completely buried in volcanic ash in your vehicle, it will all be over.

    Of course the truth is that if Yellowstone experiences a Category 8 eruption most Americans will eventually die no matter what they do.  The following is an extended excerpt from one of my previous articles

    Hundreds of cubic miles of ash, rock and lava would be blasted into the atmosphere, and this would likely plunge much of the northern hemisphere into several days of complete darkness. Virtually everything within 100 miles of Yellowstone would be immediately killed, but a much more cruel fate would befall those that live in major cities outside of the immediate blast zone such as Salt Lake City and Denver.

    Hot volcanic ash, rock and dust would rain down on those cities literally for weeks. In the end, it would be extremely difficult for anyone living in those communities to survive. In fact, it has been estimated that 90 percent of all people living within 600 miles of Yellowstone would be killed.

    Experts project that such an eruption would dump a layer of volcanic ash that is at least 10 feet deep up to 1,000 miles away, and approximately two-thirds of the United States would suddenly become uninhabitable. The volcanic ash would severely contaminate most of our water supplies, and growing food in the middle of the country would become next to impossible.

    In other words, it would be the end of our country as we know it today.

    The rest of the planet, and this would especially be true for the northern hemisphere, would experience what is known as a “nuclear winter”. An extreme period of “global cooling” would take place, and temperatures around the world would fall by up to 20 degrees. Crops would fail all over the planet, and severe famine would sweep the globe.

    In the end, billions could die.

    Let us hope and pray that nothing like this happens any time soon.  Those of you that regularly follow my work already know that I am far more concerned about an eruption of Mt. Rainier, and we should also keep a very, very close eye on Mt. Fuji in Japan.

    As our planet becomes increasingly unstable, there will be unprecedented natural disasters in the years ahead, and multitudes of people will die in those disasters.

    Unfortunately, most of the “experts” continue to assure the public that everything is going to be “just fine”, but meanwhile the shaking of our planet just continues to get even worse with each passing year.

  • S&P Warns Global Sovereign Debt Will Top $50 Trillion This Year

    It has been one week since the US Treasury revealed that the national debt had topped $22 trillion (only 11 months after it had topped the $21 trillion threshold). And as the US budget deficit shows no signs of shrinking thanks to the Trump tax cuts and the death of the Obama-era budget sequester that has allowed for an expansion of federal spending (with more presumably on the way once the Trump infrastructure plan comes into focus), S&P warned on Thursday that worldwide sovereign debt could reach $50 trillion this year.

    SNP

    According to Reuters, S&P predicted that governments will borrow some $7.78 trillion this year, up 3.2% since 2018 (the US will constitute more than $1 trillion of that all by itself). That’s a 6% increase in the total debt pile from the year before.

    Most of this borrowing will be rolling over long-term debt.

    “Some 70 percent, or $5.5 trillion, of sovereigns’ gross borrowing will be to refinance maturing long-term debt, resulting in an estimated net borrowing requirement of about $2.3 trillion, or 2.6 percent of the GDP of rated sovereigns,” said S&P Global Ratings credit analyst Karen Vartapetov.

    Governments, like corporations and individuals, took advantage of low interest rates around the world to step up borrowing in the wake of the financial crisis. Now, with borrowing costs expected to rise, these long-term burdens will become more burdensome to service. And with central banks slowly beginning to allow their inflated balance sheets to run off…

    Bank

    …investors will be watching to see if more central banks follow the Fed’s lead in pausing its balance sheet runoff, or possibly even take it one step further and return to the expansionist glory days of global QE. Who knows? As the global debt pile appears increasingly intractable, more economic officials might seriously consider Alexandria Ocasio-Cortez’s Modern Monetary Theory.

  • Burning Man CEO Bans "Billionaire Camp", Tells Instagram "Influencers" To Stay Home

    Authored by John Vibes via The Mind Unleashed,

    Nevada’s Burning Man festival, founded on a philosophy of peace, love and generosity, was intended to act as a temporary example of how people could live and get along without the financial and cultural restraints of mainstream society. Over the years the festival has grown into one of the largest events of its kind in the world, becoming more and more like the outside world that it was seeking to escape from, according to many longtime “burners.”

    In recent years, elite guests have made headlines with luxurious camps that acted as exclusive retreats for the rich and famous, safely out of reach of the sweaty, dusty and sometimes naked hippies. Humano the Tribe is the most notorious of these elite camps, with a membership cost of over $100,000 and a reputation for causing trouble.

    One festival attendee who had camped near Humano complained that the tribe grossly disrespected their neighbors as well as the land. The burner explained:

    “They were our neighbors. Fuck them. Someone from their camp literally took a shit on our camp one night. They had their entrance hidden so we constantly had sparkle ponies walking through our camp asking us how to get in. They leaked grey water all over the playa. They didn’t have enough space for all their vehicles so they parked a giant RV in the fire lane. Everything about them was terrible.”

    In response to over three years of serious complaints about the camp, Burning Man CEO Marian Goodell announced this week that the camp will not be welcomed back in 2019.

    After negative reports from participants and nearly every Black Rock City operations team, we told Camp Humano that they are not invited back in 2019 as a placed camp. Humano was a strain on resources, had a poor ‘leave no trace’ record for three years, had a very poor 2018 environmental compliance record including multiple BLM citations, and was the subject of many complaints from neighboring camps.”

    Goodell also expressed her disdain for the Instagram “influencers” who were using the event as a photo shoot or opportunity to sell products. She went on to explain:

    “Whether it’s commercial photo shoots, product placements, or Instagram posts thanking ‘friends’ for a useful item, attendees including fashion models and social media ‘influencers’ are wearing and tagging brands in their playa photos. This means they are using Black Rock City to increase their popularity; to appeal to customers and sell more ‘stuff.’ Is this okay? How could it be? Posts of gratitude cross referenced with hashtags started off slow and innocently enough, but are now wildly out of control. Failing to make clear what behavior is unacceptable has compounded the problem. I recently heard rumors of more than one product or business launch happening on playa in 2018. Seriously, people. This really isn’t Burning Man.”

    Burning Man itself is a multimillion-dollar event, so Goodell is selling a product in the form of tickets, which makes her statement a bit odd. However, in the wake of the viral Fyre Festival scandal, there is now a spotlight on social media marketing companies and their relationship with large festivals.

    Goodell also mentioned that they would be making it easier for people who are on a budget to make it to the festival by offering 18% and 30% discounts.

    “In our ongoing effort to enable participants with limited budgets, we’re growing the application-based Low Income Ticket Program by 18 percent. There will be one high-priced ticket level, and we’re reducing the overall number available by 30 percent,” Goodell said.

Digest powered by RSS Digest

Today’s News 22nd February 2019

  • As The Real Estate Market Slows, Canadians Continue To Plunder Equity From Their Homes

    Canadians are accelerating the rate at which they borrow cash against their homes, despite the fact that the real estate market is slumping in the country. This exposes the country’s financial system to obvious vulnerabilities, according to rating company DBRS and Bloomberg.

    Home equity lines of credit in Canada reached a record $184.5 billion (USD) as of October 31, which equates to 11.3% of total household credit. This is the highest share since mid 2015, according to a report released last Thursday. Canadians are drawing on their home’s equity to fund everything from home renovations to car purchases.

    And they’re doing it so quickly that borrowing has grown faster than mortgages since 2017.

    Analyst Robert Colangelo, who published the report on Thursday, commented: “The flexibility of Helocs could increase financial system vulnerabilities. In the event of a correction, borrowers could find themselves with a debt load that exceeds the value of their home, which is often referred to as negative equity.”

    Obviously, home equity lines of credit can decrease visibility for lenders to identify credit problems as consumers use the equity in their homes to consolidate high interest loans and unsecured debt into one lump sum at a lower rate.

    Out of all of the Canadian banks, Toronto Dominion bank has the largest exposure to Helocs at about 39%, followed by Royal Bank of Canada which has 18% exposure. Other large banks are averaging 11% exposure, according to the report.

    And the timing for Helocs to grow couldn’t be worse. Toronto’s real estate market continues to feel pain. Sales of new homes in the city fell to the lowest in almost 2 decades in 2018 and a glut of unsold condominiums continue to pile up, according to a Building Industry and Land Development Association report released February 1. Vancouver, still feeling the deflationary effects of a foreign real estate bubble popping, saw home sales fall about 40% in January from the same month a year earlier.

    In early January, we reported that Canadian mortgage credit growth had dropped to 22 year lows, signalling the end of the housing boom. Per a report from RBC, mortgage credit growth had decelerated to 3.2%. 

    In late December, we reported that Canadian household debt to income levels were near record highs. In addition, we pointed out that principal repayment share has been increasing and that mortgages were the main contributor to Canada’s total debt burden. 

     

     

  • What's Up With Australia's 80 Tonnes Of Gold At The Bank Of England?

    Submitted by Ronan Manly of BullionStar

    Recently, news network RT.com asked for comments on the question of the 80 tonnes of the Reserve Bank of Australia’s (RBA) gold reserves and their supposed storage location at the Bank of England’s gold vaults in London. Based on some of those comments I made, RT has now published an article in its English language news website at www.rt.com about this Australian gold that the RBA claims is held in London.

    The RT.com article, which was published on 18 February 2018, is titled “Hey UK! It’s not just Venezuela, what happened to Australia’s gold?“, and can be read in full here on the RT website.

    For the commentary, RT actually asked me quite a few interesting questions on both the Australian gold and other related gold topics. Since both the extended questions and the answers might be of interest to readers, we have decided to publish below the full set of questions and answers in Q&A format, which are as follows:

    1) What happened to Australia’s gold? What’s your opinion?

    The Reserve Bank of Australia (RBA) claims to have 80 tonnes of gold bars stored in a bailment arrangement, in an allocated gold account, at the Bank of England vaults in London. Bailment means the Bank of England is custodian, and the RBA owns and has title to specific serial numbered gold bars.

    However, there have never been any independent physical audits of this gold, which means that there is no way to verify the RBA’s claim that it has all the gold that it claims to have.

    In 2013, the Bank of England allowed the RBA to do a partial audit of some of  the claimed RBA gold holdings, but the results of this audit remain secret, and even after FOIA requests, the documents from this audit were blocked by both the Bank of England and the RBA and never released. This also raises a red flag.

    Most importantly, the critical document to any gold holding held under bailment is a proper weight list of the gold bar holdings (including refiner serial numbers), and such a list has also never been published by the RBA. Such a weight list is fundamental to any claimed gold holding (for example, think about the gold-backed Exchange Traded Funds (ETFs) which publish their full gold bar weight lists online on a daily basis).

    The RBA has not made any gold purchases or sales over the last 20 years, so apart from gold lending, the RBA gold should be the same bars that it has held over at least the last 20 years. It would therefore be a simple matter to publish in a single zipped file all of the versions of the gold bar weight list that this 80 tonnes of gold has represented over the last 20 years. The Bank of England’s gold bar accounting system has all of this information and it would be simple to extract it.

    Throughout the last 20 years, the RBA also admits that a lot of its claimed gold holdings have been lent out in the secretive London Gold Lending Market, but there is no information whatsoever available on any of these lending transactions or the serial numbers of the gold bars involved. In other words, there has never even been one snapshot publication of a proper industry standard weight list for these RBA gold bars (by refiner serial numbers), let alone an updated weight list every time the RBA lent out or closed a gold lending deal.

    During the years 1999 – 2004, the RBA says that almost all of it’s gold was on loan, and the RBA is still in the gold lending market to this day, for example, 10 tonnes of its claimed 80 tonnes at the Bank of England were said to be on loan during 2018. The important point here is that the gold bars that the RBA would have title to at the completion of a gold lending deal would not be the same bars that it held prior to this gold being lent to a bullion bank in London.

    Independent physical audits, full and proper weight lists, details of gold lending transactions, and above all a transparent attitude, would all allow instant verification of the RBA’s claims about the sovereign Australian gold holdings. That the RBA and Bank of England refuse to do any of these things is highly suspicious. Therefore, there is no black and white way to say that the RBA has the 80 tonnes of gold it claims to have.

    2) Why are countries like Australia and Canada willing to part with physical gold assets? Is that a good idea in your opinion? How much gold does Australia really have?

    Up until late 1996, the Australian central bank held nearly 247 tonnes of gold, a considerable amount of gold by any measurement. However, it then went on a gold selling spree during the first half of 1997 and sold 167 tonnes, leaving it with the current claimed 80 tonnes.So why did the RBA sell this gold? At the time, the usual justifications were wheeled out by the RBA such as that the proceeds of gold sales could be better invested in financial assets, and that other countries were also selling gold at that time, including Canada, Netherlands and Belgium. But, these reasons have always stinked. Firstly, the RBA gold sales occurred just before a huge bull market run-up the gold price between 2000 and 2011, so the RBA made a huge opportunity loss on the gold sales.

    Secondly, selling gold just because another central bank is doing is nonsensical and void of investment rationale. The same goes for Canada which basically sold all of its gold, about 500 tonnes, in the late 1990s and early 2000s. Again, there was no investment rationale for doing so and the Canadians seem to have been coaxed into these sales by external parties. It’s also interesting that in hindsight, no one in the Canadian Department of Finance ever wanted to talk about these gold sales later on when asked by the media or investigative journalists.

    Of course, it was not a good idea for Australia to sell most of its gold and for Canada to sell all of its gold. The timing of these sales was also some of the worst ever. Beyond this, these central banks acted irresponsibly and had no accountability to the populations of their nations. Gold is the Wealth of Ages, the sovereign wealth of a nation. It is not some securitized financial asset to be sold and squandered by statist central bankers who answer to no one.

    3) Some experts believe that western central banks are “covertly disposing” of their gold or otherwise leasing it to China and India through bullion banks. Do you believe in that? Do you believe there’s some grand, global gold conspiracy involving the world’s central banks?

    There is a mountain of evidence that Western central banks despise the power of gold and will go to great lengths at the highest levels to contain the gold price through coordinated interventions and anti-gold policies. From the London Gold Pool of the 1960s, to the US and IMF gold sales in the 1970s, to the 1980s Gold Pool discussions at the Bank for International Settlements (BIS), to the Bank of England intervening into the London Gold Fixes in the 1980s, G10 central bank governors have often been personally involved in committing to gold market manipulation.

    This continued through the 1980s and 1990s with the growth of the secretive gold lending market and central bank gold leasing, the various European central bank gold “agreements” which did the opposite of what they claimed to do, the sabotage of transparent IMF gold accounting policies by the main European central banks in 1999, and the gold price fix manipulation by bullion banks in London where regulators looked the other way. All of this evidence and more is available if anyone wants to look, such as on the GATA website and elsewhere.

    As regards the Australian and Canadian gold sales, the more logical explanation for both of these was that they were coordinated gold sales by G10 central banks as part of a plan to fire-fight the physical gold market or to bail out gold short bullion banks, or that the sales were part of secretive gold re-distributions to other countries, such as to China. While this may seem far-fetched, you have to realize that central banks never tell the truth, especially when it comes to the gold market, and that the sheer numbers of central bank gold sales around that time in the 1990s and 2000s, including by the UK and Switzerland, point to something collusive about the sales rationales.

    All of these sales were also secretive, with nothing revealed about the identities of the buyers. Any lists of such central bank gold sales, for example in an FOIA connected to the UK’s gold sales, have the identities of the buyers redacted. So its totally possible that a central bank, such as China, was on the receiving end of these gold sales. There is evidence that the UK Treasury gold sales in 1999 done for bullion bank bailout purposes, so this could be true with the RBA sales.

    At a broader level, there seems to be collusive policy behind the scenes of western central banks offloading physical gold in a coordinated manner through secretive sales and leasing it to achieve various policy objectives. These objectives include inducing extra gold supply to dampening down the gold price, fire fighting physical shortages, at times bailing out bullion banks, and most intriguingly, redistributing some of the West’s central bank gold holdings to central banks such as the People’s Bank of China. Gold Pools (central bank syndicates) don’t have to take the form of advertised arrangements as in the 1960s. A central bank gold pool exists any time two or more central banks clandestinely use some of their gold holdings in a coordinated way.

    You can call this a conspiracy if you want. Try to ask central banks simple questions about their gold and you will see that not one central bank will ever divulge important information about its gold, or its gold operations, or its gold related policy discussions with other central banks. The Bundesbank, the Bank of England, the New York Fed, the Bank for International Settlements, the European Central Bank, the IMF, the Swiss National bank, De Nederlandsche bank, the Swedish Riksbank, the Banque de France, Banca d’Italia. The list is endless. All of these central banks keep a lid on revealing anything substantive about their gold holdings and their gold activities, and none produce proper weights lists of their gold bars.

    Due to the secrecy of the gold lending market, there is zero confidence that the Western central banks have the amount of gold that they claim to have.

    The secretive Bank for International Settlements (BIS), Basel

    4) What or who is behind the thinking in the West that after 5,000 years gold is now become obsolete as a store of value?

    Gold is the ultimate form of money and a 5000 year old store of value. Gold is no one else’s liability and is the antithesis of central bank fiat currency regimes. Gold is the world’s best inflation barometer and a long term inflation hedge. It is for these reasons that central bankers run in fear of gold and want to disparage gold’s image at every turn and to make gold obsolete as a form of savings and investment.

    Who is responsible for this? Those who have been running the Anglo and American and Western European central banks and their London and New York commercial bank counterparts for the last 50 years, the same people who congregate at the BIS in Basel and are represented on the Group of Thirty and the Bretton Woods Committee, i.e. the elitist central bankers and their investment bank backers.

    5) If Western countries are disposing of physical gold where does it go?

    Physical gold has flown from West to East. Some of these flows have been through normal channels where gold has been sold in the market and moved from London to the Swiss precious metals refineries to be transformed from 400 oz gold bars into smaller higher purity 1 kg and 100 oz gold bars, and onward shipped to India, Hong Kong and China.

    Gold has also moved directly to the East via mining exports of South Africa, Australia, Canada, the US and elsewhere, and imported directly into China, Hong Kong and India. Western central bank gold disposals will only show up in these gold flows to the extent that the gold has been classified as non-monetary gold. Any cross-border movements of ‘monetary gold’ (which is central bank gold), will not show up in trade statistics, which is what the central banks like, as they want to keep these transactions in the shadows.

    India has imported about 15,000 tonnes of gold since 2001. There are more than 25,000 tonnes of private gold held in India. There are at least 17,000 tonnes of gold held in China, not including the gold holdings of the Chinese central bank. Gold has flowed from the West into India and China, sometimes overtly, sometimes covertly.

    Some of the gold that the Western central banks still claim that they hold is in fact not there at all. It has been leased out in London, sold and shipped abroad, and now sits in China or India, and all the while the Western central banks still claim that this gold is on their balance sheets as they maintain the fiction that ‘gold receivables’ are in fact the same as physically held gold.

    6) Australian economist John Adams said: “In the last 20 years we’ve only seen the gold once.” According to Adams, the RBA audit was so flawed it was basically meaningless. Is there any chance that the BoE could manufacture bars with fake serial numbers?

    The Bank of England allowed Australia’s central bank to do its own partial gold audit in 2013, and to inspect a random sample of the RBA gold bars, This audit was basically meaningless, yes, and was flawed from start to finish.

    Knowledge of this gold audit kept out of the public domain and the results of the audit were totally censored and buried. Only via FOIA requests did the Australian public even get a glimpse into what was going on. The FOIA emails and correspondence that the RBA did release were heavily redacted without any details of how many gold bars were selected and what the sample size was, and the results of the audit were not published. No one in any industry would accept such conditions for an audit nor of the so-called audit results.

    At no time did the Bank of England supply a proper weight list to the RBA with the refiner serial numbers of the claimed gold holding. The RBA had to select some bars a month in advance and advise the Bank of England of the bars its wanted to examine. This in itself is ridiculous. For example, the SPDR Gold Trust (GLD) has full annual audits of all of its gold holdings (of nearly 800 tonnes), i.e. 10 times more than the RBA holds. Since the GLD can get its gold physically audited twice per year, there is no reason why the RBA cannot.

    In July 2013, just before the RBA’s flawed and partial audit, the RBA didn’t even have formal ‘gold safe-custody arrangements’ in place with the Bank of England since it had to ask for “gold safe-custody arrangements between the RBA and the BoE to be formally clarified”. That’s according to a glimpse of some RBA – Bank of England correspondence that did make it out in one of the FOIA emails released.

    One of the basement levels of the Bank of England, London

    After the audit, the RBA blocked publication of the audit results document stating that it “would, or could reasonably be expected to, cause damage to’ the relationship between the RBA and the BoE” and that it could “render less effective of procedures or methods for the conduct of tests, examinations or audits’ by the Bank”. This is complete nonsense.

    The real reasons that the Bank of England does not allow proper gold bar audits and the real reason that it will never provide central bank customers with proper weight lists of refiner serial numbers is that the Bank of England wants total secrecy about gold lending and where the lent gold goes to. Revealing the refiner serial numbers would blow open the entire central bank – bullion bank gold lending scheme, as the lent gold bars could be identified wherever they turn up. The Bank of England does not need to manufacture fake serial numbers. All it needs to do is prevent any serial numbers of gold bars going into the public domain by keeping the entire inventory of central bank gold bar weight lists a secret.

    At the end of the day, it’s important to remember that all central bank gold audits are basically meaningless, not just the gold audit of the RBA. Physical gold audits are only credible if they are unconditional, without any restrictions, and if they are undertaken by independent auditors.

    7) The Bank of England is globally recognized as one of, if not the primary destination of choice, for central banks to store their gold reserves. Do you think it’s the right place for Australian gold to be?

    No, there is absolutely no need for Australian gold to be in London. Its ridiculous. Australian gold should be stored in Australia. Australia has a sophisticated gold industry and perfectly good infrastructure for storing and handling gold, in fact better than most other countries.

    The rationale claimed by the RBA that it stores its gold in London so as to be in proximity to the London Gold Trading market is also wearing thin given that the Bank of England has now confiscated the gold of Venezuela’s central bank, the Banco Central do Venezuela (BCV). This is sovereign gold of another nation which was placed into custody storage by a foreign central bank. It is also absolutely extraordinary that the Bank of England has

    All central banks that store gold bars at the Bank of England should now sit up and take note that storing gold at the Bank of England is a wealth hazard  fraught with political and confiscational risk. And if any central bank gold custody customer of the Bank of England is too embarrassed to actually ask for its gold back straight up due to heightened confiscational risk factors, the current uncertainty over Brexit can act as a good cover story for worried central banks.

    Wisely, for example, all of the Bank of Russia’s gold is held in Russia, in Moscow and St Petersburg. The RBA should do likwise, and store its gold in somewhere such as Canberra, Sydney or Perth.

    Bank of Russia gold storage, Moscow

    7) ..continued ….Maybe it’s time for Australia to get it’s gold back? Is that possible?

    The Australian central bank could request it’s gold back at any time. Australia has vast logistical experience shipping gold around the world. Likewise, the Bank of England has vast logistical experience shipping physical gold around the world.

    Assuming the RBA’s gold is actually in custody in London, the RBA could withdraw this gold at any time. The Perth Mint in Western Australia flies gold around the world all the time. Its entirely feasible that the the Bank of England could contract a company such as Brinks to fly the RBA gold back to Australia in less than 2 days. It should take a maximum of 2-3 weeks to arrange insurance and transport and fly the gold out of Heathrow or one of the other London commercial airports, or even from a military air base such as RAF Mildenhall in Suffolk which the Bank of England has used many times in the past.

    8) Do you think the Reserve Bank of Australia has to start building its gold reserves again?

    Yes, it is irresponsible that Australia not only sold a majority of its gold at fire sale prices in 1997, but that it has since done nothing to rebuild its strategic monetary gold reserves. All the while, the Asian powers of China and Russia have been doing just that. As one of world’s largest gold mining producers, Australia also has the means at its disposal to rebuild its gold by tapping into primary gold production in the way that the Russian Federation has been doing.

    9) Gold has been traditionally recognized as a safe haven asset but its price action has raised some questions. Do you think gold is still worth to be accumulated or maybe it’s time to switch to something else, for example, to silver or palladium?

    Gold is money. Gold is a monetary metal with 5000 years of history. The global fiat currency experiment which has been in practice since 1971 is just a blip in time compared to gold’s long and important history. It is therefore dangerous to fixate on the US dollar gold price or the ‘international’ gold price.

    This US dollar gold price is set in the fractionally-backed London over-the-counter (OTC) and via COMEX gold futures trading. Both of these markets are essentially trading synthetic paper gold, unallocated gold, cash-settled gold, or screen gold. Call it what you will. The price action of this US dollar quoted gold price does not mean that gold is not a safe haven. Far from it. Physical gold is and always will be a safe haven. Gold demand is still very strong despite what the Western financial media would have you believe. Just look at Asian retail and wholesale gold demand and central bank gold demand in countries such as China, India, Russia, Mongolia, and Kazakhstan.

  • Breaking Down Elizabeth Warren's Terrible, Horrible, No Good, Very Bad Math Behind "Childcare For All"

    This week Elizabeth Warren proposed a fantastical entitlement program to provide free or affordable childcare to every single American family with a young child – suggesting that the program would cost $70 billion a year

    As Breitbart‘s John Carney notes – the whole plan is absurd; not because the price tag is so expensive, but because it’s way too cheap

    Start with the basics. There are around four million babies born in the U.S. every year. That means there are approximately 20 million children under school age who could be enrolled in a national childcare program. Moody’s Analytics Chief Economist Mark Zandi and Sophia Koropeckyj, the economists behind Warren’s figures, estimate that the cost of each child in the Warren Centers—or Baby Warrens, as we would inevitably call them–would be $14,500. –Breitbart

    At $14,500 times 20 million children, a national childcare program could cost up to $290 billion per year – or an extra 2 trillion per decade over her original estimate. That said, not every family qualifies, nor would every family take advantage of such a program as some people prefer to raise their own children or place them in the care of relatives. 

    That said, Warren’s proposal promises free childcare to any family with an income under 200% of the poverty line – or around $51,000 for a family of four. All other families would pay no more than 7% of their income on childcare.

    Zandi and Koropeckyj estimate that 1/3 of American households will choose to forego professional childcare; around the same percentage as today. This is magical thinking, suggests Carney – as it assumes that stay-at-home parents won’t change their preferences in light of a massive government program. 

    Warren’s plan assumes that the number of children in childcare centers would rise from 6.8 million to 12 million – however due to shifting preferences, that number would likely be much higher

    That said – the math behind Warren’s plan is still wrong at 12 million children. At $14,500 per head, the program would cost approximately $174 billion per year, not $90 billion

    How they shave that $100 billion off the cost is partly redistribution and mostly voodoo economics, magical thinking disguised as macroeconomics. Because families earning more than 200 percent of the federal poverty level would have to pay for some of their childcare–but never really more than half–the cost would be reduced. But the size of the subsidy for even very wealthy families is large enough that this doesn’t shave much off the total cost.

    The heavy lifting here is in the rosy economic forecasts Zandi and Koropeckyj produce. They predict that the childcare for all program will “quickly lift economic growth” by transferring wealth from the rich—Warren wants to pay for the program with a tax on ultra-millionaires. In the longer term, they see it boosting economic  growth because they foresee it boosting workforce participation and the number of hours worked. –Breitbart

    In short, the plan only works if economic growth is “quickly lifted” because of a massive wealth transfer from ultra-millionaires, and if the free childcare results in more parents leaving the home in search of jobs amid already-low unemployment. The analysis fails to consider that a flood of additional workers who aren’t at home raising their own kids would put downward pressure on wages. 

    “Cheapening labor costs while raising taxes on wealth would also diminish the return on capital investment, which would be a drag on productivity—the best driver of economic growth,” notes Carney.

    “In the end, we may end up with a diminished economy, families working more hours than before and spending less time with children, and an entitlement program that is much more expensive than anticipated (as entitlement programs tend to be).

    That said, encouraging Americans to have more children by making it more affordable is not a bad idea, concludes Carney. It should just be done in a way that doesn’t require magical math – such as a much larger, fully refundable child tax credit, and allowing families to pay less in entitlement taxes when they have more than two children. After all, they will be supplying the next generation of workers who will pay for Social Security and Medicare, should it still exist by then.

    “Childcare Deserts”

    While Carney points out the crappy assumptions behind Warren’s plan, there may be another major problem; accessibility. According to the Center for American Progress, more than half of American households live in what are known as “childcare deserts” – places where there are up to 3 children for every available childcare slot, or no childcare options at all

    Warren addresses this in a blog post, suggesting that her plan would “establish and support a network of locally-run Child Care and Early Learning Centers and Family Child Care Homes so that every family, regardless of their income or employment, can access high-quality, affordable child care options.”

    The problem, as New Republic reports, “There are simply not enough providers in operation, either in formal centers or in informal home settings, with enough openings to meet current demand.”

    That demand is only likely to increase if Warren’s plan makes childcare far more affordable and better quality than it is today. Significantly increasing the funding available to provide care and compensate providers adequately will certainly entice more people to jump into the business. But there is nothing in the plan that absolutely ensures that enough providers open up shop and create new slots so that all families can take advantage of it. –New Republic

    In short, the federal government would need to become directly involved in solving the infrastructure problem – vastly expanding child development centers, which would add an entirely new set of costs to the proposal. 

    The Week‘s Ryan Cooper points out four flaws in Warren’s plan. 

    The limitations of Warren’s proposal are clearly driven in part by the desire to keep the headline price down, but somebody, in this case middle- and upper-class parents, will still have to make up the difference. Designing it in this way could easily increase the total cost (that is, including both state and private spending) of child care. The government could counter this problem by fixing prices, but there are no such controls mentioned in the proposal outline.

    Second is wasteful bureaucracy. Giving out subsidies based on income will require an administrative/surveillance apparatus to calculate payments and make sure that people aren’t cheating the system. That’s a lot of paperwork and very likely a lot of mistakes and headaches.

    Third is lower political durability. Families only eligible for smaller subsidies will be naturally resentful of the downscale families paying nothing, so there will be less resistance to a future Republican administration attempting to roll back the program. (Witness the last GOP Congress coming within a hair’s breadth of repealing ObamaCare, but largely leaving Medicare alone.)

    A fourth problem is that families in the phase-out zone of the subsidy will potentially face a high effective marginal tax rate, as a large portion of any additional income will be eaten up by reduced subsidies — especially when combined with other proposals for means-tested tax credits that would phase out in a similar way, like Kamala Harris’s LIFT Act.

    Any way you cut it, Warren’s plan – like so many before them, appears to be nothing more than a great sounding promise that would end up like California’s ill-fated bullet train.

  • Caitlin Johnstone Exposes "The Truly Obnoxious Mind Virus" Of Imperial Narrative Controllers

    Authored by Caitlin Johnstone via Medium.com,

    In an extremely weird article titled “Russia is backing a viral video company aimed at American millennials”, CNN reports that Facebook has suspended popular dissident media outlet In The Now and its allied pages for failing to publicly “disclose” its financial ties to a subsidiary of RT.

    According to CNN, such disclosures are not and have never been an actual part of Facebook’s official policy, but Facebook has made the exceptional precondition of public disclosure of financial ties in order for In The Now to return to its platform.

    I say the article is extremely weird for a number of reasons.

    Firstly, according to In The Now CEO Anissa Naouai, CNN knew that Facebook was going to be suspending the pages of her company Maffick Media before she did, suggesting a creepy degree of coordination between the two massive outlets to silence an alternative media platform.

    Secondly, the article reports that CNN found out about Maffick’s financial ties thanks to a tip-off from the German Marshall Fund, a narrative control firm which receives funding from the US government. In The Now’s Rania Khalek has described this tactic as “a case where the US government has found a legal loophole to suppress speech, in this case speech that is critical of destructive US government policies around the world.”

    Thirdly, and in my opinion weirdest of all, the article goes to great lengths to make the fact that a dissident media outlet supports the same foreign policy positions as Russia look like something strange and nefarious, instead of the normal and obvious thing that it is.

    https://platform.twitter.com/widgets.js

    The article repeatedly mentions the fact that all the people working for In The Now “claim” to be editorially independent as opposed to being told what to report by Kremlin officials, a notion which Khalek says was met with extreme skepticism when she was interviewed for the piece by CNN. As though the possibility of an American opposing US warmongering and the political establishment which drives it without being ordered to by a rubles-dispensing FSB officer was a completely alien idea to them.

    Check out the following excerpt, for example of this bizarre attitude:

    “Ben Nimmo, a senior fellow for information defense at the Atlantic Council’s Digital Forensic Research Lab, told CNN that while Russian state-backed outlets claim to be editorially independent, ‘they routinely boost Kremlin narratives, especially those which portray the West negatively.’

    “Nimmo said the tone of Maffick’s pages is ‘broadly anti-US and anti-corporate. That’s strikingly similar to RT’s output. Maffick may technically be independent, but their tone certainly matches the broader Kremlin family.’

    This is a truly obnoxious mind virus we’re seeing the imperial narrative controllers pushing more and more aggressively into mainstream consciousness today: that anyone who opposes the beltway consensus on western interventionism is not simply an individual with a conscience who is thinking critically for themselves, but is actually “boosting the Kremlin narrative”. If you say it in an assertive and authoritative tone like Mr Nimmo does, it can sound like a perfectly reasonable position if you don’t think about it too hard. If you really look at it directly, though, what these manipulators are actually saying is “Russia opposes western interventionism, therefore anyone who opposes western interventionism is basically Russian.”

    Which is of course a total non-argument. You don’t get to just say “Russia bad” for two years to get everyone riled up into a state of xenophobic hysteria and then say “That’s Russian!” at anything you don’t like. That’s not a thing. More to the point, though, there is no causal relationship between the fact that Russia opposes western interventionism and the fact that many westerners do.

    As we discussed recently, there will necessarily be inadvertent agreement between Russia and westerners who oppose western interventionism, because Russia, like so many other sovereign nations, opposes western interventionism. If you discover that an American who opposes US warmongering and establishment politics is saying the same things as RT, that doesn’t mean you’ve discovered a shocking conspiracy between western dissidents and the Russian government, it means people who oppose the same things oppose the same things.

    https://platform.twitter.com/widgets.js

    We’re seeing this absurd gibberish spouted over and over again by the mainstream media now. The other day the delightful pro-Sanders subreddit WayOfTheBern was smeared as a Russian operation by the Washington Times,not because the Washington Times had any evidence anywhere supporting that claim, but because the subreddit’s members are hostile to Democratic presidential hopefuls other than Sanders, and because its posts “consistently support positions that would be amenable to the Kremlin.” All this means is that the subreddit is full of people who support Bernie Sanders and oppose US government malfeasance, yet an entire article was published in a mainstream outlet treating this as something dangerous and suspicious.

    If you really listen to what the CNNs and Ben Nimmos and Washington Timeses are actually trying to tell you, what they’re saying is that it’s not okay for anyone to oppose any part of the unipolar world order or the establishment which runs it. Never ever, under any circumstances. Don’t work for a media outlet that’s funded by the Russian government even though no mainstream outlets will ever platform you. Don’t even subscribe to an anti-establishment subreddit. Those things are all Russian. Listen to Big Brother instead. Big Brother will protect you from their filthy Russian lies.

    “If CNN would like to hire me to present facts against destructive US wars and corporate ownership of our political system, I’ll gladly accept,” Khalek told me when asked for comment.

    “But the corporate media doesn’t allow antiwar voices a platform. In The Now does. I’ve worked for dozens of different outlets, from Vice to Al Jazeera to RT, and my message has always been the same: leftist, antiwar and pro justice and equality. People should be asking why US mainstream media outlets that claim to be free and independent refuse to air critical and adversarial voices like mine.”

    Why indeed? Actually, if CNN is so worried about Russian media influence in America, all they’d have to do is put on a few shows featuring leftist, antiwar and pro-justice voices and that would be the end of it. They could easily out-spend RT by a massive margin, buy up all the talent like Khalek, Lee Camp and Chris Hedges, put on a sleek, high-budget show and steal RT America’s audience, killing it dead and drawing all anti-establishment energy to their material.

    But they don’t. They don’t, and they never will. Because Russian media influence is not their actual target. Their actual target is leftist, antiwar and anti-establishment voices. That’s what they’re really trying to eliminate.

    https://platform.twitter.com/widgets.js

    So yes, Moscow will of course elevate some western voices who oppose the power establishment that is trying to undermine and subvert Russia. Those voices will not require any instruction to speak out against that establishment, since that’s what they’d be doing anyway and they’re just grateful to finally have a platform upon which to speak. And it is good that they’re getting a platform to speak. If western power structures have a problem with it, they should stop universally refusing to platform anyone who opposes the status quo that is destroying nations abroad and squeezing the life out of citizens at home.

    It doesn’t take any amount of sympathy for Russia to see that the unipolar empire is toxic for humanity, and most westerners who oppose that toxicity have no particular feelings about Russia any more than they have about Turkey or the Philippines. Sometimes Russia will come in and give them a platform in the void that has been left by the mainstream outlets which are doing everything they can to silence them. So what? The alternative is all dissident voices being silenced. The fact that Russia prevents a few of them from being silenced is not the problem. The problem is that they are being silenced at all.

    *  *  *

    Thanks for reading! My articles are entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, throwing some money into my hat on Patreon or Paypalpurchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish.

    Bitcoin donations:1Ac7PCQXoQoLA9Sh8fhAgiU3PHA2EX5Zm2

  • The Science Behind The Medical Cannabis Industry

    Submitted by Visual Capitalist

    There’s nothing quite like cannabis in the plant kingdom. Beneath its humble surface, over 750 unique compounds exist within – all of which have helped propel the cannabis industry into the multi-billion dollar market it is today.

    Today’s infographic from The Green Organic Dutchman takes a deep dive into the cannabis components which contribute to its therapeutic potential, how it interacts with the human body, and the ways it can be consumed.

    The Chemical Effects of Cannabis

    While many people would be familiar with THC and CBD as the two major cannabinoids, there are a few lesser-known cannabinoids which also play important roles: Cannabichromene (CBC), Cannabigerol (CBG), Cannabinol (CBN), Tetrahydrocannbivarin (THCv), and Tetrahydrocannabinolic acid (THCa).

    In different combinations, they work together with terpenes – aromatic oils that are present in most plants – to provide relief for a variety of ailments.

    When cannabinoids and terpenes interact, the human endocannabinoid system is already equipped to deal with the entourage effects that are created.

    Modern-Day Medical Cannabis

    It’s clear that many cultures embraced cannabis long before scientific research came into play. Its therapeutic properties were widely recorded and extolled around the world.

    After decades of restricted access and stigma, the tide is turning back towards what our ancestors discovered long ago. Millions of patients rely on medical cannabis today, with Canada and Israel paving the way in cannabis research.

    • Canada
      Medical cannabis has been legal nationwide since 2001, aiding scientists in studying its effects.
      Funding: CAD$1.4 million (US$1.05 million) invested by the government towards research projects.
    • Israel
      Since the 1990s, medical cannabis has been legal for patients of cancer, chronic pain, and PTSD.
      Funding: 8 million shekels (US$2.16 million) annual government funding to support innovation.

    Back in the day, typically only dried cannabis flower was used. However, consumption methods have evolved into three broad categories today: ingestion, inhalation, and application.

    • Ingesting
      The dosage of cannabis consumed is easy to control using edibles or beverages, tinctures or sprays, and capsules.
    • Inhalation
      The effects of cannabis are quickly felt through smoking, vaporizing, and/or dabbing concentrates.
    • Application
      Transdermal patches and topicals like balms offer localized relief through a controlled dose.

    Each of these methods have their own pros and cons, but in the end, they all offer the medical cannabis patient with a wide variety to choose from. Some of these forms, such as topicals and edibles, even lend themselves to the rapidly growing consumer cannabis segment.

    Courtesy of: Visual Capitalist

  • "Venezuela Was My Home, And Socialism Destroyed It. Slowly, It Will Destroy America Too"

    Authored by Daniel DiMartino

    While neither ‘Medicare for All’ nor a wealth tax will turn America into Venezuela overnight, all it would take is a series of catastrophic policies.

    The first time I couldn’t buy food at the grocery store, I was 15 years old. It was 2014 in Caracas, Venezuela, and I had spent more than an hour in line waiting. When I got to the register, I noticed I had forgotten my ID that day. Without the ID, the government rationing system would not let the supermarket sell my family the full quota of food we needed. It was four days until the government allowed me to buy more.

    This was fairly normal for me. All my life, I lived under socialism in Venezuela until I left and came to the United States as a student in 2016. Because the regime in charge imposed price controls and nationalized the most important private industries, production plummeted. No wonder I had to wait hours in lines to buy simple products such as toothpaste or flour.

    And the shortages went far beyond the supermarket.

    My family and I suffered from blackouts and lack of water. The regime nationalized electricity in 2007 in an effort to make electricity “free.” Unsurprisingly, this resulted in underinvestment in the electrical grid. By 2016, my home lost power roughly once a week.

    Our water situation was even worse. Initially, my family didn’t have running water for only about one day per month, but as the years passed we sometimes went several weeks straight without it.

    For all these problems, the regime has blamed an iguana, right-wing sabotage and even the weather.

    A rich country, wasted resources

    The excuses for these shortages were hollow: In reality, Venezuela has the largest proven oil reserves in the world to use for electricity, and three times more fresh water resources per person than the United States. The real reason my family went without water and electricity was the socialist economy instituted by dictators Hugo Chavez and Nicolas Maduro.

    The welfare programs, many minimum-wage hikes and nationalizations implemented by their regimes resulted in a colossal government deficit that the central bank covered by simply printing more money — leading to rampant inflation. Now, prices double every few weeks, and the standard of living continues to plummet.

    Mosaic depicts late Venezuelan President Hugo Chavez, left, and Venezuelan President Nicolas Maduro in Caracas on Jan. 30, 2019. (Photo11: JUAN BARRETO, AFP/Getty Images)

    I watched what was once one of the richest countries in Latin America gradually fall apart under the weight of big government.

    I didn’t need to look at statistics to see this but rather at my own family. When Chavez took office in 1999, my parents were earning several thousand dollars a month between the two of them. By 2016, due to inflation, they earned less than $2 a day. If my parents hadn’t fled the country for Spain in 2017, they’d now be earning less than $1 a day, the international definition of extreme poverty. Even now, the inflation rate in Venezuela is expected to reach 10 million percent this year.

    Venezuela has become a country where a woeful number of children suffer from malnutrition, and where working two full-time jobs will pay for only 6 pounds of chicken a month.

    American liberals embrace same failed policies

    Though so many of us Venezuelans fled to the USA to escape from the destructive consequences of socialism, liberal politicians like Sen. Bernie Sanders, I-Vt., and Rep. José Serrano, D-N.Y., have praised the same kind of policies that produced famine, mass exodus and soaring inflation in Venezuela.

    Even worse, in recent weeks, Democratic Reps. Ilhan Omar, Ro Khanna and Tulsi Gabbard have mischaracterized the protests against Maduro and condemned President Donald Trump’s widely supported moves to help end Maduro’s dictatorship.

    Additionally, many congressional Democrats support Medicare for All and the Green New Deal, proposals that would nationalize the health insurance industry, guarantee everyone who wants it a job and massively raise taxes, increasing government intervention in the economy like few countries except Cuba and Venezuela have seen before. Proponents think that they can give all Americans quality health care, housing and everything for free and that somehow, politicians can do a better job at running a business than the business owners themselves.

    Di Martino, center, with his parents in Caracas, Venezuela, in December 2016. (Photo11: Family handout)

    These proposals would skyrocket the budget deficit and national debt, which just reached a record $22 trillion. If that is not enough, Rep. Alexandria Ocasio-Cortez endorsed paying for the proposal by asking the Federal Reserve to print money. This is exactly what produced Venezuela’s nightmare.

    Even so, liberal economist Paul Krugman recently argued in a column that “whenever you see someone invoking Venezuela as a reason not to consider progressive policy ideas, you know right away that the person in question is uninformed, dishonest, or both.”

    I can assure Mr. Krugman that I’m neither uninformed nor dishonest. Of course, it’s true that neither Medicare for All nor a wealth tax alone would turn the United States into Venezuela overnight. No single radical proposal would do that. However, if all or most of these measures are implemented, they could have the same catastrophic consequences for the American people that they had for Venezuela.

    In his recent State of the Union address, President Trump said: “America will never be a socialist country.” I sincerely hope that the president is right, and that every American can resist the lure of false promises — so this great country can always shine above the dark cloud of socialism, and avoid Venezuela’s fate.

    Daniel Di Martino is a Venezuelan expatriate and Young Voices contributor studying economics at Indiana University-Purdue University Indianapolis. Follow him on Twitter @DanielDiMartino.

  • Air Force Requests Billions For F-15X Fighters

    The US Air Force is set to request funds to purchase F-15 fighter jets from Boeing, increasing its inventory with an upgraded version of the plane it last procured in 2001, even as the service pursues fifth-generation fighters from rival Lockheed Martin Corp.

    The service’s fiscal year 2020 budget request will include eight of Boeing’s new F-15X, Bloomberg reports, the first installment of an 80-plane order over the next five years.

    If the budget request is accepted, it will mark the first US purchase of the fighter jet since 2001.

    Even though the request has the Trump administration support, skeptical lawmakers have questioned the Air Force’s move to obtain a 45-year-old fourth-generation fighter for almost the same costs compared to the F-35 fifth-generation fighter.

    The reason could be due to its internal bomb bays; the F-35 cannot accommodate heavier weapons, such as hypersonic missiles.

    The Air Force is expected to purchase the F-15X without reducing the fleet of 1,763 F-35s that it has long planned, Bloomberg said.

    Lockheed told lawmakers and congressional members on why the F-35 is a better choice over the F-15X, including a “fact sheet” distributed in December.

    Boeing has offered the F-15X with the price tag of $80 million per plane under a fixed-price contract with delivers in 2022. By comparison, the Lockheed F-35 is estimated to cost $89 million each, a mere $9 million difference between the fourth and fifth generation jets.

    However, there seems to be a rift between the Air Force and lawmakers in Congress tasked with funding the new program. On Tuesday, five Republican senators sent a letter to President Donald Trump warning that an F-15 purchase would divert resources away from the F-35, thus jeopardizing national security.

    “We are extremely concerned that, over the last few years, the DoD has underfunded the F-35 Program and relied on Congress to fund increases in production, sustainment, and modernization,” the lawmakers  wrote. “In order to meet the overmatch and lethality goals laid out in the National Security Strategy, the DoD needs to make these investments in the F-35 to affordably deliver and operate this fifth-generation fighter fleet. The F-35 is the most affordable, lethal, and survivable air dominance fighter, and now is the time to double down on the program.”

    “New versions of old F-15s designed in the 1970s-1980s cannot survive against the newest Russian and Chinese fifth-generation fighter and surface to air missile threats, not to mention rapidly developing future threats,” they  added. “This action by the DoD would be a direct departure from the vision you have for a strong national defense.”

    In short: The Air Force’s request to procure the F-15x suggests that the F-35 has significant flaws. Why else would the Air Force revert to a 45-year-old airframe? There is a much bigger issue at play, China and Russia have put their fifth-generation jets into series production, a move that could jeopardize US national security.

  • Yellowstone Supervolcano Eruption Fears Rise As Geysers Become More Active

    Submitted by Mac Slavo of SHTFPlan.com

    Some of Yellowstone’s geysers have been more active lately reigniting fears that the massive supervolcano will erupt. The sudden bursts of steaming hot water highlight the dramatic nature of Yellowstone while reminding us we are all at the caldera’s mercy.

    While average people seemed concerned, geologists seemed excited and thrilled when Yellowstone’s steamboat geyser began erupting again in 2018. It has been erupting as often as once a week since last March, according to National Geographic, and scientists continue to say the volatile activity is not a sign of an imminent eruption.  The Yellowstone Volcano Observatory reported that Steamboat has now set a record by erupting a whopping 32 times in 2018, a personal best for the geyser for a single calendar year.  It’s the world’s tallest active geyser, and at the best of times, it can shoot hot water 300 feet into the air. However, it isn’t just the Steamboat Geyser that has been concerning people.

    Ear Spring Geyser, for example, has been almost since 1957, but it erupted spectacularly a few months back and sprayed human garbage from the 1930s all over the national park. But scientists insist this doesn’t mean an eruption is pending. “It’s a good lesson in how geysers actually work,” said Michael Poland, the scientist-in-charge at Yellowstone Volcano Observatory. “As soon as you start to recognize a pattern [in a geyser’s eruption], it changes.”

    “As [far as] geysers go, Steamboat is sort of typical in terms of having these sporadic, unpredictable eruptions,” Poland notes. “But because it’s this really tall geyser and it has this name recognition, it makes it that much more interesting.” But again, it’s not just Steamboat Geyser that has people concerned.  “But back in 2007 to 2008, Giant [geyser] went bananas,” Poland says. “It erupted many, many more times than it had in the past year—and Steamboat didn’t do anything of the sort.”

    Poland says that because there have been no underlying changes to the heat source which propels geysers, not have there been any geological changes, we should not be concerned about Yellowstone erupting in a cataclysmic event.  But Poland is either wrong on one front, or he’s being intentionally misleading. There has been a major geological change that could literally affect the entire globe, one which he conveniently left out for unknown reasons: Earth’s Magnetic North Pole Has Been Shifting Radpily In The Past 40 Years

    But have no fear, anyone who is worried about an eruption has fears which are “unfounded” according to a report by National GeographicThe scientists and media outlets who wish to control public thought and opinion would like for anyone concerned to take off their tin foil hat. Sometimes it feels like we are being conditioned and told what to care about and which things we should fear as opposed to allowing us the freedom to decide on our own. Is Yellowstone a threat? Maybe, maybe not. It’s not our place to tell you what to think, we ask that you take your own thoughts into your hands and decide for yourself if Yellowstone is a viable threat.

  • Why Startups Are Low-Balling Valuations When Assigning Employee Stock Options

    Start up companies become “conveniently” pessimistic about their valuations prior to going public when stock options are handed out to employees, according to a Wall Street Journal analysis. The lower valuations create a windfall for employees and can lower their tax burdens going forward.

    The report analyzed recent initial public offerings and identified 68 companies that gave employees stock options to buy about $1.5 billion worth of stock during the 12 month run up to each respective company’s IPO. The fair market value of those shares, however, was an estimated $2.2 billion at the time, based on a valuation model developed by academics. This is the equivalent of a 32% discount on shares for employees.

    Will Gornall, an assistant finance professor at the University of British Columbia, said: “The Journal’s findings show that the valuations being reported by companies are significantly below what the shares are really worth—the price that investors would pay for them.” 

    This year, these types of valuations will be in focus as names like Uber and Pinterest prepare to go public. A good example of this “low-balling” was Blue Apron Holdings. The founders of the company received a total of $30 million in October 2015 from stock sales to outside investors at $13.33 a share. This is more than triple the $3.69 per share that the company would use four months later as it granted options to employees. Blue Apron shares now trade at about $1.54 per share.

    Mukesh Bajaj, a financial economist who has testified in many valuation cases for the Internal Revenue Service said: “The law states employee-allocated stock should be priced at its fair value but doesn’t specify the basis of the pricing—which may give companies a tempting loophole to enrich their executives.”

    Stock options are one of the best weapons for startups to attract talent, and these types of discounts on stock can be a profitable benefit. Being such early investors and having options before a company goes public makes it easier for employees to reap profits, even though public market participants may see the company’s share price decline. In addition to getting stock cheap, these profits are taxed as capital gains instead of income, saving employees on taxes.

    Robert Willens, a New York-based tax analyst, said: “There’s a tremendous incentive to value the stock at the lowest possible figure. It’s a tried and true strategy and the IRS surprisingly is not very vigilant about it.”

    Private company valuations are usually far more opaque and subjective than public companies, whose valuation is constantly on display by public markets.

    The IRS is trying to clamp down on this tax avoidance by imposing penalties on companies and employees if options are granted to buy shares at less than fair market value. But IRS rules generally shield companies from action if they use an independent valuation firm, unless that valuation is deemed to be “grossly unreasonable”. As a result of this 2004 rule, many “independent” firms sprang up and got into the business of performing these types of valuations.

    Dan Eyman, managing director of San Francisco-based Meld Valuation, said online: “What we aim for … is to try and get you the lowest possible answer that is still defensible against an audit.”

    The IRS has done very little in enforcing these rules. The SEC has asked more than 180 companies that were planning an IPO to explain the pricing of their options or equity awards between 2016 and 2018. However, they didn’t ultimately require any of these companies to adjust their financial statements.

Digest powered by RSS Digest

Today’s News 21st February 2019

  • "Consequences for NATO": Germany Rebuffs UK Call To Back Off Saudi Arms Freeze

    Germany is feeling the pressure from western allies over its weapons exports freeze in the wake of the Saudi killing of Jamal Khashoggi, a freeze first announced in November, which included plans to reject any future export licences to Riyadh, but not previously approved deals. 

    German allies like the UK have lately implored the German government to soften its stance, noting the potential broader economic impact on Europe. British foreign minister Jeremy Hunt, currently in Berlin to discuss the terms of Brexit, reportedly wrote to the German foreign minister, Heiko Maas, in a private letter first revealed by Der Spiegel that UK defense companies would be hindered in contractual obligations related to Eurofighter Typhoon and the Tornado fighter jet delivery, namely to supply parts affected by the German arms freeze. 

    F-5E J-3065 and Eurofighter Typhoon. Image source: Eurofighter Gmbh-Austrian AF

    Hunt told Maas in the letter published in German press: “I am very concerned about the impact of the German government’s decision on the British and European defence industry and the consequences for Europe’s ability to fulfil its Nato commitments.”

    This follows comments by German chancellor Angela Merkel at the past weekend’s Munich Security Conference acknowledging the need for “common export controls guidelines” across Europe. She said during a question-and-answer session after her speech at the conference:

    We have because of our history very good reasons to have very strict arms export guidelines, but we have just as good reasons in our defense community to stand together in a joint defense policy. And if we want … to develop joint fighter planes, joint tanks, then there’s no other way but to move step-by-step towards common export controls guidelines.

    However, German Economy Ministry spokeswoman indicated that no change was imminent when questioned by Reuters. “The view of the government is clear and there is no new situation. There is at the moment no basis for further approvals,” she said.

    Germany has further said the decision to halt new arms sales is connected to the worsening humanitarian catastrophe still unfolding in Yemen, led by the Saudis and its gulf and US/UK allies. 

    On Wednesday Mass reaffirmed while speaking to reporters following the meeting with Hunt: “We are not delivering any weapons to Saudi Arabia at the moment and we will make future decisions depend on how the Yemen conflict develops and whether what has been agreed in the peace talks in Stockholm is being implemented,” according to Reuters

    Interestingly, the UK also appears ready to play the Russia and China card, warning Germany that Riyadh could turn to Russia and Chinese defense companies should Europe prove an unwilling partner. 

    But the most pressing and immediate UK concern remains the pending jet deal. Reuters notes that this week’s meeting in Berlin “followed complaints last week from a top Airbus official who told Reuters that the halt was preventing Britain from completing the sale of 48 Eurofighter Typhoon warplanes to Riyadh. He said the issue was also affecting potential sales of other weapons such as the A400M military transporter.”

    The four countries involved in the production of the Eurofighter include Germany, Britain, Italy, and Spain, involving the companies Airbus, BAE and Italy’s Leonardo.

  • Hungary Prime Minister Attacks Juncker And Soros In Billboard Ad

    Submitted by Mish Shedlock of MishTalk

    Hungarian Prime Minister Victor Orbán attacked EC President Jean Claude Jucker and George Soros in a billboard ad.

    The EU has never seen anything quite like this. Orbán has a billboard campaign that claims European Commission president Juncker and and George Soros are “Endangering Hungary’s Safety”.

    Opening a new front against Brussels a few months before European [parliament] elections, the poster shows the European commission president alongside the Hungarian-American philanthropist George Soros, a familiar target in Hungary.

    “You have the right to know what Brussels is planning to do,” the poster says. On its official Facebook page, the Hungarian government says the poster is part of an information campaign to tell the public about Brussels’ migration plans, which it claims “fundamentally endangered Hungary’s safety”.

    Although the government has previously run a “Stop Brussels” campaign, the decision to use an image of Junker is an escalation in the Orbán government’s public relations war with the EU’s most senior leaders.

    It also exposes the rift in the centre-right European People’s party in the European parliament, which counts Juncker and Orbán, as members.

    Orbán was re-elected for a third straight term last April, after a campaign dominated by immigration. A long-term critic of the EU, Orbán has accused NGOs and critical media of being part of a plot orchestrated by Soros to send millions of people to Hungary.

    In recent weeks, Orbán has spoken of his hopes that the next European parliament will be dominated by anti-immigration parties.

    Birds of a Feather Not

    ​Juncker once met Orbán with the jokey greeting “hello, dictator” and playfully tapped his face.

    Today, Juncker responded Orban Should Leave Europe’s Centre-Right.

    European Commission president Jean-Claude Juncker has said Hungarian prime minister Viktor Orban’s ruling Fidesz party should leave the centre-right European People’s Party (EPP) group in the European Parliament (EP).

    “Against lies there’s not much you can do,” Juncker was quoted as saying by the Reuters news agency, adding that he had called for Fidesz’s expulsion from the EPP.

    ​”They didn’t vote for me in the European Parliament,” he said in Stuttgart, Germany, in a speech. “The far right didn’t either. I remember Ms. Le Pen, she said: ‘I’m not voting for you.’ I said: ‘I don’t want your vote.’ There are certain votes you just don’t want,” Juncker said, referring to the French far-right leader Marine Le Pen.

    Eurointelligence Comments

    Looking at Orbán’s previous record, and noting that one cannot of be sure, we continue doubt that Hungary’s Prime Minister has changed his European strategy and is now working to provoke the exclusion of his party from the EPP. Rather, Orbán seems to be doing one his classic hit-and-runs.

    There is little doubt that the new smear campaign will make life on the campaign trail much more difficult for Manfred Weber, the CSU MEP and EPP spitzenkandidat. Juncker himself has now declared more forcefully than ever before that the EPP values are not consistent with keeping Fidesz in.

    But we note that the CSU leadership in Munich has in the past consistently worked to maintain close and even warm ties with Orban.

    Spitzenkandidat

    US readers no doubt need an explanation of Spitzenkandidat. The following video explains.

    In short, the term refers to an election process instead of an appointment process to determine the head of the European Commission.

    63% of Europeans want the commission president determined by vote. Those in power still support the behind closed doors process for obvious reasons.

    Orbán’s mission

    Orbán’s mission is to weaken the EU from within. Italy has the same mission, for different reasons, as does President Trump.

    EU Splintering

    Two days ago I reported a Commerce Study Deems “European Cars a Threat to US National Security”. That’s nonsensical, of course. But Trump’s mission is easy to spot. He is doing his best to bust up the EU.

    And now Trump has a lot of help on the inside: Marine Le Pen in France, Victor Orbán in Hungary, and Matteo Salvini in Italy.

    I response to Trump, I noted, EU Pokes Trump Again, This Time Over Huawei’ s 5G Technology.

    In the UK, Seven UK MPs Split from Labour Party Over Brexit. More MPs joined that parade today.

    The splintering of the EU continues with escalating infighting at unprecedented levels.

    It is illogical for the UK to want to part of this mess. Yet, the UK Remainers want to stay in.

  • Let's Face It: The U.S. Constitution Has Failed

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    Elections provide the bread-and-circuses staged-drama that is passed off as democracy.

    Despite the anything-goes quality of American culture, one thing remains verboten to say publicly: the U.S. Constitution has failed. The reason why this painfully obvious fact cannot be discussed publicly is that it gives the lie to the legitimacy of the entire status quo.

    The Constitution was intended to limit 1) the power of government over the citizenry 2) the power of each branch of government and 3) the power of political/financial elites over the government and the citizenry, as the Founders recognized the intrinsic risks of an all-powerful state, an all-powerful state dominated by one branch of government and the risks of a financial elite corrupting the state to serve their interests above those of the citizenry.

    The Constitution has failed to place limits on the power of government, on the emergence of unaccountable states-within-a-state agencies and on the political power of financial elites.

    How has the Constitution failed? It has failed in three ways:

    1. Corporations and the super-wealthy elite control the machinery of governance. The public interest is not represented except as interpreted / filtered through corporate/elite interests.

    2. The nation’s central bank, the Federal Reserve, has the power to debauch the nation’s currency and reward the wealthy via issuing new currency and buying Treasury bonds in whatever sums it deems necessary at the moment. The Fed is only nominally under the control of the elected government. It is in effect an independent state-within-a-state that dominates the financial well-being of the entire nation.

    3. The National Security State–the alphabet agencies of the FBI, CIA, NSA et al.–are an independent state-within-a-state, answerable only to themselves, not to the public or their representatives. Congressional oversight is little more than feeble rubber-stamping of the Imperial Project and whatever the unelected National Security leadership deems worthy of pursuit.

    The Constitution’s core regulatory element–the balancing of executive, legislative and judicial power–has broken down. The judiciary’s independence is as nominal as the legislative branch’s control of the central bank and National Security state: the gradual encroachment of corporate and state power is rubber-stamped and declared constitutional.

    The secret power of the National Security agencies was declared constitutional early in the Cold war, when unleashing unaccountable and secret agencies was deemed necessary.

    The bizarre public-private Federal Reserve was deemed constitutional at its founding in 1913, and the Supreme Court famously declared that corporations have the same rights to free speech (including loudspeakers that cost millions of dollars) as living citizens.

    The powers of the Imperial Presidency also continue expanding, regardless of which party is in office or the supposed ideological tropisms of Supreme Court justices.

    Every step of this erosion of public representation and the elected government’s power is declared fully constitutional, in classic boiled-frog fashion. The frog detects the rising temperature of the water but isn’t alarmed as the heat is increased so gradually.

    Since the rise of unaccountable states-within-a-state are constitutional, as is the dominance of corporate / private-wealth elites, on what grounds can citizens protest their loss of representation?

    Elections provide the bread-and-circuses staged drama that is passed off as democracy. The key goal of the corporate/state media coverage, of course, is to foster the illusion that elections really, really, really matter, when the reality is they don’t. The National Security State grinds on, the Federal Reserve grinds on and the dominance of corporate-wealth elites grinds on regardless of who’s in office.

    Every emergency is met by the ceding of more power to unelected elites in positions to serve their own interests. The Cold War, financial panics, Cold War Redux–every crisis is an excuse to expand the powers of the unaccountable, opaque states-within-a-state.

    The media is already gearing up with 24/7 coverage of the 2020 elections. The constant churn of drama-trauma serves to mask the impotence and powerlessness of the citizenry and the unaccountability of the states-within-a-state that rule the nation.

    *  *  *

    Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format. My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF).  My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

  • Sig Sauer Unveils The MPX Copperhead: Is This The Army's Next Submachine Gun?

    Sig Sauer, Inc. has announced the latest addition to the Sig Sauer MPX weapon series, the ultra-compact MPX Copperhead submachine gun at the annual SHOT Show firearms trade show in Las Vegas.

    The gun manufacturer has geared the new submachine gun toward the US civilian market as a 9mm “pistol,” but its select-fire version could trigger interest from the US military.

    “The MPX Copperhead considerably reduces the length, width, and size of the MPX platform making it the most compact addition to the MPX family of firearms,” Tom Taylor, Chief Marketing Officer and Executive Vice President of Commercial Sales at SIG SAUER, Inc., told Shooting Illustrated in an interview last month. “The Copperhead is the perfect combination of the features and performance our consumers expect from a SIG MPX in a compact package.”

    The submachine gun incorporates a three-and-a-half-inch barrel and has a total length of 14.5-inches. It is much smaller than a traditional submachine gun and weighs only four-and-half pounds, which is a 30% reduction in weight compared to the AR-15 style rifle.

    The civilian version has a barrel with a flash hider machined at the end. The military version has a threaded muzzle that allows for a quick-detach system like a sound suppressor.

    According to Guns.com, the design of the MPX Copperhead closely mirrors what the US Army has in mind for their Sub Compact Weapon (SCW) program, for which Sig Sauer, along with five other defense firms, have submitted their submachine guns for testing.

    The Army set up the SCW program to solicit defense companies for the ability to submit their next generation of submachine guns, which there will only be one winner, to swap out the decades-old HK MP5s and other similar weapons. 

    The MPX Copperhead is already a leading contender given the Army’s growing interest in the MPX weapon series.

    In July 2018, the Army contracted Sig Sauer to provide MPX and MCX weapon types, as part of a large order for American special forces, other unnamed government agencies, and unspecified foreign partners.

    The new submachine gun is ultra-compact, it is powerful, and it could be the newest submachine gun the Army fields.

  • Michael Cohen Gets Two-Month Delay Before Starting Prison Sentence

    Former Trump attorney Michael Cohen was granted a 60-day delay before he has to report to prison, ruled a federal judge in Manhattan on Wednesday. 

    The decision by US District Judge William Pauley III was granted after Cohen’s attorneys cited the need to recover from recent shoulder surgery and prepare for congressional testimony before three committees – one of which is scheduled for February 28, while dates for the other two have not been publicly announced. 

    Cohen was sentenced to three years in prison for a series of crimes, including tax evasion, financial fraud and campaign finance violations stemming from a scheme to pay off women who claimed to have had decade-old affairs with Donald Trump. 

    Cohen has attracted massive attention since he pleaded guilty to the offenses last August in a deal with federal prosecutors in New York. He separately pleaded guilty to lying to Congress about discussions within the Trump Organization about building a property in Moscow, and agreed to cooperate in special counsel Robert Mueller’s ongoing investigation into Russian interference.

    Cohen was a longtime ally of Trump but their relationship quickly turned sour last year, after Cohen implicated Trump in the hush-money scheme. Trump has denied wrongdoing and lambasted Cohen as a liar. -The Hill

    The former Trump attorney is scheduled to appear before the House Oversight and Intelligence Committees, as well as the Senate Intelligence Committee, after the latter subpoenaed him to for closed-door testimony. 

    Cohen was originally scheduled to report to prison on March 6, however the 60-day delay was granted following a letter from his attorney, Michael Monico, in a letter released by the court on Wednesday. 

    Defendant makes the request because he recently underwent a serious surgical procedure and he needs to undergo intensive post-surgical physical therapy and be monitored by his physician for recovery,” wrote Monico, who added: “Mr. Cohen also anticipates being called to testify before three (3) Congressional committees at the end of the month.” 

    “Doing so will require Mr. Cohen to spend substantial time in preparation that will limit the time he has to get his affairs in order and spend time with his family, especially given such a short period between the anticipated hearings and the present reporting date.”

     

  • These 10 GOP Senators May Vote To Terminate Trump Border Emergency

    As Congress prepares to pass a resolution to preemptively terminate President Trump’s national emergency declaration before he can redirect some $7 billion in military and Treasury Department funding, lawmakers have said that the resolution will likely make it to Trump’s desk, prompting what would be his first veto.

    Of course, passing the resolution in the Senate would be impossible without the support of at least a handful of Republicans. And already, several have spoken out to criticize the decision for circumventing Congress, robbing the coffers of the military and setting a dangerous precedent.

    Rand

    Rand Paul

    While it’s possible (likely, even) that the Ninth Circuit Court will do Congress’s work for them by responding to a lawsuit filed by 16 states challenging the declaration and calling for an injunction to stop construction on over 200 miles of Trump’s border barrier, Congress is moving ahead with its plans to vote on the resolution that Democrats are expected to bring to the floor on Friday. While no GOP senators have publicly said they would oppose the order, the Hill has compiled a list of 10 who are uncomfortable in the measure, and might move to oppose it.

    Sen. Susan Collins (Maine)

    Collins, a top Democratic target in 2020, has warned that the emergency declaration is “of dubious constitutionality” and a “mistake.”
    She hasn’t definitively said how she will vote and suggested to reporters Thursday that her decision could swing on how much money Trump plans to redirect through his emergency declaration.

    Voting against Trump’s declaration would give her some distance from the president, which could help her politically after she voted to confirm Supreme Court Justice Brett Kavanaugh.

    Sen. Lisa Murkowski (Alaska)

    Murkowski said last week that the lack of a border wall is not “a matter that should be declared a national emergency.”

    She has also said that acting “unilaterally” raises a concern about precedent.

    “We don’t know who our next president may be, but it may be a president whose No. 1 priority is dealing with climate change, who says ‘I don’t care whether I have the support of the Congress,'” she said in a CBS interview. “Or a president who may say ‘I believe that gun violence in this country is the most pressing issue and I don’t care whether the Congress supports me or not.'”

    She has also voiced anxiety about how the action could erode congressional authority.

    Sen. Thom Tillis (NC)

    Tillis is another Democratic target in 2020, though his state has voted for the GOP candidate for president in the past two cycles.
    He has generally been a strong ally of Trump’s, but he may want to demonstrate independence.

    Tillis, a member of the Senate Armed Services Committee, worries that Trump’s plan to take money from military construction projects for the wall could undermine defense readiness.

    He warned in a statement that “it wouldn’t provide enough funding to adequately secure our borders” and “would create a new precedent that a left-wing president would undoubtedly utilize to implement their radical policy agenda while bypassing the authority of Congress.”

    Sen. Lamar Alexander (Tenn.)

    Alexander, an institutionalist and student of history, is attuned to the constitutional and separation of powers questions raised by Trump’s action.

    He’s also retiring, which gives him the freedom to vote his conscience.

    Alexander was one of six Republicans who voted last month for a Democratic measure to reopen the federal government without additional funding for the border wall.

    On Friday, he called Trump’s action “unnecessary, unwise and inconsistent with the Constitution,” warning it could set the precedent for a president to declare an emergency to tear down border barriers or close coal plants.

    Sen. Cory Gardner (Colo.)

    Gardner, like Collins, faces reelection next year in a state won by Democratic presidential nominee Hillary Clinton.

    In a statement, he said Congress is “most appropriately situated to fund border security,” but he hasn’t said how he’d vote on a disapproval resolution.

    He is facing pressure from within his state, one of 16 that have filed a  lawsuit against Trump’s action. Nearly 100 people gathered outside Gardner’s Fort Collins office Monday to protest Trump’s announcement.

    Gardner says he is “currently reviewing the authorities the administration is using.”

    Sen. Marco Rubio (Fla.)

    Rubio, whom Trump defeated in the 2016 GOP primary, says he will review the administration’s arguments on its statutory and constitutional powers.

    “I am skeptical it will be something I can support,” he has said, noting the precedent it could set.

    He warned Monday of its implications for military projects.

    “Just as a matter of policy, our military construction budget is already behind schedule compared to where we need to be for some of our facilities around this country, so I think it’s a bad idea,” he said.

    Sen. Mitt Romney (Utah)

    Romney, one of six Republicans to vote to reopen the government without additional wall funding, last week said he wanted to see what “legislative authority he might cite” before rendering a decision on an emergency declaration.

    The Utah senator has harshly criticized Trump, and his national stature as a past GOP presidential nominee has set him up as a rival leader within the party to Trump.

    He predicted last month there was a “good chance” Trump would declare an emergency and warned it would set a bad precedent. “We Republicans will be concerned that this kind of approach could be used by perhaps a Democrat president in the future,” he told KSL Newsradio’s “Dave and Dujanovic.”

    Sen. Mike Lee (Utah)

    Lee said in a tweet Friday that “Congress has been ceding far too much power to the exec. Branch for decades. We should use this moment as an opportunity to start taking that power back.”

    A spokesman said Lee is undecided on how to vote on any resolution that comes to the Senate floor.

    Lee has been a leading advocate for giving Congress more say over Trump’s authority to use military force.

    In December, he was one of seven Republicans who voted for a resolution to end U.S. military assistance to Saudi Arabia in Yemen’s civil war. He co-wrote the resolution with Sen. Bernie Sanders (I-Vt.).

    Sen. Jerry Moran (Kan.)

    Moran has quietly emerged as an independent-minded lawmaker who’s willing to buck Trump on big votes.

    He also voted with Lee and Collins in December to rein in Trump’s war-making authority, sending a message to Saudi Arabia after the killing of U.S.-based journalist Jamal Khashoggi.

    Moran argues that Trump’s decision could embolden future presidents to circumvent Congress.

    “I’m worried that if it gets used this time, what’s the next instance in which it becomes used?” he said last week.

    Sen. Rand Paul (Ky.)

    Paul has emerged as a confidant of Trump’s, but he has also styled himself a constitutionalist throughout his Senate career and regularly bucks his party’s leadership on votes that strike at his core principles.

    Paul has warned against circumventing Congress’s power of the purse.

    On Thursday, he said he was “disappointed” with the president’s “intention to declare an emergency to build the wall.”

    While Paul supports stronger border security, he said “extraconstitutional executive actions are wrong, no matter which party does them.”

    And Paul hasn’t been shy about bucking Trump on other high-profile questions, as shown through his attempt to stop arms sales to Saudi Arabia.

    He voted with Lee, Collins and Moran in December to curb the president’s war powers and regularly defends the independence of the separate branches of government.

    Assuming no Democratic Senators vote with Republicans, the Dems would need four GOP senators to break ranks and vote to support the resolution to send it on to Trump’s desk (that’s assuming that both of the chamber’s independents who caucus with the Dems support the resolution).

  • The Nightmare Fairyland Of The Green New Dealers

    Authored by Richard Ebeling via The American Institute for Economic Research,

    When a small child runs around waving their arms saying, “I’m a bird, I’m a bird,” we often will say what a creative imagination they have. If an adult runs around doing the same, we usually say that that person needs help because they are clearly out of touch with reality. Anyone who takes the time to read the proposed Green New Deal legislation can only conclude that the authors are living in a fairyland that is also deeply out of touch with reality.

    Read through the list of desired and, indeed, demanded activities the congressional sponsors say they want the federal government to undertake over the next decade. The sponsors resemble a child running around the toy store saying, “I want that, and that, and that, and that, and…” while all the time completely oblivious to the fact that everything they want costs money that their parents do not have an unlimited quantity of.

    The child may very well throw a temper tantrum when they are told that not everything they want can be had, or at least not right now all at the same time. What the child is not yet fully cognizant of is the existence and meaning of scarcity, costs, and trade-offs. Food, clothing, a room in which to sleep, and various other nice things from their parents just seem to be there. So why can’t they just have all these other things as well, and just for the asking?

    The Green New Deal’s Grab Bag of Desired Things

    House Resolution 109 (February 7, 2019), “Recognizing the Duty of the Federal Government to Create a Green New Deal,” has a long list of sponsoring congresspersons who seem to be not much different from that child in the toy store.

    I want an end to climate change;

    and I want an end to poverty;

    I want an end to social injustice, and an end to racism, sexism, and ethnic discrimination;

    I want a fossil fuel–free environment with renewable-energy sources and high-speed railways;

    I want everyone to have a well-paying, secure, and meaningful job, guaranteed by the government;

    I want everyone to have good, inexpensive government-supplied housing;

    I want everyone to have a free education all the way to the PhD level;

    I want manufacturing and agriculture to be balanced through government support and subsidies;

    I want happy and respected indigenous peoples;

    and I want guaranteed and comfortable government-secured retirement pensions for everyone;

    plus, I want everyone to have guaranteed vacations.

    In addition, each of the sponsors of the legislation says,

    I also want labor unions to have the power to determine work conditions and set wages;

    and I want all the groups in society, and most especially the ones that I consider to be underprivileged and under-represented and not treated nicely, to sit at the table of governmental decision-making and make sure that every one of these groups gets what I know they want and deserve.

    And I also want the U.S. government to guide and subsidize the rest of the world to do the same.

    And I want the government to do it now, before the oceans rise, the sky falls, and greedy capitalists who don’t care about anything other than their selfish profits destroy all living things on the planet.

    Then with beautiful little birds chirping in the air in a clear blue sky, we will all live happily ever after in the Green New Deal paradise. The End.

    Ignoring Criticisms to Pursue Political Purposes

    A variety of critics have pointed out that the potential financial costs if the government attempted to implement all of this would likely run into the tens of trillions of dollars, looking over the next few decades. Others have calculated that the possible environmental benefits in monetary terms between now and the end of the 21st century most likely would be way too small to justify the lost growth in the overall American economy. And still others have reminded people of the dangerous loss of personal freedom and decision-making that would result from shifting to the required government central planning if the Green New Deal were to be fully implemented. (See my article “The Green New Dealers and the New Socialism.”)

    That most of the politicians who have signed up in support of the Green New Deal seem unconcerned by these consequences should not be too surprising.

    First, they are spending other people’s money — that is, money to be taxed from the American people or borrowed with future taxpayers expected to foot the bill. Besides, once you are talking in terms of trillions of dollars, one loses all sense of reality. Who can even picture in their mind what those kinds of sums really mean? It all seems like play money in a Monopoly game.

    Second, all those politicians suffer from electoral near-sightedness. Their vision extends no further than the next election. For members of the House of Representatives this is only two years after the last election, which means they were already running for re-election even before they were sworn in to their term of office in early January 2019. Their mindset is that of “Après nous, le deluge” (After us, the flood). The full, long-run effects of vote-getting short-run policies will only emerge much later, possibly long after many of them are no longer in office. And if they are still in government when some of those longer-run consequences start to appear, who will go back and check their voting record from decades earlier to prove that it’s really all their fault? The finger can be so easily pointed in other directions.

    Third, far too many of them are guided by an ideological zeal that is accompanied by a power lusting for remaking the world in their own image. Which one of them does not suffer from the hubris of the would-be social engineer, the redesigner of society according to their own presumptuous conception of how people should live, work, and interact with their fellow human beings? Nary a one demonstrates any modesty or hesitation in believing that they know better how humanity should live than all those actually living out their individual lives in the world according to their own lights concerning what would be best for them and their families.

    Few Politicians Know the Meaning of Bottom Lines

    According to the Congressional Research Service in its December 2018 profile of Congress, less than 40 percent of all members of the House of Representatives and less than 30 percent of those in the Senate had any prior experience in business. Before winning their congressional positions, the large majority had careers in state or local government offices, or in the law profession, or in teaching.

    Many in Congress have had little or no experience in running an enterprise, satisfying customer demands, meeting employee payrolls, or ensuring that a company’s bottom line remains in the black in the face of market competition. This does not mean that law or teaching are not worthy occupations, or that they preclude someone from having a good understanding of the market process or the value of securing individual liberty; after all, I’m in the teaching profession myself. But those who have operated a business are likely to be more aware of the reality and workings of financial costs and benefits, uncertain investment decision-making, the need for making inescapable trade-offs, and personal risks of success and failure that occur in the world of competitive private enterprise.

    Of course, having been a businessperson before entering politics does not ensure that someone is immune to the power-lusting or social-engineering bug, nor does it prevent such a person from easily falling into the mindset of spending other people’s money. Even those who claim to be for free enterprise, individual freedom, and limited government too often show themselves cut from the same political cloth as any others running for or holding political office. Indeed, those businesspeople who end up in political positions too frequently seem badly infected by the interventionist and welfare-statist viruses. (See my articles “If Political Candidates Advocated Liberty” and “Donald Trump the Corrupt Creation of America’s Bankrupt Politics.”)

    Green New Dealers’ Scarcity-Free Fairyland

    It is not really surprising that those who have most enthusiastically signed on to the Green New Deal are those in the “progressive” wing of the Democratic Party, and especially those who are the self-declared democratic socialists among them. Only a socialist can still believe that government planning can solve all the problems of the world, that merely commanding resources and directing people can take care of humanity’s economic and social shortcomings, and all within a decade of setting the plan in motion.

    Read through House Resolution 109, and not once do you find any reference to limits, scarcity, trade-offs, costs, or consumer choice and private-enterprise decision-making. Like a throwback to the Stalinist five-year plans of the 1930s, great transformations will be conjured up: new infrastructures in the form of roads, transportation, buildings, energy, and production will be redesigned and introduced in every corner of society with merely the will and command to free the world of fossil fuels and their effects. To be fair, they have shown greater modesty than the Stalinist enthusiasts of that earlier time; the Green New Dealers have given themselves a decade to perform these miracles, rather than work within the frame of a Soviet-style five-year plan.

    They admit at several points that there may be the constraints of what science and technology will allow to be physically achieved; but they also propose the necessary government funding for research and development so that even nature should not serve as an inescapable obstacle to Utopia. The government experts will surely know which technologies deserve support to meet the targets and goals laid out in the economy-wide encompassing green central plan.

    Nor should there be any concern about the money for all this, because that is what taxing the rich and government borrowing are for; and last but certainly not least, the money to pay for it can always be created since that is what central banks are for. The latter especially may have to be used since America is also to guide and subsidize similar green plans in the other parts of the world. Who said American progressives and democratic socialists don’t believe in making America great again? What could be greater than Americans paying for all that may be needed to save the entire planet? If that does not make you proud to be an American, what does?

    Listen to their responses to those who challenge their green plan. Again, like the immature child, they pout and stamp their feet that the only problem is that the rich don’t want to pay up what they owe society. Or the racists and sexists want to maintain the existing social order of things so they can have the power to oppress the victims of their exploitive profit seeking. If not for the enemies of the good, all would be possible without limit or natural constraint.

    Green Planning and the Abolition of Rational Calculation

    Is it really necessary nearly 100 years after the publication of Austrian economist Ludwig von Mises’ famous essay “Economic Calculation in the Socialist Commonwealth” (1920) to point out that it is not enough to know in technological terms what you would like to do or achieve? It is fundamentally essential in a world of inescapable scarcity of the means to attain our various desired ends to know in value terms what are the competing and most highly valued uses for which the limited factors of production might be applied.

    How will the Green New Dealers know whether they have invested too much in a high-speed railway line in Nebraska compared to one in Idaho?

    Or how will they know whether either one has been worth it at that time and in those places compared to solar panel constructions in North Dakota or wind turbines in Mississippi?

    How will they know whether a government housing project in Boston has really been affordable in comparison to a new “free” medical clinic in Tucson, Arizona?

    How will they know any of this in relation to a vast and complex variety of consumer items that citizens all around the country would have been willing to buy, if their incomes had not been taxed and there had been a competitive free market in the production and sale of finished consumption goods?

    The answer is, there will be no real and meaningful answer. Without a private competitive market for the factors of production (land, labor, capital) in which private enterprisers offer factors prices based on their alternative entrepreneurial judgments about the types and quantities of consumer goods that market demanders might be willing to buy in the future at particular anticipated prices, there is no way to know whether the means at society’s disposal (that means all of us as individual buyers and sellers) have been cost-efficiently used to attain as many of the alternative and competing ends we would like to see possibly achieved. (See my article “Why Socialism Is Impossible.”)

    But the proposed Green New Deal implicitly does away with a functioning, competitive price system. Instead, what the Green New Dealers offer is a free-for-all of political plundering through interest group horse-trading and pandering. That’s what they say in the proposal: “A Green New Deal must be developed through transparent and inclusive consultation, collaboration and partnership with frontline and vulnerable communities, labor unions, worker cooperatives, civil society groups, academia, and businesses.” The government, labor unions, and stakeholder groups will also acquire equity ownership in the private enterprises that, clearly, now will be producing for environmental-sustainability and social-justice outcomes rather than for self-interested profit guided by market-based prices to satisfy consumer demands.

    Green New Dealers Ignore How Little They Really Know

    Is it also necessary nearly 75 years after the publication of Friedrich A. Hayek’s classic essay “The Use of Knowledge in Society” (1945) to remind people who should know better that it is the height of arrogance to presume that the designers of the Green New Deal and any others appointed to detail and implement such a grand epoch in American central planning, that there is more dispersed, decentralized, and ever-changing knowledge possessed in the minds of all of humanity combined than any group of social engineers can ever hope to master and integrate to solve the various problems of society?

    Here, too, is an instance of the infantile ignorance of the green social engineers who believe that, like Olympian gods high above the ordinary mortals of humankind, they can direct the best future for not only all those in the United States but the entire population of the world. Straitjacketing everyone within the confines of the green plan means that hundreds of millions of people are prevented from deciding how best to use what they know that many others do not, and in ways that in the competitive, price-guided market process enable all to benefit from what everyone else knows. (See my article “F.A. Hayek and Why Government Can’t Manage Society.”)

    The Green New Deal Leads to Planned Chaos

    With the implementation of the Green New Dealers’ dreamland, America will begin the transition from a system of price-guided production serving and satisfying market-based consumer demand to what Ludwig von Mises called the “planned chaos” of waste-creating surpluses of unneeded and wrongly made goods along with life-frustrating shortages of desired and essential consumer items and producer commodities.

    No longer singularly directed by competitive prices, the forms and types of production will increasingly be determined by the political dictates of the coalition of “inclusive” groups participating in the democratic decision-making of remaking America into the green world of the future. But precisely because of the direct and indirect supply-chain interdependencies of sectors of the economy in a social system of division of labor, resulting imbalances and distortions in one sector will have inescapable spillover effects on many other sectors.

    A component part needed for one production process is lagging in availability because of manufacturing delays in the factory supplying that part because its energy supplies are dependent upon faulty solar panels caused by inferior inputs allocated to its manufacture under the green plan.

    In another part of the country, highways are crisscrossed with newly installed electric-car powering stations, which are underutilized or not used at all because far fewer electric-powered automobiles have been produced than the planners had planned. Or the traffic flows in that area of the country have turned out to be far less than the green planners had projected because of other mismatches between central plan and local realities.

    The types of competitive, market-based flexibilities in resource allocations and production adjustments that are constantly adapting the supplies to the demands in the face of unexpected and changing circumstances in a system of private, free enterprise under the incentives of profit and loss are all lacking under the green plan.

    Prices and wages cannot adapt to the changing circumstances because various politically connected stakeholders in these imbalanced corners of the economy insist on preserving their socially just standards and locations of living while numerous historically “victimized” groups insist that any change that does occur must protect or improve upon their existing material or social status in society; to not listen to these groups would imply continuing residues of racism, sexism, and social injustice. And there are, of course, the diehard Green New Deal ideologues who insist that personal sacrifices must be happily made because there is no going back to “capitalism.” It’s either the green plan or an end to the planet.

    With each passing day, every passing month and year, the dislocations in the economy grow with accompanying acrimonious accusations, buck-passing rationalizations and excuses, and grandiose political justifications for the increasing shortages, decreasing qualities, and lagging achievements in all the green plan had promised.

    There are outspoken complaints by more and more people; here and there groups of consumers and workers and disappointed members of old or new victimized groups publicly demonstrate with anger and insistence that something better be done. They are met with the green planners promising plan corrections and social improvements, along with accusations about shadowy and dangerous enemies of the beautiful green world being built.

    Green Planning Equals Political Plunder

    The “democratic” socialism about which its new proponents almost lyrically sing is really an extended political plunderland of all those groups listed in the proposed legislation whose leaders will get together and decide how much of other people’s money, social positions, and future life opportunities will be divvied up among their assigned followers at the expense of others in society. It is a gangster politics of coercively imposed outcomes that reduces both victims and recipients of redistributed booty to the status of slave-like dependents of those in governmental power who are determining their fates.

    In spite of the colorful rhetoric of the common good, the general welfare, and social justice, the political arena is populated with those hungering for political power, with those wanting to take from others what they cannot peacefully acquire, and with those who dream dreams of remolding the human matter of society into a better world of their fanciful imaginations.

    Everyday democratic politics is corrupt and wealth-inhibiting enough in the context of the modern interventionist welfare state. But if the Green New Dealers have their way, this will be taken to an entirely new and more destructive level as one great plan for global salvation is imposed on everyone, everywhere, with no avenues of escape in our age of electronic Big Brother surveillance and control. Once embarked on, history suggests that such central-planning systems are very difficult to reverse without great and costly hardships to nearly everyone in society.

  • World's First Anti-Tank Drone Debuts At IDEX 2019

    MBDA Missile Systems and Milrem Robotics unveiled an anti-tank unmanned ground vehicle (UGV) on Sunday at the IDEX-2019 arms exhibition in the United Arab Emirates.

    Claimed to be the world’s first anti-tank UGV, the new weapon system integrates the Milrem Robotics THeMIS (Tracked Hybrid Modular Infantry System) unmanned ground vehicle with the MBDA IMPACT (Integrated MMP Precision Attack Combat Turret) system fitted with two MMP 5th generation ground combat missiles and a self-defense machine gun.

    “This combination of two of the most modern technologies in their field is a very good example how robotic warfare systems will bring disruption to the battlefield and make some traditional technologies obsolete,” said Kuldar Väärsi, CEO of Milrem Robotics.

    Väärsi added: “Our unmanned land combat system under study together with MBDA will be very efficient in keeping our troops safe and significantly increasing the capability to fight main battle tanks, as well as any other ground target.”

    Due to the UGV’s lightweight and size, the remotely operated drone can be deployed with mounted and/or dismounted units, requiring less logistical efforts.  Powered by a diesel engine and an electric generator, the hybrid function of the UVG enables it to operate for 8 to 10 hours. For maximum stealthiness, the UGV can run on electric for .5 to 1.5 hours.

    The UGV has a low heat and noise signature so it can remain undetected, hidden from the enemy’s surveillance equipment while hunting for main battle tanks. 

    The command and control center is displayed remotely in a vehicle cab so the operator of the UGV remains safe from enemy fire.

    The purpose of the UGV is clear: Disrupt the main battle tank which has had dominance on the battlefield for almost the last half century of wars.

  • Chase Bank De-Platforms Conservative Performance Artist Martina Markota

    Two weeks after Chase Bank announced that it would no longer do business with Proud Boys Chairman Enrique Tarrio, Conservative performance artist and Rebel Media personality Martina Markota has become the latest conservative media figure to be targeted by the bank which has made no secret of its support for liberal causes (see its decision to cut ties with the gun industry).

    Markota

    In an interview with Big League Politics, Markota explained that the account that was shuttered had been linked to an Indiegogo campaign that Markota had used to raise more than $34,000 for a graphic novel that she had been working on, which made the decision to shut down the account more of a financial burden for her.

    Markota was mailed a letter form the bank, which she shared on twitter.

    Chase

    When she contacted the bank to try and figure out why the account had been shut down, Markota said they refused to give her a reason. She believes that the decision was politically motivated due to her support for President Trump.

    Upon getting notice of her account shutdown, Markota contacted Chase Bank by phone to ask why her account was shut down.

    “They refused to tell me why,” Markota stated. “They said they have the right to end our relationship and not tell me why.”

    She began to believe that her bank account shutdown was was politically motivated after reading Big League Politics‘ story on Tarrio. This suspicion is well warranted considering the fact that her outspoken support for President Trump has exposed her to a torrent of harassment in recent years.

    Markota added that she has been the victim of harassment from former coworkers when she was a burlesque dancer.

    Markota’s former co-workers from her burlesque days have been on a crusade to make her life miserable ever since she came out as a Trump supporter.

    Their harassment got so bad that Markota is pursuing legal action against the most vicious tormentor.

    If political motivations were in fact behind her de-platforming, that would make Markota the latest in a string of conservatives including Alex Jones, Laura Loomer and Jordan Peterson who have been financially targeted for their political views by what are still perceived as unbiased, apolitical organizations, when in reality financial isolation and boycotts is precisely how outspoken, ideologically opposing voices get silenced.

Digest powered by RSS Digest

Today’s News 20th February 2019

  • Staged Chemical Attack Videos And Other Trends In Modern Propaganda

    Submitted by Southfront.org

    The scandal regarding the fake hospital video published by the White Helmets as a proof of the Douma chemical attack has reached its peak in the media and has caused reaction on the diplomatic level.

    On February 13, BBC Syria’s producer Riam Dalati came out with a statement that “After almost 6 months of investigations” he “can prove without a doubt that the Douma Hospital scene was staged” and “no fatalities had occurred in the hospital.” Dalati added that he believes that “the attack did happen” but no Sarin was used and “everything else around the attack was manufactured for maximum effect.”

    “I can tell you that Jaysh al-Islam ruled Douma with an iron fist. They coopted activists, doctors and humanitarians with fear and intimidation. In fact, one of the 3 or 4 people filming the scene was Dr. Abu Bakr Hanan, a “brute and shifty” doctor affiliated with Jaysh Al-Islam. The narrative was that “there weren’t enough drs [doctors]” but here is one filming and not taking part of the rescue efforts. Will keep the rest for later,” he wrote in a tweet chain on the topic.

    An interesting fact that despite the confidence that the attack did take place and no Sarin was used, Dalati was not able to name the chemical substance used and said that it is up to the OPCW to make conclusions.

    Even this halfway contradiction to the “Assad did it” version caused a wide attention because BBC was among the mainstream media organizations fueling anti-Assad hysteria when the video first appeared in April 2018. This joint propaganda effort became a formal justification of the US-led cruise missile attack on Syria.

    Dalati’s statement widely circulated independent media organizations and was even commented by the Russian defense and foreign ministries. Foreign Ministry Spokeswoman Maria Zakharova described the revelation as a “theater of absurd.”

    “Over the past years, and not only in Syria, we have seen just a tragic farce performed by the Western community and mass media, which on the one hand, speak about the high democratic goals and how they care about the civilians of a sovereign state, and on the other hand, they just do not give a damn about all laws, the international law, freedoms and rights of a nation and certain people,” Zakharova stressed.

    She compared this case with the situation developing around Iraq prior to the start of the US intervention and recalled how then US ambassador to the UN Colin Powell was convincing the international community that there is a need to rescue “Iraq, Iraqi nation and democracy”.

    The Russian Defense Ministry also commented on the issue by saying that Russia is not surprised by the appearance of new discrediting details.

    “Many of today’s top-ranking politicians in the United States and Europe, then tearing their throats in ‘defending the peaceful Syrians from the terrible chemical attacks of the regime” and sanctioning missile and air strikes on Syria, will try to forget the topic in order to avoid moral, political and criminal liability,” defense ministry spokesman Major General Igor Konashenkov said.

    An interesting fact is that mainstream media outlets and Western diplomats in fact ignored this situation. Furthermore, BBC officially stated that its Syria producer acted on his own and his claims are “personal opinions”, distancing itself from his conduct.

    The Douma attack was not the first and only case when studio work was presented by the US-led block as a decisive evidence justifying its actions in the conflict. After the April 2017 attack in Khan Shaykhun, experts voiced concern that the video released by the White Helmets as a proof of the chemical attack conducted by the Assad regime was staged.

    In fact, weaponized disinformation campaigns, staged videos and fake news are common approaches used by the US military and special services to promote their own agenda around the world. The US was actively using these tools during its intervention in Iraq and after it.

    According to the later revelations, the employed programs were varying from placing Pentagon-provided articles in Iraqi newspapers as “unbiased news” to producing footage, which were made to look as if they had been “created by Arabic TV,” and CDs with fake al-Qaeda videos, which then distributed through various channels.

    The employed propaganda approaches are constantly evolving. Therefore, propaganda coverage of the conflict in Syria has some differences with those which were observed in Iraq. Now, mainstream media, the Pentagon, the intelligence services and diplomats are actively using Hollywood-style approaches. This style of the coverage is based on providing catchy, even if horrible, pictures and videos influencing the emotions of the audience rather than convincing it with logical conclusions.

    Just like with Hollywood movies, the mainstream news has increasingly been turning away from the logical narration of stories with realistic motivations to emotional judgements based on anonymous sources, non-verified images, pocket citizen journalists and even open speculation. The content developed within the framework of this approach is usually based on the results of social and psychological research. This allows results to be maximised by the targetted development of content and appropriate segmentation of the audience. An interesting and successful example of this audience reaction modelling can be seen in the mainstream media coverage of the Salisbury incident, which gave rise to large-scale hysteria in Western countries about Russian spies.

    Considering that US defense officials openly admit that the Pentagon, as well as other institutions, are going to develop their influencing tools and irregular warfare capabilities further, it should be expected that the intensity and sophistication of disinformation campaigns waged around the globe will continue to increase.

  • Illinois Considering "Asset Transfers" To Pensions: Be Afraid

    Submitted by Mark Glennon of Wirepoints

    Governor JB Pritzker’s administration has now made clear it will seriously consider the latest idea to address Illinois’ pension crisis – transferring public assets directly to state pensions. It recently announced the formation of a task force on the subject.

    At its core, the concept is exceptionally simple. In practice, however, it’s exceptionally subject to smoke and mirrors and would further obscure a pension system that’s already far too opaque. More importantly, asset transfers do nothing to improve the state’s overall fiscal health.

    Just convey ownership of some public assets to the pension, for free, in addition to the cash contributions taxpayers make now. That’s all this is about. Maybe the Illinois Lottery or Illinois Tollway for state pensions. Maybe Midway Airport or its water system for Chicago pensions. Those are examples of assets that have been mentioned that might be handed over.

    Illinois state pensions are officially reported to have assets about $130 billion less than what they need to have on hand to pay for pension benefits already earned. Turn over ownership of the tollway and some other assets and, voila, the thinking goes, that shortfall would shrink by whatever the transferred asset is worth.

    The first problem should be obvious – the state, as a whole, would be no better off. Whatever assets the state owns – which are your assets as taxpayers – would simply be moved over to the pension funds for the sole purpose of covering benefit obligations. But the pensions are really just a unit of government because Illinois courts have made clear that the sponsoring unit of government is liable directly to pensioners if pension assets ever fall short. So, pensions might be made more secure by an asset transfer, but the government’s overall balance sheet remains the same.

    Not true, I’ve heard some proponents of asset transfers say. They claim there are certain public assets where the value of the asset can only be fully unlocked through a transfer to a pension. Just selling or leasing the asset to some third party, they say, wouldn’t work. I’ll believe that when I see an example.

    If you’re wondering at this point whether accounting shenanigans might be at play, you’re right to be concerned. Some valuation would have to be placed on the asset transferred in order to understand a pension’s true position. But public assets don’t have clear market values. What’s the Illinois Lottery really worth, for example? Experts will have different opinions, but the temptation will be to inflate the value in order to make pension financial statements look better.

    And how on earth will actuaries decide what rate of return to assume on those assets? Currently, Illinois pensions assume about 7% per year. That’s already extremely controversial, with Nobel economists being the harshest critics. This will make heads explode in the actuary world.

    Over time, the value of the asset will change. The lottery’s value, for example, will drop markedly if Illinois expands other forms of gambling as rapidly as planned. Does anybody really expect pensions to honestly report that changing value, given their sordid history distorting their position with phony numbers on things like discount rates and mortality projections?

    And even if honest valuations are used, another temptation will be to transfer assets that are on the books at lower valuations. That would improve a government’s reported balance sheet when it’s valued fairly in the pension after transfer, but the government’s position wouldn’t really improve at all.

    In the private sector, where asset transfers to pensions are sometimes done, that accounting trick is the whole point – take an asset that’s been heavily depreciated to less than fair value and give it to the pension at fair value, which magically improves the consolidated balance sheet. That’s a sensible tactic for a private company to improve its reported position, but for governments, from a taxpayer’s viewpoint, it doesn’t change the economic realities.

    How ’bout we just transfer the Thompson Center to the pensions for $500 billion and call it a day, a reader asked? Sorry, won’t work.

    What about management and control of a public asset by a pension? Would you really want a pension managing Midway Airport, for example? No, advocates of asset transfers say, the whole transaction would be set up like a triple net lease, where the governmental unit would continue to be in control. Only the cash flow would be diverted to the pension.

    But think about that and all kinds of questions are apparent. If the city truly kept control, it would have every incentive to reduce charges for parking, landing and gate fees, which is how airports make money. They’d be sure to cover operational expenses, but nothing would truly be left for the pension, making the whole deal unfeasible. If, on the other hand, the pension could determine those charges, well, heaven forbid that.

    The complexity of asset transfers would be mind-boggling for major things like airports, water and sewer systems. They are tied up by layers of mortgages and covenants protecting bondholders. Disentangling them, if that’s possible at all, would be a matter few officeholders or taxpayers would ever understand.

    Other questions are endless. Ask them and one thing will come to mind – Chicago’s disastrous parking meter deal. In that case, a public asset was transferred not for pensions but to cover city operating expenses, but the concept is similar, and similar risks of having a bad deal foisted on the public should be apparent.

    If this is getting confusing, take a look at the attached example. It’s from a company promoting the idea of asset transfers – Colliers International, an investment manager and real estate services company. It puts the concept in glowing terms, a “brilliant strategy,” using as an example the transfer of an office building used by an Arizona town to it’s underfunded pension.

    Read that, and you’ll understand why the concept is getting attention. But ask yourself whether town residents are really better off because of the transaction. They owned the office building. It was worth what it was worth. They used it to pay their pension. Total assets and total liabilities for the town and its pension, combined together, didn’t change.

    Our view on this is the same as our view about other ways to throw money at pensions. Don’t do it unless and until the pension system is reformed. Otherwise, Illinoisans will see that their assets are being tossed into a bottomless, corrupt pit. Don’t do it all unless the economic consequences and future reporting will be transparent and certain (which is probably impossible for most assets). Don’t just give away the assets. Demand reform concessions from current workers in Tier 1, who can negotiate collectively, and Tier 1 is where all unfunded liabilities are.

    The Pritzker Administration has shown no interest in any of that.

    Prepare for smoke and mirrors.

  • America’s Socialist Revolution Has Begun

    Submitted by Simon Black via Sovereignman.com

    On October 31, 1517, an obscure German theology professor put the finishing touches on a paper he had written about the current state of the Catholic Church, and sent it off to Archbishop Albert of Brandenberg for review. The professor’s letter was polite and professional, with a formal tone that one might find in a modern academic work. It could hardly be described as revolutionary.

    Yet within a few years, the professor would find himself excommunicated by the Pope, branded an outlaw and heretic and living in hiding under the protection of an army of followers.

    His name, of course, was Martin Luther. And the publication of his famous paper, the 95 Theses, is often viewed as the start of the Protestant Reformation, one of the most important social movements in history.

    The reformation was a European-wide rejection of Church authority. But its origins far predate Luther or his 95 Theses.

    Mini revolts against the Church go back to the late 1300s, more than 150 years earlier. But historians often focus on a single watershed moment to mark the beginning of a major movement or trend, even though there are always multiple events leading up to it. For example, historians consider October 1929’s stock market crash as the start of the Great Depression, even though the London market had crashed in September, and the US market suffered a smaller crash in March.

    Point is, there are always multiple, important events that could mark the beginning of a major trend or movement.

    There’s a new major trend taking place right now in front of our very eyes– a modern Socialist Revolution. People are storming into power and prominence with a belief system that bigger government, punitive taxes and nationalization of private industry will fix everything.

    They find personal wealth utterly revolting, and they’ll stop at nothing to redistribute it.

    We’ve been writing about this for years. But its no longer theory or conjecture. It’s happening. The revolution has begun.

    There have been several watershed moments recently that future historians might view as the start of this modern Socialist Revolution… including possibly today with Bernie Sanders announcing his 2020 presidential bid.

    But I think a less obvious choice would be when Amazon surrendered to the Socialists last week over its proposed headquarters in New York City.

    Amazon’s expansion into New York would have brought 25,000 well-paying jobs to the city, plus state-of-the-art green construction, $10+ billion in tax revenue, land for a new school, a tech and art incubator, etc. In exchange, the city government would give up some tax credits that were completely trivial by comparison.

    But… the Socialists couldn’t keep their mouths shut. They were disgusted that a behemoth like Amazon, headed by the richest man in the world, would receive any benefits whatsoever. They couldn’t step back and realize that the deal was a WIN/WIN. Amazon wins. The city wins.

    Socialists are only happy with a WIN/LOSE, i.e. they have to win at your expense… otherwise no deal.

    So they whined and complained until Amazon walked away.

    Here’s a perfect example of this WIN/LOSE mentality: Before all the public outcry, Amazon’s proposed headquarters was within a designated “Opportunity Zone,” which meant that the company could have eventually been eligible for federal tax breaks on its $2.5 billion New York investment.

    Socialists immediately lamented the gross injustice, claiming that Amazon shouldn’t receive any opportunity zone tax incentives that were “meant for the poor.”

    We’ve talked about opportunity zones a few times in the past; the basic idea is that every governor across the US has designated certain portions of his/her state or territory as an “opportunity zone.”

    To qualify as an opportunity zone, the area must have a poverty rate of at least 20% and a median household income level that’s at least 20% below the local average.

    Federal law provides generous tax breaks for anyone who makes lucrative, long-term investments in opportunity zones– whether starting a business, redeveloping property, etc.

    Talk about a win/win.

    Opportunity zone investments mean that an underdeveloped community gets to enjoy more job prospects, safer neighborhoods, cleaner streets, greater economic activity, higher tax revenue, etc.

    And in exchange for putting up all the money, taking all the risk and doing all the work, investors can enjoy tax free gains.

    Everyone wins.

    You’d think people would be happy and grateful that some investors are risking their capital and investing their time to improve the neighborhood. But no. The Socialists just can’t keep their mouths shut. They can’t simply accept that they’re going to get a ton of benefit for free because someone else is going to take all the risk and do all the work.

    Nope. They’re only happy if they get everything for free… while you get absolutely nothing out of the deal.

    That’s a win/LOSE. And it’s the foundation of the Socialist mentality.

    If a rich person or a large company derives any benefit whatsoever, they have to stop the deal at all costs, even if they screw themselves in the process.

    So now Amazon has pulled out, and the Socialists get 100% of nothing. Everyone loses. And they’re insane enough to consider this a major victory. It’s as if they’re happy to screw themselves, as long as they think they can screw you even more. It reminds me of an old socialist joke from the Soviet days.

    A Russian man one day stumbles across an old metal lantern. He picks it up and shines it, and a Genie pops out, saying “I am a Communist genie… so you only get one wish instead of three. Plus, I have to give your comrade neighbor twice as much as I give you.”

    So the man thinks for a moment and says, “Then I wish for you to blind me in one eye.” This is the essence of modern socialism that is taking over America: everybody loses. And the revolution has already begun.

  • Will The Trade War Lead To Real War With China?

    Authored by Chas Freeman via ConsortiumNews.com,

    What the U.S. faces with China is not a new Cold War but a contest unlike any it has known before…

    Five hundred years ago, Hernán Cortés began the European annihilation of the Mayan, Aztec, and other indigenous civilizations in the Western Hemisphere.  Six months later, in August 1519, Magellan [Fernão de Magalhães] launched his circumnavigation of the globe.  For five centuries thereafter, a series of Western powers — Portugal, Spain, Holland, Great Britain, France, Germany, Russia, and, finally, the United States — overturned preexisting regional orders as they imposed their own on the world.  That era has now come to an end.

    In the final phases of the age of Western dominance, we Americans made and enforced the rules.  We were empowered to do so in two phases.  First, around 1880, the United States became the world’s largest economy.  Then, in 1945, having liberated Western Europe from Germany and overthrown Japanese hegemony in East Asia, Americans achieved primacy in both the Atlantic and Pacific.  Almost immediately, the Soviet Union and its then-apparently-faithful Asian companion, Communist China, challenged our new sphere of influence.  In response, we placed our defeated enemies (Germany, Italy, Japan), our wartime allies, and most countries previously occupied by our enemies under American protection.  With our help, these countries — which we called “allies” — soon returned to wealth and power but remained our protectorates.  Now other countries, like China and India, are rising to challenge our global supremacy.

    Trump receives Chinese Vice Premier Liu He in Oval Office, January 2019 (Official White House Photo by Tia Dufour via Flickr )

    President Donald Trump has raised the very pertinent question: Should states with the formidable capabilities longstanding American “allies” now have still be partial wards of the U.S. taxpayer?  In terms of our own security, are they assets or liabilities?  Another way of putting this is to ask: Do our Cold War allies and their neighbors now face credible threats that they cannot handle by themselves?  Do these threats also menace vital U.S. interests?  And do they therefore justify U.S. military presences and security guarantees that put American lives at risk?  These are questions that discomfit our military-industrial complex and invite severe ankle-biting by what some have called “the Blob” — the partisans of the warfare state now entrenched in Washington.  They are serious questions that deserve serious debate.  We Americans are not considering them.

    Instead, we have finessed debate by designating both Russia and China as adversaries that must be countered at every turn.  This has many political and economic advantages.  It is a cure for enemy deprivation syndrome — that queasy feeling our military-industrial complex gets when our enemies disorient us by irresponsibly defaulting on their contest with us and disappearing, as the Soviet Union did three decades ago.  China and Russia are also technologically formidable foes that can justify American R&D and procurement of the expensive, high-tech weapons systems.  Sadly, low intensity conflict with scruffy “terrorist” guerrillas can’t quite do this.

    China and Russia Blamed for Our Malaise

    No one in the United States now seems prepared to defend either China or Russia against the charge that they, not we, are responsible for our current national dysfunction and malaise.  After all, we’re the best, Russia’s a rogue, and China’s an unfair competitor.  Our patriotism is admirable, theirs is malign.

    It must have been the Russians who overcame our better judgment and made us vote against Hillary Clinton and for Donald Trump.  Who other than China could have caused our companies to outsource work to places with cheap labor, instead of upgrading equipment and retraining their workers to meet foreign competition?  A pox on all foreigners, not just Mexican rapists, European rip-off artists, Japanese free riders, Russian trolls, immigrants from “shithole” countries, and Chinese cyber burglars.  Why worry about how to boost our own competitiveness when we can cripple the competitiveness of others?

    White House after snow shower, Feb. 1, 2019. (White House Photo by Joyce N. Bogosian via Flickr)

    Today our government is trying to break apart Sino-American interdependence, weaken China, and prevent it from overtaking us in wealth, competence, and influence.  We have slapped tariffs on it, barred investment from it, charged it with pilfering intellectual property, arrested its corporate executives, blocked tech transfers to it, restricted what its students can study here, banned its cultural outreach to our universities, and threatened to bar its students from entering them.  We are aggressively patrolling the waters and air spaces off its coasts and islands.  Whether China deserves to be treated this way or not, we are leaving it little reason to want to cooperate with us.

    Our sudden hostility to China reflects a consensus — at least within the Washington Beltway — that we need to wrestle China to the ground and pin it there.  But what are the chances we can do that?  What are the consequences of attempting it?  Where are we now headed with China?

    Realism is out of fashion in Washington even if it’s alive and well elsewhere in America.  It should give us pause that our new enemy of choice is a very different, larger, and more dynamic country than any we have unbefriended before.  China had a couple of bad centuries.  But 40 years ago, the Chinese Communist Party and government began to evolve what turned out to be a successful model of economic development that blended state capitalism with free enterprise.  This unleashed the entrepreneurial talents of the Chinese people.  The results have been staggering.   Per capita income in China today is 25 times what it was in 1978.  Back then, well over 90 percent of Chinese lived in poverty, as defined by the World Bank.  Today, less than 2 percent do.  China’s GDP is now 60 times bigger than it was 40years ago.

    China is no longer isolated, poor, or irrelevant to affairs distant from it.  It is a society with capabilities that rival and are beginning to overtake our own.  China faces many challenges, but its people are resilient, resourceful, and optimistic that the lives of their descendants will be vastly better than their own — this at a time that we Americans are unprecedentedly pessimistic about our own country’s present and future condition.

    Flight view of Beijing Capital International Airport. (Wikimedia)

    Despite increasingly problematic policies, the Chinese economy is still growing almost three times faster than ours.  By some measures, it is already one-third larger.  China’s manufacturing sector accounts for over one fourth of global industrial production and is one-and-a-half times bigger than that of the United States.  China’s ability to defend itself and its periphery against foreign attack is now formidable despite its spending less than 2 percent of GDP on its military.  If pressed to do so, China could spend as much on defense as we do — and that’s a lot: almost $1.2 trillion when you add up all the military spending that is hidden like Easter eggs all over non-Defense Department budgets.

    China is slightly larger than the United States – 6.3 percent of the world’s landmass vs. 6.1 percent for the U.S.  But there are 1.4 billion Chinese, with only one-third the arable land and one-fourth the water we Americans have.  If we had the same ratio of population to agricultural resources that the Chinese do, there would be almost 4 billion Americans – about 600 million of them over 65 – most of them probably planning to retire in Florida.

    In China, No Margin for Error

    Nanjing Road, Shanghai. (Wikimedia)

    I suspect that, if there were that many people crammed into the United States, Americans would have a much lower tolerance for social disorder and a different attitude toward family planning than we now do.  We’d also be more worried about the prospects for individual security and survival.  Sixty years ago, perhaps 30 million Chinese died in a man-made famine known as the “Great Leap Forward.”  Chinese are acutely aware that they have narrow margins for error.  This makes them naturally risk averse and, in most respects, a more predictable actor in foreign affairs than we now are.

    Until we suddenly launched a trade war last year, China was our fastest growing export market.  It is, after all, the largest consumer of a vast array of commodities and products.  China consumes 59 percent of the world’s cement, 47 percent of its aluminum, 56 percent of its nickel, 50 percent of its coal, 50 percent of its copper and steel, 27 percent of its gold, 14 per cent of its oil, 31 percent of its rice, 47 percent of its pork, 23 percent of its corn, and 33 percent of its cotton.  It consumes about one-fourth of the world’s energy.  It provides one-third of the global market for semiconductors.  Its companies’ demand for these has been growing around 16 percent annually. Microchips have become China’s largest single import — around $110 billion this year.  China has been the main market for U.S. chips, one of the few products of industry we Americans still monopolize.

    By slapping tariffs, quotas, and export bans on China, the United States is throwing these markets away as well as raising prices and reducing choices for American consumers.  Food security has been an obsession for every Chinese state over the course of the last 2,500 years.  No responsible leader in China is again going to commit his or her country to long-term dependence on the U.S. for its feed-grain, wheat, corn, cotton, pork, or fresh fruit supply.  Erratic behavior in business makes one the supplier of last resort.  Whatever the short-term outcome of the trade war we launched against it, in future China is going to look elsewhere for critical imports.

    No “wall” is in prospect on the U.S.-Mexican border, but the United States is surrounding itself with a moat full of protectionist measures aimed at denying China not just sales in the U.S. market, but opportunities to invest its rising wealth in U.S. industry, agriculture, and services.  This is in part a response to a real but far from unprecedented problem.  In the 19th century, encouraged by Alexander Hamilton and others, Americans pioneered the art of technology theft from Britain and other more advanced manufacturing economies.  As the 20th century began and we became a net exporter of innovation ourselves, we renounced intellectual property crime.  Japan and Taiwan then took over our role.  When Japan got rich, it too retired.  Taiwan moved its pirate industries across the Strait to the China mainland.

    Fighting the Last War

    China took up the by-now, well-established practice of upgrading its industrial base by lifting technology from wherever it could.  But, like the U.S. and Japan in earlier days, China is now itself becoming an exporter not just of capital but advanced, innovative technology.  With a lot of competition among its own enterprises and an increasing share of the world’s intellectual property, Chinese companies have become very concerned to secure their innovations from pilferage.  This has made them responsive to our pressure on them to clean up their act.  In their own interest, they are almost certain to do so whether we make a deal with them or not.  Like the proverbial generals, we may be fighting the last war, not the one to come.

    The end of the 21st century’s second decade is a remarkably inauspicious moment for us to be severing ties with scientists, technologists, engineers, and mathematicians — so-called STEM workers — in China.  Technology advances through collaboration, not the sequestration of knowledge.  In the United States, we graduate about 650,000 scientists and engineers annually, over one third of whom are foreigners.  (In some disciplines, like engineering and computer science, foreign students account for about half of new U.S. degrees.)  Almost one third of all foreign students here are from China.  On its own, China now graduates 1.8 million scientists, engineers, and mathematicians annually.  It is about to overtake us in the number of doctorates it confers in these fields.

    Workers in 2008 perform quality control testing on computer drives; Seagate Wuxi China Factory Tour. (Robert Scoble via Wikimedia)

    Already about one-fourth of the world’s STEM workers are Chinese.  This Chinese intellectual workforce is eight times larger than ours and growing six times as fast.  By 2025, China is expected to have more technologically skilled workers than all members of the OECD combined.  (The OECD is not a trivial grouping.  It consists of the world’s most advanced economies: the United States, Canada and Mexico, all non-Russian-speaking Europe, Australia, Israel, Japan, Korea, New Zealand, and Turkey.)  By severing ties with the Chinese, we Americans are isolating ourselves from the largest population of scientists, engineers, and mathematicians in the world.

    U.S. Educated, Working in China

    The United States has always been a major importer of foreign brainpower.  Since 2000, 39 percent of our Nobel Prize winners have been immigrants.  A great many of our technology companies were started by immigrants or are now managed by them.  Asian immigrants, mainly from China (including Taiwan), India, and Korea, make up about 17 percent of our current STEM workforce.  In large part as a result of the less welcoming atmosphere in our country today, less than half of Chinese graduates from our universities now join the U.S. workforce.  Most are going home to work or start companies in China rather than here.  China is now home to 36 percent of the world’s “unicorns” – start-up companies valued at more than $1 billion.

    Some estimates are that the United States is already one million short of the STEM workforce our economy requires to sustain our competitiveness.  Tightening restrictions on foreign students and workers as we are now doing undercuts our ability to fill this gap.  We are reducing our openness to foreign science and technology at precisely the moment that other countries — not just China but nations like India and Korea — are pulling even with us, Europe, and Japan, or charging ahead.  China has begun to outspend us on research and development, especially in the basic sciences, where breakthroughs in human knowledge that lead to new technologies occur.

    Our strategy is not aimed at upping our own performance but at hamstringing China’s.  This is more likely to induce intellectual constipation here than in China.  The Chinese are not going to oblige us by ceasing to educate their young people, halting their progress, or severing their science and technology relationships with other countries. Nor will most other countries join us in shunning them.  We Americans, not the Chinese, are the most likely to be weakened and impoverished by our growing xenophobia and nativism. Others, not Americans, will leverage China’s advancing prosperity and brainpower to their advantage.

    At root, of course, our concern about China’s increasing technological prowess is about the balance of military power between us.  Since World War II, Americans have become accustomed to being the privileged custodians of the global commons, setting the rules and calling the shots in all the world’s oceans, including the Western Pacific.  We gained our primacy there nearly seventy-five years ago when we defeated Japan and filled the resulting power vacuum in its former imperial domain.

    Allied leaders (left to right) at Yalta Conference,1945: Winston Churchill, Franklin D. Roosevelt and Joseph Stalin.(Wikimedia)

    But Japan is back as a major power even if it has preferred to pretend otherwise.  South Korea, Vietnam, Indonesia, and others in East Asia have become powerful, independent states that bow to no foreign power.  There is no vacuum in Asia for either the United States or China to fill.

    No country in Asia can ignore the power that China’s huge and growing economy confers on it.  None could achieve a decisive victory in a war with China.  But none is prepared to enlist in our campaign against China or China’s backlash against the United States.  None wants to choose between us.  As uneasy as China’s neighbors may be in the face of its economic and military ascendancy, they all know they must accommodate it.

    For over half of the last millennium, all or part of China fell prey to a remarkable range of foreign invaders – Qiang, Jurchens, Mongols, Manchus, Portuguese, Spanish, Dutch, British, French, Russians, Austro-Hungarians, Germans, Americans, and Japanese.  Often, China was ruled by foreigners or dominated by them.  The most recent set of invasions was from the South and East China Seas.  It should surprise no one that Chinese are determined to defend the approaches to their coasts or that, to this end, they are developing what the Pentagon calls “anti-access, area denial” or A2/AD capabilities.

    The Chinese People’s Liberation Army’s rapidly strengthening capabilities have become a formidable impediment to anyone planning to mount an attack on China or on shipping approaching or leaving Chinese ports.  The United States has repeatedly declared that we see China’s new ability to control its periphery as a threat to us.  The Chinese take this, our plan to “pivot” much of our military to their frontiers, and our aggressive patrols of their defenses as ipso facto evidence of U.S. preparation for war with them.  The United States and China are caught in a classic “security dilemma,” in which each side’s defensive moves are seen as threats by the other.

    The contest between our determination to defend our continuing military primacy in the Indo-Pacific and China’s imperative of keeping potentially hostile armed forces like ours at bay is clearest in the South China Sea.  Though long claimed by both China and Vietnam and fished in by the Philippines, this was traditionally a no-man’s land – part of the regional commons where fishermen from all the littoral countries felt free to ply their trade.  But, in the late 1970s and early ‘80s, Malaysia, the Philippines, and Vietnam seized most of the land features in the Spratly Islands in an effort to secure its seabed resources for themselves.  A decade later, China took the few rocks and reefs that were left.  It has since turned these into islands with secure harbors, garrisoned them, and built airfields on them.

    Games of Chicken

    The U.S. and PLA Navies are now engaged in escalating games of chicken around these artificial islands as well as along the coasts of the China mainland.  Both navies are highly professional.  The danger of an accident is therefore low, but the risk of miscalculation is high.  Should actual combat between our armed forces occur, it could rapidly widen.

    In the East China Sea, the United States has pledged to back Japan’s claims to the Senkaku (or Diaoyu) islands.  These are barren rocks about 100 miles east-north-east of Taiwan and 250 miles west of Okinawa.  Chinese in both Taiwan and the mainland claim them as part of Taiwan.  Armed Japanese and Chinese coast guards began patrolling them a decade ago..  At least for now, both seem determined to manage their differences prudently.  Neither wants a war.  Still, there is a decided risk that we Americans might be dragged into a bloody encounter between Chinese and Japanese nationalism.

    But the greatest danger of a Sino-American war is Taiwan.  Taiwan is a former Chinese province that was recovered from its Japanese occupiers by Nationalist China at the end of World War II.  In 1949, having been defeated everywhere else in China, Chiang Kai-shek and his Nationalist forces retreated to it.

    The universal expectation at the time was that the People’s Liberation Army would cross the Taiwan Strait and unify China by finishing off Chiang and the Nationalists.  But, when the Korean War broke out, the United States intervened to prevent its widening through a PLA invasion of Taiwan or a Nationalist attempt to retake the China mainland.  We Americans thus suspended but did not end the Chinese civil war.  To this day, we remain committed to preventing war in the Taiwan Strait.  To this end, we continue to sell weapons to the island.  China sees this as hostile interference in a quarrel among Chinese in which foreigners should not involve themselves.

    Night market in Taipei. (Wikimedia)

    Behind its U.S. shield, over the course of 70 years, Taiwan emerged as a prosperous democratic Chinese society with decidedly mixed feelings about whether it should be part of China.  The island is now ruled by a political party that is deterred from declaring independence from China only by its realization that this would trigger a violent resumption of the Chinese civil war that would almost certainly destroy Taiwan and its democracy.

    Chinese on the mainland see their country’s continued division as an artifact of U.S. policy.  While they have pledged to try to resolve their differences with Taiwan peacefully, they remain determined to erase the humiliation that the continued foreign-supported separation of Taiwan from the rest of China represents.  War is not imminent, but it is an ever-present danger, with the potential to produce a nuclear exchange between China and the United States.

    Taiwan illustrates the dangers of managing disputes by relying exclusively on deterrence to the exclusion of diplomacy.  Deterrence can inhibit the outbreak of war, but it does nothing to resolve its underlying causes.  In the case of Taiwan, the United States lacks a diplomatic strategy to encourage the parties to the dispute to address and resolve their differences.  In default of a strategy, we are now doubling down on our politico-military support of Taiwan.  But if Beijing loses confidence in the possibility of a peaceful reconciliation with the Taiwan authorities, it will be increasingly tempted to use force.  This is precisely the trend at present. We have no plan to deal with that trend other than to prepare ourselves for combat.

    China enjoys widening military superiority over Taiwan.  Many judge that it could already defeat an effort by us to defend Taiwan.  The PLA need not invade Taiwan to devastate it.  Taiwan would be the main loser in any conflict whether the U.S. supported it or not.

    A Sino-American war over Taiwan could quickly escalate to the nuclear level.  China has a policy of no-first-use of nuclear weapons but it could deliver a devastating counterstrike on the U.S. homeland if we attacked it.  There is very little substantive contact between the U.S. and Chinese militaries, and there are no mechanisms for escalation control in place.  It is not clear how either side could fend off domestic pressures for escalation if we come to blows, as we may.  Instead of exploring means of establishing and managing a strategic balance with China, we are withdrawing from the Intermediate Range Nuclear Forces (INF) Treaty in part to enable us to deploy nuclear weapons closer to China.

    For better or ill, the admirably liberal Chinese society on Taiwan cannot assure its security or prosperity without reaching some sort of accommodation with the much larger, authoritarian Chinese society on the other side of the Strait.  Sooner or later, Taiwan will have to negotiate a durable modus vivendi with the mainland.  Current U.S. policies help Taiwan avoid hard choices even as the balance of power shifts against it.  We are inadvertently helping Taiwan set itself up for a Chinese offer it will be unable to refuse.  Meanwhile, US-China relations are increasingly hostile politically, economically, and militarily.

    What we face with China is not a new Cold War but a contest unlike any we have ever experienced in our 230 years as a constitutional democracy.  China is fully integrated into the global economy.  George Kennan’s grand strategy of containment was based on the correct judgment that, if isolated for long enough, the defects in the autarkic Soviet system would cause it to fail.  China cannot be isolated, and its economy is currently outperforming ours.

    The Soviet Union was an overly militarized state that collapsed under the burden of excessive defense spending.  China has kept the proportion of its GDP devoted to its military at or below the level of our European “allies,” whom we accuse of spending too little on their defense.  The Soviet Union controlled satellite countries and sought to impose its ideology on others, including us.  The Chinese have no satellites and are notorious for not caring at all how foreigners govern ourselves.

    Our competition with China is primarily economic.  It will not be decided by who has the more appealing ideology, the most aircraft carriers, or the greatest stash of nuclear weapons, but by who delivers the best economic performance and by which country’s statecraft is soundest.

    Are we ready for such a contest?  Let’s look at the bright side.  Maybe it will challenge us to get our act together.  Let’s hope so.

    President Trump and Chinese President Xi Jinping with their wives, April 2017. (Wikimedia)

    It doesn’t seem to matter which political party controls the House or Senate.  Congress still can’t pass a budget or otherwise set national priorities.  When it’s not shut down, our government runs on credit rollovers.  Our debt is out of control.  So far this century, we’ve committed almost $6 trillion to wars we don’t know how to end.  Meanwhile, we’ve deferred about $4 trillion in maintenance of our rapidly deteriorating physical infrastructure.  We are disinvesting in our human endowment, cutting funding for our universities and scientific research.  Our government is bleeding talent.  This is not our finest hour.

    And, if allies are assets rather than liabilities, the willingness of our security partners abroad to follow us is more uncertain than at any point since we became an active world power seven decades ago.  We are withdrawing from international agreements and institutions, not seeking to shape them to our advantage or crafting new ones.  Instead of asking our allies to do more to defend themselves, we are asking them to pay us to defend them.  Our Senate can no longer bring itself to consider, let alone ratify treaties – even those we ourselves originally proposed.  In short, we are not leading the world as we once did.  We’re not part of the solution to transnational problems like global warming or arms control.  Instead, we are becoming active obstructionists of solutions to pressing global problems.

    The social mobility that once made equality of opportunity a reality in our country has ebbed away.  Our wealthy are getting richer; those less fortunate are not.  We have the highest percentage of our population imprisoned of any country in the world.  That superlative aside, on many other measures of international excellence, we have complacently fallen to levels of mediocrity.  Our students are thirty-eighth in math proficiency and twenty-fourth in science.  We rank forty-second in life expectancy, forty-fifth in press freedoms, nineteenth in respect for the rule of law, and seventeenth in quality of life.  Need I go on?

    There’s a lot to fix at home before we can be sure we have what it takes to go abroad in search of dragons to destroy.  There is a real danger that we have taken on more than we can handle.  China is guilty of malpractice in several aspects of its trade policies.  We are right to demand that it correct these.  Experience strongly suggests that, if we work with others of like mind in organizations like the World Trade Organization to persuade China to do so, we can move China in desirable directions.  An across-the-board assault on China of the sort we have just mounted is not only likely to fail, it entails risks we have not adequately considered.  These risks include armed combat with a nuclear power.  And China is getting relatively stronger, not weaker, even as our inept handling of foreign affairs increasingly marginalizes the United States in areas of human endeavor we have traditionally dominated.

    We have given inadequate thought to how to leverage China’s rise to our advantage.  Trying to tear China down will not succeed.  Neither will it cure our self-induced debilitation as a nation.

    We have launched a comprehensive competition with China for which we are not ready.  We cannot afford to learn this the hard way.  Whatever we do about China, we have to get our act together and do it now.

  • The Outlook For Automation And Manufacturing In Seven Charts

    Submitted by Visual Capitalist

    Over the last decade, the prospect of mass automation has seemingly shifted from a vague possibility to an inescapable reality. While it’s still incredibly difficult to estimate the ultimate impact of automation and AI on the economy, the picture is starting to become a bit clearer as projections begin to converge.

    Today’s infographic comes to us from Raconteur, and it highlights seven different charts that show us how automation is shaping the world – and in particular, the future outlook for manufacturing jobs.

    The Age of Automation

    The precise details are up to debate, but here are a few key areas that many experts agree on with respect to the coming age of automation:

    Half of manufacturing hours worked today are spent on manual jobs.

    • In an analysis of North American and European manufacturing jobs, it was found that roughly 48% of hours primarily relied on the use of manual or physical labor.
    • By the year 2030, it’s estimated that only 35% of time will be spent on such routine work.

    Automation’s impact will be felt by the mid-2020s.

    • According to a recent report from PwC, the impact on OECD jobs will start to be felt in the mid-2020s.
    • By 2025, for example, it’s projected that 10-15% of jobs in three sectors (manufacturing, transportation and storage, and wholesales and retail trade) will have high potential for automation.
    • By 2035, the range of jobs with high automation potential will be closer to 35-50% for those sectors.

    Industrial robot prices are decreasing.

    • Industrial robot sales are sky high, mainly the result of falling industry costs.
    • This trend is expected to continue, with the cost of robots falling by 65% between 2015 and 2025.
    • With the cost of labor generally rising, this makes it more difficult to keep low-skilled jobs.

    Technology simultaneously creates jobs, but how many?

    • One bright spot is that automation and AI will also create jobs, likely in functions that are difficult for us to conceive of today.
    • Historically, technology has created more jobs than it has destroyed.
    • AI alone is expected to have an economic impact of $15.7 trillion by 2030.

    Unfortunately, although experts agree that jobs will be created by these technologies, they disagree considerably on how many. This important discrepancy is likely the biggest x-factor in determining the ultimate impact that these technologies will have in the coming years, especially on the workforce.

  • Lawsuit To Halt $500 Million Obama Library May Proceed, Judge Rules

    A federal judge in Chicago ruled on Tuesday that a lawsuit aimed at scuttling President Obama’s $500 million library may proceed, according to the Associated Press

    Dubbed an “ugly waste of taxpayer resources” by angry Chicagoans, the presidential center slated for construction in a park beside Lake Michigan may be in jeopardy after Judge John Robert Blakey denied the city’s motion to dismiss a lawsuit filed by Protect Our Parks. 

    Supporters of the project had hoped the court would grant a city motion to throw out the lawsuit by Protect Our Parks, some fearing any drawn out litigation might lead Obama to decide to build the Obama Presidential Center somewhere other than his hometown.

    Blakey’s ruling doesn’t mean the group will necessarily prevail in the end, but confirms that the suit poses a formidable threat to the project. The judge indicated that he doesn’t want the litigation to drag out, and that he would strictly limit any fact gathering leading up to trial to 45 days. –Associated Press

    While originally slated to open in 2021, ground has yet to be broken on the project due to the ongoing litigation in which Protect our Parks accused the city of illegally transferring park land to The Obama Foundation, a private entity. The group claims this was effectively “gifting” prized public land to a longstanding crony of Chicago politicians.  

    “Defendants have chosen to deal with it in a classic Chicago political way … to deceive and seemingly legitimize an illegal land grab,” reads the lawsuit. 

    The Chicago City Council approved the project in a 47-to-1 vote last May, with the Chicago Park District selling the land to the city for $1 before it was “gifted” to the Obama foundation. Moreover, Illinois legislators made an exception to the state’s no-development rules by amending the Illinois Aquarium and Museum Act to include a “compelling public interest” provision. 

    The Obama Foundation, a private nonprofit, would pay $10 to the city for use of the park land for 99 years, cover the costs of building the complex and be responsible for covering operating costs for 99 years. Once built, the Obama Presidential Center’s physical structures would be transferred to the city for free, meaning the city would formally own the center but not control what happens there. –Associated Press

    They are essentially giving (property) to Obama … for 10 cents a year for 99 years,” says Mark Roth a parks advocacy lawyer. 

    Filing a “friend-of-the-court” brief, legal scholar Richard Epstein argued that authorities must meet an additional burden of proving an overwhelming public benefit in their decision to offer the use of public parks to “well-connected figures such as Obama,” writes AP – noting that the city’s Mayor Rahm Emanuel once served as Obama’s White House chief of staff. 

    That said, the Obama library scored a win, after Judge Blakey tossed out a complaint that taxpayers’ First Amendment rights would be infringed because taxpayer money would be used for the reconfiguration of roads and traffic – and that public funds should not be used to subsidize any potential partisan political activity by Obama at the center. 

    City lawyers conceded Thursday that Chicago would pay an estimated $175 million to reconfigure roads to manage traffic around the center.

    The lawsuit also claims that the center would interfere with migrating butterflies and birds.

    City lawyers said Protect Our Parks misread the law, misrepresented how the approval process played out and exaggerated potential environmental disruptions.

    The center would comprise 20 acres (8 hectares) of the 500-acre (202-hectare) park. Its centerpiece would be a 225-foot (69-meter) museum tower, surrounded by a cluster of smaller buildings, including a 300-seat auditorium. –Associated Press

    According to lawyers for the city, the center would create 5,000 jobs during construction and more than 2,500 permanent positions, with an estimated 760,000 people visiting each year. 

  • Amazon Paid Zero Corporate Tax For Second Year In A Row

    Submitted by SafeHaven.com

    President Trump has never hidden his disdain for cyber-retailing giant Amazon Inc., accusing the company of unfair tax practices and antitrust violation. The president probably won’t be too amused by a new report that the company avoided paying any federal income tax in 2018 for the second year in a row despite posting billions of dollars in profits.

    The purveyor of two-day delivery of just about everything posted a massive net income of $11.2 billion in fiscal 2018 after doubling it from the previous year’s tab of $5.6 billion. Yet, a report by the Institute on Taxation and Economic Policy (ITEP) shows that the company did not pay a single cent in income tax on both occasions—ironically in large part due to Trump’s tax bonanza of 2017.

    Tax loopholes

    Source: ITEP

    Incredibly, the company’s latest corporate filing reveals that far from paying the statutory 21 percent income tax demanded under the new tax laws, it’s the federal government that ended up paying Amazon thanks to a slew of tax loopholes.

    In 2017, Amazon collected $140 million in rebates for an effective tax rate of -2.5 percent with the company pocketing another $129 million last year for a tax rate of -1%. The fine print in Amazon’s tax disclosure says the company achieved this partly due to a tax break for executive stock options as well as various unspecified ‘‘tax credits.’’

    ITEP, an organization that has studied tax-paying habits by corporations for nearly 40 years, places the blame on Congress for this scenario. Proponents of the new laws claimed that a lower tax rate would incentivize better corporate citizenship.

    Yet, Congress failed to anticipate a potentially tricky situation after failing to broaden the tax base or close critical tax loopholes  that allow companies to avoid paying federal tax on nearly half their profits. The Tax Act saw the statutory corporate tax rate lowered from 35 percent to just 21 percent with the Trump administration and its congressional allies also throwing in lavish new giveaways for good measure, including the immediate expensing of capital investments.

    Numerous prognosticators scored the new law as being a potentially huge revenue loser that would end up giving away far more to big corporates like Amazon that it would take in loophole-closers. And, it appears they were spot on. Many companies now effectively pay zero or single-digit tax rates.

    In fact, Amazon is not the only high-profile company that has mastered the art of corporate subterfuge. Last year, Netflix got away with it too despite posting a net profit of $858M, the largest in the history of the video-streaming company.

    Tax controversies

    Amazon is not exactly a stranger to tax controversies. Last year, the company engaged in an aggressive push for new relocation subsidies for its new HQ2 locations, in New York and Virginia as well as additional tax breaks for its Nashville operations. The latest developments though suggest that the company is likely to find it increasingly hard to muscle its way with local tax authorities. The company’s hubris-laced search for a second headquarter was a pageant-like affair that ended in embarrassment for the retail giant after New York leaders and politicians publicly balked at the massive tax giveaways the company was to receive in return for creating 25,000 jobs.

    But so far, allies in Congress are yet to answer why nobody is willing to lay a glove on one of the world’s most valuable companies. Trump himself has criticized the company for its tax avoidance in the past yet seems oblivious to the fact that his generous tax package only appears to have exacerbated the problem. The year 2018 was the first full year of the new tax law, meaning we will get a better sense of just how much the floodgates have opened after most Fortune 500 companies have reported their fourth-quarter results about a month from now. Initial findings though suggest that Amazon and Netflix are unlikely to be the only ones.

  • Grand Canyon Museum Tourists Exposed For Years To Dangerous Radiation, Whistleblower Admits

    For nearly two decades at the Grand Canyon, tourists, employees, and children on tours passed by three paint buckets stored in the National Park’s museum collection building, unaware that they were being exposed to radiation.

    Federal officials learned last year that three five-gallon buckets stored in the Grand Canyon’s museum building were literally overflowing with highly-radioactive uranium ore. The buckets were moved to the museum building when it opened in 2000 and were so full of the ore one literally wouldn’t close. 

    As AZCentral.com reports, in a rogue email sent to all Park Service employees on Feb. 4, Elston “Swede” Stephenson – the safety, health and wellness manager – described the alleged cover-up as “a top management failure” and warned of possible health consequences.

    “If you were in the Museum Collections Building (2C) between the year 2000 and June 18, 2018, you were ‘exposed’ to uranium by OSHA’s definition,” Stephenson wrote.

     “The radiation readings, at first blush, exceeds (sic) the Nuclear Regulatory Commission’s safe limits. … Identifying who was exposed, and your exposure level, gets tricky and is our next important task.”

    Stephenson says he tried to convince Parks executives to warn the public that anyone visiting the site after 2000 could have been exposed to radiation he calculated at levels potentially over 4,000 times the Nuclear Regulatory Commission’s “safe” level for children and 400 times the level for adults, but was “stonewalled” by management. He believes the Park Service violated the law by not informing the public of the danger.

    Respectfully, it was not only immoral not to let Our People know, but I could not longer risk my (health and safety) certification by letting this go any longer,” 

    Stephenson released a 45-page report detailing the allegations.

    As RT reports, the radioactive hoard was discovered by a teenager with a Geiger counter during a museum tour and promptly swept under the rug, Stephenson says, adding that technicians dumped the ore into an old mine near Grand Canyon Village, concealing their meter readings from him the entire time they were cleaning up the radioactive mess.

    Alarmed at their unprofessional behavior, he called in the Occupational Health and Safety Administration, who found only the empty drums – which had been “inexplicably returned to the building” and still gave off faint radiation readings.

    Emily Davis, a public affairs specialist at the Grand Canyon, said the Park Service is coordinating an investigation with the Occupational Safety and Health Administration and the Arizona Department of Health Services.  AZCentral reports that Davis stressed that a recent review of the building in question uncovered only background radiation, which is natural in the area and is safe.

    “There is no current risk to the park employees or public,” Davis said.

    “The building is open. … The information I have is that the rocks were removed, and there’s no danger.”

    Davis declined to address Stephenson’s assertion that thousands of people may have been exposed to dangerous levels of radiation, or his allegation that the Park Service violated the law by not issuing a public warning.

    “We do take our public and employee safety and allegations seriously,” she said.

  • Covington High School Student Files $250 Million Defamation Suit Against Washington Post

    After an investigation conducted by the Covington Diocese turned up no evidence that 16-year-old high school student Nicholas Sandmann confronted Native American activist Nathan Phillips during a March for Life rally at the Lincoln Memorial last month, seemingly confirming that the mainstream press was incorrect to pillory the white, MAGA-hat wearing teen for a confrontation that never actually happened, lawyers for Sandmann filed the first of what are expected to be many defamation lawsuits demanding compensatory and punitive damages for leading an Internet mob that villified Sandmann and his peers.

    According to Reuters, lawyers Lin Wood and Todd McMurtry are seeking $250 million in damages from the Washington Post on behalf of Sandmann, a sum equal to the amount that billionaire Jeff Bezos paid to buy the paper in 2013.

    The suit claims that the paper – which helped publicize a now infamous photo that helped trigger an Internet mob that swiftly outed the teen and demanded he be punished – led the hate campaign against Sandmann – and failed to practice proper journalistic due diligence – “because he was the white, Catholic student wearing a red ‘Make America Great Again’ souvenir cap on a school field trip to the January 18 March for Life in Washington, D.C. when he was unexpectedly and suddenly confronted by Nathan Phillips (‘Phillips’), a known Native American activist, who beat a drum and sang loudly within inches of his face (‘the January 18 incident’).”

    Cov

    Not only did the diocese’s investigation corroborate the students’ version of events, but it also found no evidence to support Phillips’ claims that Sandmann and his fellow students had been chanting “build the wall” at the time of the confrontation. What really happened – as is now widely known – is that the students, who were marching with the pro-life rally, were verbally accosted by the Black Hebrew Israelites, who hurled homophobic slurs at the students and accosted them.

    “In targeting and bullying Nicholas by falsely accusing him of instigating the January 18 incident, the Post conveyed that Nicholas engaged in acts of racism by “swarming” Phillips, “blocking” his exit away from the students, and otherwise engaging in racist misconduct,” the suit read. “The Post ignored basic journalist standards because it wanted to advance its well-known and easily documented, biased agenda against President Donald J. Trump (“the President”) by impugning individuals perceived to be supporters of the President.”

    The Washington Post’s Vice President for Communications Kristine Coratti Kelly told Reuters “We are reviewing a copy of the lawsuit and we plan to mount a vigorous defense.”

    Sandmann’s lawyers also accused WaPo of resorting to modern-day McCarthyism to “claim leadership of a mainstream & social media mob” of bullies who sought to attack and defame Sandmann. The suit also accused WaPo of publishing “no less than six false and defamatory articles”.

    “In a span of three (3) days in January of this year commencing on January 19, the Washington Post engaged in a modern-day form of McCarthyism to claim leadership of a mainstream & social media mob of bullies which attacked, vilified & threatened Nick Sandmann, an innocent minor,” attorney Lin Wood said.

    He continued: “The Post published to third parties without privilege no less than six false and defamatory articles of and concerning Nicholas, including two in its print newspaper and four online.”

    According to the Daily Wire, Sandmann’s lawyers sent “letters for potential lawsuits to over 50 entities ranging from Democratic politicians to celebrities to media figures.”

    That list includes journalists, media outlets and celebrities:

    1. The Washington Post
    2. The New York Times
    3. Cable News Network, Inc. (CNN)
    4. The Guardian
    5. National Public Radio
    6. TMZ
    7. Atlantic Media Inc.
    8. Capitol Hill Publishing Corp.
    9. Diocese of Covington
    10. Diocese of Lexington
    11. Archdiocese of Louisville
    12. Diocese of Baltimore
    13. Ana Cabrera (CNN)
    14. Sara Sidner (CNN)
    15. Erin Burnett (CNN)
    16. S.E. Cupp (CNN)
    17. Elliot C. McLaughlin (CNN)
    18. Amanda Watts (CNN)
    19. Emanuella Grinberg (CNN)
    20. Michelle Boorstein (Washington Post)
    21. Cleve R. Wootson Jr. (Washington Post)
    22. Antonio Olivo (Washington Post)
    23. Joe Heim (Washington Post)
    24. Michael E. Miller (Washington Post)
    25. Eli Rosenberg (Washington Post)
    26. Isaac Stanley-Becker (Washington Post)
    27. Kristine Phillips (Washington Post)
    28. Sarah Mervosh (New York Times)
    29. Emily S. Rueb (New York Times)
    30. Maggie Haberman (New York Times)
    31. David Brooks (New York Times)
    32. Shannon Doyne
    33. Kurt Eichenwald
    34. Andrea Mitchell (NBC/MSNBC)
    35. Savannah Guthrie (NBC)
    36. Joy Reid (MSNBC)
    37. Chuck Todd (NBC)
    38. Noah Berlatsky
    39. Elisha Fieldstadt (NBC)
    40. Eun Kyung Kim
    41. HBO
    42. Bill Maher
    43. Warner Media
    44. Conde Nast
    45. GQ
    46. Heavy.com
    47. The Hill
    48. The Atlantic
    49. Bustle.com
    50. Ilhan Omar
    51. Elizabeth Warren
    52. Kathy Griffin
    53. Alyssa Milano
    54. Jim Carrey

Digest powered by RSS Digest

Today’s News 19th February 2019

  • Escobar: How New Silk Roads Are Shaping Southwest Asia

    Authored by Pepe Escobar via The Asia Times,

    Businesses in the Middle East have begun to think ‘Make trade not war’ and being part of China’s Belt and Road scheme

    Singapore, aiming high for the status of Asia’s unofficial capital, seems like the ideal venue for a conference to discuss how the Middle East could learn a few lessons from ASEAN’s multi-layered relations with China, especially involving partnership in the New Silk Roads, or Belt and Road Initiative (BRI).

    But first, let’s get things straight. The “Middle East” is, of course, a Eurocentric, Orientalist denomination. From Asia’s – and China’s – cultural and geographical point of view, the “Middle East” is correctly seen as Southwest Asia.

    It’s enlightening to evaluate two Chinese informed perspectives on how China is deploying its geopolitical soft power across Southwest Asia in contrast to the Trump administration’s immensely muddled strategy.

    Duke University professor Bai Gao, also a visiting professor at Peking University, stresses how ASEAN privileges “a stronger regional identity that often unites these countries together to pursue their common interests when they deal with external great powers.” That’s in sharp contrast with Southwest Asia, where nations, geopolitically, are extremely selfish and eschew aligning on common interests.

    Peking University Professor Wu Bingbing, also Qatar Chair Professor in Middle Eastern Studies, for his part, stresses how “China believes in partnerships and does not take sides with any single country.”

    Enter, inevitably, BRI, which Wu describes as a “network of partnerships (and) projects” uniting a vast array of nations, aiming at win-win outcomes all across Southwest Asia. The objective is not “competition with the US, but cooperation.”

    Beyond ASEAN and Southwest Asia that also happens to be the exact emphasis of the December 2018 China policy paper on the EU. Make trade, not war.

    The Chinese think of the Middle East as Southwest Asia. Map: iStock

    Watch those BRI figures

    Contrary to rumors, BRI is not exactly a walking dead “debt trap” – as a constant update on business deals attest.

    Trade flows between China and BRI partners are still set to grow by $117 billion in 2019, after an estimated $158 billion last year. China’s exports to BRI-related markets should grow by $56 billion in 2019, after $76 billion last year. From China’s point of view, even if the figures are smaller, the Big Picture remains. That means economic upgrading, internationalization of the yuan and reduction of internal Chinese imbalances.

    BRI partners have already captured over $410 billion in Chinese investment in the period 2014-2018, always taking into consideration that BRI is still, officially, only in the planning stage.

    BRI partners are also set to profit from over $61 billion in additional exports to China in 2019. This Asia-wide infrastructure expansion translates into lower transaction and transportation costs. Not only ASEAN, but Southwest Asia is also ideally positioned to take advantage from BRI’s non-stop expansion.

    A measure of BRI’s challenges in Southwest Asia is offered, for instance, by the development of connectivity projects involving Israel. This study argues that for projects to work, China needs to turbo-charge its political “engagement” – something that for Beijing is a definitive red line.

    By comparison, in ‘Gold at the End of the Rainbow? The BRI and the Middle East’, Anoushiravan Ehteshami of Durham University argues that “it is in the outlying regions such as Central Asia and the Middle East that the BRI’s metal will be tested, as indeed China’s resilience as a major power. If China is able to overcome the geopolitical, cultural, institutional and socio-economic barriers of these Asian regions then it will have made some headway towards creating Asia’s first international community, arguably an ‘Asian international society’.”

    Asian international society

    As it picks up speed in the next decade, BRI is certainly set to shake up the balance of power from ASEAN to Central Asia and to Southwest Asia. Ehteshami is right when he predicts BRI “will generate counter-forces as it traverses Asia’s sub-regions, and nowhere more so than in South Asia, where both Middle East countries and China are actively engaged in developing security and economic links.”

    But Beijing’s ultimate target is way more ambitious. It wants to develop an “Asian international society” capable of rivaling, and surpassing, the West.

    A key lab to watch will be the Gulf Cooperation Council. Geoeconomically, the GCC – as well as Iraq and Iran – are focusing on Asia much more than the West. China is their top – or near top – energy buyer. Arrays of Chinese companies are heavily investing across the GCC.

    A glimpse of what’s to come is offered by China’s online Silk Road offensive in the UAE – a masterpiece of geo-connectivity.

    The tall buildings of Abu Dhabi. Business people in the United Arab Emirates and other parts of the Middle East are thinking about being part of the Belt and Road scheme. Image: iStock

    Tech consultant Sam Blatteis sums it all up:

    “Simply put, China is rewriting the rules on how to rise in influence in the Middle East. Because of the UAE’s Goliath-sized ports and the country’s geographic position almost sandwiched between Saudi Arabia to its West and Iran to its East, the UAE is thinking at-scale too about how to contribute to both Silk Road routes.”

    Investors from ASEAN to Southwest Asia are increasingly convinced that China is the only game in town for new ideas and major capital investment, way ahead on 5G and just about every technology. Moreover, the Chinese have not yet commercialized all their advances. That’s something even Singapore, the “capital of Asia”, has not been able to crack.

  • Visualizing The 7 Major Flaws Of The Global Financial System

    Since the invention of banking, the global financial system has become increasingly centralized.

    In the modern system, central banks now control everything from interest rates to the issuance of currency, while government regulators, corporations, and intergovernmental organizations wield unparalleled influence at the top of this crucial food chain.

    There is no doubt that this centralization has led to the creation of massive amounts of wealth, especially to those properly connected to the financial system. However, as Visual Capitalist’s Jeff Desjardins notes, the same centralization has also arguably contributed to many global challenges and risks we face today.

    FLAWS OF THE GLOBAL FINANCIAL SYSTEM

    Today’s infographic comes to us from investment app Abra, and it highlights the seven major flaws of the global financial system, ranging from the lack of basic access to financial services to growing inequality.

    Courtesy of: Visual Capitalist

    1. Billions of people globally remain unbanked
    To participate in the global financial sector, whether it is to make a digital payment or manage one’s wealth, one must have access to a bank account. However, 1.7 billion adults worldwide remain unbanked, having zero access to an account with a financial institution or a mobile money provider.

    2. Global financial literacy remains low
    For people to successfully use financial services and markets, they must have some degree of financial literacy. According to a recent global survey, just 1-in-3 people show an understanding of basic financial concepts, with most of these people living in high income economies.

    Without an understanding of key concepts in finance, it makes it difficult for the majority of the population to make the right decisions – and to build wealth.

    3. High intermediary costs and slow transactions
    Once a person has access to financial services, sending and storing money should be inexpensive and fast.

    However, just the opposite is true. Around the globe, the average cost of a remittance is 7.01% in fees per transaction – and when using banks, that rises to 10.53%. Even worse, these transactions can take days at a time, which seems quite unnecessary in today’s digital era.

    4. Low trust in financial institutions and governments
    The financial sector is the least trusted business sector globally, with only a 57% level of trust according to Edelman. Meanwhile, trust in governments is even lower, with only 40% trusting the U.S. government, and the global country average sitting at 47%.

    5. Rising global inequality
    In a centralized system, financial markets tend to be dominated by those who are best connected to them.

    These are people who have:

    • Access to many financial opportunities and asset classes
    • Capital to deploy
    • Informational advantages
    • Access to financial expertise

    In fact, according to recent data on global wealth concentration, the top 1% own 47% of all household wealth, while the top 10% hold roughly 85%.

    On the other end of the spectrum, the vast majority of people have little to no financial assets to even start building wealth. Not only are many people living paycheck to paycheck – but they also don’t have access to assets that can create wealth, like stocks, bonds, mutual funds, or ETFs.

    6. Currency manipulation and censorship
    In a centralized system, countries have the power to manipulate and devalue fiat currencies, and this can have a devastating effect on markets and the lives of citizens.

    In Venezuela, for example, the government has continually devalued its currency, creating runaway hyperinflation as a result. The last major currency manipulation in 2018 increased the price of a cup of coffee by over 772,400% in six months.

    Further, centralized power also gives governments and financial institutions the ability to financially censor citizens, by taking actions such as freezing accounts, denying access to payment systems, removing funds from accounts, and denying the retrieval of funds during bank runs.

    7. The build-up of systemic risk
    Finally, centralization creates one final and important drawback.

    With financial power concentrated with just a select few institutions, such as central banks and “too big too fail” companies, it means that one abject failure can decimate an entire system.

    This happened in 2008 as U.S. subprime mortgages turned out to be an Achilles Heel for bank balance sheets, creating a ripple effect throughout the globe. Centralization means all eggs in one basket – and if that basket breaks it can possibly lead to the destruction of wealth on a large scale.

    THE FUTURE OF THE GLOBAL FINANCIAL SYSTEM?

    The risks and drawbacks of centralization to the global financial system are well known, however there has never been much of a real alternative – until now.

    With the proliferation of mobile phones and internet access, as well as the development of decentralization technologies like the blockchain, it may be possible to build an entirely new financial system.

    But is the world ready?

  • GE, Boeing, T-Mobile Among Latest Victims Of Chinese IP Theft

    As US and Chinese negotiators prepare to begin their seventh round of trade talks this week, more reports are being leaked to the media about China’s efforts to steal trade secrets from US companies via “Operation Cloudhopper”, the Ministry of State Security-backed infiltration campaign that used service providers in the US and Europe to infiltrate the systems of their clients.

    According to a report in the New York Times that detailed how China and Iran have ramped up their hacking efforts since 2015, when the now-abandoned Iran deal was initially struck, and China promised the Obama administration that it would pull back on its cyberespionage efforts. After an 18-month lull, China’s 10-year-long commercially motivated campaign was revitalized in the midst of growing trade tensions between the US and China (tensions that predated Trump’s trade war).

    China

    Among the latest targets of China’s hacks, according to the NYT’s military and private sources, were GE Aviation, Boeing and T-Mobile.

    A summary of an intelligence briefing read to The New York Times said that Boeing, General Electric Aviation and T-Mobile were among the recent targets of Chinese industrial-espionage efforts. The companies all declined to discuss the threats, and it is not clear if any of the hacks were successful.

    Offering some background on China’s hacking strategy in recent years, sources described how China has managed to carry out more sophisticated attacks that have been increasingly difficult to detect.

    But the 2015 agreement appears to have been unofficially canceled amid the continuing trade tension between the United States and China, the intelligence officials and private security researchers said. Chinese hacks have returned to earlier levels, although they are now stealthier and more sophisticated.

    “Cyber is one of the ways adversaries can attack us and retaliate in effective and nasty ways that are well below the threshold of an armed attack or laws of war,” said Joel Brenner, a former leader of United States counterintelligence under the director of national intelligence.

    Federal agencies and private companies are back to where they were five years ago: battling increasingly sophisticated, government-affiliated hackers from China and Iran – in addition to fighting constant efforts out of Russia – who hope to steal trade and military secrets and sow mayhem. And it appears the hackers substantially improved their skills during the lull.

    […]

    Mr. Segal and other Chinese security experts said attacks that once would have been conducted by hackers in China’s People’s Liberation Army are now being run by China’s Ministry of State Security.

    These hackers are better at covering their tracks. Rather than going at targets directly, they have used a side door of sorts by breaking into the networks of the targets’ suppliers. They have also avoided using malware commonly attributed to China, relying instead on encrypting traffic, erasing server logs and other obfuscation tactics.

    […]

    “The fingerprint of Chinese operations today is much different,” said Priscilla Moriuchi, who once ran the National Security Agency’s East Asia and Pacific cyber threats division. Her duties there included determining whether Beijing was abiding by the 2015 agreement’s terms. “These groups care about attribution. They don’t want to get caught.”

    One of Beijing’s primary motivations in carrying out these attacks has been to bolster its latest five-year economic plan to make China a leader in AI and other cutting edge technology.

    But Chinese hackers have resumed carrying out commercially motivated attacks, security researchers and data-protection lawyers said. A priority for the hackers, researchers said, is supporting Beijing’s five-year economic plan, which is meant to make China a leader in artificial intelligence and other cutting-edge technologies.

    “Some of the recent intelligence collection has been for military purposes or preparing for some future cyber conflict, but a lot of the recent theft is driven by the demands of the five-year plan and other technology strategies,” said Adam Segal, the director of the cyberspace program at the Council on Foreign Relations. “They always intended on coming back.”

    This is only the latest in a string of leaks about China’s espionage efforts since 2015. But the constant stream of evidence being leaked to the press, all of which seems to corroborate Robert Lighthizer’s claims that China’s cyberespionage efforts have continued unabated since the trade war began, are happening at an interesting time. Which would seem to raise serious questions about the US’s ability to strike a sweeping trade compromise without President Trump looking like he has caved to the Chinese.

  • The 'Disappearing Democrat' Scandal – Part 2

    Authored by Tim Donner via Liberty Nation,

    This is the second of a two-part series on a massive scandal which has gone largely unreported, based on an interview on Liberty Nation Radiowith Luke Rosiak, author of Obstruction of Justice: How the Deep State Risked National Security to Protect the DemocratsIn part one, Mr. Rosiak described how the scandal unfolded and jeopardized the security of more than two dozen Democratic members of Congress.

    The media, the DOJ, and the Democrats: A powerful axis with the ability to shape what we perceive as the issue of the day…

    It was a scandal that threatened to metastasize and blow up in the face of Democrats in a presidential election year like no other. But with the Hillary Clinton email scandal growing by the day, Democrats willing to do almost anything to avoid the specter of a Donald Trump presidency, the FBI burying their findings and a drive-by media behaving with a distinct lack of curiosity, few people took notice.

    Imram Awam, an IT specialist and Pakistani national with a checkered past, yet unvetted by the many congressional Democrats who employed his services, took advantage of the unfettered access he was granted to their computer files to hack, steal, blackmail – and even threaten to kill his wife’s family – in the process placing national security in distinct jeopardy.

    We were joined on Liberty Nation Radio by Luke Rosiak, an investigative reporter at the Daily Caller, who has just released the definitive book on this scandal, Obstruction of Justice: How the Deep State Risked National Security to Protect the Democrats.

    Tim Donner: This scandal went relatively unnoticed, because it came to a head in the heat of the 2016 presidential campaign. Do you think it would have been in the headlines and stayed there for some time if it happened at another time? Or would it have been written off like all the revelations about the FBI’s covert investigation of Trump, which we now know began before the presidential election?

    Luke Rosiak: That’s an interesting question because the media is a big part of this story, isn’t it? I mean, and what I basically learned through the reporting of this is I approached it first as what I just said. It’s a remarkable national security story that I thought surely everyone would be interested in. I had The Washington Post right behind me following my leads.

    Soon, I saw that no one was looking. I would write these stories, and I would say, “Look at the court documents from civil court. Look at these government records, these photographs, all this proof, and all this evidence.” There was basically just a campaign of concealment. And the media gladly went along with it, and they kind of bought the idea of fake news. You can just kind of say that now whenever it’s convenient. Politicians can get away with a lot by just saying, “It’s fake news.” And they do that on both sides, of course.

    The other thing is really just the lack of investigative reporting, especially when it’s not something that a lot of the media is interested in. It just turned out that, as you said, there was a much bigger appetite for this Russia story that is really kind of running on fumes here. No one can tell us exactly who was … the Trump campaign did what with Russia? But the media is very, very interested.

    Meanwhile, we’ve got direct evidence, and this is investigators on Capitol Hill. The Capitol police wrote a memo saying that after they caught this guy hacking Congress and actually hacking a particular server called the House Democratic Caucus server, the Capitol police wrote a memo saying that that server disappeared. It’s like holy cow, an important Democratic server disappeared while it’s evidence in a hacking probe. This is huge stuff. It’s documented by government investigators. And the media had no appetite for it. So ultimately, the Democrats kind of worked the FBI, and the FBI goes along with making this thing go away despite all the evidence. Then the media says, “No need to look into this. The FBI says there’s nothing there.”

    So my book documents, and the readers can see for themselves and judge for themselves, what happened on Capitol Hill with this Pakistani hack and the frightening ties to foreign governments and the track record of blackmail, and then the FBI basically conspiring to rig a political case.

    But the other thing that’s really important for people to learn from it is it shows you how they work behind the scenes to manipulate what we hear about and manipulate the system of justice here in America.

    Tim: What conclusions have you personally drawn from your extensive research about the pervasiveness of official corruption in Washington?

    Luke Rosiak: I’m shocked by how corrupt Congress is. I’ve been an investigative reporter here in Washington for a decade, and I’ve seen a lot. But the cynicism on Capitol Hill and the willingness to put personal reputation above all else. This may not sound … maybe everyone’s saying, “Yes, we already know that.” But this particular case, it kind of underscored. I saw things with my own eyes that were shocking.

    So this guy was taking all this equipment from Congress, for example, and sending it over to Pakistan. In one congresswoman’s office, a tenth of her budget disappeared. That’s enough for ten computers for every staff. They had invoices and so on proving this on Capitol Hill. They put out the statements, and we’re not going to seek any charges in this case.

    There is no way to justify it. They want to act like, “That one reporter. He must be doing fake news.” But it’s documented. So it’s remarkable to see the people we trust, and in other words, okay, you’ve got this Pakistani guy. He’s a horrible guy. Things happen. There are always bad people out there in the world. But what really shook me is to see the people that we trusted, the ones we elected and also the ones that we task with enforcing the law with the FBI and the DOJ, to see those people letting us down, it really shook my faith in some of the fundamental institutions that we count on in America.

    I think anyone who reads the book is going to see that it’s actually a remarkably sympathetic and empathetic portrait of what happened in Capitol Hill and a lot of people who were struggling with the decision of, “Should I do the right thing even if it puts my job at risk?” So this is a story about human beings, that a lot of times who chose convenience over speaking out. Then there’s also a few heroes in that mix who came forward and tried to do the right thing despite all the retaliation. They retroactively try to spin it as partisan, but when you read the book, it’s all Democratic whistleblowers who first were calling attention to the wrongdoing that they had witnessed on Capitol Hill.

    Tim: What lesson should be learned? What should voters take away from what you’ve uncovered in this book?

    Luke Rosiak:  I think that to question everything is really one of the lessons, I think, because the techniques that they use, the Democrats working with the DOJ and the media, that’s a powerful axis right now. That trifecta, the three of them working together have the ability to shape a lot of what we perceive as being the main issues of the day or the biggest things. It turns out that it’s kind of a big PR operation with a lot of very savvy people. I call them puppeteers on Capitol Hill, and I go into how they’re manipulating us. So identifying the ways in which we are being manipulated, I think, is key for Americans. Because these kind of tricks are going on all the time, and it’s important for us to be able to see what they’re doing to us.

  • The Wealthiest And Poorest County In Every U.S. State

    Submitted by Visual Capitalist

    The average U.S. state is made up of 62 counties.

    With so many counties spread throughout each state in the nation, it’s not surprising that we can find counties that exemplify almost any part of the American experience.

    In this case, we’re comparing county-level data to look at the differences in economic opportunity within each state. More specifically, we are looking at the range of median household income, which is one proxy for the difference in economic status between counties.

    Disparity By State

    Today’s infographic comes to us from TitleMax, and it looks at the wealthiest and poorest counties in each individual U.S. state based on the measure of median household income.

    Here are the five states with the biggest disparity between rich and poor counties:

    1. Virginia: $102,800

    Loudoun is about an hour’s drive to D.C., and it also happens to be the richest county in the U.S. in terms of median income. Further west in the state, bordering Kentucky and West Virginia, lies Buchanan County, which has a median household income of just $31,800.

    2. New Mexico: $86,500

    In Los Alamos, known as the birthplace of the atomic bomb, median household income has exploded to $114,700 – meanwhile, along the Mexico border lies Luna, the poorest county in the state.

    3. Colorado: $85,200

    Just like the Colorado has a difference in elevation, it also holds a large difference in median income. Folks in Douglas County, which lies between Denver and Colorado Springs, take home $112,400 in income on average, while folks in Costilla bring in about $27,200 per year.

    4. Maryland: $80,900

    Howard County, which lies between Baltimore and Washington D.C., has the highest median household income in the state. Meanwhile, it’s Somerset County at the south of the Delmarva Peninsula that has the lowest.

    5. Tennessee: $79,700

    Just to the south of the Music City sits Williamson County – a wealthy part of the state with $107,900 in median income. Hancock County is the poorest, and it’s tucked away in the northeast corner of the state.

    A note on Cost of Living

    While median household income can help point to disparities between counties, it is just one indicator.

    It’s worth noting that the cost of living can often be cheaper in counties with lower median incomes, and this can partially offset the difference in some instances. For example, while Trinity County is the poorest county in California by median income, it’s also far away from San Francisco, Los Angeles, or Sacramento, and has a much cheaper cost of living and a different way of life.

    In some ways it is comparing apples to oranges. Trinity County is completely rural, holds zero incorporated cities, and holds just 3,600 people in its largest community (Weaverville) – a far cry from the urban sprawl of L.A. or the booming Bay Area.

  • What A Way To Go? Hackers Can Turn Sex Robots Into Killing Machines, Security Expert Warns

    Authored by John Vibes via The Mind Unleashed,

    According to Nicholas Patterson, a cybersecurity lecturer at Deakin University in Melbourne, Australia, humanoid sex robots that have recently hit the market could potentially be hacked and turned into killing machines.

    Patterson gave this warning in a string of interviews with various UK publications:

    “Hackers can hack into a robot or a robotic device and have full control of the connections, arms, legs, and other attached tools like in some cases knives or welding devices. Often these robots can be upwards of 200 pounds and very strong. Once a robot is hacked, the hacker has full control and can issue instructions to the robot. The last thing you want is for a hacker to have control over one of these robots. Once hacked they could absolutely be used to perform physical actions for an advantageous scenario or to cause damage.”

    Similar warnings surfaced last year in response to the growing popularity of Bluetooth-enabled sex toys. It was revealed that hackers could control the devices from remote locations, and even use them to spy on unsuspecting pleasure seekers.

    Realistically, any device connected to the internet can be programmed to do harm, or at the very least spy on you. In fact, most smart devices are specifically designed to spy on users for data mining purposes.

    The primary reason sex robots evoke a special fear when it comes to hacking potential is because they are made in the likeness of humans. These devices are some of the very first humanoid robots that everyday consumers have the opportunity to interact with, which is naturally causing a great deal of anxiety for some. It has been predicted that humanoid robots will become a part of our everyday lives in the near future, but in reality they are far less dangerous than their formless counterparts.

    We have been trained to believe that the threat of artificial intelligence (AI) will come in the form of a Terminator-like robot that looks indistinguishable from an actual human, while invisible AI algorithms have been silently taking over our lives for the past decade, right under our noses. The real AI threat is disembodied, and comes in the form of algorithms that are sending the wrong people to jailcontrolling the information you see online, and even writing the news.

    The idea of a rogue robot that can walk and talk is indeed scary, but having every service and product being controlled by invisible algorithms is far worse. While this technology could be used to make positive change in the world, it is unfortunately true, as many experts have pointed out, that the ethics of these devices are only as good as the humans who programming them.

    An article published last year in Nature, explores the ethical framework of technology like self-driving cars. The article notes that the ethics of self-driving cars are based on the trolley problem, an ethical lifeboat scenario that would prove extremely unlikely in the real world.

    https://platform.twitter.com/widgets.js

    According to the ethics of self-driving cars, informed by the trolley problem, the lives of old people are less valuable than those of younger generations, and the life of an athlete is likewise more valuable than a “large” woman or homeless person.

  • US Army Patents "Net Warhead" To Combat Drones

    A team of Army researchers has designed a 40mm grenade round with a net embedded inside the warhead to take down enemy unmanned aerial vehicles, according to patent number 10,197,365.

    The new, high-tech round, which was patented on Tuesday, brings an entirely new approach for the Army to combat the proliferation of drones on the modern battlefield.

    The “net warhead” was invented by Tomasz Blyskal, Richard Fong, and LaMar Thompson of the Armament Research, Development, and Engineering Center at the Picatinny Arsenal in New Jersey. The round is designed to ensnare the propellors of a drone rather than using expensive electronic or kinetic countermeasures.

    “As the round nears the target, a signal from a control board activates a servo. The servo pulls on a central lock plunger to release a ball mechanism. This releases the ogive section, which in turn allows the ejection spring means to eject the petals and weights along with the net stowed there within,” according to the patent.

    Here is how the round works:

    More importantly, the new round is compatible with the M320 Grenade Launcher Module that can be mounted on the standard issue M4 carbine and M16 rifle.

    *Pic of rifles

    Initial testing showed the round outperforms other net-centric counter-drone weapons like pulling a net from another larger drone, according to the Army, because that requires trained pilots and does not work in countering drone swarms.

    Army commanders and civilian officials have expressed concerns over the increased availability of small drones to the public.

    Last month, the Newark Liberty International Airport experienced delays after two commercial airline pilots spotted a drone in the airspace. Moreover, drone sightings at London’s Gatwick Airport, UK’s second largest airport, in December, caused the airport to shut down for several days.

    Army officials are preparing tactics, techniques, and procedures for field units to counter drones on the modern battlefield. The use of conventional surface-to-air weapons like shoulder-fired rocket launchers designed to take out aircraft and tanks might be an expensive overkill against drones that can easily be purchased online.

  • Credit Exhaustion Is Global

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    Europe is awash in credit exhaustion, and so is China.

    The signs are everywhere: credit exhaustion is global, and that means the global growth story is over: revenues and profits are all sliding as lending dries up and defaults pile up.

    What is credit exhaustion? Qualified buyers don’t want to borrow more, leaving only the unqualified or speculators seeking to save a marginal bet gone bad with one more loan (which will soon be in default).

    Lenders are faced with a lose-lose choice: either stop lending to unqualified borrowers and speculators, and lose the loan-origination fees, or issue the loans and take the immense losses when the punters and gamblers default.

    Europe is awash in credit exhaustion, and so is China. China’s situation is unique, as credit expansion has been propping up the entire economy, from household wealth to corporate speculation to the export sector.

    As this article explains, The China Story That Is Far Bigger Than Apple, China’s trade balance–trade surpluses for decades–is close to slipping into trade deficits.

    At the same time, China’s once-mighty pool of savings has diminished as consumption has risen. As a result, China now needs foreign investment more than it did in the previous era.

    Chinese businesses have borrowed around $2 trillion in US dollar-denominated debt, requiring the acquisition of dollars to service the debt.

    So far this sounds like a typical case of a fast-growth economy maturing into a trade-deficit, debt-dependent consumption economy.

    What the article misses is the staggering rise in the cost of living in China over the past two decades. Some services are still affordable to the masses–subway fares are extremely cheap–and private healthcare is a mere fraction of healthcare costs in the U.S.

    But other costs–housing, food, clothing, etc.–have shot up to the point that our on-the-ground correspondents report that many living expenses aren’t much different than in the U.S.

    Officially, inflation is low in China, but the reality is not so cheery. “Domestic sentiment is definitely very bad, perhaps even worse than during the 2008 global financial crisis,” said Fred Hu. Chinese Professor Censored After Admitting Real GDP Growth Is Below 2%

    Recall that wages for college graduates are around $1,100 per month (7600 RMB), with $1,500 per month (10,000 RMB) being an above-average salary.

    While white-collar wages are $13,000 annually, apartments in first and even second tier cities are similar in cost to desirable U.S. cities. Rent for a small flat is $800 USD in Shanghai, more than half the average salary, and typically cost hundreds of thousands of dollars to buy.

    As I’ve noted before, roughly 3/4 of all household wealth in China is tied up in real estate, where it is effectively dead-money, earning no yield and completely illiquid.

    Reflecting a broad malaise, China’s stock market has dropped by 25% in 2018 while its currency weakened against the USD (by official design, of course).

    Echoing Tolstoy, every economy in a credit-fueled boom is happy in a similar way, but every economy in a credit-exhaustion decline is unhappy in its own way. The euro’s internal contradictions and the EU’s political “irreconcilable differences” are about to manifest in a unique way, and China’s credit bubble bursting is about to deflate bubbles in shadow banking, housing, speculation and confidence in China’s central planning model.

    *  *  *

    Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print): Read the first section for free in PDF format. My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF). My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

  • 16 States File Lawsuit Challenging Trump Border Emergency

    After making the rounds on seemingly every cable news show that would have him over the weekend and on Monday, California Attorney General Xavier Becerra led a coalition of 16 states in challenging Trump’s national emergency declaration, according to the Washington Post.

    Becerra

    California Attorney General Xavier Becerra

    The states are seeking a preliminary injunction to stop the order in the suit, which has been filed – just as Trump anticipated – in the Ninth Circuit, which has already struck down several key Trump policies.

    The lawsuit, brought by states with Democratic governors except for Maryland, could stall the president’s ability to build the wall for weeks or even months.

    Accusing the president of “an unconstitutional and unlawful scheme,” the suit alleges that the states are trying “to protect their residents, natural resources, and economic interests from President Donald J. Trump’s flagrant disregard of fundamental separation of powers principles ingrained in the United States Constitution.”

    https://platform.twitter.com/widgets.js

    Having sued Trump dozens of times already, Becerra, who noted the irony of filing a challenge to one of the president’s signature policies on President’s Day, said he was challenging Trump now because the president “admitted there’s no crisis at the border” – a reference to a remark made during Trump’s Friday press conference where he said that he “didn’t need” to declare the national emergency.

    “The president admitted that there’s not a basis for the declaration. He admitted there’s no crisis at the border. He’s now trying to rob funds that were allocated by Congress legally to the various states and people of our states,” Becerra told Andrea Mitchell on MSNBC Monday afternoon.

    “The separation of powers is being violated, we’re going to go out there and make sure that Donald Trump cannot steal money from the states and people who need them, since we paid the taxpayer dollars to Washington, D.C., to get those services,” he said.

    The Trump administration is already faces a litany of lawsuits over the national emergency declaration that have been filed by special interest groups. Over the weekend, the Center for Biological Diversity, Border Network for Human Rights and the American Civil Liberties Union all announced lawsuits. According to Bloomberg, another group called Public Citizen, which represents landowners in Texas along the US-Mexico border – who are worried about their property being taken by Eminent Domain – is reportedly preparing to file a suit. The eminent domain issue could become a problem for Trump in a state that supported him in the 2016 presidential race by a wide margin because, as one analyst told BBG, Texans are “very supportive of property rights.”

    It’s also looking increasingly likely that Congress will pass a resolution to terminate the emergency by simple majorities in both chambers of Congress, thanks to the support of several Republicans who oppose the emergency declaration, which could force Trump’s first-ever veto.

Digest powered by RSS Digest

Today’s News 18th February 2019

  • The Data Behind Surging NBA Team Valuations

    Submitted by Visual Capitalist

    At the beginning of this decade, the NBA was not on firm footing. More than half of the league’s teams were losing money, and negotiations on a new collective bargaining agreement were looming.

    Today, however, the NBA has undeniable momentum, buoyed by hefty broadcast agreements and superstars like LeBron James and Steph Curry. With interest in the NFL flagging in the U.S., professional basketball appears to be seizing the opportunity to win over sports fans and grow the popularity of the league.

    This momentum has pushed team valuations to new heights, with the median team now being worth a solid $1.56 billion.

    What are the exact valuations of individual franchises in the league, and how are these values derived? Let’s dig into Forbes’ annual NBA Valuations Ranking to learn more.

    Breaking down team value

    Forbes has broken down the value of an NBA team valuations into four components:

    Sport: The revenue shared equally among all teams in the league
    Market: City and market size
    Arena: Revenues from sources such as attendance and premium seating
    Brand: The actual value of the team’s brand

    Courtesy of: Visual Capitalist

    Every single team in the NBA is now valued at over $1 billion, and all but one team (the Cavaliers) were profitable last year.

    For teams like the Knicks and Lakers, it’s easy to see how their huge market size contributes to their sky-high valuations. The former is currently the second-most-valuable sports franchise in America, tied with the New York Yankees.

    While the biggest teams are worth more than double the NBA median value, the rising tide appears to be lifting all boats. The median team value has risen steadily and is up nearly 200% since 2014.

    Gold Rush

    The biggest story in basketball over recent years has been the ascension of the Golden State Warriors.

    Making the NBA finals four seasons in a row – and winning three of those match-ups – has had a massive impact on the team’s value, which has shot up 367% over the last five years. As the team moves to the brand new Chase Center next season, Golden State may even have a shot at surpassing the Knicks or Lakers in overall valuation.

    Here are the top five gainers over the past five years:

    NBA team value gainers

    Fan Power

    The teams with the highest revenue-per-fan are typically in smaller markets like Salt Lake City and Oklahoma City, though both cities are unique in that an NBA franchise is their only professional sports team.

    The struggling Chicago Bulls comes in near the bottom by revenue-per-fan, despite being the fourth most valuable team in the league.

    Shifting Gravity

    In recent years, LeBron James has been one of the most electrifying personalities in professional sports, however, his influence on the NBA is now proving to be a double-edged sword. Since LeBron moved time zones from Cleveland to Los Angeles, NBA viewership is down – a dip that is particularly pronounced during the earlier Eastern Conference time slot.

    Despite the slight dip in viewership, NBA teams are more profitable than they’ve ever been, and as the NBA turns its sights eastward to China, today’s valuations may seem modest in a few years time.

  • "The Trap Has Been Set"

    Submitted by Tuomas Malinen of GnS Economics

    The failing engines of global growth

    The global slowdown has been much discussed lately. A slowdown in Europe and China was considered to be the main reason for the December stock market rout combined with the balance sheet normalization (QT) program of the Federal Reserve. What is behind the slowdown?

    No satisfactory answer has emerged, though China’s efforts to curb excessive lending are a natural candidate, in addition to the fact that central banks have been removing stimulus. The answer, however, goes deeper into the structure of modern economies.

    We will show in the March issue of our Q-review that the world economy never actually recovered from the financial crisis, and explain the reasons why. The failure of the economic drivers of global growth, China, the Eurozone and the US, is at the heart of the non-recovery. We will delve into that here.

    Killing the spirit

    In June 2017, we noticed that something strange was going on in the global economy. The growth of total factor productivity (TFP) had stagnated starting in 2011. This is something that should not happen in a growing economy.

    TFP is the measure of that part of GDP growth that changes in the quality and quantity of investments and work force cannot explain. It’s generally thought to be the measure of technological change driving economic growth. If it stagnates, it means that production is not becoming more efficient. That is, the achieved production is just the sum of capital and labor. Stagnation thus implies that our ability to create productive innovations has halted. A serious omen, and yet this is exactly what has happened since 2011. Why?

    Figure 1. Regional and global growth rates of total factor productivity (TFP) in percentage points. Source: GnS Economics, Conference Board

    The Three Kings on a journey down

    When the global economy falters, you turn to its leaders to look for blame. At the end of 2017, China, the euro area and the United States accounted for some 51 percent of the global GDP. They were the undisputed engines of global growth.

    After the GFC, leaders of Europe, China and the United States enacted exceptional measures to “save” the global economy. These kept many insolvent banks and companies operating thus intensifying the zombification of the global economy. However, the GFC also led to a fall in the investment rate in the euro area and in the US (see Figure 2). Their gross formation of physical capital fell by several percentage points and it has never recovered.

    Figure 2. Formation of gross physical capital in China, euro area, and in the United States in constant (base year: 2010) US dollars. Source: GnS Economics, World Bank

    The capital formation in China has kept its (very high) rate. There, however, the problem is that investments have grown increasingly unproductive. Figure 3 shows the TFP growth of China, the euro area and the US. It shows that since 2011, the productivity of China has actually fallen despite heavy investment levels. This has led to an even more intractable problem, over-indebtedness, because the revenue from the investments has not been sufficient to service the debt.

    Figure 3. Growth rates of total factor productivity (TFP) in China, euro area and the United States points. Source: GnS Economics, Conference Board

    Figure 4 shows the combined private and government debt and the real GDP of China since 1995.[1] From 1995 till 2007, the overall debt in China grew only fractionally faster than GDP, as it should. However, between 2008 and 2017, the real GDP of China grew by around 7.6 trillion US dollars, but private and government debt grew by an astonishing 25 trillion US dollars. That is, during those nine years, the debt in China grew faster than GDP by a factor higher than three! There are no parallels in modern history, and it prompts an uncomfortable conclusion.

    Figure 4. Nominal gross domestic product and the total private sector and government debt in China. Source: GnS Economics, Mbaye, Moreno-Badina and Chae (2018), World Bank

    The Chinese economy has become a Ponzi.  It cannot sustain itself without a continued harrowing rise in debt. Halt the growth in debt and the real economy will tumble, and that’s what we have seen recently.

    If it’s broken, you might want to fix it

    The fact is that something has gone seriously wrong in the model of global economic governance that has been in place since the Second World War. It may have never worked the way the macroeconomists envisaged it to work, but clearly it is not working anymore.

    In the March issue, we will explain in detail, based on data and academic research, why the model of global governance has failed. It should be heeded closely, as the fragility of the global economy creates the possibility of a global crash, as we have warned since March 2017. Most likely, it’s too late to avert the global crash, but one can always prepare. We will return to that in more detail in June.

    Based on what has happened in the global economy, one should be extra careful when calling for more stimulus. It will most likely not benefit the real economy, but it is likely to propel over-valued asset markets even higher. The unfortunate fact is that when asset markets go, the fragile global economy will go with them. The trap has been set.

  • Pelosi Quietly Deletes Tweet Slamming "Racist, Homophobic" Attack On Jussie Smollett

    As the Jussie Smollett “attack” is looking more and more like a class-4 felony hoax, House Speaker Nancy Pelosi (D-CA) quietly deleted a tweet sympathetic to the Empire actor who claimed that he was assaulted, in what Pelosi uncritically described as a “racist, homophobic attack.” It had over 100,000 “likes” and 21,000 retweets. 

    Unfortunately for Nancy, the internet never forgets

    Pelosi is just one snowflake in an avalanche of liberals who accepted Smollett’s bizarre story without so much as questioning the logic behind two Trump supporters, who watch Empireout at 2 a.m. in a wealthy Chicago enclave, who not only recognized Smollett – but knew he was gay, and happened to be packing a bleach-like substance and a noose (in “MAGA Country). 

    The Speaker of the House wasn’t alone in her uncritical support of Smollett – who faces up to three years in prison if charged and found guilty of filing a false police report.

    https://platform.twitter.com/widgets.js

    As the Daily Callers Kerry Pickett notes, 2020 Democratic contenders Sen. Kamala Harris (D-CA) and Corey Booker (D-NJ) have yet to delete their tweets. 

    Booker – another kneejerk snowflake in the avalanche of MAGA-hate, called the Smollett “attack” a “modern day lynching.” 

    https://platform.twitter.com/widgets.js

    Harris parroted Booker 90 minutes later, also calling it a “modern day lynching.”

    Oddly, quickdraw Booker seems be taking his sweet time time figuring out what he thinks of the Smollett situation now that his two Nigerian friends have apparently flipped on the Empire star and accused him of paying them to stage the attack – practicing beforehand and purchasing the rope and red hats used in the “MAGA Country” attack. 

    https://platform.twitter.com/widgets.js

    The “Democratic party’s rising star,” Alexandria Ocasio-Cortez has also left her Smollett tweet up, hanging there. 

    https://platform.twitter.com/widgets.js

    Who else went off half-cocked over Smollett’s unbelievable encounter? 

    And many, many more. 

    Or just delete it?  

    https://platform.twitter.com/widgets.jshttps://platform.twitter.com/widgets.js

  • Resolution To Block Border Emergency Likely To Pass, Forcing First-Ever Trump Veto

    Now that a handful of influential Senate Republicans started expressing their reservations about President Trump’s decision to call a national emergency to secure another $7 billion in funding for his promised border wall (or “barrier”…or “fence”…), it’s becoming increasingly clear that a Congressional challenge to order will likely clear both the Democrat-controlled House and the Republican-controlled Senate, provoking the president to issue what would be the first veto of his presidency, Bloomberg reported on Sunday, citing remarks made on Sunday news shows.

    Both Illinois Democratic Sen. Tammy Duckworth and Ohio Republican Rep. Jim Jordan said on ABC’s “This Week” that they expect a resolution in Congress to terminate Trump’s order would have enough votes to pass both the House and the Senate by simple majorities, thanks to Republicans who fear Trump’s order would deprive the military of essential funds.

    Trump will redirect $3.6 billion in military construction funding toward the border project, and will also take separate executive action repurposing about $2.5 billion from the Defense Department’s drug-interdiction program and $600 million from the Treasury Department’s asset-forfeiture fund. Officials said the goal is to ultimately build roughly 234 miles of barriers along the border, including bollard-style wall. The funding is on top of roughly $1.4 billion earmarked to build 55 miles of barrier as part of the border security compromise passed last week.

    Trump

    But the resolution will likely run into trouble if Trump issues the veto, because it’s doubtful that the Democrats could muster enough votes in the Senate to override it.

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    And, assuming the resolution does pass, Stephen Miller implied during an appearance on “Fox News Sunday” that President Trump would veto it, saying that the president would “protect his emergency order” and adding that the order itself wasn’t unconstitutional because Congress had passed the National Emergency Act, which enabled the president to take this step.

    https://platform.twitter.com/widgets.js

    “He is going to protect his national emergency declaration, guaranteed,” Miller said. Jordan added that once a veto is issued, “I don’t think there’s any chance the veto would be overridden.”

    Of course, Trump’s national emergency declaration is also facing a challenge from several states’ attorneys general (including likely New York and California), and presumably lawsuits from interest groups will follow. To that end, Congressman Adam Schiff said on CNN’s “State of the Union” that Trump’s admission during his press conference that he “didn’t need to do this” could doom his order in the courts.

    But for now, at least, the vote to block the order could backfire on the Dems, as Trump will likely use it as blatant politicking and one more example of Democratic obstructionism which he has sought to tie to Democratic leaders Nancy Pelosi and Chuck Schumer.

  • $166 Billion In Student Debt Is Now Officially Delinquent

    According to the Federal Reserve Bank of New York’s latest quarterly household debt report, student loan delinquencies surged last year, up to $166.4 billion in the fourth quarter. The report includes the total owed and the percentage of delinquent accounts past 90 days or in default. 

    The percentage of delinquent accounts figure has stood at 11% since about mid-2012, but the total amount of debt outstanding has increased to a stunning $1.46 trillion at the end of December 2018 – and unpaid student debt rose to its highest levels ever. 

    Delinquencies rose even as unemployment fell below 4%, telegraphing that the U.S. job market simply hasn’t generated the level of wage growth necessary to deal with the country’s growing debt load. 

    Bloomberg Intelligence interest-rate strategist Ira Jersey said: “Income levels for graduates are not necessarily high enough for debt payments overall. If you have a choice to pay your student loan or for food or housing, which do you choose?”

    According to Jersey, the loans “probably won’t hurt the economy” because they are government-sponsored. Which is another way of saying taxpayers will once again come to the “rescue.”

    “But incrementally, it does mean higher federal deficits if the loans are not repaid,” he conceded. 

    Echoing what we first said back in 2012, Bloomberg notes  that the total amount in arrears is twice the amount the U.S. Treasury paid to bail out the auto industry during the last recession.

    Meanwhile, with the cost of higher education doubling over the last 20 years, even the St. Louis Fed was unsure as to whether or not “college was still worth it”, according to a blog posted on their website. 

    Another stunning observation: the age group that is transitioning to delinquency the fastest is not workers fresh out of college, but the 40 to 49 year old cohort, partly as a result of parents shouldering the load and borrowing to pay for their children’s expenses. 

    This has forced some schools to provide more support for those attending. For instance, Cornell increased tuition for 2019-2020 by “the lowest it has been in decades” and the school is “budgeting for a significant increase in financial aid”. Purdue University will also not boost room and board rates for 2019-2020, the seventh year in a row it has avoided hiking these prices.

    On average, however, in-state tuition and fees for a public four year institution has risen by 3.1% beyond inflation over the last decade. 

  • Smollett Shuffles Attorneys, Hires Crisis Management Firm As Scandal Deepens

    Update2: Smollett’s management team has reportedly retained the services of Anne Kavanaugh, whose Chicago firm MediaPros24/7 provides several media services including crisis management.

    https://platform.twitter.com/widgets.js

    He is also reportedly no longer being represented by high-profile criminal defense attorney Michael Monico after an alleged disagreement about Smollett’s Saturday statement (h/t Nick Monroe). 

    Monico told Fox 32 Chicago‘s Rafer Weigel that he “was but is no longer representing” Smollett, who is now represented by Chicago attorneys Victor Henderson and Todd Pugh. 

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    Update: According to CBS Chicago, the Nigerian brothers who were arrested and then released, “Abel” and “Ola,” told detectives that they did a practice run a few days before the “attack.”

    Sources said one of the brothers held the rope and poured bleach while the other wore a plain red hat and yelled slurs at Smollett.

    The sources say the red hat was bought at an Uptown beauty supply store and that the attack was supposed to happen before Jan. 29. The brothers told detectives the three men rehearsed the attack days prior to it happening. –CBS Chicago

    https://platform.twitter.com/widgets.js

    ***

    After Chicago police arrested, interviewed, and then released two Nigerian brothers whose information “shifted the trajectory of the investigation,” Empire star Jussie Smollett is doubling down on his claim that he was attacked nearly three weeks ago at 2 a.m. in an upscale Chicago neighborhood. 

    “As a victim of a hate crime who has cooperated with the police investigation, Jussie Smollett is angered and devastated by recent reports that the perpetrators are individuals he is familiar with,” reads a statement from his criminal defense attorneys Todd S. Pugh and Victor P. Henderson. 

    “He has now been further victimized by claims attributed to these alleged perpetrators that Jussie played a role in his own attack,” reads the statement given to media outlets. 

    Of note, Jussie is now pitting himself against the Nigerian brothers who reportedly told police they were paid $3,500 each to stage the attack, and promised $500 each upon their return from Nigeria after they left the country following the January 29 incident. 

    https://platform.twitter.com/widgets.js

    “One of the purported suspects was Jussie’s personal trainer who he hired to ready him physically for a music video. It is impossible to believe that this person could have played a role in the crime against Jussie or would falsely claim Jussie’s complicity,” the statement continues. 

    To recap: 

    Smollett, 36, claims he was attacked on January 29 around 2 a.m. by two white men who shouted racist and homophobic slurs, doused him in a bleach-like liquid, hung a rope around his neck, and yelled “This is MAGA country,” before he was able to chase them away. He was seen on security footage entering his upscale apartment with an intact Subway sandwich and a noose around his neck (which he was still wearing when police arrived). Of note, Smollett’s manager claims he heard the “MAGA country” slur – which makes him part of this. 

    While there was no footage of the “attack” despite Chicago’s thousands of surveillance cameras, two “persons of interest” were captured on camera…

    … who turned out to be Nigerian-born brothers Abimbola “Abel” and Olabinjo “Ola” Osundairo, one of whom is Jussie’s personal trainer and was an extra on Empire

    After Chicago police arrested the brothers as “potential suspects,” they were later released without charges – and investigators say their interview “shifted the trajectory of the investigation.”

    “We can confirm that the information received from the individuals questioned by police earlier in the Empire case has in fact shifted the trajectory of the investigation. We’ve reached out to the Empire cast member’s attorney to request a follow-up interview,” said Chicago police spokesman Anthony Guglielmi. 

    According to ABC 7, “Two officials familiar with the Smollett investigation confirmed to ABC News that detectives confronted the two brothers with evidence that they purchased the rope found around Smollett’s neck at a local hardware store. The brothers agreed to cooperate with police, who are investigating whether Smollett made up the story, after police threatened to charge them with battery and hate crimes.

    https://platform.twitter.com/widgets.js

    Police want to speak with Smollett again, and reportedly no longer consider him a victim

    https://platform.twitter.com/widgets.js

    Meanwhile, CNN journalists Brian Stelter and S.E. Cupp are already trying to shift blame onto “Trumpsters.”

    https://platform.twitter.com/widgets.jshttps://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    Meanwhile, Smollett’s response to all of this:  

    https://platform.twitter.com/widgets.js

  • The Birth Of A Monster

    Authored by David Howden via The Mises Institute,

    The Federal Reserve’s doors have been open for “business” for one hundred years. In explaining the creation of this money-making machine (pun intended – the Fed remits nearly $100 bn. in profits each year to Congress) most people fall into one of two camps.

    Those inclined to view the Fed as a helpful institution, fostering financial stability in a world of error-prone capitalists, explain the creation of the Fed as a natural and healthy outgrowth of the troubled National Banking System. How helpful the Fed has been is questionable at best, and in a recent book edited by Joe Salerno and me — The Fed at One Hundred — various contributors outline many (though by no means all) of the Fed’s shortcomings over the past century.

    Others, mostly those with a skeptical view of the Fed, treat its creation as an exercise in secretive government meddling (as in G. Edward Griffin’s The Creature from Jekyll Island) or crony capitalism run amok (as in Murray Rothbard’s The Case Against the Fed).

    In my own chapter in The Fed at One Hundred I find sympathies with both groups (you can download the chapter pdf here). The actual creation of the Fed is a tragically beautiful case study in closed-door Congressional deals and big banking’s ultimate victory over the American public. Neither of these facts emerged from nowhere, however. The fateful events that transpired in 1910 on Jekyll Island were the evolutionary outcome of over fifty years of government meddling in money. As such, the Fed is a natural (though terribly unfortunate) outgrowth of an ever more flawed and repressive monetary system.

    Before the Fed

    Allow me to give a brief reverse biographical sketch of the events leading up to the creation of a monster in 1914.

    Unlike many controversial laws and policies of the American government — such as the Affordable Care Act, the Troubled Asset Relief Program, or the War on Terror — the Federal Reserve Act passed with very little public outcry. Also strange for an industry effectively cartelized, the banking establishment welcomed the Fed with open arms. What gives?

    By the early twentieth century, America’s banking system was in a shambles. Fractional-reserve banks faced with “runs” (which didn’t have to be runs with the pandemonium that usually accompanies them, but rather just banks having insufficient cash to meet daily withdrawal requests) frequently suspended cash redemptions or issued claims to “clearinghouse certificates.” These certificates were a money substitute making use of the whole banking system’s reserves held by large clearinghouses.

    Both of these “solutions” to the common bank run were illegal as they allowed a bank to redefine the terms of the original deposit contract. This fact notwithstanding, the US government turned a blind eye as the alternative (widespread bank failures) was perceived to be far worse.

    The creation of the Fed, the ensuing centralization of reserves, and the creation of a more elastic money supply was welcomed by the government as a way to eliminate those pesky and illegal (yet permitted) banking activities of redemption suspensions and the issuance of clearinghouse certificates. The Fed returned legitimacy to the laws of the land. That is, it addressed the government’s fear that non-enforcement of a law would raise broader questions about the general rule of law.

    The Fed provided a quick fix to depositors by reducing cases of suspensions of their accounts. And the banking industry saw the Fed as a way to serve clients better without incurring a cost (fewer bank runs) and at the same time coordinate their activities to expand credit in unison and maximize their own profits.

    In short, the Federal Reserve Act had a solution for everyone.

    Taking a central role in this story are the private clearinghouses which provided for many of the Fed’s roles before 1914. Indeed, America’s private clearinghouses were viewed as having as many powers as European central banks of the day, and the creation of the Fed was really just an effort to make the illegal practices of the clearinghouses legal by government institutionalization.

    Why Did Clearinghouses Have So Much Power?

    Throughout the late nineteenth century, clearinghouses used each new banking crisis to introduce a new type of policy, bringing them ever closer in appearance to a central bank. I wouldn’t go so far as to say these are examples of power grabs by the clearinghouses, but rather rational responses to fundamental problems in a troubled American banking system.

    When bank runs occurred, the clearinghouse certificate came into use, first in 1857, but confined to the interbank market to economize on reserves. Transactions could be cleared in specie, but lacking sufficient reserves, a troubled bank could make use of the certificates. These certificates were jointly guaranteed by all banks in the clearinghouse system through their pooled reserves. This joint guarantee was welcomed by unstable banks with poor reserve positions, and imposed a cost on more prudently managed banks (as is the case today with deposit insurance). A prudent bank could complain, but if it wanted to use a clearinghouse’s services and reap the cost advantages it had to comply with the reserve-pooling policy.

    As the magnitude of the banking crisis intensified, clearinghouses started permitting banks to issue the certificates directly to the public (starting with the Panic of 1873) to further stymie reserve drains. (These issues to the general public amounted to illegal money substitutes, though they were tolerated, as noted above.)

    Fractional-Reserve Free Banking and Bust

    The year 1857 is a somewhat strange one for these clearinghouse certificates to make their first appearance. It was, after all, a full twenty years into America’s experiment with fractional-reserve free banking. This banking system was able to function stably, especially compared to more regulated periods or central banking regimes. However, the dislocation between deposit and lending activities set in motion a credit-fueled boom that culminated in the Panic of 1857.

    This boom and panic has all the makings of an Austrian business cycle. Banks overextended themselves to finance the booming industries during America’s westward advance, primarily the railways. Land speculation was rampant. As realized profits came in under expectations, investors got skittish and withdrew money from banks. Troubled banks turned to the recently established New York Clearing House to promote stability. Certain rights were voluntarily abrogated in return for a guarantee on their solvency.

    The original sin of the free-banking period was its fractional-reserve foundation. Without the ability to fund lending activity with their deposit base, banks never would have financed the boom to the extent that it became a destabilizing factor. Westward expansion and investment would still have occurred, though it would have occurred in a sustainable way funded through equity investments and loans. (These types of financing were used, though as is the case today, this occurred less than would be the case given the fractional-reserve banking system’s essentially cost-free funding source: the deposit base.)

    In conclusion, the Fed was not birthed from nothing in 1913. The monster was the natural outgrowth of an increasingly troubled banking system. In searching for the original problem that set in motion the events culminating in the creation of the Fed, one must draw attention to the Panic of 1857 as the spark that set in motion ever more destabilizing policies. The Panic itself is a textbook example of an Austrian business cycle, caused by the lending activities of fractional-reserve banks. This original sin of the banking system concluded with the birth of a monster in 1914: The Federal Reserve. 

  • “Down With Americans, Long Live Putin!” Haitian Protesters Seek Russian Help Against US "Puppet" Regime

    A French language AFP report over the weekend featured surprising photographs of Haitians burning American flags as the unrest and chaos continues especially in the Haitian capital of Port-au-Prince.

    Major cities throughout Haiti have for days essentially been on “lockdown” due to civil unrest and mass protests demanding that President Jovenal Moise step down over charges of corruption and rampant inflation under his watch — yet unlike similar unrest happening hundreds of miles due south of the small Caribbean country in Venezuela, Washington has stood in support of the president, who since 2017 has found himself facing a flood of popular anger surrounding the PetroCaribe scandal.

    A man identifying himself only as Bronson, a Haitian protester, burns the US flag on February 15, via the APF.

    Though the mass protests have multiple layers in terms of motives, stemming mostly from skyrocketing inflation and the government’s failure to hold to account leaders caught embezzling from a multi-billion dollar Venezuelan program that sent discounted oil to Haiti, or the PetroCaribe affair, a number of the protest gatherings are distinctly anti-American in their rhetoric and symbolism, while at the same time being pro-Russian. 

    Reflecting the global geopolitical divide over the crisis in nearby Venezuela, the AFP report describes some of the anti-American elements to the protests as follows (based on a rough translation from the French): 

    A group of protesters burned an American flag Friday afternoon in the heart of the Haitian capital Port-au-Prince, calling for help from Russia to solve the crisis that paralyzed the country for over a week.

    Down with Americans, long live Putin!” the roughly 200 demonstrators in the capital Port-au-Prince chanted, some holding up printouts with the face of the Russian president.

    The protester who set the American flag on fire, calling himself Bronson, told the AFP, “We are asking Russia, Venezuela and China to take a look at the misery we live in here.” Bronson and the group of protesters said the Haitian political system had for too long been under the thumb of Washington, and appealed to Russia and China for help.

    Bronson said further, as related by the AFP

    “We mean that we divorce completely Americans: we took too much occupation in the hands of the United States, we can not,” said Bronson, a small group protester who set the flag on fire.

    According to some 200 participants in the rally, former Haitian President Michel Martelly and his successor, the current head of state Jovenel Moise, were placed in power by the United States.

    Indeed over the weekend the White House said it is sticking by Moise’s leadership, and called for calm in the streets. 

    Haitian protesters appealing the Russian president Putin for help, via the AFP.

    Starting weeks ago Washington began putting immense pressure on Port-au-Prince to break ties with the Maduro regime in Venezuela, in recognition of self-styled “Interim President” Juan Guaido. 

    These pressures were successful and the Haitian government caved earlier this month, fueling the rage of many Hatians in the street, many of which were already angered over the impact that Washington’s oil sanctions on nearby Venezuelea are having on Haiti.

    Thus Jovenal Moise’s government so easily succumbing to Washington against Maduro was the last straw for many in a politically complex scandal which has grown for years as a result of the Petrocaribe deal, which began in earnest when it was revealed in 2017 that almost $4bn in funds earmarked for social development went missing, widely assumed to be the result of corrupt officials still holding positions of power within the Moise government ranks skimming on a mass scale. 

    https://platform.twitter.com/widgets.js

    Meanwhile the US State Department urged all American citizens out of the country over the past days, and issued a no-not-travel advisory due to “crime and civil unrest.” This was followed on Saturday by national security adviser John Bolton issuing a statement for all sides in Haiti to “respect and protect their democracy” — a bit ironic considering he spent the rest of the day tweeting regime change related messages targeting Venezuela’s Maduro.

    He revealed in the tweet that he met with Haitian Foreign Minister on Friday “to express the United States’ enduring support for and friendship with Haiti.” He further urged “all of Haiti’s political actors to respect and protect their democracy, engage in dialogue, and put an end to the political violence.”

    This is certainly unlikely to mitigate the growing anti-American sentiment present in the protests, which have also included violent clashes with police, resulting in several deaths. 

  • China's HNA Conglomerate Dumps Even More Deutsche Bank Stock

    Chinese troubled conglomerate HNA, whose Co-Chairman Wang Jian allegedly committed suicide during a business trip to France last summer, has once – again – cut its stake in Deutsche Bank by nearly a fifth to 6.3%, a new SEC filing shows. That marks the latest reduction in HNA’s holdings of the largest German Bank, which as of February 8 held 7.64% of the voting rights.

    HNA’s C-Quadrat unit exercised options to sell 26.8 million Deutsche Bank shares for 363.4 million euros ($410 million) according to an SEC filing, BBG reported. The shares were sold at prices ranging from 11.45 euros to 16.70 euros apiece, far above current market prices, because the Chinese group had hedged its investment in Deutsche Bank with put options. Deutsche Bank shares closed at 7.752 euros in Frankfurt on Friday

    Even with its reduced holdings, HNA remains the largest shareholders in Germany’s largest lender, just ahead of the Qatari royal family, which owns 6.1% while Blackrock is in third spot with 100 million shares representing 4.85% of the shares outstanding.

    Hainan-based HNA started out as a regional airline but went on to take large stakes in companies such as Hilton Worldwide and Deutsche Bank, part of a $40bn acquisition binge that made it one of China’s largest owners of overseas assets, the FT summarizes. HNA initially bought into Deutsche Bank in early 2017 as part of a sweeping global acquisition spree which led the company to acquire billions in foreign companies and US real estate, borrowing heavily to amass a stake of close to 10% with the stake gradually reducing since then as this complex financing has unwound.

    But it has since trimmed its stake in installments, following an aggressive crackdown by Beijing targeting offshore money flows,  with high debts at the conglomerate fueling speculation about the future of its Deutsche stake as it reduces or exits some of its other holdings. In parallel, HNA has put its buying spree into reverse making a series of divestments that include parts of its core aviation business, in a bid to tackle the nearly $100bn debt pile it amassed, which last year sparked concerns that China’s financial conglomerates could become ground zero for a financial crisis engulfing China.

    One year ago, HNA itself was said to be on the verge of liquidation, however aggressive asset liquidations have so far deferred the company’s day of reckoning.

    HNA holds the stock through Austrian fund C-Quadrat and a chain of offshore holding companies, while Swiss bank UBS provided a derivatives product known as a funded equity collar to help build the stake. As Reuters further notes, HNA’s interests in the bank are represented through a member sitting on Deutsche Bank’s supervisory board. Before the latest reduction, C-Quadrat held a direct stake of 1.01 per cent in Deutsche Bank, with another 6.63 per cent held through equity collars. According to the FT, the reduction in the stake was the result of the expiry of these derivatives. In July of last year C-Quadrat transferred options on more than 26 million of its Deutsche Bank shares to JPMorgan Securities.

    Equity collars originally developed as a way to hedge against a drop in a company’s share price, with Saudi Arabia recently using such a collar to slash its exposure to Tesla’s volatile share-price swings. Investment banks can also use the mechanics of this hedging to help investors discreetly build a fresh stake in a company, while deploying little of their own capital.

    Adding insult to HNA’s financial injury, shares in Deutsche Bank have lost more than half their value since HNA started building its stake, hit by worries about its recurring losses, high litigation costs and falling market share in investment banking.

    Investor have often puzzled at the logic behind China’s purchase of DB share, with HNA’s overarching strategy behind the Deutsche Bank stake never becoming clear. Meanwhile, banking supervisors in Europe have felt uneasy about the complex financing structure for a while, as it allows the group to exert corporate control while employing very little capital.

    To be sure, HNA has long been a controversial shareholder for Deutsche Bank. Former CEO John Cryan initially refused to meet with its executives; he eventually relented when the issue fueled tensions with Deutsche Bank Chairman Paul Achleitner, who was personally involved in wooing the investor.

    Shortly after the Chinese conglomerate built its stake, Austrian investor and HNA confidant Alexander Schütz joined Deutsche Bank’s supervisory board. Mr Schütz, who heads the C-Quadrat group through which HNA holds its stake, got a five-year extension of his term at Deutsche Bank’s annual shareholder meeting in May last year.

    As a reminder, HNA plans to dispose of its entire stake in Germany’s largest lender according to prior reports.

    As for Deutsche Bank whose shares continued to plumb all time lows, the fact that its largest investor has continued to trim its holdings and is now down nearly 40% from its peak, and will continue to do so until it is fully out, will hardly generate much buying interest for what was Europe’s worst major stock in 2018. Following recent earnings, and a recent dovish U-turn by the ECB which has collapse Europe’s rate hike odds not to mention the bund yield curve, 2019 isn’t looking any better.

Digest powered by RSS Digest

Today’s News 17th February 2019

  • Man Jailed After Police Find 3D Printed Gun And US Lawmaker Kill List

    A Dallas man has been sentenced to eight years in federal prison after officers discovered a 3D-printed assault rifle and a hit list of US lawmakers in his backpack, despite a court order that banned him from owning a gun, stated US Attorney for the Northern District of Texas Erin Nealy Cox.

    According to Cox, Eric McGinnis obtained a barrel, tactical stock, upper receiver, and a vertical grip — and then used a 3D printer to build the gun’s lower receiver, the section of the firearm which provides housing for internal components such as the hammer, bolt, action, and firing mechanism.

    He then assembled the parts into a short-barrel AR-15 rifle and traveled to a nearby woodland with what federal attorneys called an extensive “hit list” of Democratic and Republican lawmakers, including their home addresses. The list was titled, “9/11/2001 list of American Terrorists.”

    The arrest of McGinnis occurred in 2017 after Grand Prairie Police Department in Texas heard rapid-fire shooting in a remote area of town. On Wednesday, he was sentenced to eight years in prison.

    McGinnis being arrested outside Dallas in 2017 

    “When he realized he couldn’t legally purchase a firearm, Eric McGinnis circumvented our gun laws by 3D-printing his weapon, eliminating the need for a background check,” said Cox.

    A second examination of McGinnis’ cellphone and computer by US Capitol investigators suggested he was overly obsessed with James Hodgkinson, the shooter who wounded Rep. Steve Scalise at a GOP Congressional baseball practice in Virginia in 2007, the federal prosecutor revealed at sentencing Wednesday.

    McGinnis admitted he had “printed” the lower receiver of the gun to a family member during a jailhouse phone call.

    “I didn’t buy a gun, I built the gun,” he said in the recorded phone call. “The upper, I printed a lower, and I built it — installed the trigger and did all that stuff. I built it.”

    Chief US District Judge Barbara M.G. Lynn found McGinnis guilty of possessing an unregistered assault rifle and illegally possessing ammunition while subject to an active protective order.

    This case, investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosive with support from the Grand Prairie Police Department and US Capitol Police, was initiated by Cox’s initiative to keep dangerous weapons away from criminals.

    “When he realized he couldn’t legally purchase a firearm, Eric McGinnis circumvented our gun laws by 3D-printing his weapon, eliminating the need for a background check,” said Nealy Cox. “This case should send a message to prohibited persons contemplating acquiring guns by any method: this office is committed to keeping guns out of the hands of those who violate protective orders for domestic violence, no matter how the guns are obtained – by theft, purchase, or 3D printing.”

    “Controls to determine if an individual is prohibited from purchasing firearms and ammunition worked,” said Jeffrey C. Boshek II, Special Agent in Charge of ATF’s Dallas Field Division. “Mr. McGinnis applied evolving technology to by-pass those controls to manufacture an untraceable NFA weapon. The fact a prohibited person was able to manufacture an untraceable firearm with apparent ease and anonymity presents a significant challenge and major concern to law enforcement and our community.”

    Recently, Senate Democrats condemned President Trump’s proposal to transfer oversight of 3D guns to the Commerce Department, indicating that it would allow criminals to get easier access to electronic blueprints.

    “The Trump administration basically gave anyone – including criminals and murderers – a green light to 3D print and sell untraceable ‘ghost guns,'” said Sen. Chris Murphy, D-Conn., according to The Washington Examiner. “Thankfully, the courts have blocked this for now, but Congress needs to act to close this glaring loophole before anyone gets killed.”

    Rapid advances in 3D-printing technology have made it possible for anyone to buy a 3D printer on Amazon and print a gun in their living room.

    These guns can be assault rifles or pistols, are referred to as “ghost guns,” which have no serial numbers and cannot be traced by the government, a problem that has frightened federal and state officials.

  • Howard Marks: The Most Dangerous Thing The Fed Ever Did Was Convince Investors That "It's Different This Time"

    As the infamous quote from the movie “the Usual Suspects” goes: “The greatest trick the devil ever pulled was convincing the world he didn’t exist.” Similarly, as the billionaire investor and Oaktree Capital Management founder Howard Marks explained during a recent interview with RealVision’s Grant Williams, the most dangerous trick the Federal Reserve ever pulled was to convince investors that “it’s different this time”.

    That in the post-crisis era, the central bank has discovered an elixir to eliminate the business cycle, installing in its place an everlasting bull market, abetted by a “goldilocks” economy, where every dip presents an immediate buying opportunity.

    Williams described Marks in their interview as “a great student of [market] cycles” before questioning whether old-school thinking about the boom-bust nature of the markets was even still relevant in the post-crisis brave new world that QE and negative interest rates have brought us.

    Marks

    But Marks quickly dismissed this, affirming that he is still believes in the value of analyzing and timing the market cycle. Perhaps that’s why his fund, Oaktree Management, seized the opportunity to deploy capital during Q4, when nothing was working (2018 will go down in history as one of the worst years for financial markets on record, given the breadth of losses across asset classes), and everybody seemed to be selling in a panic.

    Negative

    Elaborating further Marks explained his view on where we are in the cycle. Until Trump’s arrival in the West Wing, the recovery had been chugging along slowly (while asset prices had been moving in a nearly uninterrupted diagonal line from left to right). Setting aside the direct impact of central bank liquidity, Marks explained that after the crisis, people and businesses were left traumatized, which was one reason why growth was so tepid, even once this immense monetary assistance had been factored in. But the fiscal stimulus unleashed by the Trump administration, in the form of tax cuts and increased federal spending, was like administering a “shot of adrenaline to an already healthy patient.”

    For this reason, Marks doesn’t think the highs are in – at least not yet. But ultimately, he believes we will get to new “highs that lead to lows.”

    GRANT WILLIAMS: There must come a point where things get out of hand. Going back to the original question of 2005, 2006, do you see any similarities in what you’re seeing and what’s starting to make your spidey sense tingle?

    HOWARD MARKS: Not similarities in the sense of specific things repeating. But I have felt that because people were traumatized by the great recession, the recovery has been the slowest one since World War II. And that has kept things moderate, which meant that we would certainly have a recession one of these days. But it would be moderate. When you don’t have a boom, you don’t have to have a bust in my belief.

    But now between the tax bill, which was a shot of adrenaline into, in my opinion, an already healthy patient, and then the possibility that we’re going to see a Powell put in action, I think that we may get to highs that lead to lows.

    I’m a believer in cycles. I believe they always have occurred, I think I understand why. And I think they always will occur and I try to study them. And then when I kind of got to the end of writing the book I said, well why do we have cycles? If the market goes up 10% a year on average, why doesn’t just go 10% every year? And in fact, it almost never goes up between 8 and 12. So the average is not the norm. Why not?

    And the answer, I think, is excesses and corrections. So you have a trend line and most trend lines are upward sloping, but then you deviate from the trend line on the upside because of some combination of optimism and greed and wishful thinking. And then you have to have a correction to the downside. So now I’m thinking we may have more of an excess, which leads to more of a correction.

    And the longer the Fed and the federal government forestall a recession by artificial means, the worse the fallout will be when one finally arrives. Offering an extremely apt analogy, Marks contrasted the Fed’s machinations with the “good forest management” policies needed to prevent out-of-control wildfires like those that have erupted in California over the past two years (see here for an example of what we’re talking about).

    Marks reasoning goes, the best way to avoid an out-of-control blaze is to permit moderate fires to burn from time to time. That way, they clear out the underbrush. But if we extinguish every blaze before it has a chance to burn, then we put ourselves at risk for a “big one” that could quickly accelerate beyond our control.

    GRANT WILLIAMS: When did we get to the point where a recession is something that has to be avoided at all costs?

    HOWARD MARKS: Yeah, well it’s a big mistake. In one of my memos – postmortem for the global financial crisis –  I talked about forest fires. Good forest management, you permit there to be fires once in a while. And if there are fires of moderate size, occasionally it burns out the fuel and then you don’t get the one big one. Same thing, in my opinion.

    And the fluctuations of the economy are natural, in my opinion. And should be permitted to occur. And if you try to forestall them, then when they happen – I don’t think you can forestall forever. And when they happen, they’re bigger.

    Over the past 20 years, the whims of the financial markets have grown to outweigh the influence of the economic cycle. The financial crisis, for example, had almost nothing to do with the real economy, Marks explained. Which is why tacit Fed policies like the “Powell Put” could be far more destabilizing than many investors might suspect.

    GRANT WILLIAMS: Yeah sure. Well you mentioned cycles, I know you’re a great student of cycles. And they used to be so important in markets – everywhere you look. Whether it was the human cycle, whether it was a market cycle, credit cycles – everything seemed to have a rhythm.

    And it made investing a lot easier because you could at least have some sense of how these cycles would turn. That seems to have changed significantly in the last 15, 20 years. You’re shaking your head there.

    HOWARD MARKS: I don’t agree with that. If you talk about 20 years, if you came in this business 20 years ago, you have seen two profound cycles. You had the TMT bubble and crash and then you had the mortgage bubble and crash. And I think that maybe they weren’t predictable, but I’m not sure they ever were.

    GRANT WILLIAMS: I wouldn’t classify those cycles. I kind of look at them and think they were both attempts at cycle turns that happened quickly in kind of short order in small corners of the market. And then got squashed quickly by Fed policy.

    HOWARD MARKS: Well, they were market cycles – bubble and crash.

    GRANT WILLIAMS: Yeah.

    HOWARD MARKS: They weren’t economic cycles in the traditional sense. And in the last 20 years, I think that developments in the financial world have taken over in importance from developments in the rest of the business world.

    Ultimately, Marks still believes in the importance of understanding market cycles because, fundamentally, human nature hasn’t changed. Which is why it’s dangerous to believe that, in an increasingly unstable world, that stability has become the norm.

    HOWARD MARKS: …And the big theme of the book is Mark Twain – history does not repeat, but it does rhyme. And the world is just too unstable a place to believe that stability is the norm.

    And you know if you think about it, in the economy a great year is up four, and a bad year is down two. So the economy has an upward trend and it kind of goes like this. Then companies have leverage – financial leverage and operating leverage. So their profits go like this. And then the market goes like this. And why? Because of people.

    The risk in the market does not come from stock certificates, companies, exchanges, it comes from people. But people are prone to excess and I don’t see how it can be argued otherwise.

    And by the way, when people say, I don’t think we’re going to have cycles in the future because the astute Fed has it under control – or whatever it is – what they’re saying is what I consider the four worst words in the world – it’s different this time. OK until now we’ve had cycles, but we’re not going to have anymore.

    One risk that markets are probably failing to truly understand is the rise of the radical left, and their support for “confiscatory” taxation policies.

    GRANT WILLIAMS: I mean, it certainly seems that way. When you look at the traction Ocasio- Cortez is getting – and Liz Warren – and it’s clear that they both realize that this is how we’re going to create that traction – by going against the elite.

    But some of the things they’re proposing are the 70% tax. Liz Warren was on MSNBC looking straight down the camera at everybody else saying, we’re going to find your wealth and we’re going to come and get it. These are things that I’m sure a lot of people in America never thought they’d hear in this country.

    HOWARD MARKS: I think the thing in the memo that I got heated about the most, and I was trying to put it out and then Friday Elizabeth Warren came out with her wealth tax idea. But what got me was that – she tweeted it out of course – the way she did it.

    She said something like – don’t quote me – the rich and powerful run America and look at what they have arranged for themselves. They are allowed to keep their accumulated wealth. Well, guess what? We’re all allowed to keep our accumulated wealth.

    And she makes it sound like – through some skullduggery – they have exempted themselves from the wealth tax. You can’t exempt yourself from something that doesn’t exist. But she makes it sound nefarious. And that’s populism – they, they. And it’s not constructive.

    I would lay a strong bet that five years from now, my tax rate will be higher than it is today. But it should be, as I said in the memo, it should be progressive, but not punitive. And not confiscatory. Among other things, people don’t have to sit still and pay it.

    I wrote a memo back in 2016 called “Economic Reality” and I talked about a guy I know who was the biggest taxpayer in New Jersey. They raised the rates to a point where he moved to Florida where there is no tax.

    So the point is, the people who want to confiscate seemed to think that there’s nothing that the confiscatees can do about it.

    Marks believes the growing divisiveness in Washington will lead to increasingly counterproductive policymaking, as Democrats and Republicans focus more on spiting one another by passing major policy initiatives without any participation from the minority party (Obamacare and Trump’s tax bill are both examples of this). But shifting his focus back to his investing strategy, Marks explained that he recently realized that cyclical extremes offer probably the best chances of trades with high returns. “When you are at an extreme high or an extreme low, the logic is compelling and the probability of being right is high.”

    But the problem is, these opportunities don’t come around very often. Marks most successful market calls occurred about once a decade – 5 times in 50 years.

    But another inflection point where valuations are obviously overstretched could be just around the corner.

    Watch a clip from the RealVision interview below:

  • In Unprecedented Move, Catholic Church Expels Cardinal For Sexual Abuse

    Some six months after an archbishop in the Vatican ignited a scandal that nearly brought down the pope by publicizing allegations that the Vatican had systematically suppressed and dragged its feet on investigating one of the most powerful cardinals in the US, Pope Francis has taken the unprecedented step of defrocking – or laicizing, as its technically known – 88-year-old retired cardinal William McCarrick, who was once one of the most powerful Catholic officials in the US.

    Priest

    According to the New York Times, the de-frocking of McCarrick, who was found guilty of using his position of power to abuse both seminarians and children, may be the first example in the church’s 2,000+ year history of a cardinal being expelled from the priesthood, though no scholar of the church can say for certain that this is true. According to the ruling, McCarrick can no longer perform any religious duties – including taking confession and delivering holy communion – and will henceforth be known simply as Mr. McCarrick. \

    In a statement on Saturday, the Vatican said Mr. McCarrick had been dismissed after he was tried and found guilty of several crimes, including soliciting sex during confession and “sins” with minors and with adults, “with the aggravating factor of the abuse of power.”

    While the Vatican has defrocked hundreds of priests for sexual abuse of minors, few of the church’s leaders have faced severe discipline. The decision to laicize, or defrock, Mr. McCarrick is “almost revolutionary,” said Kurt Martens, a professor of canon law at the Catholic University of America.

    “Bishops and former cardinals are no longer immune to punishment,” Professor Martens said. “The reverence that was shown in the past to bishops no longer applies.”

    Francis expedited the church’s final decision so that it would be delivered ahead of a Vatican summit on sexual abuse in the priesthood, a story that was first uncovered by the Boston Globe back in 2002, and has since escalated to a global scandal that has threatened the church’s power in traditional strongholds from the US to Ireland. Still unknown is how the church will investigate McCarrick’s rise under Pope John Paul II and his successors. Francis himself has been accused of turning a blind eye to McCarrick’s misconduct.

    Per the WSJ, McCarrick had appealed an initial ruling of guilt on Jan. 11. And on Wednesday, the Vatican’s Congregation for the Doctrine of the Faith, rejected the appeal. McCarrick, who is now 88, was notified of the decision on Friday. He will now likely lose the church-supported housing and health benefits, and may need to find a new place to live. McCarrick’s expulsion follows the pope’s decision to laicized two retired Chilean bishops accused of sexually abusing minors. In December, he also removed two top cardinals from his powerful advisory council after they were implicated in sexual abuse cases.

    A man who was victimized by McCarrick as a child delivered a statement to the NYT praising Francis for his decision to strip McCarrick of his title, though he lamented the fact that it came after years of trauma and pain.

    James Grein, who told The Times that he was 11 when Mr. McCarrick began a sexually abusive relationship with him, said in a statement on Saturday: “For years I have suffered, as many others have, at the hands of Theodore McCarrick. It is with profound sadness that I have had to participate in the canonical trial of my abuser. Nothing can give me back my childhood.”

    He added: “With that said, today I am happy that the Pope believed me. I am hopeful now I can pass through my anger for the last time. I hope that Cardinal McCarrick will no longer be able to use the power of Jesus’ Church to manipulate families and sexually abuse children.”

    McCarrick has been living in a Capuchin friary in Kansas under orders to pursue a life of “prayer and penance.” He wears a pacemaker and had knee replacement surgery in 2016.

  • NFL Paid Kaepernick $60 To $80 Million To Settle: Report

    Colin Kaepernick received between $60 and $80 million in an out-of-court settlement with the NFL, according to NFL columnist Mike Freeman, who tweeted on Friday: “Number NFL team officials are speculating to me is the NFL paid Kaepernick in the $60 to $80 million range.”

    While the exact terms of the settlement have not been revealed, Kaepernick attorney Mark Geragos released a statement following Freeman’s tweet, noting that the terms of the agreement are subject to a confidentiality agreement. 

    For the past several months, counsel for Mr. Kaepernick and Mr. Reid have engaged in an ongoing dialogue with representatives of the NFL. As a result of those discussions, the parties have decided to resolve the pending grievances. The resolution of this matter is subject to a confidentiality agreement so there will be no further comment by any party. 

    The NFL Players Association, meanwhile, acknowledged the settlement in a separate statement. 

    “Today, we were informed by the NFL of the settlement of the Colin Kaepernick and Eric Reid collusion cases. We are not privy to the details of the settlement, but support the decision by the players and their counsel. We continuously supported Colin and Eric from the start of their protests, participated with their lawyers throughout their legal proceedings and were prepared to participate in the upcoming trial in pursuit of both truth and justice for what we believe the NFL and its clubs did to them. We are glad that Eric has earned a job and a new contract, and we continue to hope that Colin gets his opportunity as well.”

    As Breitbart‘s Dylan Gwinn notes, perhaps this is why Kaepernick refused to play in the Alliance of American Football for anything less than $20 million. 

    https://platform.twitter.com/widgets.jshttps://platform.twitter.com/widgets.jshttps://platform.twitter.com/widgets.js

  • All US Citizens Ordered Out Of Haiti Amidst Mass Unrest And Chaos

    Haiti continues to be gripped by civil unrest and mass protests demanding that President Jovenal Moise step down over charges of corruption and and rampant inflation under his watch — yet unlike similar unrest happening hundreds of miles due south of the small Caribbean country in Venezuela, Washington has stood in support of the president. Starting Thursday the US State Department urged all American citizens out of the country and issued a no-not-travel advisory due to “crime and civil unrest”. 

    And national security adviser John Bolton followed with a statement on Saturday for all sides in Haiti to “respect and protect their democracy” — a bit ironic considering he spent the rest of the day tweeting regime change related messages targeting Venezuela’s Maduro. He revealed in the tweet that he met with Haitian Foreign Minister on Friday “to express the United States’ enduring support for and friendship with Haiti.” He further urged “all of Haiti’s political actors to respect and protect their democracy, engage in dialogue, and put an end to the political violence.”

    Protests from days ago, via The Miami Herald/AP

    In its prior travel ban the State Dept. described a rapidly deteriorating situation ofProtests, tire burning, and road blockages are frequent and unpredictable. Violent crime, such as armed robbery, is common,” and said further that “Emergency response, including ambulance service, is limited or non-existent.” An update told all U.S. citizens who remained in Haiti “to strongly consider departing as soon as they safely can do so” and warned of encountering potential roadblocks or hazardous checkpoints.  

    “Travelers are sometimes targeted, followed and violently attacked and robbed shortly after leaving the Port-au-Prince international airport,” the State Department said.

    https://platform.twitter.com/widgets.js

    According to CNN one group of 24 missionaries from Canada have become trapped in a town about 30 miles outside of the capital of Port-au-Prince, unable to navigate the blocked roads into the capital. 

    CNN also describes clashes that have left an unknown number of Hatians dead:

    Several people have been killed in the clashes, according to local media reports. CNN has not been able independently to confirm the exact number of those killed.

    In the Port-au-Prince neighborhoods of Nazon and Turgeau, scores of people stood in lines Saturday desperate for the basics of life: water, gas and food.

    Crowds, about 100 strong in spots, dotted the roadways, waiting with 5-gallon plastic buckets, and gas stations were mobbed.

    The evacuation orders amidst the unrest, which have been issued by other governments such as Canada, are sure to make things further difficult for the county’s economic woes, as tourism makes up about 5% of GDP.

    Protesters clashed with police over the past week. In some instances the police reportedly responded with live ammo. Image source: AP

    Mass protests paralyzed the Port-au-Prince region starting a little over a week ago, and are in some aspects actually related to the Venezuela crisis. For starters,

    At work is a messy cocktail of political forces opposed to the Jovenel Moïse presidency. This is fueled in part by a judicial report issued in January that outlined massive embezzlement of Venezuela’s discounted oil PetroCaribe program to Haiti. The report highlights individuals from no fewer than three successive Haitian presidencies, and follows a parliamentary report issued more than a year ago that covered many of the same allegations—all left unanswered.

    And amidst this Washington starting weeks ago put immense pressure on Port-au-Prince to break ties with the Maduro regime in Venezuela, in recognition of self-styled “Interim President” Juan Guaido. 

    https://platform.twitter.com/widgets.js

    These pressures were successful and the Haitian government caved earlier this month, fueling the rage of Hatians in the street, many of which were already angered over the impact that Washington’s oil sanctions on nearby Venezuelea are having on Haiti.

    https://platform.twitter.com/widgets.js

    The overlapping Haitian and Venezuelan situations are outlined as follows:

    The first and most notable has been the pressure it has been under—most notably from an increasingly irritated Washington—to break ranks with Venezuela’s Maduro regime, which it finally did early this month. The Maduro regime in effect tried to bribe Haiti by offering to reprogram some of the PetroCaribe funding but the Moïse government didn’t back down. 

    What’s at stake is described by Ariel Fornari of Haiti Analysis:

    For more than a decade Venezuela has aided the governments of Haiti and the Dominican Republic through a preferential system known as Petrocaribe, which provided subsidized crude oil prices to meet the countries critical energy demands. The Petrocaribe oil agreement, allowed for governments to pay only 60 percent of the oil shipments they purchase from Venezuela. The remaining 40 percent could be financed over 25 years at 1 percent interest, as long as oil prices stayed above $40 per barrel. This allowed for tremendous savings, and money that (according to the agreement) was supposed to be used for socially beneficial purposes.

    And further: 

    Countries such as Nicaragua, Jamaica, Cuba, and many islands in the eastern Caribbean have successfully utilized Petrocaribe funds and other Venezuelan support mechanisms, investing in vital infrastructure, education, healthcare, and have used the funding to avoid austerity deals with the IMF and other international financial institutions.  Corrupt politicians in Hispaniola, though, whose regimes are closely aligned with Washington, have by contrast become well-known for robbing many of the funds meant for the social needs of their population.

    Thus Port-au-Prince so easily succumbing to Washington against Maduro was the last straw for many in a politically complex scandal which has grown for years as a result of the Petrocaribe deal, which began in earnest when it was revealed in 2017 that almost $4bn in funds earmarked for social development went missing, widely assumed to be the result of corrupt officials still within the Moise government skimming on a mass scale. 

    Interestingly the Maduro government itself has been accused of stirring discontent in Haiti’s streets through the Venezuelan embassy in the Haitian capital and its ambassador, who is reportedly still in residence. This is an accusation likely to grow coming from anti-Maduro leaders. 

    Meanwhile the value of the national currency (Gourde) keeps plummeting, and the future looks increasingly bleak, signified by an early February tragedy in which a boatload of Haitians drowned trying to reach the Bahamas — which observers see as a worrisome indicator of what’s coming. 

  • Group Of 10 Elite Hedge Fund Managers Made $7.7 Billion In 2018

    Remarkably enough considering investors just endured a year that will be remembered as one of the worst for cross-asset performance in recent memory, Citadel founder and hedge fund billion Ken Griffin – who capped off a $700 million real-estate buying binge by dropping more than $450 million for properties in London and New York City – still finished the year well in the black.

    According to Bloomberg, Griffin was one of the leaders of a pack of well-compensated hedge fund billionaires who saw their wealth expand by $7.7 billion in 2018. Griffin alone saw his fortune swell by $870 million, bringing his total net worth to $10 billion.

    Griffin

    Citadel had a good year last year, but its returns didn’t include anything on the scale of George Soros’ legendary pound short or John Paulson’s bet against the housing market. So how did he do so well?

    The answer is that funds like Citadel and Ray Dalio’s Bridgewater Associates have grown so large, they effectively throw off hundreds of millions – if not billions – of dollars in fees a year, even during relatively lean stretches for the market. 

    “We still want the mega funds to produce returns that are better than a typical hedge fund, that’s why we’re willing to pay the 2 and 20 percent fees,” said Tim Ng, CIO of Clearbrook Global Advisors, which invests in hedge funds. “We’re willing to tolerate lower performance from some in a market like 2018 because they have for years outperformed their peers.”

    As Bloomberg’s ranking showed…

    BBG

    Quant

    …quant funds dominated the competition last year.

    Citadel’s flagship Wellington fund, for instance, returned 9.1 percent last year, while the average fund lost 6.7 percent, slightly worse than the S&P 500 Index. Of course, Griffin doesn’t get performance fees unless he makes a profit for his clients. As the largest investor in the funds, the billionaire’s interests are aligned with theirs.

    How did other big names stack up in 2018?

    Quants feature heavily on Bloomberg’s list, led by James Simons of Renaissance Technologies. The former code-breaker’s fortune increased $1.6 billion to $16.6 billion, according to Bloomberg estimates, making him the world’s wealthiest hedge fund manager.

    RenTech’s Institutional Equities Fund gained 8.5 percent, while its Medallion vehicle, closed to outside investors, did better.

    Ray Dalio’s fortune rose $1.3 billion, powered by Bridgewater’s approximately $160 billion of assets.

    He’s now worth about $16.2 billion. His flagship Pure Alpha fund gained 14.6 percent last year, while the All Weather strategy lost money.

    And while the average fund was down 6.7%, trailing the S&P 500’s ~4.5% drop, some managers crushed the competition.

    Michael Platt of Bluecrest Capital Management returned 25 percent, although hedge fund investors didn’t benefit after he kicked out clients. Jeffrey Talpins of Element Capital Management had a 17 percent gain for his macro fund, elevating him to billionairedom.
    For several people on the list, hedge funds are just a component of their businesses.

    Griffin owns one of the world’s largest firms making markets in stocks and bonds. In addition to buying houses and art, he’s given away more than $700 million to charity.

    Chase Coleman of Tiger Global Management runs a fabulously successful venture capital arm, helping to boost his fortune to $3.9 billion.

    And with the market in the midst of one of the best start-of-year rallies since the early 1990s, 2019 is shaping up to be an even better year across the industry…though there’s still plenty of time (and some evidence in historical market data) for things to head south from here.

  • China Accounts For More Than 60% Of All New Credit Created Globally In The Past Ten Years

    Over five years ago, in November 2013, when the world’s attention was still largely focused on what the “Big 4” central banks would do with QE and/or interest rates, we wrote an article showing in one simple chart  “How In Five Short Years, China Humiliated The World’s Central Banks“, and noted that in just the brief period since the financial crisis “Chinese bank assets (and by implication liabilities) have grown by an astounding $15 trillion, bringing the total to over $24 trillion. In other words, China has expanded its financial balance sheet by 50% more than the assets of all global central banks combined.”

    Fast forward to today, when not only is China’s debt the biggest wildcard for the stability of the global financial system – something China is well aware of and is why in January, Beijing injected a gargantuan $685 billion in new credit into its financial system, greater than the GDP of the 21st largest country, Taiwan…

    …  but even central banks openly admit that China’s relentless debt-issuance spree is a major risk factor for global financial stability. One such bank is the NY Fed, which this week issued a report titled “Could Rising Household Debt Undercut China’s Economy?” which while containing nothing that regular readers don’t already know, provides a handy snapshot of the full extent of China’s debt problems (and is a useful sequel to the NY Fed’s 2017 report “China’s Continuing Credit Boom“.)

    So for those curious how and why China now accounts for more than 60% of all new credit created globally over the past ten years (an increase from 50% just two years ago), read on:

    Could Rising Household Debt Undercut China’s Economy?

    Although there has been a notable deceleration in the pace of credit growth recently, the run-up in debt in China has been eye-popping, accounting for more than 60 percent of all new credit created globally over the past ten years. Rising nonfinancial sector debt was driven initially by an increase in corporate borrowing, which surged in 2009 in response to the global financial crisis. The most recent leg of China’s credit boom has been due to an important shift toward household lending. To better understand the rise in household debt in China and its implications for financial stability and China’s economic performance, it is important to examine the expansion in household credit, how the rise in debt compares to international experience, and the associated risks.

    The Drivers of Household Debt in China

    The growth of China’s household debt reflects a natural evolution in financial sector deepening and has grown in two waves. The first occurred during the late-1990s following major financial reforms and the privatization of China’s housing stock. The second wave began in the wake of the global financial crisis and has witnessed much more rapid growth, with debt increasing by nearly $5.7 trillion, or nearly 30 percent of China’s GDP. In fact, household lending overtook corporate borrowing in early 2018 to become the largest driver of aggregate loan growth in China. New household lending now accounts for roughly half of new loans.

    As illustrated in the upper panel of the chart below, the majority of household debts in China are residential mortgages, although other forms of consumer credit are also large and growing rapidly. The lower panel of the chart shows the shares of household loans by lending category.

    As of June 2018, outstanding mortgage loans accounted for close to 60 percent ($4 trillion) of total household debt. Mortgages comprise roughly 19 percent of bank loans in China (compared to 30 percent in Korea and 23 percent in Japan). Growth in mortgage lending has averaged 27 percent per year over the past three years, although the pace of growth has decelerated gradually over the last year as Chinese authorities have tightened macroprudential policy.

    China’s credit card debt is part of “consumption loans,” which comprises 14 percent of total household debt, and is now the fastest growing component. Additional consumer credit not captured in the official data include online peer-to-peer lending platforms, other forms of microlending and consumer finance, and informal lending. Peer-to-peer lending platforms, which have increased rapidly in recent years, have also been the focus of heightened regulatory scrutiny recently due to a series of failures by some platforms.

    How Does China’s Household Debt Compare with Other Countries?

    China’s household debt relative to its GDP and aggregate household disposable income is broadly comparable to international peers, but this follows a period of rapid growth from initially low levels. For example, according to statistics compiled by the Bank for International Settlements (BIS), China’s household debt-to-GDP ratio now stands at around 50 percent. As illustrated in the left panel of the chart below, this is still fairly modest compared with most developed economies, but above most emerging market economies outside of Asia. Within Asia, China is rapidly catching up to Japan (57 percent), but is further behind Thailand, Malaysia, and Hong Kong (all close to 70 percent), and well below Korea (95 percent). However, China’s ratio increased by nearly 30 percentage points over the past decade, a much larger increase than witnessed in virtually all other countries, including Korea, which increased by about 23 percentage points.

    Debt ratios relative to households’ disposable income are arguably better measures of the aggregate burden on households, but are more difficult to compile on an internationally comparable basis. Nonetheless, a similar picture is evident. As shown in the right panel of the above chart, China’s ratio of household debt to total disposable income ranges from roughly 80 percent to 110 percent, depending on the measure of income. This range is broadly comparable to the ratio in the United States and the median for countries in the OECD (113 percent), but is well below Korea (170 percent).

    The next chart shows an estimate of China’s household debt service ratio (principal and interest) relative to disposable income (DSR), where we compute China’s DSR comparably to the method used by the BIS (specifically, we use the five-year nominal interest rate in China and assume an 18-year average remaining maturity on debt). Based on this metric, China’s DSR is comparable to the United States, and is catching up to some other countries where household debt is often viewed as a concern among policymakers and market participants.

    Rapid Build-Up of Debt Is Posing a Risk to China’s Growth Outlook

    Overall, the risks related to household debt in China are generally viewed as manageable by most observers. However, it is important to caution against being overly sanguine, especially since aggregate measures of debt and income may mask important differences among households.

    In fact, some household survey data already paint a more worrisome picture. For example, a recent working paper using micro-level data from 2015 suggests that a quite large proportion of Chinese households with debt outstanding to formal financial institutions—that is, excluding informal borrowing—already carry high debt service burdens. One of the metrics used in that paper to define a high burden are households with DSRs exceeding 0.4, a commonly used cutoff for identifying highly indebted households. The authors’ data show that 25 percent of indebted households carried DSRs exceeding 0.4 in 2015.

    Though it is difficult to make direct comparisons due to data and methodological differences, these figures appear rather high in an international context. The fraction of indebted households in Spain with DSRs exceeding 0.4 was 16.5 percent in 2008, while the proportion in the United States peaked at 14.8 percent in 2007 (using gross income). China’s figure is even comparable to that in Korea, which was 23.5 percent in 2017. Partly attenuating the Chinese figures are the facts that income may be understated in the survey data, and that relatively small fractions of Chinese households report negative net worth. The fraction of households whose DSRs and debt-to-asset ratios jointly exceed 0.4 and 1, respectively, has increased rapidly from a low base, but was about 1.2 percent in 2015, still well below the 3.1 percent in Korea reported in the Bank of Korea’s Financial Stability Report.

    The impact on growth and consumption dynamics of household debt are complex, but some research suggests that fast increases in household debt entail trade-offs between faster, near-term GDP growth and slower growth in the future. For instance, a one percentage point increase in the household-debt to GDP ratio would lower economic growth in the long run by a tenth of a percentage point, while some other research has found somewhat larger reductions in growth over shorter forecast horizons. The results suggest that the negative long run effects tend to kick in at GDP ratios ranging between 60 and 80 percent, which China is on track to reach fairly soon, as illustrated in the left panel of the chart below.

    Risks to Financial Stability Are a Longer Term Watch Point

    In addition to the growth outlook, the rapid increase in household debt also raises issues from a financial stability perspective. Given the rise in mortgage loans and growing concerns with an overheated housing market, the property sector is a key watch point. Property has become the most important store of wealth in China, with alternative investment channels for household income still developing or under restrictions. For this reason, Chinese authorities view the housing sector as a key risk to financial and social stability and are likely to ease macroprudential policy in the event of a significant downturn in home prices.

    Limits on initial loan-to-value ratios are an important macroprudential tool in China, which provide some insulation to financial institutions and households in the event of shocks to house prices, incomes, or interest rates. The majority of mortgages in China are floating-rate loans, although benchmark interest rates are not adjusted often. Although loan-to-value ratios are increasing, they are generally low at around 50 percent on average; securitization of mortgage loans is also quite limited.

    Other direct and indirect risks related to the rise in household debt in China also stand out and bear close monitoring. Household lending is being driven by small- and medium-sized banks, as shown in the right panel of the above chart, which are typically less well-capitalized. These banks are increasing household loans at roughly 30 percent, on average, compared to 20 percent at the larger banks.

    The pickup in nonmortgage household lending (for example, credit cards and other consumption loans) may be adding additional leverage to borrowers of both mortgages (for down payments) and unsecured revolving consumer credit (from online peer-to-peer lending platforms). This additional leverage is of particular concern for the roughly one third of household debt that is estimated to be held by highly indebted households (those with debt-to-income greater than four times). It also suggests that a deterioration in the balance sheets of these households could have a negative impact on the banking sector as well as on the economy, a risk highlighted by the International Monetary Fund in its October 2017 Global Financial Stability Report.

  • Another Retailer Bites The Dust: Payless To Shutter US Operations As Bankruptcy Filing Looms

    With its second bankruptcy filing in two years imminent, Bloomberg is reporting that discount shoe retailer Payless (Shoesource Inc.) will liquidate its US operations, and begin shutting down its online operations, as the US “retail apocalypse” claims its latest victim.

    While it’s still unclear whether the retailer will ultimately file Chapter 11 or Chapter 7, as of now, its Latin American operations are expected to continue operating. Meanwhile, its corporate-owned stores in the US and Puerto Rico are expected to remain open through March. The Topeka, Kansas-based retailer has been looking for a “Debtor-in-Possession” loan to see it through the proceedings.

    Payless

    Last year saw bankruptcy filings from once-iconic retailers like Toys R’ Us and Sears. And already this year, at least half a dozen names have gone bust, including Shopko, FullBeauty Brands, Charlotte Russe, Things Remembered and Gymboree, which like Payless, also filed for bankruptcy last month and is also liquidating most of its operations. In total, since 2016, some 35 retail chains have filed for chapter 11 reporting more than $100M in debt according to Reorg First Day.

    https://platform.twitter.com/widgets.js

    Payless, which employs more than 18,000 globally and operates about 3,600 outlets worldwide, with more than 2,700 in North America, was founded in 1956 with the goal of selling affordable shoes in a self-service setting and is, or rather was, the largest specialty footwear chain in the Western Hemisphere.

    In what has become a common theme among troubled retailers, some of whom have continued to do a brisk (or brisk enough) business, the company was doing great until its 2012 LBO by Golden Gate Capital and Blum Capital Partners, which saddled the company with untenable debt, and ended up filing for bankruptcy protection in April 2017. A few months later, it emerged with fewer stores, half the debt load, creditors owning the equity.

    All of these bankruptcies have happened during a period when interest rates are relatively low and economic growth and consumption (the most recent retail sales report notwithstanding) have been pretty robust.

    So just imagine what will happen to America’s brick-and-mortar stalwarts when the next recession finally arrives.

  • Elon Musk-Backed Software Can Churn Fake News Stories And Is "Too Dangerous To Release"

    The ability of technology to spread disinformation has been a favorite talking point of the left since the 2016 election, and now it appears that environmentally-conscious poster-boy, Elon Musk, is contributing to the problem. OpenAI, a company co-founded by Musk, has rolled out a piece of software that can produce real looking fake news articles after being given just a few pieces of information to work with.

    An example of this was recently reported by technology website stuff, detailing an example published last Thursday. The system was given sample text of:  “A train carriage containing controlled nuclear materials was stolen in Cincinnati today. Its whereabouts are unknown.”

    From there, software was able to write a seven paragraph news story, including quotes from government officialswith the only catch being that the story was 100% made up.

    https://platform.twitter.com/widgets.js

    New York University computer scientist Sam Bowman said: “The texts that they are able to generate from prompts are fairly stunning. It’s able to do things that are qualitatively much more sophisticated than anything we’ve seen before.”

    While OpenAI claims it is “aware of the concerns around fake news” its co-founder Musk has been vehemently outspoken about the quality of news coverage he, and his portfolio of companies, has received over the last few years. Back in May of 2018, Musk was so concerned with truth in news, he famously came up with the idea of creating a site where the public can “rate the core truth” of any article and track the credibility score of its author.

    https://platform.twitter.com/widgets.js

    The software creation is trained in language modeling, which involves predicting the next word or piece of text based on knowledge of all previous words, the same way your auto-complete works on your phone, Gmail account or in Skype. The software can also be used for translation and question answering. The positive is that the software can help creative writers generate ideas or dialogue. The software can also be used to check for grammatical errors and hunt for bugs in software code, according to the company.

    As Gizmodo notes, the researchers used 40GB of data pulled from 8 million web pages to train the GPT-2 software. That’s ten times the amount of data they used for the first iteration of GPT. The dataset was pulled together by trolling through Reddit and selecting links to articles that had more than three upvotes. When the training process was complete, they found that the software could be fed a small amount of text and convincingly continue writing at length based on the prompt. It has trouble with “highly technical or esoteric types of content” but when it comes to more conversational writing it generated “reasonable samples” 50 percent of the time.

    In one example, the software was fed this paragraph:

    In a shocking finding, scientist discovered a herd of unicorns living in a remote, previously unexplored valley, in the Andes Mountains. Even more surprising to the researchers was the fact that the unicorns spoke perfect English.

    Using those two sentences, the AI was able to continue writing this whimsical news story for another nine paragraphs in a fashion that could have believably been written by a human being. Here are the next few machine-paragraphs that were produced by the machine:

    The scientist named the population, after their distinctive horn, Ovid’s Unicorn. These four-horned, silver-white unicorns were previously unknown to science.

    Now, after almost two centuries, the mystery of what sparked this odd phenomenon is finally solved.

    Dr. Jorge Pérez, an evolutionary biologist from the University of La Paz, and several companions, were exploring the Andes Mountains when they found a small valley, with no other animals or humans. Pérez noticed that the valley had what appeared to be a natural fountain, surrounded by two peaks of rock and silver snow.

    GPT-2 was also remarkably good at adapting to the style and content of the prompts it’s given. The Guardian was able to take the software for a spin and tried out the first line of George Orwell’s Nineteen Eighty-Four: “It was a bright cold day in April, and the clocks were striking thirteen.” The program picked up on the tone of the selection and proceeded with some dystopian science fiction of its own:

    I was in my car on my way to a new job in Seattle. I put the gas in, put the key in, and then I let it run. I just imagined what the day would be like. A hundred years from now. In 2045, I was a teacher in some school in a poor part of rural China. I started with Chinese history and history of science.

    The OpenAI researchers found that GPT-2 performed very well when it was given tasks that it wasn’t necessarily designed for, like translation and summarization. These excellent results have freaked the researchers out. One concern they have is that the technology would be used to turbo-charge fake news operations. The Guardian published a fake news article written by the software along with its coverage of the research. The article is readable and contains fake quotes that are on topic and realistic. The grammar is better than a lot what you’d see from fake news content mills. And according to The Guardian’s Alex Hern, it only took 15 seconds for the bot to write the article.

    The good news is that journalists – already threatened by the collapse in the ad-revenue supported business model, aren’t about to  go extinct just yet.

    OpenAI has decided not to publish or release sophisticated versions of its software as a precaution, but it has created a tool that lets people experiment with the algorithm and see what type of text it can generate. The company says that the system’s abilities are not consistent enough to “pose an immediate threat”.

    Other concerns that the researchers listed as potentially abusive included automating phishing emails, impersonating others online, and self-generating harassment. But they also believe that there are plenty of beneficial applications to be discovered. For instance, it could be a powerful tool for developing better speech recognition programs or dialogue agents.

    OpenAI plans to engage the AI community in a dialogue about their release strategy and hopes to explore potential ethical guidelines to direct this type of research in the future, although we are confident that various “deep state” organization already posses a similar, if not far more advanced version.

    Musk helped kickstart the nonprofit research organization in 2016 along with Sam Altman. Musk’s foundation grants that were used to help start the company became a topic of controversy in a recent article that we published about Musk’s charitable foundation.

Digest powered by RSS Digest

Today’s News 16th February 2019

  • Asymmetrical Warfare And 4GW: How Militia Groups Are America's Domestic Viet Cong

    via Ammo.com,

    It is interesting to hear certain kinds of people insist that the citizen cannot fight the government. This would have been news to the men of Lexington and Concord, as well as the Mujahedeen in Afghanistan. The citizen most certainly can fight the government, and usually wins when he tries. Organized national armies are useful primarily for fighting against other organized national armies. When they try to fight against the people, they find themselves at a very serious disadvantage. If you will just look around at the state of the world today, you will see that the guerillero has the upper hand. Irregulars usually defeat regulars, providing they have the will. Such fighting is horrible to contemplate, but will continue to dominate brute strength.”

    – Col. Jeff Cooper

    When one discusses the real reason for the Second Amendment – the right of citizens to defend themselves against a potentially tyrannical government – inevitably someone points out the stark difference in firepower between a guerilla uprising in the United States and the United States government itself.

    This is not a trivial observation. The U.S. government spends more on the military than the governments of China, Russia, Saudi Arabia, India, France, United Kingdom, and Japan combined. Plus, the potential of a tyrannical government is arguably upon us – with the federal government spying on its own citizensmilitarizing local police departments with equipment and tactics from the War on Terror, and repeatedly searching Americans, which desensitizes them to this invasive process.

    There is much historical precedent, however, for guerilla uprisings defeating more powerful enemies. For instance, the Cold War saw both superpowers brought to their knees by rural farmers – for the Soviets, their adventure in Afghanistan against the Mujahideen, and for the United States, the Vietnam War against the Viet Cong.

    In both cases, nuclear weapons could have been used against the guerilla uprising, but were not. Even assuming the use of nuclear weapons from the position of total desperation, it’s hard to imagine they would have made much of a difference in the final outcome of either conflict. Unlike the invading armies, the local resistance enjoyed both broad-based support as well as knowledge of the local terrain.

    Now imagine such a scenario in the United States. You wouldn’t be the first person to do so. From Red Dawn to James Wesley, Rawles’ Patriots series, there is a relatively long-standing tradition of American survival literature about the hoi polloi resisting the tyranny of big government, either before or after a collapse.

    For the purposes of this article, consider what a domestic American terrorist or freedom fighter (after all, the label is in the eye of the beholder) organization based on the militia movementwould look like in open revolt against the United States government. In the spirit of levity, we’ll call them the “Hillbilly Viet Cong.” They would most likely find their largest numbers in Appalachia, but don’t discount their power in the American Redoubt, or the more sparsely populated areas of the American Southwest, including rural Texas.

    Here we have tens of thousands of Americans armed to the teeth with combat experience, deep family ties to both the police and the military, extensive knowledge of the local geography, and, in many cases, survivalist training. Even where they are not trained, militant and active, they enjoy broad support among those who own a lot of guns and grow a lot of food.

    On the other side, you have the unwieldy Baby Huey of the rump U.S. government’s military, with some snarky BuzzFeed editorials serving as propaganda.

    Could the Hillbilly Viet Cong take down the USG? Maybe, maybe not. But it’s difficult to imagine that the USG could take them down.

    Indeed, even with a number of nasty little toys on the side of the federal government, we live in an age of a technologically levelled playing field. This is true even when it comes to instruments of warfare. While the USG has nuclear weapons, it’s worth remembering that a pound of C4 strapped to a cheap and readily available commercial-grade drone is going to break a lot of dishes.

    This sort of guerilla insurgency has a name: It’s called fourth-generational warfare (4GW), and you might be surprised to learn that you already live in this world.

    What Are the First Three Generations of Warfare?

    To understand how 4GW is a new and improved form of war, we first need to explain what the first three generations of warfare were:

    First-Generation Warfare

    The first generation (1GW) is basically what you would have seen in the movie 300. The hallmarks of this generation of warfare are armies from two different state actors leveraging line-and-column tactics and wearing uniforms to distinguish between themselves.

    This generation is not entirely without subterfuge. For example, counterfeit currency was used to devalue the money supply during the 1GW Napoleonic Wars. Other examples of 1GW conflicts include the English Civil War and the American Revolutionary War.

    Second-Generation Warfare

    The second generation (2GW) comes with the advent of rifling and breech-loaded weapons. As students of military history know, the invention of rifling was one of the reasons that the United States Civil War was so bloody. This meant that firearms that were once mostly for show after 100 feet or so, were now deadly weapons – and tactics did not immediately evolve.

    But evolve they did. Many things we take for granted as being just part of warfare – such as camouflage, artillery, and reconnaissance – are defining features of 2GW. The American Civil War is probably the first 2GW conflict. Others include the First World War, the Spanish Civil War and, much more recently, the Iran-Iraq War. The United States military coined this phrase in 1989.

    Third-Generation Warfare

    This phase of warfare, also known a 3GW, is the late modern version of warfare, where speed and stealth play a much bigger role. Weapons and tactics alone are less important. Instead, military units seek to find ways to outmaneuver one another before – or even instead of – meeting on the battlefield.

    The era of 3GW was initiated with the Blitzkrieg, which marked the decisive end to cavalry and replaced it with tank and helicopter warfare. Junior officers were given more leeway to give orders. The Second World War was the first 3GW conflict, with the KoreanVietnam and both Iraq Warsbecoming further examples of this style of fighting.

    What Is Fourth-Generation Warfare?

    The most direct way of discussing 4GW is to say that it describes any war between a state actor and a non-state actor. This is also known as asymmetrical warfare, but it’s not the only difference between 4GW and other, earlier forms of conflict. Asymmetrical warfare does, to be sure, blur the lines between combatants and civilians. This is in part what made the Bush-era “war on terror” so difficult and complicated: The war was against a set of ideas rather than a nation or even an extra-national army.

    There are a number of characteristics that flow from the state actor vs. non-state actor aspect of 4GW. The first is the use of terrorism as a regular tactic, almost always on the part of the non-state actor. Particularly for the state actor, non-combatants become tactical problems – you simply can’t just carpet bomb and hope everything works out.

    The non-state actors tend to be highly decentralized. One faction can stop fighting as another 10 crop up in its place. Funding and source of manpower and material comes from a wide array of sources spread out over nearly the entire globe. This necessarily makes 4GW long and drawn out over years or perhaps even decades. The psychological warfare, propaganda and lawfare aspects are an integral part of the conflict.

    The genesis of 4GW lies in the Cold War and the post-colonial era. Insurgent groups and counter-insurgency groups vied for power, often times with state actors operating behind the scenes and in the background. Sometimes the goal was to establish a new state or reestablish a defunct one. However, many times the only goal was to delegitimize the existing state and create a power vacuum.

    Places such as Laos, Myanmar, Iran, Guatemala, Vietnam, the Congo, Cuba, East Timor, Korea, Poland, and Afghanistan were all pieces in the global chessboard of the Cold War as various insurgency and counter-insurgency groups backed by the Soviets, the Americans, and/or the Chinese fought one another or fought against occupying forces.

    What Is the Difference Between 4GW and Asymmetrical Warfare?

    Put simply, all 4GW is asymmetrical, but not all asymmetrical warfare is 4GW. It refers to virtually any asymmetry in combat. This can be as simple as one military having more advanced technology than another – for example, the English longbow at the Battle of Crécy gave the English forces a decisive technological advantage. The Spartan forces were greatly outnumbered by their Persian adversaries and used the landscape to compensate.

    In one sense, 4GW can be seen as asymmetric warfare come to full fruition. The less powerful forces must find a way to compensate for their relative lack of strength. On the other hand, the stronger forces must paradoxically find ways to compensate for their abundance of strength. This is because of the all-important propaganda war, an integral part of 4GW. State actors often seek deniability during war by proxy when engaging non-state actors.

    John Boyd, Chuck Spinney, and 4GW

    Colonel John Boyd may be the most remarkable unsung hero in all of American military history. Widely considered to be the greatest U.S. fighter pilot ever, Boyd developed the F-15 and F-16, revolutionized ground tactics in war, and covertly designed the coalition battle plans for the 1990-91 Gulf War. He foresaw 4GW, and he shunned wealth, fame, and power in his pursuit to get things done, despite the bureaucracy of the Pentagon.

    Boyd closely studied Sun-Tzu (The Art of War) and Carl von Clausewitz (On War). This informed his push for greater adaptability and agility of United States fighting forces. Simple, cheap, effective, dependable, durable weapons were prized over flashy tricks. Decentralized command, control and communications were Boyd’s cause – looking for a way to avoid burying boots on the ground underneath layers of officers with potentially less field knowledge than they had.

    Franklin C. “Chuck” Spinney became the voice of 4GW preparation after Boyd’s passing inside the Pentagon. He spent more than 20 years campaigning against rigid forms of thinking and budget bloat. Spinney believes that the 9/11 attacks should have been a wake-up call for the United States military, and sees 4GW as something beyond mere terrorism, but rather a new form of warfare. He believes the United States military is stuck in second-generation warfare thinking and is woefully unequipped for 4GW. Ultimately, Spinney believes that the United States military’s response to 9/11 in particular and 4GW in general was not enough.

    Where Is 4GW Happening Today?

    While many think 4GW is something in the far-off future, it’s actually happening right now. The most archetypal 4GW is perhaps the conflict with ISIS – a non-state actor with recruits all over the world in conflict with several states. Some of the conflict is classically military, but there is also the propaganda war taking place all over the Internet. In fact, ISIS was using the PlayStation network to communicate because they correctly believed it wasn’t being monitored by international intelligence services. These attacks on the West were not limited to the area controlled by ISIS, but extended all around the world.

    Counter-attacking ISIS was a bit like trying to catch water in a net. Attacking ISIS proper was possible: There was territory. But attacking the support of ISIS was a whole other problem.

    It’s worth noting that the international Islamist movement is not limited to ISIS. Al-Qaeda and its offshoots still exist. What’s more, they seem to multiply over time. This is another feature of 4GW. A state actor can make peace with one faction of a group while other, more militant factions simply retreat deeper into the metaphorical mountains to continue the fight – which is precisely the situation that the Republic of the Philippines has faced in its struggle against the Moros separatists of the Southern Philippines.

    But the Philippines and Syria are all likely far away from where you live in terms of geography, sociology, demographics and culture. What does 4GW have to do with London, Paris or even Springfield, MO? Probably a lot more than you think.

    Is 4GW Coming to the Developed World?

    Is fourth-generational warfare coming to the developed world? Quite possibly, especially when you consider the spectre of failed states in the West.

    Many Western states are not quite as stable as they are made out to be. Sweden and France in particular have extensive problems with No Go Zones. Other parts of Europe want to secede, such as Catalonia in Spain, and are being violently suppressed from doing so.  

    Elsewhere around the world, previously first-world countries like South Africa are deteriorating in the span of a generation due to government mismanagement. The United States, for its part, is in what some have described as a “Cold Civil War,” with many futurists agreeing that the potential for outward civil war is greater than you’d like to think.

    How might such a 4GW scenario play out in the West? There are two potential scenarios, one for Europe and one for the United States. Each of these is worth considering.

    4GW: The European Model

    For our purposes, we’re going to call this the “European Model” of 4GW. This is because this model is based on the political and social realities of life in Europe today. It is by no means the only place something like this could unfold, nor is it impossible that 4GW could unfold in an entirely different way in Europe.

    4GW in Europe will likely be an outgrowth of No Go Zones and resulting failed states. Geographic areas within European nations will likely increase in size. And conflict will likely develop between the de facto areas of the No Go Zones, as well as more militant elements of the civilian population. While there is not much of a militia movement to speak of in Europe, in true 4GW fashion, people will find ways to improvise weapons out of what they have available to them.

    It’s impossible to talk about this phenomenon in Europe without discussing the ethnic and religious character of the areas, as ethnic and ethno-religious conflict will likely be the infrastructure for such a war – especially since many of these areas have legal and social structures based on Islamic laws and customs.

    In a scenario leading to a 4GW conflict in mainland Europe, attacks on civilians will escalate while the legitimate civilian authority is increasingly incapable of dealing with it. There will be both an inability and an unwillingness to maintain legal norms within larger and larger areas in Europe.

    Next would come the formation of militias. The model here is close to what happened in Lebanon during its civil war. Militias will form around political, ethnic and religious lines. Some of these will be the No Go Zones attempting to consolidate their power. Others will be European civilians seeking to protect themselves and their neighborhoods from the growing power of the No Go Zones. This, in turn, will further fuel the breakdown in government control. Members of the government, both law enforcement and military, will increasingly pick sides in the conflict, leaving their allegiance to the rump state behind. In the end, this will make it more difficult for the state to assert its power.

    The remaining government will begin taking measures against free speech and free association in an attempt to crack down and regain lost power. But at this point, the battle will mostly already be lost. Factions of the government will cease cooperating with one another, making it harder and harder to maintain order. These factions will, to varying degrees, start lining up behind the militias and parallel legal structures that have begun cropping up at the street level. This will also be the time foreign governments will step in and begin supporting local militias more. An example of this is Serbian-backed militias in Croatia and Bosnia during the Yugoslav Wars, or Israeli support of Maronite Christians and Iranian support of Shiite Muslims during the Lebanese Civil War.

    Crime will increase, but not just petty street crime. Insurgent movements have a long history of using organized crime to fund their operations and the 4GW conflicts in Europe would be no exception to this. The drug trade, human trafficking and financially driven kidnapping are three examples of how militias will fund themselves using extra-legal means. This will serve as an additional cause to restrict freedom of movement through both de jure and de facto means within a nation’s borders, another case where the Yugoslav Wars and Lebanese Civil War are instructive cases. Conversely, refugee scenarios will develop, which will further complicate the situation.

    4GW: The American Model

    The American 4GW Model is somewhat different and is based more on ideological and political differences than ethnic and cultural ones – though the ethnic and cultural differences will play a role, as we will soon see.

    In the United States, the federal system of government can play a key role. For example, while the prospect of a gun ban causing the peasants to pick up their pitchforks and torches is unlikely, a scenario where states simply refuse to enforce the law is far closer to the realm of possibility. Consider that this is already starting under the Trump Administration – cities and states are refusing to comply with the President’s directives on federal immigration law. Flipping the script, it’s worth wondering just how much state and federal compliance a federal ban on AR-15s, a high tax on ammunition, or a call for widespread registration would generate.

    This could happen one of two ways: Leftist states like California and Massachusetts balk at a new federal law, or more conservative and libertarian states like Arizona and New Hampshire refuse compliance. It’s worth noting that states themselves are not monoliths. California is largely still a conservative state outside of Los Angeles and the Bay Area, while several municipalities in deep blue Massachusetts went for Trump. On the other hand, Arizona has blue enclaves like Flagstaff and New Hampshire’s cities vote almost identically to Boston.

    The red state / blue state divide is very real, but it also exists within states as well as between them. In the event that a cleavage between the two political and cultural halves of America started, this divide would become increasingly unstable within the states themselves.

    Unlike Europe, the United States has a homegrown militia movement that is heavily armed and, to varying degrees, ready for battle. When the AR-15 is talked about as a “weapon of war on our streets,” it is frequently mentioned in the same breath how an insurrection in the United States would never stand a chance against the modern weapons of war wielded by the federal government. This would be news to the Viet Cong. People who make such statements are unaware of the dynamics of 4GW.

    While the political aspects are very real, so are the demographic ones. In particular, there is the spectre of the Scotch-Irish in Appalachia. These are a people with hundreds of years of long skepticism (and often outright hostility) toward the federal government. It’s also, geographically speaking, a very difficult place to conquer. Eric Rudolph evaded the feds for five years in the mountains of North Carolina, despite being on the FBI’s Ten Most Wanted Fugitive List.

    This segment of American society has a significant connection to both the police force and the military. Simple suggestions that local police, SWAT teams or even the military will be quick to crush such a rebellion are ill-informed on two counts. First, the aforementioned one: In many cases, the military and police who are being sent out are going to be friends, family and intimates of the Hillbilly Viet Cong. What’s more, due to the extensive military experience in this area, many of the foot soldiers of an anti-government rebellion centered in Appalachia would not only just be trained, but also battle-tested. Divided loyalties always play a role in 4GW, and the United States will be no exception.

    The weapons of war are leveled in 4GW. There is air war by drones, but also the role of computer hacking, kidnapping and other unsavory activities. The point of 4GW, from the perspective of the underdog, is less about “winning” in some quick and dramatic fashion, and more about dragging out the conflict as long as possible, causing the dominant power to lose through blood loss and death by 1,000 cuts.

    Consider the Vietnam Conflict: Between the end of the French occupation of Vietnam in 1954, through the Fall of Saigon when U.S. forces abandoned the city to the Viet Cong, the American Vietnam War lasted approximately 20 years. And that doesn’t count the seven bloody years of French occupation post-WW2, when French colonial forces lost approximately 100,000 troops attempting to put down the guerilla movement in Indochina.

    Finally, there’s the U.S. government’s track record in 4GW. The United States does not have a solid track record of being able to defeat guerilla insurgencies. From the Filipino Insurrection in the late 19th century to the current Afghan insurgency – the United States military can make inroads against 4GW actors, but it’s never really able to seal the deal.

    4GW in America: The Battle of Athens

    There is a history of 4GW in the United States and we don’t need to go very far back to find it. In 1946, there was an uprising of the citizens of Athens, TN (in McMinn County) to reestablish the rule of law. The story illustrates how American patriots resisting domestic tyranny can succeed in their struggles.

    Citizens of Athens had complained about election fraud since 1940. The town was filled with battle-hardened veterans from both the European and Pacific theaters of World War II. This filled them with a militancy that did not exist before the war. Several citizens of Athens had complained, but the administration of Franklin Roosevelt did nothing, perhaps because the town was ruled over by an entrenched Democratic Party machine.

    First, the men ran one of their own, a GI named Knox Henry, for sheriff. They wanted fair elections, so they petitioned the FBI to monitor, a request which was denied. The machine, for their part, imported 200 strong arms to “protect” the polling places from voters. In one case, a deputy pointed his revolver at a GI, ejecting him from the polling station and telling him “If you sons of bitches cross this street I’ll kill you!” Poll watchers were arrested and in one case, a black poll watcher was shot. Finally, the party machine locked the ballot boxes up in the county jail.

    Despite lacking in numbers, ammunition and arms, the veterans used the key to the local armories belonging to the State and National Guard. This evened the score considerably. They went to the jail house and requested the release of the ballot boxes, but were rebuffed with the sheriff’s men shooting two of the GIs. A firefight erupted and the GIs were reinforced by men from neighboring Meigs County and their IEDs. Eventually, the sheriff and his men surrendered, releasing the ballots.

    After obtaining the ballots, the men cleaned and returned the weapons. The GI candidate was elected sheriff and several others were elected to key county positions.

    This demonstrates 4GW in miniature in the United States. For those concerned about nuclear retaliation or other heavy guns the USG has, it’s worth noting that the underdog can always obtain some of these weapons by hook or by crook.

    The Militia Movement and 4GW

    No discussion of 4GW in the United States would be complete without touching on the militia movement, something specific to the U.S. While Europe has a history of factions in the military who oppose the government (the French Secret Army Organization is the most famous of these), it does not, to nearly the same extent as the United States, have men actively training in the woods getting ready for civilizational collapse or 4GW.

    The militia movement began in the early 1980s, when it was known as the Posse Comitatus movement. It exploded (no pun intended) after the attack on the Oklahoma City Federal Building and the showdown at Ruby Ridge. By the mid-1990s, the militia movement had a presence in all 50 states and was comprised of approximately 60,000 people.

    Note that the militia movement is no longer limited to the political right. Left-wing organizations have begun openly training with arms since the election of Donald Trump as President in 2016. In any kind of 4GW scenario in the United States, it’s likely that these two strains of the militia movement would come into conflict with each other, as well as the United States government. And don’t forget about the narcissism of small differences that tends to plague fringe political movements – the most bitter enemies in a 4GW conflict in the United States will likely be competing factions of left- and right-wing political movements.

    Skills Required for 4GW

    Combat isn’t the only helpful skill for 4GW. If you’re concerned with 4GW and want to get ready for everything to go down, here’s a list of skills for you to acquire in preparation for 4GW.

    • Weapons Versatility: Let’s just get this out of the way. Combat training with a variety of weapons is important for 4GW. This is because in 4GW, combatants often have to use weapons commandeered from their enemies. What they capture can vary widely from what their unit ordinarily uses.

    • Survivalism: Knowing how to live off the land is an indispensable skill for any SHTF scenario, and 4GW is no exception to this rule. 4GW combatants must know how to hunt, fish, trap, track, stay hidden, find potable water, and prep game.

    • First Aid: Any time there’s combat, there are casualties. 4GW requires the knowledge of first aid at the very least. Knowing other medic skills is a welcome addition to the toolkit as well.

    • Physical Fitness: Those involved in 4GW combat will have to walk long distances, often with a lot of weight strapped to their back. Being in top physical condition can mean the difference between life and death.

    • Navigation: 4GW combatants need to know the area, but they also need to know how to find their way around unfamiliar terrain. That means without electronic equipment, and instead using items like compasses and maps.

    • Demolition: This might also be filed under weapon versatility. Demolition is a big part of 4GW for depriving the enemy of a base and cutting off lines of communication and transit. 

    Many of the above skills are just as helpful when it comes to general survivalism, so you don’t have to be getting ready for 4GW to make them worth acquiring. And as with any kind of SHTF preparation and training, we hope you never have to use what you learn.

  • 'Made-In-China' Diamonds Poised To Rock Global Market

    A diamond in the rough can fetch over $2,000 per carat. These precious stones are mined deep within the Earth where they were forged in extreme pressure and heat over thousands of years. However, companies in mainland China have now mastered advanced technology to manufacture them en masse in several weeks or even in days, with products almost indistinguishable from natural ones, reported Xinhua News Agency.

    China, a significant consumer of mined diamonds, has a decent chance of becoming a large supplier of synthetic gems and could reshape the entire global diamond industry, analysts warn.

    By Chinese industry estimates, the country produces about 10 billion carats annually, but most are used in industrial applications, such as aeronautics, oil rigs, and electronic chips.

    As competition swells and technology to manufacture synthetic gems matures, Chinese companies on the mainland have shifted from using diamonds in industrial applications to fine jewelry, a move that could upset Anglo American, De Beers Sa, Alrosa, and Rio Tinto.

    Liu Yongqi, the general manager of Sino-Crystal, told Xinhua the company manufactures between 2 million and 3 million carats per year, with more than half of the carrots used for expensive jewelry.

    “We began our transformation in 2014 to expand to gem-grade diamonds,” said Liu.

    According to Paul Zimnisky, a diamond expert in New York, “It is important to understand that even if synthetic diamond production is initially lower quality, the diamonds can be ‘enhanced’ with processes that turn lower quality goods into higher-quality.”

    He further explained that if a fraction of Chinese synthetic gems is upgraded to jewelry-quality diamonds, it will unleash a massive deflationary wave that could collapse diamond prices.

    “China, and by extension Asia, is the main producer of synthetic diamonds,” Margaux Donckier, spokeswoman for Antwerp World Diamond Center, told Xinhua. “Synthetic goods only represent about 3-5% of the [consumer] market, but the share is growing rapidly.”

    In the last several years, an ample supply of synthetic diamonds have flooded the global market, Chinese manufacturers said, mainly originating from De Beers, one of the largest players in the diamond space who popularized the saying, “a diamond is forever.”

    Reversing its previous position on lab-made gems, De Beers did an about-face that shocked the diamond industry in 2018 by selling synthetic diamonds through its Lightbox Jewelry brand.

    “Since De Beers embraced man-made diamonds, the market has been developing rapidly,” said Liu, citing expanding sales in Japan.

    Synthetic diamond’s growth prospects are their increasing quality at declining cost. It is almost impossible to tell a fake diamond from a mined one with the naked eye.

    Experts with high-tech computers can distinguish the two, but that distinction is so irrelevant to the Federal Trade Commission (FTC) of the US, that the previously specified “natural” origin within the FTC’s definition of a diamond was removed last year.

    In its handbook for Jewelry, Precious Metals, and Pewter Industries, the FTC ruled “based on changes in the market, the final Guides eliminate the word ‘natural’ from the definition of diamond…because lab-created products that have essentially the same optical, physical and chemical properties as mined diamonds are also diamonds.”

    Regulations in China and many other countries require that synthetic gems and natural diamonds be clearly labeled so that consumers can understand the difference.

    Man-made diamond jewelry is classified as “fashion jewelry” while natural diamonds are called “fine jewelry,” Zimnisky said.

    While synthetic diamonds represent 3-5 % of the consumer market, the share is growing at an exponential rate, expected to grow 22% annually from $1.9 billion to $5.2 billion by 2023, Zimnisky projected.  The analyst added that Chinese companies could soon compete with De Beers.

    Yonden Lhatoo, the chief news editor at the Hong Kong-based South China Morning Post, wrote in a recent column: “Anyone with a basic education should know by now that the ridiculous tradition of men having to buy diamond engagement rings for women before marriage was wholly concocted.”

    “Diamonds are such a waste of money,” he wrote: “If you must buy a diamond, it makes much more sense to go for a lab-manufactured one.”

    In a world where global wealth inequality is at extremes, made-in-China diamonds could be the best news American millennials have heard in a while, considering they are wrapped up in insurmountable debts with borrowing costs moving higher, have delayed marriage, i.e, they cannot afford a real diamond — until now. 

  • Trifecta Of Folly: Pritzker Admin's Pension Plan For Illinois Will Center On The Three Worst Ideas Available

    Authored by Mark Glennon via WirePoints.com,

    Deputy Governor Dan Hynes today released the first details of the Pritzker Administration’s plan for addressing Illinois’ pension crisis.

    The administration will pursue three of the worst ideas available:

    • First, the state will borrow to pay off pension debt by offering a $2 billion pension obligation bond. We and many others have already written very extensively on why pension obligation bonds are irresponsible.  One credit card to another solves nothing and adds risk.

    • Second, the state will kick the can on its ramp for taxpayer pension contributions out seven years. The new goal for reaching 90% funding (which is still inadequate) will be 2052. Your grandchildren will fully understand why pensions are called “intergenerational theft.

    • Third, the state will gift public assets to the pensions. The particular assets and their value remain to be identified, but speculation has centered on the Illinois Tollway, the Illinois Lottery and government office buildings. The concept goes by the name “asset transfer.” We explained why it’s a sham in an article just yesterday. A pension actuary writing in Forbes did the same.

    The combined effect of the first two is odd. All $2 billion from the bond offering will go immediately to the pensions, but the regularly scheduled pension contribution for the upcoming fiscal year will drop by $800 million.

    That $800 million will be needed by the administration to balance the upcoming budget, to which it has firmly committed. Pritzker’ budget speech will be on February 20 and will have the details.

    We have no idea how Pritzker will be able to claim a balanced budget, even with that $800 million and even using all the gimmicks available under the phony budget accounting rules used by the state. Those phony accounting rules show the upcoming budget to be $3.2 billion short, according to the Pritzker administration.

    But see my colleagues’ article showing why, if the state were truly paying its bills, the shortfall would be $9 billion. In other words, the true shortfall amounts to almost one-fourth of the budget, almost three times the government number Pritzker is using, which most of the press falls for. We can’t say this often enough: The budget numbers the regular press focus on are junk, and shortfalls of the magnitude Illinois faces cannot be fixed without drastic, structural remedies.

    Deputy Governor Hynes and Governor Pritzker

    The pension specifics were part of a speech delivered by Hynes at the City Club, the full text of which is linked here.

    Also in the speech, Hynes repeatedly trumpeted a progressive income tax as the gold at the end of the rainbow. “The fair income tax will change the arc of this state’s finances in a very positive way – forever,” he said. He already has some of it spent. The state, he says, will dedicate $200 million per year out of the additional revenue from a progressive income tax to pensions, in addition already scheduled taxpayer contributions.

    Good grief. $200 million per year is almost meaningless. Currently, pension and related healthcare contributions are running about $6 billion short of what actuaries say they should be, as my colleagues’ piece today explains.

    And the progressive tax requires a constitutional amendment that the public will have to vote on, which can be no earlier than 2020. We think its chances are slim. Pritzker and his party seem drunk on their overwhelming election success last year, believing their own you-know-what about the progressive utopia they painted for voters. In reality, the “fair tax” panacea for our fiscal crisis is myth, which is why Pritzker has never offered specifics.

    We’ve documented why repeatedly. It either won’t raise much money or the rates would be absurdly high, even for the middle class. Pritzker’s own budget advisor during his transition offered a specific set of rates that he admitted would raise just $2 billion per year, not even enough to cover the current budget deficit.

    Reality is on the march. So is math. In its first skirmish with them, the Pritzker Administration fled the battlefield.

  • Visualizing America's Crime Rate Perception Gap

    There’s a persistent belief across America that crime is on the rise.

    Since the late 1980s, Gallup has been polling people on their perception of crime in the United States, and, as Visual Capitalist’s Nick Routley notes, the majority of respondents consistently indicate that they see crime as becoming more prevalent. As well, a recent poll showed that more than two-thirds of Americans feel that today’s youth are less safe from crime and harm than the previous generation.

    Even the highest ranking members of the government have been suggesting that the country is in the throes of a crime wave.

    We have a crime problem. […] this is a dangerous permanent trend that places the health and safety of the American people at risk.

    – Jeff Sessions, Former Attorney General

    Is crime actually more prevalent in society? Today’s graphic, amalgamating crime rate data from the FBI, shows a very different reality.

    Courtesy of: Visual Capitalist

    DATA VS PERCEPTION

    In the early ’90s, crime in the U.S. was an undeniable concern – particularly in struggling urban centers. The country’s murder rate was nearly double what it is today, and statistics for all types of crime were through the roof.

    Since that era, crime rates in the United States have undergone a remarkably steady decline, but public perception has been slow to catch up. In a 2016 survey, 57% of registered voters said crime in the U.S. had gotten worse since 2008, despite crime rates declining by double-digit percentages during that time period.

    There are many theories as to why crime rates took such a dramatic U-turn, and while that matter is still a subject for debate, there’s clear data on who is and isn’t being arrested.

    ARE MILLENNIALS KILLING CRIME?

    Media outlets have accused millennials of the killing off everything from department stores to commuting by car, but there’s another behavior this generation is eschewing as well – criminality.

    Compared to previous generations, people under the age of 39 are simply being arrested in smaller numbers. In fact, much of the decline in overall crime can be attributed to people in this younger age bracket. In contrast, the arrest rate for older Americans actually rose slightly.

    There’s no telling whether the overall trend will continue.

    In fact, the most recent data shows that the murder rate has ticked up ever-so-slightly in recent years, while violent and property crimes continue to be on the decline.

    A GLOBAL PERSPECTIVE

    Perceptions of increasing criminality are echoed in many other developed economies as well. From Italy to South Korea, the prevailing sentiment is that youth are living in a society that is less safe than in previous generations.

    As the poll above demonstrates, perception gaps exist in somewhat unexpected places.

    In Sweden, where violent crime is actually increasing, 53% of people believe that crime will be worse for today’s youth. Contrast that with Australia, where crime rates have declined in a similar pattern as in the United States – yet, more than two-thirds of Aussie respondents believe that crime will be worse for today’s youth.

    One significant counterpoint to this trend is China, where respondents felt that crime was less severe today than in the past.

  • Veni, Vidi, Tweeti – An Obituary For The Republic

    Authored by Tom Engelhardt via TomDispatch.com,

    What dreamers they were! They imagined a kind of global power that would leave even Rome at its Augustan height in the shade. They imagined a world made for one, a planet that could be swallowed by a single great power. No, not just great, but beyond anything ever seen before — one that would build (as its National Security Strategy put it in 2002) a military “beyond challenge.” Let’s be clear on that: no future power, or even bloc of powers, would ever be allowed to challenge it again.

    And, in retrospect, can you completely blame them? I mean, it seemed so obvious then that we — the United States of America — were the best and the last. We had, after all, outclassed and outlasted every imperial power since the beginning of time. Even that other menacing superpower of the Cold War era, the Soviet Union, the “Evil Empire” that refused to stand down for almost half a century, had gone up in a puff of smoke.

    Imagine that moment so many years later and consider the crew of neoconservatives who, under the aegis of George W. Bush, the son of the man who had “won” the Cold War, came to power in January 2001. Not surprisingly, on viewing the planet, they could see nothing — not a single damn thing — in their way. There was a desperately weakened and impoverished Russia (still with its nuclear arsenal more or less intact) that, as far as they were concerned, had been mollycoddled by President Bill Clinton’s administration. There was a Communist-gone-capitalist China focused on its own growth and little else. And there were a set of other potential enemies, “rogue powers” as they were dubbed, so pathetic that not one of them could, under any circumstances, be called “great.”

    In 2002, in fact, three of them — Iraq, Iran, and North Korea — had to be cobbled together into an “axis of evil” to create a faintly adequate enemy, a minimalist excuse for the Bush administration to act preemptively. It couldn’t have been more obvious then that all three of them would go down before the unprecedented military and economic power of us (even if, as it happened, two of them didn’t).

    It was as clear as glass that the world — the whole shebang — was there for the taking. And it couldn’t have been headier, even after a tiny Islamist terror outfit hijackedfour American jets and took out New York’s World Trade Center and part of the Pentagon on September 11, 2001. As President Bush would put it in an address at West Point in 2002, “America has, and intends to keep, military strengths beyond challenge, thereby making the destabilizing arms races of other eras pointless, and limiting rivalries to trade and other pursuits of peace.” In other words, jihadists aside, it was all over. From now on, there would be an arms race of one and it was obvious who that one would be. The National Security Strategy of that year put the same thought this way: “Our forces will be strong enough to dissuade potential adversaries from pursuing a military build-up in hopes of surpassing, or equaling, the power of the United States.” Again, anywhere on the planet ever.

    Look at more or less any document from the period and you’ll sense that they weren’t shy about touting the unprecedented greatness of a future global Pax Americana. Take, for instance, columnist Charles Krauthammer who, in February 2001, six months before the terror attacks of September 11th, wrote a piece swooning over the new Bush administration’s “unilateralism” to come and the “Bush Doctrine” which would go with it. In the process, he gave that administration a green light to put the pathetic Russians in their nuclear place and summed the situation up this way:

    “America is no mere international citizen. It is the dominant power in the world, more dominant than any since Rome. Accordingly, America is in a position to reshape norms, alter expectations, and create new realities. How? By unapologetic and implacable demonstrations of will.”

    “How Did USA’s Oil Get Under Iraq’s Sand?”

    And soon enough after September 11th, those unapologetic, implacable demonstrations of will did, in fact, begin — first in Afghanistan and then, a year and a half later, in Iraq. Goaded by Osama bin Laden, the new Rome went into action.

    Of course, in 2019 we have the benefit of hindsight, which Charles Krauthammer, Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, Deputy Secretary of Defense Paul Wolfowitz, and the rest of that crew didn’t have as they applied their Roman-style vision of an imperial America to the actual world. It should be added, however, that the millions of people who hit the streets globally to protest the coming invasion of Iraq in the winter of 2003 — “How did USA’s oil get under Iraq’s sand?” said a typical protest sign(which Donald Trump would have understood in his own way) — had a far better sense of the world than did their American rulers-to-be. Like the Soviets before them, in fact, they would grievously confuse military power with power on this planet.

    More than 17 years later, the U.S. military remains stuck in Afghanistan, bedeviled in Iraq, and floundering across much of the Greater Middle East and Africa on a planet with a resurgent Russia, and an impressively rising China. One-third of the former axis of evil, Iran, is, remarkably enough, still in Washington’s gunsights, while another third (North Korea) sits uncomfortably in a presidential bear hug. It’s no exaggeration to say that none of the dreams of a new Rome were ever faintly fulfilled. In fact, if you want to think about what’s been truly exceptional in these years, it might be this: never in history has such a great power, at its height, seemed quite so incapable of effectively applying force, military or otherwise, to achieve its imperial ends or bring its targets to heel.

    And yet, wrong as they may have been on such subjects, don’t sell Krauthammer and the rest of that neocon crew short. They were, in their own way, also prophets, at least domestically speaking. After all, Rome, like the United States, had been an imperial republic. That republic was replaced, as its empire grew, by autocratic rule, first by the self-anointed emperor Augustus and then by his successors. Arguably, 18 years after Krauthammer wrote that column, the American republic might be heading down the same path. After all, so many years later, the neocons, triumphantly risen yet again in Washington (both in the administration and as its critics), finally have their Caesar.

    Hail, Donald J. Trump, we who are about to read your latest tweet salute you!

    A Rogue State of One

    Let’s note some other passing parallels between the new Rome and the old one. As a start, it’s certainly accurate to say that our new American Caesar has much gall(divided into at least three parts). Admittedly, he’s no Augustus, the first of a line of emperors, but more likely a Nero, fiddling while, in his case, the world quite literally burns. Still, he could certainly say of campaign 2016 and what followed: Veni, Vidi, Tweeti (I came, I saw, I tweeted). And don’t forget the classic line that might someday be applied to his presidency, “Et tu, Mueller?” — or depending on who turns on him, you can fill in your name of choice.

    One day, it might also be said that, in a country in which executive power has become ever more imperial (as has the power of the Senate’s majority leader), blowback from imperial acts abroad has had a significant, if largely hidden, hand in crippling the American republic, as was once true of Rome. In fact, it seems clear enough that the first republican institution to go was the citizen’s army. In the wake of the Vietnam War, the draft was thrown out and replaced by an “all-volunteer” force, one which would, as it came to fight on ever more distant battlefields, morph into a home-grown version of an imperial police force or foreign legion. With it went the staggering sums that, in this century, would be invested — if that’s even the word for it — in what’s still called “defense,” as well as in a vast empire of bases abroad and the national security state, a rising locus of power at home. And then, of course, there were the never-ending wars across much of the Greater Middle East and parts of Africa that went with all of that. Meanwhile, so much else, domestically speaking, was put on the equivalent of austerity rations. And all of that, in turn, helped provoke the crisis that brought Donald Trump to power and might, in the end, even sink the American system as we’ve known it.

    The Donald’s victory in the 2016 election was always a sign of a deep disturbance at the heart of an increasingly unequal and unfair system of wealth and power. But it was those trillions of dollars — The Donald claims seven trillion of them — that the neocons began sinking into America’s “infinite” wars, which cost Americans big time in ways they hardly tracked or noticed. Those trillionsdidn’t go into shoring up American infrastructure or health care or education or job-training programs or anything else that might have mattered to most people here, even as untold tax dollars — one estimate: $15,000 per middle-class family per year — went into the pockets of the rich. And some of those dollars, in turn, poured back into the American political system (with a helping hand from the Supreme Court’s 2010 Citizens United decision) and, in the end, helped put the first billionaire in the Oval Office. By the 2020 election campaign, we may achieve another all-American first: two or even three of the candidates could be billionaires.

    All of this not only gave Americans a visibly unhinged president — think of him, in axis-of-evil terms, as a rogue state of one — but an increasingly unhinged country. You can feel so much of this in President Trump’s confused and confusing attempts to both end American wars and ratchet them up, 17-and-a-half — he always claims “almost 19” — years after the invasion of Afghanistan. You can feel it in his gut-level urge to attack the “deep state” and yet fund it beyond its wildest dreams. You can feel it in his attempts to create a corps of “my generals” and then fire them all. You can feel the unhinged nature of events in a world in which, after so many years of war, America’s enemies still seem to have the formula for staying afloat, no matter what Washington does. The Taliban in Afghanistan is on the rise; al-Shabaab in Somalia, is still going strong; the Houthis in Yemen remain functional in a sea of horror and starvation; ISIS, now without its caliphate, has from Syria to the PhilippinesAfrica to Afghanistan, become a distinctly global brand; al-Qaeda in the Arabian Peninsula thrives, while terror groups more generally continue to spread.

    You can feel it in the president’s confused and confusing explanations for his urges to withdraw American troops in days or four months or whenever from Syria and do the same or maybe not exactly in Afghanistan. (As he said in his State of the Union address, American troops would both withdraw and “focus” on “counterterrorism” in that country.) You can feel it in the way, after so many years of visible failure, the neocons are once again riding high in Washington, ascendant both in his administration and as critics of its global and military policies.

    These days, who even remembers that classic early Cold War question — who lost China? — that rattled American domestic politics for years, or later, the similar one about Vietnam? Still, if Donald Trump ever truly does withdraw American forces from Afghanistan (undoubtedly leaving this country’s allies in a Vietnam-style ditch), count on foreign policy establishmentarians in Washington and pundits around the country to ask an updated version of the same question: Did Donald Trump lose Afghanistan?

    But no matter what happens, don’t make the mistake of blaming him. It’s true that he tweeted endlessly while the world burned, but he won’t be the one who “lost” Afghanistan. It was “lost” in the grisly dreams of the neocons as the century began and it’s never truly been found again.

    Of course, we no more know what’s going to happen in the years ahead than the neocons did in 2001. If history has taught us anything, it’s that prediction is the diciest of human predilections. Still, think of this piece as an obituary of sorts. You know, the kind major newspapers write about those still living and then continually update until death finally occurs.

    Think of it not as an obituary for a single loopy president, a man who, with his “great, great wall,” has indeed been an opiate of the masses (for his famed base, at least) in the midst of an opioid crisis hitting them hard. Yes, Donald J. Trump, reality TV star and bankruptee, he of the golden letters, was elevated to a strange version of power by a troubled republic showing signs of wear and tear. It was a republic feeling the pressure of all that money flowing into only half-noticed distant wars and into the pockets of billionaires and corporate entities in a way that turned the very idea of democracy into a bad joke.

    Someday, if people ask the obvious question — not who lost Afghanistan, but who lost America? — keep all those failed imperial wars and the national security state that went with them in mind when you try to answer. Cumulatively, they had a far more disruptive role than is now imagined in toppling the dominos that sent us all careening on a path to nowhere here at home. And keep in mind that, whatever Donald Trump does, the Caesarian die was cast early in this century as the neocons crossed their own Rubicon.

    Hail, Caesar, we who are about to die salute you!

  • Russians Told To "Prepare For Worst Outcome" As US Prepares New Sanctions

    A bipartisan team of US senators is preparing to hit Russia with additional sanctions over its 2016 US election interference and military operations in Syria and Ukraine.

    Sens. Bob Menendez (D-N.J.) and Lindsey Graham (R-S.C.) are spearheading the measure, called the Defending American Security from Kremlin Aggression Act, which includes a wide range of financial penalties targeting Russia’s energy complex, financial industry and “political figures, oligarchs, and family members and other persons that facilitate illicit and corrupt activities, directly or indirectly, on behalf of Vladimir Putin,” reported The Independent.

    Threats of the sanctions rocked Russian stock and government bond markets at the end of the week, and the country’s debt insurance costs jumped alongside FX volatility.

    Moscow has responded to the prospect of new sanctions with anger.

    A former minister told Russians to prepare for the worst outcome; the Kremlin accused the US of “racketeering.”

    “We see clear symptoms of emotional Russophobia,” Kremlin spokesperson Dmitry Peskov told journalists. “But behind the emotions … is an entirely pragmatic, assertive trade calculation, and … nothing less than an attempt to engage in dishonest competition.”

    Frants Klintsevich, a member of the Defence and Security Committee of Russia’s upper house, described the new sanctions as a “dangerous habit” similar to “smoking a pipe before breakfast, poisoning all those around.”

    The head of Russia’s largest bank and its former economics minister, Herman Gref, warned that the sanctions could damage the already slowing economy.

     “We need to prepare for the very worst of situations,” Gref warned.

    The sanction also includes support for NATO, including requiring a two-thirds majority in the Senate for the US to leave the alliance. It includes plans to make it easier to transfer military hardware to NATO countries to reduce their dependences on Russian arms.

    The possibility of new sanctions suggests that the US is ready to increase its economic war against Russia. As the global economy rapidly slows in 2019, relations with the US and the rest of the world are at tense levels, the possibility of a geopolitical flare-up is right around the corner.

    Should we be looking in the East China Sea or the South China Sea for potential conflicts, or maybe hone in our attention on the Ukraine and Russia border?

    Judging by the additional sanctions, all eyes should be on Europe. 

  • The 'Disappearing Democrat' Scandal – Part 1

    Authored by Tim Donner via Liberty Nation,

    This is the first of a two-part series on a massive scandal that has gone largely unreported, based on an interview on Liberty Nation Radio with Luke Rosiak, author of Obstruction of Justice: How the Deep State Risked National Security to Protect the Democrats.

    Have we had enough of scandals – fake or real – in Washington? On one side, we’ve been hearing for two years about accusations of collusion between Trump and Russia – no proof found. From the other side comes claims that innocent Trump campaign operatives were drawn into an FBI trap to trigger an unfounded investigation – plenty of proof on that one.

    But if you think you have a handle on all the scandals pervading the DC swamp, think again. There was another truly shocking turn of events involving Congress that flew mostly under the radar in the heat of the 2016 presidential campaign. An unvetted Pakistani national given to blackmail gained access to the computer files of more than 30 Democrats in the House of Representatives, and from there the story reads like a spy novel. Some have called it the biggest scandal in congressional history, notwithstanding the lack of publicity surrounding it.

    Luke Rosiak, investigative reporter at The Daily Caller, has unmasked the scandal in his new book, Obstruction of Justice: How the Deep State Risked National Security to Protect the Democrats. And he dove into the details on Liberty Nation Radio.

    Luke Rosiak: Imran Awan was an IT guy for Congress for many years. He was working for Debbie Wasserman Schultz and other members of Congress. In the heat of the 2016 election, actually the same week that the DNC was hacked, Congress’ own internal police caught him hacking Congress. So although he was the IT guy, he was taking much more data than he should have had access to, impersonating members of Congress, and logging into their accounts and so on, and shuttling data off the House network and taking steps to hide what he was doing.

    So obviously, especially with the context of what was going on in the DNC, this was a huge deal. And yet no one ever heard about it from month to month to month. Even after that, you never heard anything about it.

    So it turned out after I pulled the thread on this for two years and found everywhere I looked literally just James Bond stuff, just the absolute wildest things. This guy was taking money from an Iranian government minister and laundering it through a front company called CIA LLC. After he was banned from Congress, he had a back door into the House network, because he was impersonating an intelligence staffer. The list goes on and on.

    So, they kicked the can down the road until after the election. They let him continue to log in to Congress this whole time while they’re building this Russian narrative. After the election, they still don’t want this to really go public. So they kick him off the network and they fire him, but they don’t arrest him. That’s when I find out that he’s still got access. He goes into Debbie Wasserman Schultz’ office at midnight, takes her laptop, after he’s been banned from Congress, and leaves it in a phone booth. So as I say, truly this is a surreal tale. As I investigated it, I just couldn’t believe what I was learning, and yet this was concealed from the American public.

    Imran Awan

    Tim Donner: Did Mr. Awan have so much on so many Democrats that there was a great hesitancy to really bring down the full weight of the law on him?

    Luke Rosiak: Actually that’s what he himself said. So a couple of reasons why they wanted this to go away. The first is the Russian narrative. They didn’t want this competing hack involving Pakistanis that they had failed to vet. And there were a series of very embarrassing missteps by the Democrats that allowed this happen, and incompetence.

    Then the other thing is, what you just said. I mean, this guy had access to everything. I think there was the worry that he would release it if they didn’t kind of make this thing go away. So his own wife goes to the FBI and says, “My husband told me that he’s a mole in Congress from Pakistan. He told me that he knows so much that he can never be prosecuted. So it’s okay.” And then she says, “I’m going to go to the FBI.” And he goes, “Well, I’ve been surveilling you. I’ve got videotape, a sex tape. I’m going to release that in Pakistan if you come forward.”

    So here we are. This is a guy hacking Congress and he’s caught, and he starts blackmailing people to prevent them from going to the FBI. His stepmother comes forward, and it’s virtually the identical story. She says, “I’ve been held in captivity by this guy to prevent me from coming forward. He said he’s going to have my family killed in Pakistan.” They basically intimidate this woman, and witnesses are scared. Evidence starts disappearing, and really this remarkable coverup is in full swing.

    The funniest part of all is the Democrats who are working frantically behind the scenes to orchestrate this coverup. Publicly they kind of say, “Oh, what are you talking about? That sounds crazy. It must be a conspiracy theory. I bet it’s Donald Trump somehow behind this being Islamophobic.” Meanwhile, these poor women, who are, of course, Muslim, are basically begging for their lives, and they’re being hung out to dry while this guy’s being protected.

    *  *  *

    In part two of this series, Mr. Rosiak discusses the Capitol police investigation, how a server with critical evidence suddenly disappeared, and the media’s refusal to cover this scandal.

  • Deutsche Bank Renegs On Pledge To Help Distressed Homeowners

    This ought to win Deutsche Bank some badly needed good will with global prosecutors investigating the bank for its involvement in various financial frauds – not to mention Financial Services Committee Chairwoman Maxine Waters.

    According to a Bloomberg report on Friday, DB has decided – apparently with the blessing of a federally appointed monitor – that it won’t pay out the $4 billion balance on its commitment to help distressed homeowners impacted by the housing collapse. The bank had agreed to spend billions of dollars on consumer relief during the waning days of the Obama administration as part of a massive settlement with the DOJ over its role in selling mortgages.

    DB

    Instead, the bank will use the money on providing new loans.

    The bank’s monitor said the decision might disappoint some homeowners who had reached out to the bank for relief over the past two years…but, to be fair, DB has already paid out $1.5 billion as part of the program.

    The decision reverses pronouncements by the bank and the U.S. Justice Department that some of the funds – part of an overall $7.2 billion settlement over bad mortgage bonds sold before the 2008 crisis – would go to aiding people who were in imminent risk of defaulting on their mortgage payments, have especially high interest rates or owe more on their mortgage than in the value of their home.

    The change in plans “may disappoint distressed homeowners and others, including the many individuals who have reached out to the monitor over the past two years, hoping to receive different types of consumer relief from the bank,” Bresnick wrote in the report, which was posted online.

    Bresnick, a partner at the law firm Venable LLC and a former U.S. prosecutor, declined to comment for this article. The Justice Department didn’t have an immediate comment.

    The bank rationalized its decision by saying the “most effective” form of consumer relief would be to provide loans to consumers so they can purchase homes (though, presumably, those distressed consumers wouldn’t qualify under the more stringent lending standards of the modern era).

    The decision reverses pronouncements by the bank and the U.S. Justice Department that some of the funds – part of an overall $7.2 billion settlement over bad mortgage bonds sold before the 2008 crisis – would go to aiding people who were in imminent risk of defaulting on their mortgage payments, have especially high interest rates or owe more on their mortgage than in the value of their home.

    The change in plans “may disappoint distressed homeowners and others, including the many individuals who have reached out to the monitor over the past two years, hoping to receive different types of consumer relief from the bank,” Bresnick wrote in the report, which was posted online.

    Bresnick, a partner at the law firm Venable LLC and a former U.S. prosecutor, declined to comment for this article. The Justice Department didn’t have an immediate comment.

    Unlike other bank settlements from the Obama era, DB’s settlement didn’t require the bank to spend the money on consumer relief; instead, DOJ and DB had what amounted to a handshake agreement. The money earmarked for consumer relief wasn’t specifically earmarked for loan modifications, which means the bank is free to use it for loans at its discretion. By comparison, similar settlements reached during the Trump era haven’t required money be set aside to help consumers.

    Earlier monitor reports said the bank was planning to offer loan relief and had entered into financing arrangements with two companies specializing in modifications.

    “The bank now has declined to pursue these options for relief,” the latest monitor report said. “It will not, after all, help any underwater homeowner by forgiving a portion of the principal owed on a mortgage, offer forbearance to any homeowner finding it difficult to make a monthly mortgage payment, or provide any of the other relief addressed in the monitor’s prior report.”

    The settlement – which initial reports suggested could be as high as $14 billion – instead required the bank to pay a roughly $3 billion fine and offer the $4 billion for consumer relief. But rest assured, the bank’s new Democratic overlords on the House Financial Services Committee likely won’t forget this.

  • Why Schumer And Sanders Are Wrong On Buybacks

    Authored by Ben Steil and Benjamin Della Rocca via CFR.org,

    In a widely discussed New York Times op-ed, Senators Chuck Schumer and Bernie Sanders excoriated share buybacks as “corporate self-indulgence,” diverting profits away from investment and worker compensation

    Is this true?

    Logically, there is no basis for believing that a firm prevented from buying back its stock will, in consequence, increase investment or compensation. If it can’t find other ways to return excess cash to its owners, it can always park it in, say, Treasuries. More importantly, other companies do need cash for equipment, R&D, attracting workers, and the like. And it makes sense for investors to re-allocate funds from companies that don’t need it to those that do.

    So if buybacks are happening for sound economic reasons, we would expect to see them at firms whose return on capital is falling—that is, companies with deteriorating investment opportunities. Is this the case?

    Take a look at the left-hand graphic above, which plots the growth in buyback activity between the first halves of 2017 and 2018 and the change in return on capital relative to the post-crisis (post-2010) average. The relationship is as we would expect. Firms that experience a deterioration in return on capital boost buybacks, which is a logical way to return underperforming cash to investors. And, as expected, the sector in which buybacks increased the most—Information Technology (IT)—is also the sector that experienced the biggest decline in return on capital.

    Now look at the right-hand graphic. This one shows that the three sectors experiencing the largest decline in return on capital – IT, Health Care, and Energy – account for nearly 80 percent of the rise in buyback activity in the first half of last year.

    In short, Schumer and Sanders have this wrong. The data show clearly that buybacks are being undertaken overwhelmingly by companies that should be returning cash to investors – companies that don’t have good uses for it. That cash is not disappearing into the vaults of billionaires, but is being reinvested in firms that do have good uses for it – like capital investment and worker retention.

    And isn’t that what Schumer and Sanders say they want?

Digest powered by RSS Digest

Today’s News 15th February 2019

  • Guess Where European Workers Go On Strike Most Frequently

    This week, the Irish health system was plunged into further chaos as nurses held three consecutive days of strike action.

    The Irish Nurses and Midwives Organisation already held three 24 hour strikes in its row over pay, recruitment and the retention of staff. Thousands of patients have already seen their medical appointments disrupted with many operations cancelled.

    However, as Statista’s Niall McCarthy notes, data from the European Trade Union Institute shows that as bad as the disruption is, the Irish are not the worst country in Europe for industrial action

    Infographic: Where European Workers Go On Strike Most Frequently  | Statista

    You will find more infographics at Statista

    Between 2010 and 2017, 17 days were not worked on average due to industrial action per 1,000 employees. Cyprus had the highest average number of days lost due to strikes in that period – 316.

     France is well known for industrial action and it came second with 125 days not worked.

  • The Deep Hurt: Lessons From American Coups

    Authored by Michael Welton via Counterpunch.org,

    As the world watches aghast at another US and allies’ attempt to engineer a coup in Venezuela, I would like to offer a few insights from Stephen Kinzer’ provocative chapter, “The deep hurt,” (pp. 227-250) in his book, The True Flag: Theodore Roosevelt, Mark Twain, and the Birth of the American Empire (2017). This remarkable text carries some hope and lessons for all of us. It tells the story of the great conflict around the turn of 20th century about the role that the US might play in either dominating the world or building a cosmopolitan democracy where all people feel secure that they reside in one country, the earth.

    Indeed, Kinzer states:

    “Anti-imperialists decisively influenced American history by helping to ensure that the first burst of American annexation would be the last” (p. 228).

    Even swash-buckling Teddy Roosevelt was influenced, losing his zest for the idea of conquest.  When he charged into the White House he held two views simultaneously, intervene to help other people, without oppressing them. Kinzer thinks that this dichotomy “torments our national psyche” (p. 229). In the early parts of the book Kinzer sets out the anti-imperialist (Mark Twain) and pro-imperialist visions (Henry Cabot Lodge). These speeches are worth gathering round for reflection.

    During the following hundred years much of what the anti-imperialists predicted has come to pass. The United States has become an “actively interventionist power. It has projected military or covert power into dozens of countries on every continent except Antarctica”(ibid.).  George Frisbie Hoar was right, Kinzer points out, when he “warned that intervening in other lands would turn the United States into a ‘vulgar, commonplace empire founded upon physical force”” (ibid.).

    Anti-imperialists also predicted that an “aggressive foreign policy would have pernicious effects at home” (ibid.). Military budgets have soared to heights unimaginable in the days of fervent expansionism in the 1898 war with the Philippines. The armaments industries wield extraordinary clout. The wealth-soaked elites dominate politics. The invasion and overthrowing of distant regimes resides in the hands of a few decision-makers. And militaristic values and rituals saturate American life and expunge peaceful ones.

    To be sure, American intervention brought some material blessings (good schools and orderly systems of justice, etc) and rising American power was perceived as “good for everyone simply because it means strengthening the world’s most beneficent nation” (p. 230). The expansionists of 1898 believed that America was “inherently benevolent,” and subject nations would rally around the May pole in celebratory dance. “The opposite happened….Carl Schurz was right when he warned that dominating foreigners would ultimately force Americans to ‘shoot them down because they stand up for their independence’” (p. 231).

    Kinzer states that: “In the face of profound new challenges, Americans are once again debating the role of the United States in the world. Should it intervene violently in other countries? This remains what Senator William V. Allen called it in 1899: ‘The greatest question that has ever been presented to the American people’” (p. 231). American culture carries a current of anti-imperialism and commitment to an international legal order. They played a big role in the establishment of the UN and nurturing global governance. They remain the world’s only superpower with enormous capacity to move towards building the cosmopolitan world order. What is evident now in this dark moment of history is that the world as it is, is not the way it has to be.

    It is difficult, I think, for the United States with its inordinate military might and present delusionary self-understanding to wrench itself free from wanting to intervene for political and economic reasons. Many in the post-WW I world had placed their bet for a better world on the Presbyterian professor Woodrow Wilson. Famously, Wilson triggered immense hopefulness to the disenfranchised in the colonies of European powers. He preached that they should “choose the sovereignty under which the shall live” (p. 232). In office, American troops were dispatched to intervene in Cuba, Haiti, the Dominican Republic, Mexico and Russia….Like his predecessors—and successors—Wilson insisted that he was doing it for the good of the target countries. Americans would leave them alone, he promised, as soon as they learned ‘to elect good men’” (ibid.). Today scholars speak of the “shattered peace” of the post-WW I world. Was the desire to begin building, slowly, carefully, a cosmopolitan world order, as Jan Smuts thought, an “impossible dream”?

    Kinzer observes that “this most compassionate of presidents not only invaded countries that defied the United States, but studiously ignored appeals from colonized people outside Europe, notably in Egypt, India, Korea, and Indochina. His hypocrisy set the stage for generations of war and upheaval” (ibid.). Margaret MacMillan’s lively and densely detailed book, Paris 1919 (2001)provides the stories for these outcast colonized countries.

    Today, the US has intervened one more time. The difference now may well be that there is little pretence that the US is engaging in the bully politics of “might is right.” They don’t care two hoots about what the world thinks. They do not give a damn about the self-determination of all countries and peoples. This invasion is stripped of any moral or legal justification. The US has decided to declare the Speaker of the House, Juan Guaido, president. This is unheard of! And Canada has forsaken the best of its liberal and social democratic traditions of adherence to rule of law to hitch its caboose to the US’s rampaging imperialist train.

    There are several lessons that Kinzer draws from American history of intervention that our worth careful reflection.

    1) American imperialists (and many Americans) truly believe that they are superior and that the world would become a better place if nations submitted to their leadership. The United States would be better off, Kinzer says, if it became a learning nation and not a teaching one.

    2) Early promoters of American intervention were zealous patriots. They proclaimed love of country and loyalty to the flag. Yet they could not imagine that people from non-white countries might feel just as patriotic. Love of country was a mark of civilization. Lesser peoples, therefore, couldn’t grasp it.

    3) Americans have been said to be ignorant about the world. They are, says Kinzer, but so are other peoples. The difference is that American leaders, puffed with a sense of mission, acted on ignorance. American leaders see little reason to bother learning about the nations whose affairs they intrude.

    4) Violent intervention in other countries always produces unintended consequences. Cuba was turned into a protectorate in 1901. A fine idea? It led ultimately to a bitter anti-American regime. Intervention in the Philippines sparked waves of nationalism across East Asia that contributed to the Communist revolution in China in 1949. Later American interventions also had terrible results planners never anticipated. From Iran and Guatemala to Iraq and Afghanistan, intervention has devastated societies and produced violent anti-American passion.

    5) Generations of American foreign policy makers have made decisions on three assumptions: the US is the indispensable nation that must lead the world; this leadership requires toughness; and toughness is best demonstrated by the threat or use of force. Thus: America is inherently righteous; its influence on rest of world always benign.

    6) Most American interventions are not soberly conceived, with realistic goals and clear exit strategies. But violent invasions always leave so-called “collateral damage”: families killed, destroyed towns, ruined lives, damaged land.

    7) The argument that the United States intervenes to defend “freedom” rarely matches facts on the ground. Many (most?) interventions prop up predatory regimes. The goal is simply to increase American power rather than to liberate the suffering.

    8) Foreign intervention has weakened the moral authority that was once the foundation of America’s political identity. Today many people around the world see it as a bully, recklessly invading foreign lands. The current invasion of Venezuela is such an example. The name “United States” is associated with bombing, invasion, occupation, night raids, covert action, torture, kidnapping, and secret prisons. Who wants to be saved by America? John Bolton recently threatened Maduro with prison in Guantanamo if he doesn’t get the hell out of Venezuela.

    9) Nations lose their virtue when they repeatedly attack other nations. That loss, as Washington predicted, has cost the United States its felicity. Kinzer says that the US can regain it only by understanding its own national interests more clearly. He thinks it is late for the United States to change its course in the world—but not too late.

  • Does Coconut Milk Make Women's Breasts Bigger? Chinese Ads Say 'Yes'

    A Chinese coconut milk manufacturer says that its beverage will make a woman’s breasts grow bigger. The company, Coconut Palm, has spent several years promoting this claim in a series of “tone-deaf” advertisements that offer no evidence to support their claims – causing many to voice their doubts. 

    While their 2019 pitch features big breasted women on the drink’s distinctive black packaging, a 2017 ad featuring scantily clad women folicking in the ocean recommends that women “drink one can every day, [your] curves will excite people, whiter and more plump,” and “drinking more coconut milk every day can make [your] breasts fuller,” reports the South China Morning Post

    One woman boasts: “genuine Coconut Palm coconut juice, I drank from small to big.”

    https://platform.twitter.com/widgets.js

    “When I first saw the advert, I thought some netizen had just Photoshopped it. It’s only now that I realised it was actually true and not someone joking around,” reads onme comment on China’s Twitter equivalent, Weibo. 

    Others voiced their displeasure. “The old brand has been around for so many years, and still needs to do this!” wrote another person of the Hainan-headquartered company that has been making the drink since 1988. 

    Ava Kwong, a professor in the University of Hong Kong’s medical faculty, told the South China Morning Post that, based on peer-reviewed scientific literature, she had not come across studies that supported the claims made for the products. –SCMP

    Our extensive research for this totally legitimate article also turned up no scientific evidence of breast-enhancing qualities linked to coconut milk. 

    The company also came under fire for its 2017 papaya juice advertisement, which similarly featured large-chested women in bikinis who claimed: “when I’m full of papaya I’m ample-chested.

    According to SCMP, a representative from the Coconut Palm factory in Hainan told the Beijing Times that they will conduct a thorough investigation into the matter – while the Industrial anbd Commercial Bureau of Longhua district in Haikou is also investigating “and has removed some of the controversial adverts,” according to SCMP, citing state news agency Xinhua

    “Market regulatory departments will strictly, and in accordance with the law, carry out inspections and investigate any unlawful advertisements … to protect the legitimate interests of consumers,” reads the report. 

    Watch the entire advertisement here, for science: 

  • Trump To Unveil $8 Billion Border Wall Funding Plan Tomorrow

    Having successfully passed the House and Senate, the compromise border security bill to avoid another government shutdown has wended its way to President Trump’s desk.

    As he confirmed earlier, Trump plans on signing the bipartisan congressional bill and declaring a national emergency at the southern border to expand the limited border wall funding ($1.375 billion) in the bill.

    As Bloomberg reports, Trump plans to use his unilateral authority to spend more than $8 billion to construct physical barriers along the U.S.-Mexico border, according to a White House official, a maneuver that Speaker Pelosi has already warned will likely prompt a lengthy legal challenge:

    “The president is doing an end run around Congress, the power of the purse.”

    The president will invoke an emergency declaration to redirect an additional $3.5 billion Congress approved for the Defense Department’s military construction budget, said another person familiar with the deliberations.

    Trump also will use his ordinary executive authority to reprogram $2.5 billion from the Defense Department’s drug interdiction efforts and $600 million from the Treasury department’s drug forfeiture program, said the person, who asked not to be identified to discuss plans ahead of announcement.

    The strategy avoids another politically risky government shutdown while allowing him to show his political supporters he has the will to build the wall.

    The White House confirmed that Trump will address the nation with regard the Border Wall situation at 10amET tomorrow.

    “President Trump will sign the government funding bill, and as he has stated before, he will also take other executive action — including a national emergency — to ensure we stop the national security and humanitarian crisis at the border,” White House spokesman Sarah Huckabee Sanders said in a statement.

    “The President is once again delivering on his promise to build the wall, protect the border, and secure our great country.”

    And just in case you were wondering what the left is thinking, here is Beto O’Rourke claiming that Americans have not “in any demonstrative way” been made safer by the current wall and finally addressing Rep. Dan Crenshaw’s question:

    “if you could snap your fingers and make El Paso’s border wall disappear, would you?”

    O’Rourke replied during an MSNBC interview at the border today…

    “Yes, absolutely. I’d take the wall down.”

    Crenshaw immediately responded that “at least Beto is honest about his open border policy” since “most [Democrats] claim to support a secure border while simultaneously undermining it at every turn.”

    “Should also note: El Paso mayor stated ‘The fence has worked.’ Residents have ‘stated that they felt more secure with the fence.’” Crenshaw added.

    Of course, we should expect an avalanche of media-sponsored outrage that President Trump should declare this a National Emergency in order to secure funding, but as The Epoch Times details, there are currently 31 National Emergencies:

    1. Nov 14, 1979: Blocking Iranian Government Property (EO12170)

    2. Nov 14, 1994: Proliferation of Weapons of Mass Destruction (EO 12938)

    3. Jan 23, 1995: Prohibiting Transactions With Terrorists Who Threaten To Disrupt the Middle East Peace Process (EO 12947)

    4. Mar 15, 1995: Prohibiting Certain Transactions with Respect to the Development of Iranian Petroleum Resources (EO 12957)

    5. Oct 21, 1995: Blocking Assets and Prohibiting Transactions with Significant Narcotics Traffickers (EO 12978)

    6. Mar 1, 1996: Declaration of a National Emergency and Invocation of Emergency Authority Relating to the Regulation of the Anchorage and Movement of Vessels (Proc. 6867)

    7. Nov 3, 1997: Blocking Sudanese Government Property and Prohibiting Transactions With Sudan (EO 13067)

    8. Jun 26, 2001: Blocking Property of Persons Who Threaten International Stabilization Efforts in the Western Balkans (EO 13219)

    9. Aug 17, 2001: Continuation of Export Control Regulations (EO 13222)

    10. Sep 14, 2001: Declaration of National Emergency by Reason of Certain Terrorist Attacks (Proc. 7463)

    11. Sep 23, 2001: Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism (EO 13224)

    12. Mar 6, 2003: Blocking Property of Persons Undermining Democratic Processes or Institutions in Zimbabwe (EO 13288)

    13. May 22, 2003: Protecting the Development Fund for Iraq and Certain Other Property in Which Iraq Has an Interest (EO 13303)

    14. May 11, 2004: Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria (EO 13338)

    15. Jun 16, 2006: Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus (EO 13405)

    16. Oct 27, 2006: Blocking Property of Certain Persons Contributing to the Conflict in the Democratic Republic of the Congo (EO 13413)

    17. Aug 1, 2007: Blocking Property of Persons Undermining the Sovereignty of Lebanon or Its Democratic Processes and Institutions (EO 13441)

    18. Jun 26, 2008: Continuing Certain Restrictions With Respect to North Korea & North Korean Nationals (EO 13466)

    19. Apr 12, 2010: Blocking Property of Certain Persons Contributing to the Conflict in Somalia (EO 13536)

    20. Feb 25, 2011: Blocking Property and Prohibiting Certain Transactions Related to Libya (EO 13566)

    21. Jul 24, 2011: Blocking Property of Transnational Criminal Organizations (EO13581)

    22. May 16, 2012: Blocking Property of Persons Threatening the Peace, Security, or Stability of Yemen (EO 13611)

    23. Mar 6, 2014: Blocking Property of Certain Persons Contributing to the Situation in Ukraine (EO 13660)

    24. Apr 3, 2014: Blocking Property of Certain Persons With Respect to South Sudan (EO 13664)

    25. May 12, 2014: Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic (EO 13667)

    26. Mar 8, 2015: Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela (EO 13692)

    27. Apr 1, 2015: Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities (EO 13694)

    28. Nov 22, 2015: Blocking Property of Certain Persons Contributing to the Situation in Burundi (EO 13712)

    29. Dec 20, 2017: Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption (EO13818)

    30. Sep 12, 2018: Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election (EO 13848)

    31. Nov 27, 2018: Blocking Property of Certain Persons Contributing to the Situation in Nicaragua (EO 13851)

    If President Trump declare the National Emergency tomorrow it will become number 32.

  • US Stealth Jets Conduct Bombing Drill In Philippine And East China Sea

    F-35B Lightning II stealth fighter jets with the fixed-wing detachment of Medium Marine Tiltrotor Squadron 262, 31st Marine Expeditionary Unit (MEU), conducted a bombing exercise from the Wasp-class amphibious assault ship USS Wasp in the Philippine and East China Seas, Jan. 26 through Feb. 6, according to a press release by the US Indo-Pacific Command.

    F35B releases smart bombs above the Pacific Ocean, Feb. 3, 2019.

    During the exercise, fifth-generation combat aircraft were armed with Sidewinder missiles and precision-guided munitions.

    “We conducted these missions by launching from the USS Wasp, engaging role-player adversary aircraft, striking simulated targets with internally and externally mounted precision guided munitions, returning to the Wasp, and recovering via a vertical landing – a niche capability of the F-35B,” Lieutenant Colonel Michael Rountree, the F-35B detachment officer-in-charge aboard the USS Wasp. “This was the first time that this level of training has been performed by an operationally-deployed F-35B detachment with the 31st [Marine Expeditionary Unit].”

    The exercise marks the first time that the F-35B jet performed bombing runs in the Indo-Pacific region, “demonstrating an increase in lethality and integrated amphibious capability,” according to Col. Robert Brodie, commanding officer of the 31st MEU.

    “The combination of stealth tactics and fully-loaded strike aircraft increases the lethality of the F-35B, enabling greater contribution and combat effectiveness by the Amphibious Ready Group/Marine Expeditionary Unit Team,” said Brodie, a career F/A-18 Hornet pilot. “The formidable and versatile capability of the F-35B provides a premier platform to support the Marine Air-Ground Task Force’s ability to own the fight in the dynamic and evolving Indo-Pacific environment.”

    The purpose of the drill could be a clear warning shot to China.

    US and Japanese officials are worried about the sheer number of Chinese warships and bombers patrolling the Senkaku islands, which are uninhabited, located east of mainland China, northeast of Taiwan and west of Japan’s Okinawa prefecture. Their location makes them strategically valuable to both China and Japan. Both countries have overlapping claims.

    The 31st MEU is continuously forward-deployed with USS Wasp, provides a rapid lethal force ready to perform combat missions as the top crisis response force in the Indo-Pacific Region.

    Conflict with China could be on the horizon. The US military is undoubtedly preparing with stealth jets in a tense region in the East China Sea.

  • Oil, Agriculture, & Imperialism: Averting The Fast-Track To Armageddon?

    Authored by Colin Todhunter via Off-Guardian.org,

    US National Security Advisor John Bolton has more or less admitted that the ongoing destabilisation of Venezuela is about grabbing its oil. He recently stated:

    We’re looking at the oil assets… We’re in conversation with major American companies now… It will make a big difference to the United States economically if we could have American oil companies really invest in and produce the oil capabilities in Venezuela.”

    The US’s hand-picked supposed leader-in-waiting, Juan Guaido, aims to facilitate the process and usher in a programme of ‘mass privatisation’ and ‘hyper-capitalism’ at the behest of his coup-instigating masters in Washington, thereby destroying the socialist revolution spearheaded by the late Hugo Chavez and returning to a capitalist oligarch-controlled economic system.

    One might wonder who is Bolton, or anyone in the US, to dictate and engineer what the future of another sovereign state should be. But this is what the US has been doing across the globe for decades. Its bloody imperialism, destabilisations, coups, assassinations, invasions and military interventions have been extensively documented by William Blum.

    Of course, although oil is key to the current analysis of events in Venezuela, there is also the geopolitical subtext of debt, loans and Russian investment and leverage within the country. At the same time, it must be understood that US-led capitalism is experiencing a crisis of over-production: when this occurs capital needs to expand into or create new markets and this entails making countries like Venezuela bow to US hegemony and open up its economy.

    For US capitalism, however, oil is certainly king. Its prosperity is maintained by oil with the dollar serving as the world reserve currency. Demand for the greenback is guaranteed as most international trade (especially and significantly oil) is carried out using the dollar. And those who move off it are usually targeted by the US (Venezuela being a case in point).

    US global hegemony depends on Washington maintaining the dollar’s leading role. Engaging in petrodollar recycling and treasury-bond ‘super-imperialism’ are joined at the hip and have enabled the US to run up a huge balance of payments deficit (a free ride courtesy of the rest of the world) by using the (oil-backed) paper dollar as security in itself.

    More generally, with its control and manipulation of the World Bank, IMF and WTO, the US has been able to lever international trade and financial systems to its advantage by various means (for example, see this analysis of Saudi Arabia’s oil money in relation to African debt). US capitalism will not allow its global dominance and the role of the dollar to be challenged.

    Unfortunately for humanity and all life on the planet, the US deems it necessary to attempt to prolong its (declining) hegemony and the age of oil.

    OIL, EMPIRE AND AGRICULTURE

    In the article ‘And you thought Greece had a problem’, Norman Pagett notes that the ascendance of modern industrialised humans, thanks to oil, has been a short flash of light that has briefly lifted us out of the mire of the middle ages. What we call modern civilisation in the age of oil is fragile and it is becoming increasingly difficult and expensive to extract remaining oil reserves. The age of oil is a driver of climate change, that much is clear. But what is equally disturbing is that the modern global food regime is oil-dependent, not least in terms of the unnecessary transportation of commodities and produce across the planet and the increasing reliance on proprietary seeds designed to be used with agrochemicals derived from petroleum or which rely on fossil fuel during their manufacture.

    Virtually all of the processes in the modern food system are now dependent upon this finite resource:

    Vast amounts of oil and gas are used as raw materials and energy in the manufacture of fertilisers and pesticides, and as cheap and readily available energy at all stages of food production: from planting, irrigation, feeding and harvesting, through to processing, distribution and packaging. In addition, fossil fuels are essential in the construction and the repair of equipment and infrastructure needed to facilitate this industry, including farm machinery, processing facilities, storage, ships, trucks and roads. The industrial food supply system is one of the biggest consumers of fossil fuels and one of the greatest producers of greenhouse gases.”
    Norman J Church (2005)

    Pagett notes that the trappings of civilisation have not altered the one rule of existence: if you don’t produce food from the earth on a personal basis, your life depends on someone converting sunlight into food on your behalf. Consider that Arabia’s gleaming cities in the desert are built on its oil. It sells oil for food. Then there is the UK, which has to import 40 per cent of its food, and much of the rest depends on oil to produce it, which also has to be imported. Pagett notes that while some talk about the end of the oil age, few link this to or describe it as being the end of the food age.

    Without oil, we could survive – but not by continuing to pursue the ‘growth’ model China or India are pursuing, or which the West has pursued. Without sustainable, healthy agriculture, however, we will not survive. Destroy agriculture, or more precisely the resources to produce food sustainably (the climate, access to fresh water and indigenous seeds, traditional know-how, learning and practices passed on down the generations, soil fertility, etc.), which is what we are doing, and we will be in trouble.

    The prevailing oil-based global food regime goes hand in hand with the wrong-headed oil-based model of ‘development’ we see in places like India. Such development is based on an outmoded ‘growth’ paradigm:

    Our politicians tell us that we need to keep the global economy growing at more than 3% each year – the minimum necessary for large firms to make aggregate profits. That means every 20 years we need to double the size of the global economy – double the cars, double the fishing, double the mining, double the McFlurries and double the iPads. And then double them again over the next 20 years from their already doubled state.”
    Jason Hickel (2016)

    How can we try to avoid potential catastrophic consequences of such an approach, including what appears to be an increasingly likely nuclear conflict between competing imperial powers?

    We must move away from militarism and resource-gabbing conflicts by reorganising economies so that nations live within their environmental means. We must maximise human well-being while actively shrinking out consumption levels and our ecological footprint.

    Some might at this point be perplexed by the emphasis on agriculture. But what many overlook is that central to this argument is recognising not only the key role that agriculture has played in facilitating US geopolitical aims but also its potential for transforming our values and how we live. We need a major shift away from the current model of industrialised agriculture and food production. Aside from it being a major emitter of greenhouse gases, it has led to bad food, poor health and environmental degradation and has been underpinned by a resource-grabbing, food-deficit producing US foreign policy agenda for many decades, assisted by the WTO, World Bank, IMF and ‘aid’ strategies. For instance, see Sowing the Seeds of Famine in Ethiopia by Michel Chossudovsky and Destroying African Agriculture by Walden Bello.

    The control of global agriculture has been a tentacle of US capitalism’s geopolitical strategy. The Green Revolution was exported courtesy of oil-rich interests and poorer nations adopted agricapital’s chemical-dependent model of agriculture that required loans for inputs and related infrastructure development. It entailed trapping nations into a globalised system of debt bondage, rigged trade relations and the hollowing out and capture of national and local economies. In effect, we have seen the transnational corporate commercialisation and displacement of localised productive systems.

    Western agricapital’s markets are opened or propped up by militarism (Ukraine and Iraq), ‘structural adjustment’ and strings-attached loans (Africa) and slanted trade deals (India). Agricapital drives a globalised agenda to suit its interests and eradicate impediments to profit. And it doesn’t matter how much devastation ensues or how unsustainable its food regime is, ‘crisis management’ and ‘innovation’ fuel the corporate-controlled treadmill it seeks to impose.

    But as Norman J Church argues, the globalisation and corporate control that seriously threaten society and the stability of our environment are only possible because cheap energy is used to replace labour and allows the distance between producer and consumer to be extended.

    We need to place greater emphasis on producing food rooted in the principles of localisation, self-reliance, (carbon sequestrating) regenerative agriculture and (political) agroecology and to acknowledge the need to regard the commons (soil, water, seeds, land, forests, other natural resources, etc) as genuine democratically controlled common wealth. This approach would offerconcrete, practical solutions (mitigating climate change, job creation in the West and elsewhere, regenerating agriculture and economies in the Global South, etc) to many of the world’s problems that move beyond (but which are linked to) agriculture.

    This would present a major challenge to the existing global food regime and the prevailing moribund doctrinaire economics that serves the interests of Western oil companies and financial institutions, global agribusiness and the major arms companies. These interlocking, self-serving interests have managed to institute a globalised system of war, poverty and food insecurity.

    The deregulation of international capital flows (financial liberalisation) effectively turned the world into a free-for-all for global capital. The further ramping up of US militarism comes at the back end of a deregulating/pro-privatising neoliberal agenda that has sacked public budgets, depressed wages, expanded credit to consumers and to governments (to sustain spending and consumption) and unbridled financial speculation. This relentless militarism has now become a major driver of the US economy.

    Millions are dead in Iraq, Syria, Libya and Afghanistan as the US and its allies play out a continuation of what they regard as a modern-day ‘Great Game’. And now, in what it arrogantly considers its own back yard, the US is instigating yet another coup and possible military attack.

    We have Western politicians and the media parroting unfounded claims about President Maduro, like they did with Assad, Saddam Hussein, Qaddafi and like they do about ‘Russian aggression’. All for what? Resources, pipelines, oil and gas. And these wars and conflicts and the lies to justify them will only get worse as demand across the world for resources grows against a backdrop of depletion.

    We require a different low-energy, low-carbon economic system based on a different set of values. As the US ratchets up tensions in Venezuela, we again witness a continuation of the same imperialist mindset that led to two devastating world wars.

  • Radioactive Fukushima Debris Picked Up By Remote-Controlled Robot For First Time

    A remote-controlled robot sent into the bowels of a melted nuclear reactor at Fukushima Daiichi Nuclear Plant has made picked up pebble-sized chunks of radioactive debris for the first time, according to AFP

    On Wednesday, operator Tokyo Electric Power (TEPCO) sent a remote-controlled probe to the bottom of the plant’s No. 2 reactor and lifted five small pieces of radioactive debris two inches. 

    “We were able to confirm that the fuel debris can be moved,” said spokeswoman Yuka Matsubara, adding “We accomplished the objective of this test.” 

    Matsubara says tht TEPCO plans to move more debris by next March. 

    Robots have already peered inside the reactor to allow experts to assess the melted fuel visually, but Wednesday’s test was the first attempt to work out how fragile the highly radioactive material is.

    Removing the melted  is considered the most difficult part of the massive clean-up operation in the wake of the worst nuclear disaster since Chernobyl.

    It is not expected to begin until 2021, and TEPCO has other issues to resolve including how to dispose of large quantities of contaminated water stored in containers at the plant site. –AFP

    The 2011 Tōhoku earthquake and tsunami swept across mainland Japan and killed over 15,000 people – knocking out the emergency generators at the Fukushima site. With no power, plant operators were unable to cool the – resulting in the meltdown of units 1, 2, and 3, along with hydrogen air explosions and the release of radioactive material into the air and the Pacific Ocean. 

    According to Gizmodo, the most difficult part of cleaning up the site will be dealing with the intense radiation coming from the melted fuel. In February 2017, a remote-controlled robot became unresponsive after two hours of exposure inside of reactor No. 2. Radiation has been reported as high as 650 sieverts per hour – enough to kill a human within seconds. 

    Illustration showing how radioactive debris from the reactor pressure vessel are collecting at the bottom of the primary containment vessel.
    Image: Tepco via Gizmodo

    Last year, a remote controlled probe with a camera was sent back into the No. 2 reactor, which confirmed that fuel debris had in fact melted through a containment area known as the reactor pressure vessel (RPV) a.k.a. the reactor core, and made its way down to the primary containment vessel (PCV). 

    Images of the chamber showed pebble- and clay-like deposits covering the entire bottom of the PCV pedestal. This accumulated waste, along with similar piles at reactors No. 1 and 3, needs to be cleaned up, and Tepco is currently trying to determine the best way of doing so.

    To that end, the state-owned company devised an operation to see what that material is like and determine if it can be moved. On Wednesday February 13, Tepco sent a probe equipped with a remotely operated robotic hand down into the No. 2 lower chamber, Japan Times reports. Using its tong-like fingers, the probe picked up five grain-sized pieces of radioactive melted fuel. AFP reported that the pieces were moved to a maximum height of 2 inches (5 centimeters) above the bottom of the chamber. In addition to taking images with a camera, the probe measured radiation and temperature during the investigation, according to a Tepco release.

    Gizmodo

    The Japan Times reports that TEPCO plans to move forward with another test in April to remove some debris from the chamber, and hopes to start removing radioactive material from the chamber in earnest by 2021. 

  • If Everything Is Great, Why Are So Many IPOs Getting Pulled In The Last Moment

    Every day, the question about organic demand for stocks in this market, or the lack thereof, rears its ugly head.

    As we observed yesterday, while stocks have been blazing higher for the past 7 weeks, in a bizarre twist professional investors, including institutions, hedge funds and retail investors have been selling in droves.

    So who was buying? The answer, as Bank of America revealed, is the companies themselves, as yet another spree of corporate buybacks has been unleashed in 2019…

     

    … with the result that buybacks this year are already set to smash last year’s records, as YTD repurchases are trending 78% higher compared to the same period in 2018 (as a reminder, total announced buybacks in 2018 hit a record $1 trillion).

    The problem with this, however, is that while companies are buying back their own stock – largely to boost management’s equity-linked executive comp – there is no appetite for others’ stock.

    Nowhere is this more obvious than in the US IPO market, where in stark denial of the scorching equity rally, there has been a sudden and unexpected freeze.

    Indeed, as Bloomberg notes, Amazon isn’t the only company scrapping its New York debut: Cibus Corp. today became the last company to postpone its Nasdaq listing on the morning it was supposed to start trading; it was the third firm on this week’s IPO calendar to inexplicably shelve plans at the last minute.

    Here Bloomberg makes a laughable argument, stating that there is “mounting evidence of rocky market conditions.”

    Uhm, where exactly? In the 17% surge in the S&P in under 7 weeks? Or the record collapse in both the VIX and yield spreads.

    No, dear Bloomberg editors, there are no “rocky market conditions.” There are simply no buyers, because the only “buyers” in this market are either shorts forced to cover, or companies buying back their – and only their – stock.

    Where Bloomberg is right, however, is in stating that after the postponement by Cibus, plus those by BankFlorida and Virgin Trains USA LLC earlier this week, “it’s more than fair to worry about market conditions for new issues.”

    For comparison, zero launched IPOs were postponed at this point in 2018. And those fears will only grow bigger when you look at IPOs that did manage to lift off: three of four “successful” public offerings are already trading below their offering price, while the only stock in the green (TCR2 Therapeutics) closed just 7 cents higher after its first day of trading today.

    On average, the full 2019 IPO class has been a disaster, and is failing to keep pace with the market, unless of course one realizes that the “market” is merely companies lifting themselves – and only themselves- by the bootstraps in the form of buybacks.

    As for organic demand for equity risk, well the sudden burst of pulled IPOs tells you all you need to know.

    Will this change? For the answer, keep an eye on the primary market: Stealth BioTherapeutics will attempt to buck the trend during tomorrow’s scheduled debut. However, don’t hope to use the IPO market as an equity barometer into next week: nNext week’s IPO calendar is blank thanks to today’s deadline for companies to price IPOs without having to provide updated – and audited – financial information for all of 2018. Additionally, presidents’ Day vacations would have likely made next week a quiet one, anyway.

    The silver lining is that at least the government won’t be shutting down again, so the new issue market should finally have a chance to normalize as the SEC goes through its backlog and IPO candidates update their financials.

    However, whether or not that means that “organic” buyers finally emerge, the kind that doesn’t buy back their own shares, is a different matter entirely. So far, and for the past 7 weeks, that has not happened. Which is why until such time as real buyers finally emerge, instead of just buybacks and short squeezes, hold that IPO champagne on ice…

  • NJ Pension Fund Might Ditch Enquirer Owner As Bezos Blackmail Backlash Intensifies

    As federal prosecutors explore whether National Enquirer publisher AMI broke the law by allegedly trying to blackmail Jeff Bezos, the world’s richest man, one public pension fund in blue-state New Jersey is exploring ways to hit AMI where it would hurt the most: in its pocketbook. Or at least, find a way to punish the investors who have helped keep AMI afloat, according to Bloomberg.

    Chatham

    Kevin O’Malley, a principal at Chatham Asset Management

    Following reports that AMI is in dire financial straits, and facing a popular backlash, New Jersey’s State Investment Council, which exercises ultimate authority over its $77 billion state pension fund, is reportedly considering ditching its investment in Chatham Asset Management, the $4 billion hedge fund that owns 80% of AMI, after the  “seriously troubling” revelations about the paper’s attempt to blackmail Jeff Bezos.

    New Jersey’s State Investment Council called Jeff Bezos’s allegations against the National Enquirer seriously troubling and said it’s evaluating its options for the state pension fund’s investment in Chatham Asset Management, the hedge fund that owns most of the newspaper’s parent company.

    “The allegations of AMI’s conduct, if true, are completely unacceptable and violate our expectations for investment partners,” Adam Liebtag, acting chairman of the investment council, said in an email, referring to Enquirer parent American Media Inc. “It is extremely disappointing that the Pension Fund, as an investor, and our beneficiaries, have to be linked to such a distasteful story.”

    The council’s acting chairman, Adam Liebtag said the board has relayed ts concerns to Chatham, and though its investment in the fund manager has been successful, is seriously considering ditching the fund.

    “While the investment has performed well to date, that is no excuse for this type of behavior. We continue to explore all available options,” he said.

    Limiting risk is also a factor in the fund’s decision-making, as the board is reportedly responsible for making sure companies in which it is invested follow all applicable laws.

    The state pension fund’s investment in Chatham has become the subject of renewed scrutiny after after a bombshell blog post published by Bezos, who accused the Enquirer of trying to blackmail him with photos of him with a woman who wasn’t his wife. The tech billionaire also suggested that American Media might have been acting on behalf of President Donald Trump and questioned whether it was motivated by coverage of Saudi Arabia in Bezos’ Washington Post newspaper.

    Elkan Abramowitz, an attorney for AMI Chairman David Pecker, has denied that there was any blackmail, extortion or political motivation involved in the fight between the tabloid and Bezos. Chatham, meanwhile, has said that it has no involvement in the editorial process or the day-to-day business decisions of the company.

    If NJ’s pension fund does drop Chatham, this could have repercussions across the asset management industry. After all, Leon Cooperman, the CEO of Omega Advisors, still owns a small stake in AMI. If the backlash grows, institutions might start evaluating whether to pull out of that fund, too.

Digest powered by RSS Digest

Today’s News 14th February 2019

  • London Gangs: A Tragic Remnant Of British Colonialism

    Authored by T.T.Coles via Counterpunch.org,

    London is plagued by street gangs. By the year 2016 there were an estimated 3,600 gangsters. According to government figures, these form some 225 gangs. Of these, 58 gangs are regularly active and are thought by police to be responsible for two-thirds of gang-related offences, including assault, theft, murder and, most of all, drugs. Ethnically, gangsters are mainly white, Asian, black and Eastern European. In the absence of official data, on-the-ground reports suggest that the majority of gangsters dealing in drugs, where the most violent crimes occur, are young black males, particularly Jamaican. 

    This is not only a symptom of how successive British governments have failed young ethnic minorities, it reflects the tragic legacy of colonialism.

    The British Empire left Jamaica and its other regional colonies poor and devastated .One book on the topic notes that emancipation from slavery “removed the gross features of the slave system without basically upsetting the underlying class-colour differentiations.” Likewise, a London School of Economics report notes that although Jamaica’s Constitution of 1944 introduced so-called democracy, it was “overlaid onto a set of administrative structures and doctrines which had developed since the imposition of Crown Colony rule in 1866.”

    Jamaica’s pre-Independence gangs, like The Yardies, emerged from the poverty of the 1950s. Caribbeans experienced similar hardships when they and their parents moved to the UK after the Second World War. According to the British National Archives, between 1948 and 1970, almost half a million people from the West Indies (including the Caribbean) came to Britain, many of them on government initiatives, “to run the transport system, postal service and hospitals. Other West Indians were returning soldiers who had fought for Britain during the Second World War.” Most of the immigrants settled in London. One academic paper notes that “Britain’s experience of West Indian immigration” was “traumatic … Both first and second generations in the U.K. have experienced open hostility” from media, politicians and the public. Inner city violence, including white gangs vs. black gangs, affected Liverpool in the north, Handsworth in the Midlands and, in London, Brixton, Notting Hill and Tottenham.

    Within a generation, poverty and discrimination in London had given rise to the gangland culture, with children growing up poor and oppressed and turning to crime for prestige and money. In 1992, the British police launched Operation Lucy to crush the gangs. Not having learned their lessons, successive governments, including the Tories under Margaret Thatcher and John Major, as well as New Labour under Tony Blair and Gordon Brown, failed to address the grievances of young ethnic minority Britons–the children and grandchildren of the migrant generations–and help them integrate into society. As in previous decades, some youngsters of this neglected generation have turned to gangs for profit and protection.

    Britain has been condemned by the United Nations for its structural racism. Just 14% percent of British people are from ethnic minorities. Yet 26% of British prisoners are non-whites, with black offenders 53% more likely to be sent to prison than whites. By 2011, black people were, in some areas of the UK, 28 times more likely than white people to be stopped and searched by police. The children of black Caribbeans are three times more likely than white children to be permanently expelled from school.

    According to government figures, by 2016 the rate of employment for white Britons was 74.7%. For black Britons, however, it was 59.3%. While the rate of overall poverty for white Britons (according to the government’s questionable measure of poverty) was 17.2%, for black Britons it was 39.9%. The percentage of white people likely to get a good degree at college is 76.3% compared to 60.3% for ethnic minorities in general. Although just 7.3% of the British population supposedly experiences “persistent poverty” (again, by the government’s dubious measure), for black and Asian households, the percentage rises to 20. Poverty, unemployment, imprisonment and general discrimination put massive strains on ethnic minority families, hence many absent fathers. Twenty-two percent of white parents are single, but 51% of black parents are single. There are few means for ethnic minority women to make a decent living. By 2011, unemployment for ethnic women was 14% compared to 6.8% for white women.

    These factors have merged to create a psychologically damaged demographic of socially alienated, angry youths, who believe that their only hope for respect and belonging is to join a gang. According to the Metropolitan Police’s database, by the year 2014 the average ageof a London gangster was 21. The Mayor of London Office for Policing and Crime’s report on gangs notes that youths are “pulled” into joining gangs by a number of factors. Many of these factors are the same as those noted above: poverty, lack of education and employment skills, and family problems. The allure of gang membership, says the report, includes the perceived sense of “safety, protection, excitement, financial opportunities and a sense of belonging” that gangs appear to offer. Crucially, the report notes that “These young people are often the most excluded in our society, facing multiple levels of deprivations and often growing up exposed to traumatic and abusive environments.”

    British governments used Caribbeans and their African ancestors as slaves and then as cheap labour to rebuild post-war Britain. Having been exploited, they and their offspring have been left to face poverty and discrimination.

    Another indication of how badly the system has failed these young, mainly ethnic minority males is the extent to which many believe in casting magic spells (Obeah) for self-protection. Here, the link between modern gangland violence and colonialism is apparent. According to a four-part investigation into London gangs by the International Business Times (IBT), Obeah originated in the west African Ashanti. Centuries ago, the practitioners believed that their spells could protect them. The magicians were respected and feared. The Spanish and later English slave traders brought them and their tradition to the Caribbean and thus to modern London.

    The IBT investigation concludes that many of today’s black London gangsters believe that Obeah will protect them from the police and bullets of rival gangs. It is significant that in the past the practitioners of Obeah “played a key role in slave rebellions and would create powders that supposedly possessed magical properties that would protect users from the white man’s weapons.” Today, the white man’s weapons are job discrimination, racism in policing, an economic system that favours wealthy and middle-class people, and the refusal of successive governments to get to the root of what drives young males to join gangs. Like so many things, London’s gang crisis is in no small part one of the tragic legacies of colonialism.

  • US Airstrikes Hit Decade High In Afghanistan

    While Trump professes antipathy for US conflicts abroad, the US military in Afghanistan last year was busy dropping the most bombs in at least a decade, reported Military.com.

    American fighter jets, strategic and stealth bombers, attack aircraft and helicopters, and drones dropped an unprecedented 7,362 bombs in 2018, according to the latest US Air Force Central Command airpower statistics report published last week.

    For more clarity on just how many bombs were dropped in 2018, the second-highest year on record was 2011, when the US dropped 5,411 bombs during the height of the Operation Enduring Freedom – Afghanistan (2001–14), according to available government figures dating back to 2009.

    “Throughout the last year, the air component has supported multiple ongoing campaigns, deterred aggression, maintained security, and defended our networks,” said Lt. Gen. Joseph Guastella, Combined Forces Air Component Commander, in a news release.

    “We’ve orchestrated coalition airpower to destroy the [Islamic State] caliphate, support Iraq, and enabled significant progress in Afghanistan,” Guastella said.

    The “Combined Forces Air Component Command 2015-2018 Airpower Statistics” spreadsheet, found within the report, shows a tremendous increase in the “number of weapons released,” starting in the September 2018 through the end of the year.

    The unclassified data also shows aircraft operating under the Combined Forces Air Component Command flew 8,196 sorties in 2018, more than double the amount of amount of sorties in 2017.

    During the record year of Afghanistan bombardments, President Trump in December instructed the Pentagon to remove troops from Syria and dramatically reduce their numbers in Afghanistan.

    The increased bombing runs could be explained by the Trump administration trying to finish the job, which one of his campaign promises was to end the wars in the Middle East.

    President Trump received broad bipartisan criticism over his troop reduction plans in Afghanistan, where they have been stationed since 2001.

    Even as airstrikes hit a decade-long high, the Trump administration has signaled renewed interest in peace negotiations with the Taliban, a move that could potentially end the 17-year-long war.

    “In Afghanistan, my administration is holding constructive talks with a number of Afghan groups, including the Taliban,” Trump said last week during his annual State of the Union address.

    “As we make progress in these negotiations, we will be able to reduce our troop presence and focus on counter-terrorism. We do not know whether we will achieve an agreement — but we do know that after two decades of war, the hour has come to at least try for peace.”

    President Trump has taken an anti-war stance on the conflicts in the Middle East, but government data now shows his plan on ending the Afghanistan conflict is to bomb the country into oblivion so the Taliban want to negotiate.

  • Whitehead: Is It Too Late For Non-Violent Means To Restore American Liberty?

    Authored by John Whitehead via The Rutherford Institute,

    There’s absolutely no evidence to support the statement that [America is] the greatest country in the world. We’re 7th in literacy, 27th in math, 22nd in science, 49th in life expectancy, 178th in infant mortality, 3rd in median household income, number 4 in labor force and number 4 in exports. We lead the world in only three categories: number of incarcerated citizens per capita, number of adults who believe angels are real and defense spending, where we spend more than the next 26 countries combined, 25 of whom are allies…

    “[America] sure used to be [the greatest country in the world ]… We stood up for what was right. We fought for moral reason. We passed laws, struck down laws, for moral reason. We waged wars on poverty, not on poor people. We sacrificed, we cared about our neighbors, we put our money where our mouths were and we never beat our chest. We built great, big things, made ungodly technological advances, explored the universe, cured diseases and we cultivated the world’s greatest artists AND the world’s greatest economy. We reached for the stars, acted like men. We aspired to intelligence, we didn’t belittle it. It didn’t make us feel inferior. We didn’t identify ourselves by who we voted for in the last election and we didn’t scare so easy. We were able to be all these things and do all these things because we were informed… by great men, men who were revered. First step in solving any problem is recognizing there is one. America is not the greatest country in the world anymore.” ― Aaron Sorkin, The Newsroom (Episode 1)

    Life in America has become a gut-wrenching, soul-sucking, misery-drenched, demoralizing existence.

    We have managed to survive crackdowns, clampdowns, shutdowns, showdowns, shootdowns, standdowns, knockdowns, putdowns, breakdowns, lockdowns, takedowns, slowdowns, meltdowns, and never-ending letdowns.

    We’ve been held up, stripped down, faked out, photographed, frisked, fracked, hacked, tracked, cracked, intercepted, accessed, spied on, zapped, mapped, searched, shot at, tasered, tortured, tackled, trussed up, tricked, lied to, labeled, libeled, leered at, shoved aside, saddled with debt not of our own making, sold a bill of goods about national security, tuned out by those representing us, tossed aside, and taken to the cleaners.

    We’ve had our freedoms turned inside out, our democratic structure flipped upside down, and our house of cards left in a shambles.

    We’ve had our children burned by flashbang grenades, our dogs shot, and our old folks hospitalized after “accidental” encounters with marauding SWAT teams. We’ve been told that as citizens we have no rights within 100 miles of our own border, now considered “Constitution-free zones.” We’ve had our faces filed in government databases, our biometrics crosschecked against criminal databanks, and our consumerist tendencies catalogued for future marketing overtures.

    We’ve seen the police transformed from community peacekeepers to point guards for the militarized corporate state. From Boston to Ferguson and every point in between, police have pushed around, prodded, poked, probed, scanned, shot and intimidated the very individuals—we the taxpayers—whose rights they were hired to safeguard. Networked together through fusion centers, police have surreptitiously spied on our activities and snooped on our communications, using hi-tech devices provided by the Department of Homeland Security.

    We’ve been deemed suspicious for engaging in such dubious activities as talking too long on a cell phone and stretching too long before jogging, dubbed extremists and terrorists for criticizing the government and suggesting it is tyrannical or oppressive, and subjected to forced colonoscopies and anal probes for allegedly rolling through a stop sign.

    We’ve been arrested for all manner of “crimes” that never used to be considered criminal, let alone uncommon or unlawful, behavior: letting our kids walk to the playground alonegiving loose change to a homeless manfeeding the hungry, and living off the grid.

    We’ve been sodomized, victimized, jeopardized, demoralized, traumatized, stigmatized, vandalized, demonized, polarized and terrorized, often without having done anything to justify such treatment. Blame it on a government mindset that renders us guilty before we’ve even been charged, let alone convicted, of any wrongdoing. In this way, law-abiding individuals have had their homes mistakenly raided by SWAT teamsthat got the address wrong. One accountant found himself at the center of a misguided police standoff after surveillance devices confused his license plate with that of a drug felon.

    We’ve been railroaded into believing that our votes count, that we live in a democracy, that elections make a difference, that it matters whether we vote Republican or Democrat, and that our elected officials are looking out for our best interests. Truth be told, we live in an oligarchy, politicians represent only the profit motives of the corporate state, whose leaders know all too well that there is no discernible difference between red and blue politics, because there is only one color that matters in politics—green.

    We’ve gone from having privacy in our inner sanctums to having nowhere to hide, with smart pills that monitor the conditions of our bodies, homes that spy on us (with smart meters that monitor our electric usage and thermostats and light switches that can be controlled remotely) and cars that listen to our conversations and track our whereabouts. Even our cities have become wall-to-wall electronic concentration camps, with police now able to record hi-def video of everything that takes place within city limits.

    We’ve had our schools locked down, our students handcuffed, shackled and arrested for engaging in childish behavior such as food fights, our children’s biometrics stored, their school IDs chipped, their movements tracked, and their data bought, sold and bartered for profit by government contractors, all the while they are treated like criminals and taught to march in lockstep with the police state. 

    We’ve been rendered enemy combatants in our own country, denied basic due process rights, held against our will without access to an attorney or being charged with a crime, and left to molder in jail until such a time as the government is willing to let us go or allow us to defend ourselves.

    We’ve had the very military weapons we funded with our hard-earned tax dollars used against us, from unpiloted, weaponized drones tracking our movements on the nation’s highways and byways and armored vehicles, assault rifles, sound cannons and grenade launchers in towns with little to no crime to an arsenal of military-grade weapons and equipment given free of charge to schools and universities.

    We’ve been silenced, censored and forced to conform, shut up in free speech zones, gagged by hate crime laws, stifled by political correctness, muzzled by misguided anti-bullying statutes, and pepper sprayed for taking part in peaceful protests.

    We’ve been shot by police for reaching for a license during a traffic stop, reaching for a baby during a drug bust, carrying a toy sword down a public street, and wearing headphones that hamper our ability to hear.

    We’ve had our tax dollars spent on $30,000 worth of Starbucks for Department of Homeland Security employees, $630,000 in advertising to increase Facebook “likes” for the State Department, and close to $25 billion to fund projects ranging from the silly to the unnecessary, such as laughing classes for college students and programs teaching monkeys to play video games and gamble.

    We’ve been treated like guinea pigs, targeted by the government and social media for psychological experiments on how to manipulate the masses. We’ve been tasered for talking back to police, tackled for taking pictures of police abuses, and threatened with jail time for invoking our rights. We’ve even been arrested by undercover cops stationed in public bathrooms who interpret men’s “shaking off” motions after urinating to be acts of lewdness.

    We’ve had our possessions seized and stolen by law enforcement agencies looking to cash in on asset forfeiture schemes, our jails privatized and used as a source of cheap labor for megacorporations, our gardens smashed by police seeking out suspicious-looking marijuana plants, and our buying habits turned into suspicious behavior by a government readily inclined to view its citizens as terrorists.

    We’ve had our cities used for military training drills, with Black Hawk helicopters buzzing the skies, Urban Shield exercises overtaking our streets, and active shooter drills wreaking havoc on unsuspecting bystanders in our schools, shopping malls and other “soft target” locations.

    We’ve been told that national security is more important than civil liberties, that police dogs’ noses are sufficient cause to carry out warrantless searches, that the best way not to get raped by police is to “follow the law,” that what a police officer says in court will be given preference over what video footage shows, that an upright posture and acne are sufficient reasons for a cop to suspect you of wrongdoing, that police can stop and search a driver based solely on an anonymous tip, and that police officers have every right to shoot first and ask questions later if they feel threatened.

    Are you depressed yet? You should be.

    More than depressed, however, you should be outraged at what has been done to our country.

    I’m outraged at what has been done to our freedoms.

    We are no less prisoners than those who are incarcerated behind prison walls.

    As Aldous Huxley recognized in his foreword to A Brave New World Revisited:

    “It is perfectly possible for a man to be out of prison and yet not free – to be under no physical constraint and yet be a psychological captive, compelled to think, feel and act as the representatives of the national state, or of some private interest within the nation wants him to think, feel and act…

    To him the walls of his prison are invisible and he believes himself to be free.”

    The prison we inhabit may not be as bleak as the soul-destroying gulags described by Aleksandr Solzhenitsyn in his masterpiece The Gulag Archipelago, but that’s just a matter of aesthetics.

    It’s time to stop waiting patiently for change to happen, stop waiting for someone to rescue you, and stage a breakout.

    Get mad, get outraged, get off your duff and get out of your house, get in the streets, get in people’s faces, get down to your local city council, get over to your local school board, get your thoughts down on paper, get your objections plastered on protest signs, get your neighbors, friends and family to join their voices to yours, get your representatives to pay attention to your grievances, get your kids to know their rights, get your local police to march in lockstep with the Constitution, get your media to act as watchdogs for the people and not lapdogs for the corporate state, get your act together, and get your house in order.

    Appearances to the contrary, this country does not belong exclusively to the corporations or the special interest groups or the oligarchs or the war profiteers or any particular religious, racial or economic demographic.

    This country belongs to all of us: each and every one of us—“we the people”—but most especially, this country belongs to those of us who love freedom enough to stand and fight for it.

    As I point out in my book Battlefield America: The War on the American People, we are fast approaching the point at which we will have nothing left to lose.

    Don’t wait for things to get that bad before you find your voice and your conscience.

    As Solzhenitsyn’s character reflects The Gulag Archipelago:

    “How we burned in the camps later, thinking: What would things have been like if … during periods of mass arrests, as for example in Leningrad, when they arrested a quarter of the entire city, people had not simply sat there in their lairs, paling with terror at every bang of the downstairs door and at every step on the staircase, but had understood they had nothing left to lose and had boldly set up in the downstairs hall an ambush of half a dozen people with axes, hammers, pokers, or whatever else was at hand?… The cursed machine would have ground to a halt! If…if…We didn’t love freedom enough. And even more – we had no awareness of the real situation…. We purely and simply deserved everything that happened afterward.”

    Take your stand now—using every nonviolent means at your disposal—while you still can.

    Don’t wait to reflect back on missed opportunities to push back against tyranny.

    Don’t wait until you’re the last one standing.

    Time is running out.

  • US Army Set To Field "iPhone Of Lethality” Assult Rifle By 2022

    The Army is on the hunt for a high-tech weapon to replace the standard issue rifle for it’s Next Generation Squad Weapon program (NGSW). The service believes it can spark a “revolution in small arms” on par with what the iPhone did to cell phones.

    https://platform.twitter.com/widgets.js

    Army officials at the Armament Research, Development, and Engineering Center at New Jersey’s Picatinny Arsenal told Task & Purpose last week that the purpose of the NGSW program, in which the military is currently soliciting bids to replace its M16 rifle, M4 carbine, and the M249 light machine gun with a 6.8mm gun, is to create an iOS-like platform for killing.

    “Imagine that Steve Jobs and his engineers were trying to convert the iPod Touch to the first 3G iPhone,” said Army Col. Elliott Caggins, project manager for soldier weapons. “There were a thousand technologies they could have put in the first iPhone but they were looking to mature the platform before they could actually go onto the system.”

    In the last 12 months, the Army published several notices asking private defense manufactures across the US to submit their futuristic rifles to the NGSW program for testing. The Army is not interested in improvement programs for current guns that have been in service for decades, but rather a new weapon that can shoot further and have the ability for sophisticated add-ons or modifications.

    Task & Purpose said, NGSW officials expected the rifle to include “a specially-designed fire control system engineered to boost hit probability at extended ranges,” “an onboard processor hardened against cyber attacks,” and a multi-laser rangefinder system to increase the probability of killing the enemy.

    “The operator, as he lases the target, instantly gets an aim point and the system adjusts for ballistics instead of the operator trying to figure things out,” Fiorellini told Task & Purpose. “

    The Army also wants the rifle to have a suppressor base and “aim augmentation” system in the future. The NGSW project expects to integrate the weapon into a heads-up display system that will be mounted in tactical helmets.

    “We have hundreds of capabilities we can put into this weapons system, but we want to do it by holistically creating a system that that takes advantage of everything we’ve done in the past,” Caggins told the website. “This means its capabilities will only grow, just as the iPhone’s did.”

    The Army expects to field its “iPhone of lethality” by 2022. The first soldiers to receive the weapon will be the “close combat 100,000,” which include infantry and reconnaissance units.

  • Understanding State Propaganda From The USSR To The USA

    Authored by Adam Garrie via EurasiaFuture.com,

    While the de jure role of state sponsored propaganda is to convince a population to adopt a certain line of thinking on the issues of the day, the de fato function of state sponsored propaganda is rather different. In a society in which even a sizeable minority of the public are capable of critical thinking, few will immediately believe everything they are told, even if they can’t quite put their figure on a specific point of contention.

    Because of that, in educated societies as the Soviet Union’s was, state propaganda serves a purpose of alerting people as to what they are forbidden to disagree with in public. In other words, if the official state line as delivered through state sanctioned newspapers, radio and television is that the economy is booming, people are being paid well and on time and that the new housing stock is superior to any other in the world – the authors of such propaganda do not expect those who are under-paid, living in mediocre housing and unable to elevate themselves into a higher living standard, to believe the self-evident nonsense that forms the core of the propaganda.

     

    Instead, as part of the political requirement for society not to fall apart, it is expected that in private, people will complain to their friends and family about the fact that the economy is poor, people are stuck in dead end jobs and that housing is substandard, but that in public one will refrain from voicing these thoughts, because if they did, they would lose their job at a state owned factory, lose their state pension and if they took their message of opposition to greater heights, they could even receive a visit from the police.

    Against this background, one could imagine a mild political dissident in early 1980s Moscow who enjoys poking fun at authority, but who nevertheless does not want to lose his day job or see his family harassed. Such an individual might look closely at the daily state propaganda that he does not for a moment take seriously, if for no other reason than to see if the satirical poem he is about to write regarding the Cuban fishing industry might get him into trouble back home in Moscow.

    Thus, when the evening’s propaganda (aka “news”) bulletin indicates that one cannot criticise Soviet foreign policy (“because the war in Afghanistan is going great”), cannot criticise Moscow-Warsaw relations (“because both countries will forever be ruled by communist parties”) and cannot criticise timber production methods (“because worker productivity is at its highest in history”), the dissident in question will breathe a sigh of relief because there is no story indicating an official position on the fishing industry in brotherly Cuba.

    But that was the Soviet Union, a now long gone state that has given way to a modern Russia whose biggest problem is not a lack of free speech but a lack of truly free markets.

    But while the USSR’s old adversary, the United States is having its own problems with a less and less free market that is overly taxed, overly regulated, back in love with tariffs and all at the mercy of an inflation-happy yet unaccountable Federal Reserve, there is alas a giant free speech problem, one that is all the worse in America’s European allied states who don’t even bother to pretend to have something akin to America’s constitutional first amendment.

    First, one must examine the propaganda business model of the US and the EU, as it is somewhat more complicated that the old propaganda model in the USSR. In the USSR, it was the state that owned the factories, your apartment and the media you were subjected to. Thus, the state looked after its own interests by telling people what they could not say in order to keep up the illusion that the state run industry and infrastructure was in far better shape than it was.

    But while Soviet propaganda worked on a linear business model, today’s American and European propaganda machine works on a triangular model. At the top of the triangle is big business. At the bottom two points of the triangle are government and media – both of which want the help of big businesses in order to enrich themselves.

    In order to accomplish this, big business will donate vast sums of money to all major political parties so that in spite of who is in putative control, they’ll generally get what they want out of government. To keep the people unaware of this scheme, big business will invest in the shares of media outlets in order for stories favourable to their business interests getting air time. Likewise, because government does not want its own complicity with the desires of big business to be exposed, it too will offer media corporations carrots and sticks so that they never step out of line. Some of the most popular carrots include everything from generous tax breaks, the ignoring of unethical business practices by media regulators, to invitations for so-called “journalists” to attend elite government events. The sticks are merely the opposite of the carrots and more often than not, everyone does what they are told so long as the increasingly worthless paper currency keeps being handed out to the good soldiers of the media-industrial complex.

    The result is the same as it was in the USSR.

    Every day major western media outlets (the largest of which are American) tell the masses what they cannot say if they want to keep their job, get a credit card, a mortgage, maintain a position of high social standing and stay on the right side of the law. The only difference is that because the western business model is one that pretends to be open, while the Soviet model did not hide that it was all controlled by the state, some in the west are actually still stupid enough to believe that the propaganda they see is either the truth or an attempt to tell the truth, when the reality is that it is merely guidance about what one cannot disagree with in public unless one is willing to take a major risk to one’s economic and social welfare.

    Thus, the American and European media constantly send messages that it is impermissible to have an opinion contrary to the standard line on the following issues:  invading other people’s nations in the name of “human rights”, climate change being the fault of anyone with a car, the wonders of narcotics and pornography, why strict education is somehow evil and why fiat currencies are just swell.

    Thus, just as Soviet propaganda had slogans that insulted the intelligence of the ordinary person like “brotherhood of nations” in order to keep people from questioning why certain investments were going to far off hinterlands while Russia’s heartlands were being economically destroyed, so too do western propagandists use terms like “fact checking” to imply that anyone who disagrees with a corporate (and hence government) sanctioned “fact” is a deceitful liar that should be shunned, shamed and insulted as such. While terms like “fact checking” are mostly used by social elites who author the propaganda, ordinary people tend to use the phrase “politically incorrect” to signal to their fellow man what cannot be said under fear of social and economic punishment.

    This is why in the search for real news, one ought to look first at those proclaiming to be little more than entertainers, rather than official purveyors of “fact”. In societies whose official news outlets have vested interests in giving people nothing but guidance on what cannot be said, the best way to amuse the masses is by telling the truth that they are otherwise not only allowed to hear but more importantly, are not allowed say in the open with a straight face.

  • Futures, Yuan Spike On China Tariff Delay Headlines

    US equity futures and China’s yuan both kneejerked higher on Bloomberg reports that President Trump is considering pushing back the deadline for imposition of higher tariffs on Chinese imports by 60 days.

    Having already hinted at it during a pool spray today that he was open to letting the March 1 deadline for more than doubling tariffs on $200 billion of Chinese goods slide if the two countries are close to a deal, Bloomberg reports that, according to people familiar with the matter, Trump is weighing whether to add 60 days to the current deadline to give negotiations more time to continue.

    Yuan spiked…

    As did US futures…

    However, some human traders (as opposed to headline algos) are wondering why this would be perceived as bullish at all as it simply indicates they are no closer to deal than they were 60 days ago and the 10% tariffs will remain in effect – weighing on global trade (as the Baltic Dry Index collapse suggests)…

    U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are in Beijing for the latest round of high-level talks with Chinese Vice Premier Liu He on Thursday and Friday. Negotiations this week are focused on how to enforce the trade deal and putting on paper a framework agreement to present to the two presidents.

  • China Is The "Greatest Long-Term Strategic Threat" To US, Top Pacific Commander Tells Congress 

    After yet another US Navy sail-by operation in the South China Sea early this week, which sparked fury in Beijing, and following a series of provocative Taiwan Strait passes by US ships over the past months, the commander of US Indo-Pacific operations has again warned China to back off. 

    Adm. Philip Davidson told lawmakers on Tuesday that China represents the “greatest long-term strategic threat to a free and open Indo-Pacific and to the United States.” He testified before a Senate Armed Services Committee hearing that US-China competition represents “two incompatible visions of the future.”

    Image via The Daily Star

    Warning that the geopolitical rivalry and situation is actually worse than most pundits believe, he said, “Those who believe this is reflective of an intensifying competition between an established power in the United States and a rising power in China are not seeing the whole picture,” during an opening statement. 

    “Rather, I believe we are facing something even more serious: a fundamental divergence in values that leads to two incompatible visions of the future,” he said. Adm. Davidson described the communist leadership in Beijing as using “fear and coercion” in an attempt to “expand its form of ideology in order to bend, break and replace the existing rules-based international order.”

    “Beijing seeks to create a new order, one with Chinese characteristics led by China, an outcome that displaces the stability and peace of the Indo-Pacific that has endured for over 70 years,” Davidson added. 

    This follows prior April 2018 testimony wherein Davidson noted of China’s controversial man-made islands in the South China Sea, being used of Beijing to claim expanded territorial waters, that the People’s Liberation Army (PLA) “populated those islands with anti-ship cruise missiles, with surface-to-air missiles and electronic jammers.”

    Adm. Davidson’s testimony is sure to be received in Beijing as a fresh attack connected with Monday’s “freedom of navigation operation” involving two Arleigh Burke-class destroyers — the USS Spruance and the USS Preble — which sailed within 12 nautical miles of Chinese bases in the contested Spratly Islands. 

    https://platform.twitter.com/widgets.js

    The navy’s own rhetoric has gotten noticeably direct of late, as it described the purpose as “to challenge excessive maritime claims and preserve access to the waterways,” while also underscoring America’s right to “fly, sail, and operate wherever international law allows,” Cmdr. Clay Doss, a US Navy 7th Fleet spokesman, told CNN.

    More broadly, according to The Hill, Davidson described the implications of Chinese tactics as increasingly hindering “the international free flow of communications, oil, trade, other economic means, cyber connectivity and the movement of people.”

    Meanwhile, each incident in both the East and South China seas will surely only get hotter, with the potential for “near miss” incidents growing, potentially sparking direct conflict between two super powers. 

  • Billionaires Already Gave Their "Fair Share"

    Authored by C.Jay Engel via The Mises Institute,

    It is becoming increasingly fashionable to agitate against the very existence of billionaires. Recently, for instance, Business Insidersummarized a statement of Congresswoman Alexandria Ocasio-Cortez as follows: “[she] said a society that “allows billionaires to exist” while some Americans live in abject poverty is “immoral.” Echoing this sentiment, Elizabeth Warrenrepeated a very popular sentiment among the mainstream and far left; namely, that it was time that billionaires pay “their fair share in taxes.”

    While both of these narratives are commonly held and frequently expressed, they are completely wrongheaded and misunderstand the role that billionaires actually play in society.

    Government-Made Billionaires vs. Market-Made Billionaires

    We must be clear in our analysis that the State often has a hand in the creation of billionaires; not because it “allows” billionaires to exist, but because the western world suffers from a framework that actually redistributes resources – via taxation and monetary expansion – from the poor and middle class to the well-connected.

    These recipients of State redistribution, often called “crony capitalists” are excluded in our praise of billionaires and to whatever extent a billionaire (or millionaire) is a net recipient of government redistribution, to that extent we are critical of them.

    Given the complexities of the owners of big business and their relationship with the state, the consideration of whether a wealthy CEO of a company is to be criticized or praised becomes a difficult exercise. Nevertheless, the libertarian position on this is to eradicate the confusion by unraveling the involvement in industry that characterizes the modern United States Federal Government (and most other western governments). Any positive subsidies that are transferred, via the government, from the taxpayers to the capitalists must be eliminated if we are to benefit from the role of the billionaire capitalist, as discussed below.

    Now that we have that out of the way, we can analyze the existence of billionaires who have achieved such a status on the market. Far from being the cause of inequality and poverty, it is actually the billionaire who has contributed, in one way or another, to the well being of society. It is the billionaire, who has bestowed upon his fellow man the goods and services that raise their standard of living.

    On the market, the source of the billionaire’s billions is the hundreds of thousands, perhaps even millions, of people who have decided that whatever the billionaire was offering was more important to them than the money it cost to obtain it. But even before the consumers made this judgement, the billionaire had to anticipate their preferences and he had to risk the prospects of a loss in order to bring forth the goods and services that the people desired.

    The Role of the Billionaire in the Marketplace

    On the market, there are no guarantees. As Ludwig von Mises once noted, the consumers do not offer assurances as to their commitment to the goods and services that the billionaire produces— they change their minds, they shift their preferences, and they choose goods of alternative quality at their own whim. The billionaire then, before he makes his billions, faces the prospects of a loss; that is, the market has a built in set of financial consequences as a penalty to the capitalists who choose unwisely in their allocation of resources.

    Capitalists either succeed in providing things that people want or they do not. If they do, then not only are they rewarded, but by definition other people’s lives are improved. This improvement is not politically determined and judged, but determined by actual and demonstrated preferences of the consumers. If the capitalist does not succeed in making people better off, he is penalized and suffers the financial and other consequences of his poor decisions.

    In this way, those politicians and commentators who push the idea that billionaires need to “give back” or pay their fair share do not understand that there is nothing to “give back” and that the “fair share” has already been contributed to society. There is nothing to “give back” because an exchange took place; value for value, with the capitalist giving a good or service and the consumer reciprocating with a transfer of funds. There was an even exchange such that there is no deficit or surplus in what one party continues to owe the other.

    Further, the idea that billionaires must pay their fair share via taxation is similarly interpreted. The fair share, the wealth that the capitalist created on the path toward his billions, has been bestowed upon society in the course of his receiving the reward for his accurate anticipation of the wants and needs of consumers he has likely never even met.

    If a capitalist earns billions of dollars in the course of his investment and subsequent selling of the goods and services he produces, he paid out his fair share in the form of the very goods and services he sold! If the capitalist earns a billion dollars, he contributed a billion dollars worth of goods. If he earns a million dollars, he contributed a million dollars worth of goods. If he earns a negative return (a loss), he has contributed nothing and is therefore penalized for this.

    Thus, a wealth tax, by its very coercive nature is not only a breach of the private property rights that a capitalist has in his wealth, but it is also definitely not about “fair share.” It is an additional obligation above the fair share and diminishes the future investment capabilities that the capitalist has. And to diminish the capital stock is literally to undermine the potential wealth-creating activities of the capitalist billionaires.

    The future of western civilization depends on the socio-economic framework of capitalism and free markets. It depends on people understanding that the wealth we see around us is a result of capitalism – of the “rich” seeking profits by investing their capital into the structure of production to produce goods for people and profit as they do it. In the words of George Reisman, “the protesters and all other haters of capitalists hate the foundations of their own existence.”

    Thus, to launch an attack against the capital stock of capitalists of all wealth levels, is to undermine the very tool that mankind has in fighting impoverishment long term. If we want to overcome poverty, nothing is more important than investment into the structure of production; this is how goods are made more affordable to more people that have never before been to attain them. To siphon capital in preference for consumption is to siphon the very goods that bring mankind out of its natural state of impoverishment. In order to address the eternal struggle over scarcity of resources, we need capitalists and billionaires. They are the providers of a better tomorrow.

  • China Global Exports Surge In January But Trade With US Tumbles

    Amid intensifying trade talks, Chinese exports rebounded dramatically in January as companies trying to ship goods ahead of the Lunar New Year shutdown likely exaggerated the gains.

    In USD terms, exports rose 9.1% in January from a year earlier (far above expectations of a 3.3% decline and December’s 4.4% YoY drop). Imports also smashed expectations: falling just 1.5% against expectations for a 10.2% collapse.

    In Yuan terms, Exports rose and even more impressive 13.9% YoY and imports rose 2.9% YoY (both far better than expected).

    The overall trade surplus fell in both Yuan and USD terms from December.

    Impressive numbers, but as Bloomberg details, the Lunar New Year break coming about 10 days earlier than last year probably boosted January’s shipments, as companies rushed to ship more goods ahead of the holiday shutdown of many factories and companies.

    Trade with US tumbled with both exports and imports plunging further in January.

    China Jan. exports to U.S. was $36.54b and imports from U.S. was $9.24b, according to website of General Administration of Customs.

    Also of note, China’s crude oil imports -2.7%MoM to 10.07m b/d last month, according to Bloomberg calculations based on data from General Administration of Customs Thursday.

    “We expect that growth of exports in 2019 will decelerate from 2018, even if there is a deal not to raise tariffs on $200 billion in Chinese imports, due to lackluster global economy,” UBS AG economist Ning Zhang said.

    “But if there’s a deal to scrap all the existing tariffs, that will be a different scenario, and the exports will not weaken significantly.”

    The initial reaction was a kneejerk higher in yuan but that is fading…

     

Digest powered by RSS Digest